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What are the Patterns of a Conservation Economy?

People's Food Co-Op is a member-owned worker's cooperative providing organic food to its neighborhood
Image by Katy Langstaff.

Local Assets

There is an increasing wealth disparity between rich and poor and rural and urban dwellers in the Pacific Northwest and throughout the world. This threatens the stability of communities and creates pressures to eat into natural capital to meet pressing short-term needs.

In the United States, it has been estimated that 60% of wealth is concentrated in the hands of 1% of the population. This means that the vast majority of citizens have very little ability to direct and control decisions about the economic life of their communities. If the benefits of an economic system are not widely distributed, wealth disparities will only continue to grow more extreme. In order to address this structural problem, A Conservation Economy greatly expands the number of people with an ownership stake in assets of all kinds, including homes, businesses, land, and natural resources. This is the foundation of an inclusive prosperity that gradually mitigates wealth inequities while contributing to Local Economies.

When businesses — whether electrical utility or farm, bank or grocery store — are largely owned by employees, customers, local residents, and others with a direct relationship, they become increasingly accountable to the needs of the various communities they serve. Furthermore, when ownership is spread broadly within a region, benefits will also be shared broadly, helping to generate enduring Social Equity. The relationship between broad patterns of ownership and social equity is equally direct for other assets like homes, land, and resources.

The most direct way for a large business to give an ownership stake to its employees is through an employee stock-option plan (ESOP). As recent events demonstrate, such plans need to be relatively liquid, and should be part of a diverse retirement portfolio.

Smaller businesses may be structured as worker-owned co-operatives or collectives, in which employees maintain various degrees of shared ownership and management. The Burley Design Cooperative in Eugene, Oregon is a very successful worker-owned cooperative with about 100 employee-owners that manufactures a range of bike equipment and accessories. In the case of consumer co-operatives like Puget Consumer's Co-Op or public utility districts like Eugene Water and Electricity Board, ownership and its benefits are widely shared by customers while management is left to a professional team.

Community-development land trusts and co-housing arrangements allow land to be held in common by current residents, often with protective covenants, while allowing individuals to reap the economic benefits of any building improvements they make.

Over time, individuals should acquire an ownership stake in the businesses that they work for and buy from, the homes they make payments on, and the land and resources they restore and steward. Such ownership stakes can be structured in a remarkable variety of ways, each helping to more fairly distribute economic benefits and decision-making responsibility. Building Local Assets is fundamental to economic democracy and Civic Society.

Community-based financial institutions are local lenders. Their mission is to invest in the community in which they are owned and operated, thereby building Local Assets. Personal and business loans to low-income people ensure that wealth is shared more broadly. Community development banks, credit unions, loan funds, venture capital funds, and locally-owned banks all play a critical role in rooting capital in place, rather than allowing it to be controlled externally.

Models for community lending have emerged in the last thirty years. Financial institutions have begun to serve as bridges between socially-minded investors and community-based initiatives. For example, Chicago-based Shorebank Corporation partnered with Ecotrust to establish ShoreBank Pacific, the nation's first environmental bank. The bank has raised about $40 million in operating capital through savings, checking, and retirement EcoDeposits marketed nationally. The money is then used to make environmentally and socially responsible loans to restorative enterprises, initially in the Willapa Bay, Washington and Portland markets. A companion non-profit, Shorebank Enterprise Pacific, offers technical assistance, marketing, and revolving loans.

Provide financial and legal forms of ownership that equitably distribute both the benefits and responsibilities of ownership. Seek forms of ownership accountable to local communities. Create financial institutions that can make a wide range of loans to those of all income-levels, help to build resilient local economies, and reinvest in the local community.

Examples of this pattern in action:

Organizations whose work incorporate this pattern:

Corporation for Enterprise Development

Burley Design Collective

Food Front

Puget Consumer's Co-Op

Eugene Water and Electricity Board

References:

Gates, Jeff. The Ownership Solution: Toward a Shared Capitalism for the 21st Century. Perseus Books. Reading, MA. 1998.

Morrison, Roy. We Build the Road as We Travel: Mondragon, A Cooperative Social System. New Society Publishers. Gabriola Island, BC. 1989.

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