Ownership Matters|Issue 20
Zebras Rising; Good Scout Capital; Catholic Economics
This issue:
- Connecting with Our Readers
- A Conversation with Zebras Unite’s Astrid Scholz
- Books: Tony Annett’s Cathonomics
- Fund Profile: Good Scout Capital
- Upcoming: Neighborhood Economics, May 4–6
- When Co-op and Union Cooperate
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Editors’ Note
share this segment by right‑clicking icon to copy linkConnecting with Our Readers
Let’s begin with a note of gratitude for our growing list of readers who send us notes like the following:
“Best newsletter & analysis in my inbox currently”
“Such great cooperative content”
“A spot-on newsletter on the power of collective ownership. Highly recommend!”
“Congratulations on your newsletter — you are the best at what you do!”
Feedback like this reminds us: at Ownership Matters, we have collected a very special readership. Many of you are well-informed practitioners of cooperativism, already the vital shapers of an emerging alternative economy.
From the outset, our perspective about this project has been that it held promise of becoming something more than a publication simply. We saw the potential in it for fostering community — a particular community of practice, perhaps, amid the wide spectrum of solidarity-economy institutions and initiatives older and newer.
Your responsiveness, a gradual but steady growth in reader numbers, has encouraged us to keep nurturing this discussion internally. It’s not a conversation we want to keep to the publishing team, of course. We want you to be an active part of it.
We’re conscious at the same time that any development of Ownership Matters is going to require building its financial base. To date, we’re a sponsored project of Community Cooperative, a non-profit based in Washington DC. (Our publisher, Felipe Witchger, is one of the co-founders.) And we’re doing a lot with that foundational support, growing an editorial team and adding technical capacity as we can.
There’s much we can’t predict about how this will unfold. But we are taking first steps to enlist your participation in molding this project’s future.
To start, we’re building two things into the Ownership Matters website. One is a way for readers to offer support in the manner of a recurring patronage-style donation of any amount. More about that soon.
The other, coming first, is a space for being in conversation directly. We’re calling it the Editor / Reader Circle. This is an opt-in form of participation in the project, open to anyone who is receiving the newsletter.
Watch your inbox for more info and an invitation to join our Circle in the interval between this issue and next!
share this segment by right‑clicking icon to copy linkThe Capital Hackers
A Conversation with Zebras Unite’s Astrid Scholz
Elias Crim
Astrid Scholz is a co-founder of the Zebras Unite cooperative and network, as well as managing partner of Armillaria. She has a Ph.D. in ecological economics from the University of California at Berkeley.
EC :
I wonder if we might start with a little personal history which I think readers will find interesting. I recall you mentioned on a panel that you grew up in Cologne, Germany. What is it like to grow up in Cologne? How would you describe it to a friend who had never been there?
AS :
Sure. It’s a bit difficult to describe for Americans in particular. I mean, you think about how old Europe is, right? My husband, the first time he came to Cologne, he was blown away by the Roman ruins in the city.
It’s hard to appreciate the age of this city. I remember being like nine or ten years old when it celebrated its 2,000th birthday.
EC :
Wow.
AS :
Of course, there is also some very ancient history in North America but it doesn’t tend to be expressed in monumental cathedrals and other ancient architecture.
We know Cologne’s monumental Cathedral is sitting on top of a bunch of prior churches that are sitting on top of a bunch of earlier temples. So that has been a very sacred space for literally millennia. I like to joke that every time they dig a subway tunnel in Cologne, they find either more ruins — or unexploded ordnance from World War II.
You know, Cologne was bombed pretty badly. And the rebuilt city is spectacularly ugly. It’s still got the Gothic Cathedral but everything else was bombed to smithereens so they rebuilt the old part of town. But the general face of the city is sort of mid-century modern and not in a good way.
EC :
Very interesting. And you were coming up as the Green Party was emerging, correct?
AS :
Yes, I just turned fifty this last year, and the Greens were definitely still sort of a far-left Splinter party when I was a teen. But now today, there’s one thing that people don’t really appreciate about Germany. We actually ended up with what I think is the single best democracy in the world, after having been the worst aggressor of the 20th century. We created this beautiful multiparty democracy — which today includes the Greens.
They came out of the anti-nuclear movement — that was the rallying cry in the late 70s, early 80s. And a lot of the Green leadership came out of the student protest movement of the late 60s.
Those people who created the Green Party, they ended up in power for a period, and they’re now in power again. We’ve had a Green foreign minister. And the Food and Ag minister, not surprisingly, is a Green Party member who is Turkish-German — so it’s the first time that we have had a Turkish-German minister in the cabinet. So yes, the Greens are definitely part of my formative experience.
EC :
And were you involved in green politics, particularly?
AS :
I was too young. Not to say that I didn’t have friends who got into the student politics of it all. When I was about fourteen, I went to a boarding school on Lake Constance. And from there, I really began my international meandering. I left Germany when I was sixteen to go to an international high school in Canada, and so I didn’t really get involved in politics that much.
EC :
Moving on to your college days, I’m wondering who are some of the formative influences on your thinking?
AS :
My economics teacher in high school, a place with the remit to educate the next generation of global leaders, he really brought a very holistic perspective to economics. He had personal experience with what was then called developing countries, and the detrimental effects of the predominant economic paradigms on local populations.
I ended up going to the University of St. Andrews to take a joint honors program in economics and philosophy. They are right in the cradle of the Scottish Enlightenment, which is a weird way to say that David Hume was an influence. And Adam Smith, because I literally went to school down the road from where he grew up and worked.
EC :
And then you went into a new field called ecological economics.
AS :
Yes. That was the influence of Richard Norgaard, one of the founders of ecological economics, who was really the reason I went to UC Berkeley to do my Ph.D.
EC :
So you were already on to ecological economics when you got to Berkeley, you already had that in mind?
AS :
Oh yes — it was literally the only program I applied to in the U.S.
EC :
Were there not very many choices at the time?
AS :
Well I really didn’t want to work with anybody other than Dick. I had read his book Development Betrayed as an undergrad. So then I really wasn’t interested in going anywhere else.
EC :
What did you work on at Berkeley? What was your dissertation about?
AS :
I was interested in how humans really don’t understand nature very well, unless we can think of it as natural resources, i.e., something to be extracted and mined and turned into quote, unquote, useful things.
There are areas like mining and oil and diamonds and growing food, in which we’re extractive in nature. But I was curious about how nature becomes a natural resource. What’s that shift? I mean, it’s such a social construct.
And what was wild about this time — you’ll remember this — the Rio Conference was just happening in 1992, the first United Nations Earth Conference. The new discussion about the need to preserve nature and preserve the Amazon rainforest.
And you had these just wildly divergent estimates and opinions about how valuable the rainforest is as a source of potential future economic value to humanity. And one area where this played out was like, you know, in estimating the future value of the rainforest in giving us life-saving drugs. And the estimates were literally off by four orders of magnitude. So I started digging into how we come up with these estimates of the value of nature. And come to find out that not surprisingly, it’s a total construct.
Books
share this segment by right‑clicking icon to copy linkIn Search of a New (Also Old) Framework
Anthony Annett’s Cathonomics
E. F. Schumacher famously endorsed Buddhist economics in his 1973 classic Small Is Beautiful, while later noting that he could have made the same arguments drawing on Catholic social teachings but then “nobody would have paid attention.”
The playful title of the book I’m reviewing here suggests its subject is “Catholic economics.” Is that actually a thing?
Not for the hard-nosed professionals who are likely to compare it to claims for a “Catholic algebra.” Economics, on this view, is a lofty, value-free endeavor, up there with physics, say, without the slightest trace of any particular historical or cultural flavoring.
Tony Annett has written an excellent book arguing the contrary position. There is indeed a Catholic tradition of economics — or at least, a body of teaching on social questions which offer an alternative to the current economic orthodoxy. (Schumacher called it meta-economics.)
A Ph.D. economist and former speechwriter for the IMF, Annett could be described as a “Pope Francis Catholic” whose book is addressed not only to Catholics but to all people of good will — especially those who believe in the need for system change and are in search of an alternative framework.
Non-Catholics (and many Catholics as well) are sometimes amazed to discover the tradition of ideas called Catholic social teachings (often abbreviated CST). Originating in the late 19th century, at a time of great oppression of labor generally, Pope Leo XIII was the first (in 1891) to use these letters to the world’s Catholic bishops to move beyond theological pronouncements in order to speak out on the “social questions” — meaning issues of labor, work, and the human dignity of working people.
In a dozen pages or so, Annett author offers a brilliant discussion of ten concrete principles of CST: the common good; integral human development; integral ecology; solidarity; subsidiarity; reciprocity and gratuitousness; the universal destination of goods; the preferential option for the poor; Catholic notions of rights and duties; Catholic notions of justice. This section alone is worth the price of the book.
The documents of CST (Annett lists the thirteen most important over the last 131 years) generally attempt to steer toward a cautious middle ground between unchecked capitalism and state socialism. But historically they have landed with a bang. The 1931 encyclical Quadregesimo Anno (Latin titles obligatory, of course) from Pope Pius XI has been cited as contributing to the creation of various social welfare programs, including President Roosevelt’s New Deal. (FDR occasionally quoted from Pius’ encyclical to show its agreement with his administration’s agenda and his views of the rights of labor.)
Moreover, CST has been foundational in the creation of the U.N., including its Universal Declaration of Human Rights, as well as the U.N.’s Sustainable Development Goals more recently. The latter, Annett points out, align very closely with Laudato Si’, the blockbuster 2015 encyclical Pope Francis used to introduce a new term into this tradition: integral ecology.
The reader may notice that these principles, if taken individually, are not peculiar to any one religious tradition. (Although it may be that the CST’s particular mix of principles is distinctively Catholic.)
CST, Annett suggests, has a new relevance for at least two reasons: 1) its value as a comprehensive framework with which to address our multiple crises; and 2) the non-religious confirmation of its centuries-old principles and its view of human nature (very different from that of neoclassical / neoliberal economics) through modern disciplines such as economic game theory, evolutionary biology, neuroscience, happiness studies, and psychology.
In what may be the final throes of neoliberal economic hegemony, we need an alternative framework with which to build solidarity and humane solutions. Tony Annett is claiming we have one — and it has been hiding in plain sight.
share this segment by right‑clicking icon to copy linkFund Profile: Good Scout Capital
Elias Crim
We’re excited at Ownership Matters to feature two emerging fund managers who are introducing an investment thesis to fill out the employee ownership asset class. Good Scout Capital is a private equity firm based in Los Angeles headed by BIPOC fund managers and is woman-led.
Designed as a traditional private equity fund with a high impact component, the Good Scout model is inclusive capitalism, seeking to align investors, operators, and workers in the financial success of their portfolio companies. Their first fund requires a 20% equity floor for workers in exchange for investment to align workers’ incentives alongside investors and operators.
Key industries of focus are food and agriculture, tourism and hospitality, health and wellness, and workforce training / impact consulting.
We spoke recently with founders Rupal Patel and Karlo Marcelo.
EC :
Excited to connect with this very interesting new model you’re working on. Maybe we could begin with hearing how you came up with the idea for this private equity fund focused on “sweaty” enterprises?
RP :
I founded Good Scout Capital with Karlo Marcelo, whom I met in graduate school at the University of Michigan. We were both in the Public Policy program and both focused our studies on poverty, racial equity, and the working poor. We became fast friends and have remained peers in the space over the last twenty years. About two years ago we began to develop Good Scout to fill an investment and impact gap that would benefit investors, operators, and workers. To create Good Scout, I applied the lessons I learned as a former community organizer and private equity executive, blending unique and complementary skill sets and experiences.
EC :
That’s a pretty unlikely combination!
RP :
It is! Over twelve years as Principal at Renewable Resources Group (RRG), I developed a 1.6 gigawatt solar energy portfolio and created the first farm labor cooperative in the U.S. — California Harvesters, Inc. The energy portfolio included one of the largest solar photovoltaic projects operating in the world today and was acquired by Berkshire Hathaway.
The projects included union contracts and other environmental benefits beyond the clean energy production. California Harvesters is one of the largest farm labor service companies today, employing 1,200 farm workers with annual revenues of $10M. I served as Chair of the Board for the first four years, raised capital, and supported the management and operations team at California Harvesters. RRG, Ford Foundation, Democracy at Work Institute, The Working World and The Workers Lab were important partners in launching CHI and I’m so grateful for their contributions.
These two examples of solar energy and cooperative businesses made clear to me that capital can accelerate environmental and social change at scale, and revealed some things that informed the investment strategy and the DEI thesis for Good Scout Capital.
First, we need to simplify the cooperative model in early-stage enterprises. We also saw that financing products for seed and early stage SMEs, which are often led by diverse entrepreneurs, are limited — and yet they are critical to innovation in the space.
Then there’s the way that capital and impact investors can play the same role in accelerating change in wealth and income inequality as they did for climate change — by including workers in the capital stack.
And finally, in order to attract investors to labor- and gig-focused businesses we need to de-risk the investment with a diversified portfolio and an active PE team that provides back office support to the portfolio companies.
EC :
So was your conclusion that if you could create a vehicle for farm workers, you ought to be able to create a vehicle for any “sweaty industry,” as you call it, out there?
RP :
Exactly. It’s a model that can be replicated and now we have better lessons to execute it. The way I look at it, we raised $5M to capitalize the farm labor cooperative and that was also a $5M investment in learning about how to bring this to scale. These concepts of employee ownership are actually mainstream now. Just look at what KKR has done with their industrials or how Pete Stavros launched Ownership Works, a new nonprofit focused on the same principles we created at Good Scout. It’s a really exciting time in the employee ownership capital space.
Upcoming : May 4–6, Indianapolis
share this segment by right‑clicking icon to copy linkNeighborhood Economics Event
We know that the solidarity economy has already arrived — it’s always been here, at the local level at least. (We do not yet have a national network of Small Solidarity Business Administration offices! Or a Federal Cooperative Bank ready to lend!)
In the meanwhile, we continue to get better organized on the ground, as the upcoming Neighborhood Economics event shows. Organized by the SOCAP founders at Faith+Finance, along with Parish Collective, the Kheprw Institute and a growing list of additional partners, this event is an invite-only practitioners gathering (with an option for self-nomination).
The eight design labs are as follows:
- Bridging the Racial Wealth Gap
- Catalytic Capital
- Neighborhood Investment
- Trusts
- Ownership Matters (the “silver tsunami” and worker ownership conversions)
- Church Assets in Transition
- Policy to Localize the Economy
- Local Mission-guided Investing
- Lining Up Endowments with Missions
From the event website:
Through curated experiences, working groups, and neighborhood tours that showcase the possibility and urgency of our shared work, we will build momentum and new connections over three days. A movable feast of ideas, meals, and design sessions, this event will culminate in commitments from each working group and a shared celebration.
Each design lab will be made up of 2–3 domain focus hosts, 7–10 leading practitioners with promising, replicable innovations from around the country, and 2–3 locally selected guides.
share this segment by right‑clicking icon to copy linkWhen Co-op and Union Cooperate
USFWC Endorses REI Workers’ Push to Unionize
What role should unions play in a strong cooperative ecosystem? One answer is: the one they have played historically at various moments — as a strong partner.
Thus after employees at REI’s SoHo store in Manhattan announced on Jan. 21 their intention to unionize, the U.S. Federation of Worker Cooperatives quickly came out with a statement in support.
According to the New York Times, the filing at the REI store asked the labor board for an election involving about 115 employees, who are seeking to be represented by the Retail, Wholesale and Department Store Union, the same union that has overseen the ongoing union campaign at the Amazon warehouse in Bessemer Alabama.
The USFWC noted, “Rather than ‘getting between the co-op and the members,’ unions can strengthen the relationship between workers and owners in a consumer co-op. Just as the consumer members join in collective action through a consumer cooperative to have a meaningful voice in the marketplace, workers join in collective action through a labor union to have a meaningful voice in the workplace. We encourage consumer members to engage the principle of solidarity with the workers who create the value of the cooperative.”
For over a decade, the USFWC has had a Union Co-ops Council, a space focused on building worker power in coordination with organized labor. As the Council noted in their 2021 statement, the cooperative movement and the trade union movement both have deep roots in liberation struggles for economic independence. Labor unions and cooperatives should be seen as an “either / or” option of organization but work together in solidarity to achieve similar goals.
For more on this history, the Union Toolkit for Cooperative Solutions, developed by Union Co-ops Council member Rebecca Lurie with Bernadette King Fitzsimons, delves into some of the incredible success stories of cooperatives and unions coming together to help workers and businesses flourish across the United States.
Coming in Issue 21, February 22
- Interview: Tim Huet of Arizmendi Association
- Books: Chris Benner and Manuel Pastor’s Solidarity Economics
Article ideas? Submissions? Helpful suggestions?
Contact the editor: ecrim@ownershipmatters.net.
Masthead
- Elias Crim, Editor
founder, Solidarity Hall; former business journalist and publishing consultant
- Júlia Martins Rodrigues, Contributing Editor
attorney (Brazil); visiting scholar, law, University of Colorado Boulder; PhD candidate, civil and constitutional law, University of Camerino
- Daniel Fireside, Contributing Editor
founder, Uncommon Capital Solutions; board member, Namaste Solar; capital coordinator, Downtown Crenshaw Rising
- Zoe Crim, Editorial Assistant
B.A., linguistics, Indiana University Bloomington; co-founder Fair Trade group
- Paul Bowman, Design / Content Mgr.
Advisory Board
- Jessica Mason, Start.coop
- Stephanie Swepson-Twitty, Eagle Market Streets Development Corp.
- Nathan Schneider, University of Colorado Boulder
Disclaimer: The content of Ownership Matters is for informational purposes only. Such information should not be construed as legal, tax, investment, financial, or other advice. Nothing contained in these materials constitutes a solicitation, recommendation, or offer to buy, or a solicitation of an offer to sell, any securities. Subscribers / readers agree not to hold the authors, their affiliates or any third party service provider liable for any possible claim for damages arising from any decision made based on information published here.