Ownership Matters|Issue 7
CFNE Profile; Mondragon’s Sovereignty of Labor; Community Equity Fund Launch
- Editorial: In It for the Long Haul
- Fund Profile: Cooperative Fund of New England with Micha Josephy
- Rebecca Fisher-McGinty on Mondragon’s Sovereignty of Labor
- Community Equity Fund Launches in Asheville
- Downtown Crenshaw
- The PRO Act
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Editorial: In It for the Long Haul
Sometime in 2010, a new business acquaintance in Chicago shared an amazing insider “war story” with me about the fabled 2008 financial crash.
A high-level investment banker with Lehman Brothers in New York at the time, he explained, “I was in an elevator in our building talking with a friend about the rising complexity and volume of our trading operations. I said to him, ‘You realize there are only maybe two or three ‘quants’ in this building that have any idea of what our position is in the market at this moment?’” (“Quants” are highly-paid experts — often math or physics PhDs — who create strategy for their firms’ trading activities in the global markets.)
He added, “A few hours later that same day, we learned the ceiling had collapsed on the whole firm.” (For an entertaining introduction to this category of systemic disaster, the film The Big Short holds up well today.)
Money that is moving too fast: there is such a thing, as Slow Money founder Woody Tasch argued in his wonderful book of the same name. So is there an appropriate velocity for money?
Yes. As author David Orr writes, it’s a velocity which corresponds to “long-term needs of communities rooted in particular places and to the necessity of preserving ecological capital.” Exceeding the speed limits makes us “vulnerable to ecological degradation, economic arrangements that are unjust and unsustainable, and, in the face of great and complex problems, to befuddlement that comes with information overload.”
As most readers of this newsletter will probably agree, our very diverse movement for greater shared ownership is partly about re-education for a different sense of time. The Slow Money group (now making 0% loans, by the way) was founded on this insight. The need for a re-education process is becoming more widely understood across the disciplines of economics and finance — painfully and too slowly, we might add.
It’s not only about the speed of transactions but also the time horizons of our own life commitments. If you’ve not picked up a copy of the new book Dedicated, by my friend Pete Davis, it’s a brilliant twist on the self-help book — almost an anti-self-help book (get over yourself!).
Using a gallery of fascinating examples, Davis argues that in our culture of infinite browsing (the author’s image of never being able to decide on which Netflix movie to watch), we forget that the people we really admire are almost always “long-haulers,” individuals who made a choice and then spent years cultivating, revising, building — whether their choice was a community, a life partner, a cause, or simply a passion.
Ownership implies stewardship — that’s a long-haul idea, one which builds in the time we so badly need in order to “find the others” and to make sure everybody is participating in what comes next.
In future issues, we’ll be exploring the connections between ownership, stewardship and solidarity as we endeavor to make sense of all this good new work going on out there.
Fund Profile: Cooperative Fund of New England (CFNE) with Micha Josephy
From a modest loan fund started in 1975 to help area food co-ops, Cooperative Fund of New England now serves both the New England and New York areas, encompassing seven states. Over its history, CFNE has made over 1,000 loans, disbursing more than $70 million with loan losses of less than 2% and zero losses of investor funds.
In 2020, CFNE’s efforts meant 671 jobs retained, and almost 16,000 retained since its inception. In affordable housing last year, 44 new units were created, with almost 7,000 created since inception.
Ownership Matters spoke with CFNE’s executive director, Micha Josephy.
Micha, great to speak with you. Let’s begin in 2019, when you became executive director at CFNE. You showed up just before things got really crazy with the pandemic.
Yeah, we were very fortunate in certain ways. For example, when Covid hit, our decentralized operations — we’ve always worked that way, no central office — meant that we had a loan officer within a couple of hours of practically anyone in our market. And thanks to the many years of great work by my predecessor as ED, Rebecca Dunn, our loan portfolio when I took over was up to $23 million with an overall balance sheet of about $30 million.
So last year stretched CFNE in some new directions. Your loan volume slowed while your team must have been busy processing loan modifications.
Exactly. For one thing, we raised a record $4.2 million in new capital during a time when it was obviously very difficult to initial new loans. That meant we were able to create a $1 million relief fund, just to help our co-ops get through the crisis. There was quite a bit of publicity in this period about two kinds of economic first responders — CDFIs (like us) and co-ops. Out of over 100 co-ops we support — and last year that was a record number — only one has closed its doors.
Rebecca Fisher-McGinty on Mondragon’s Sovereignty of Labor
In the Fall of 2019, I visited the Mondragon Cooperatives through the Saint Mary’s Masters of Cooperative Management Field Research course taught by Marcelo Vieta. Before I left for the field research trip, I was attracted to the Mondragon Principle “Sovereignty of Labor.” There is so much to say about this worker cooperative operating at such a large scale. I decided to dive more deeply into how the Sovereignty of Labor shows up in multiple aspects of life, work, and systems. I’m really inspired by it!
Following, you’ll find an adapted version of my final academic paper from my experience. In it, you’ll find information including 7 lessons I learned that contribute to the “Sovereignty of Labor” from Mondragon, connections to the United States and my cooperative, and dreams of a cooperative future.
(Also: enjoy video capturing our trip by my talented co-learner and friend in the Saint Mary’s program, Anne Caraan.)
The cooperative movement needs to have deep roots of solidarity, justice and freedom, in the interest of those who are committed to our base units, such as our work commitments. — Fr. Josemaria Arizmendiarrietta, founder of Mondragon
Cooperatives build new economies based on human needs rather than profits. The cooperative model is a shift from the extractive nature of corporate globalization. The cooperative difference is simple. A cooperative serves the needs of its members guided by the cooperative principles. In a capitalist economy, it is not easy to center the needs of cooperative members. In the Arrasate region (also known as Mondragon), I witnessed a special connection to work and humanizing workers. In this piece, I reflect on the ways that the Mondragon Cooperative Corporation (MCC) has created a humanizing support system and prioritizes its workers and cooperatives.
Lesson 1Workers are the historic heroes, embedded in history and legends.
On an old building in Mondragon, a message enscripted in Latin conveys work as an honor. Mondragon spokesperson Ander Etxeberria (our generous host and guide for the week) shares that viewing work as honor is culturally important to the community at Mondragon. There are today some 2,000 cooperatives in the Mondragon region, with 97 of those connected under the Mondragon Cooperative Corporation. This cultural relationship and understanding of work highlights the MCC principle of the sovereignty of labor. This principle, sovereignty of labor, is clearly a Mondragon principle which “considers labour the principle factor for transforming nature, society and human beings themselves.”
The cultural meanings, narratives, practices, and building inscriptions in Mondragon demonstrate the power and infiltration of this principle, the sovereignty of labor. In many cultures, there is the legend of the dragon terrorizing the village; and there is always someone who saves the town from the dragon. Sometimes, the king, the knight, or the under-dog turned hero saves the village. What story is familiar to you?
Community Equity Fund Launches Funding in Support of BIPOC Businesses in Asheville Area
On Community Equity Fund, a project profiled in Ownership Matters’ issue 2, an exciting update from co-founder Kevin Jones:
“The first checks will be going out of between $50,000 to $75,000 within two weeks on the innovative Community Equity Fund Stephanie Swepson Twitty and I have been working for a couple of years. We’ve raised the first $1 million to invest equity in Black and brown sole proprietors who don’t have a rich uncle to give them friends and family money to enable them to grow to be able to take on CDFI loans.”
Downtown Crenshaw (“Forty Acres and a Mall”)
As Oscar Perry Abello wrote a few weeks ago about the Baldwin Hills-Crenshaw Plaza Mall in Los Angeles, “The solidarity economy is looking for a statement win,” adding, “[the Mall] could be that statement win.”
The win would be the creation of a Black-owned “urban village” which builds and keeps Black wealth within this historically Black L.A. community.
We’re talking about 41 acres of prime commercial real estate in the nation’s second largest metro area. And about a savvy community organization, Downtown Crenshaw, which announced on March 24 their war chest of some $28 million raised in donations for a down payment on the property. As Abello suggests, this project could become the largest example of shared community ownership in the country.
The vision is for a hub of locally owned businesses, especially worker co-ops, along with mixed-income housing, a grocery store, a recording studio, and green space.
Sometime before the March 24 announcement, the brokers for the property stopped responding to Downtown Crenshaw and accepted another bid at a lower price. For that irrational rebuff, the brokerage firm, Deutsche Bank’s DWS, may earn a congressional inquiry at the behest of Congresswoman Maxine Waters.
Progress of the Protecting the Right to Organize (PRO) Act
On July 21, Rideshare Drivers United, a coalition of Uber and Lyft drivers, launched a 24-hour national strike with three goals: fair pay, stopping the second-class status, and passage of the PRO Act by the U.S. Congress. The latter bill would reverse the effects of Prop 22, last year’s California ballot initiative which changed the drivers’ classification status from full-time employees to gig workers. Rideshare drivers argue that the app-based companies wasted $220 million lobbying for Prop 22 and then broke the promises included in it.
The PRO Act has passed in the U.S. House but it is unclear whether Senate Democrats have the votes to ensure its passage there. If the PRO Act fails in the Senate, President Biden will have an opening in August to appoint a Democrat to the National Labor Relations Board, giving Democrats a 3–2 majority. That shift will likely mean a wave of employee and union friendly decisions.
Coming in Issue 8, August 10
- A Conversation with Equal Exchange’s Rob Everts on Lessons Learned about Principle 6 (Co-op Cooperation) — and Other Things
- Daniel London on the Best Doc Films about Co-ops
- Review: On Common Ground (on Community Land Trusts)
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