Heading toward his fifth hour of filleting, his thick rubber boots squeaking on the wet concrete floor, Glen Libby, a fisherman by trade, looks more like a beleaguered line cook than the hero of a seafood revolution.
Five years ago this month in this unspoiled fishing port immortalized by three generations of Wyeths, Mr. Libby and about a dozen cohorts banded together to try to rescue their depleted fish stock and their profession.
The result (“after trial and error with a lot of error” in Mr. Libby’s words) was Port Clyde Fresh Catch, the country’s first community-supported fishery, now part of a burgeoning movement trying to do for small-scale local fishermen what community-supported agriculture does for farmers.
In the kitchen, community-supported fisheries require cooks to agree in advance to buy whatever fish or shellfish local fishermen catch. Fishermen are asked to embrace plentiful species like skate or redfish, once routinely tossed overboard. With about 80 percent of the seafood on the American plate imported and “traceability” the mandate du jour, community-supported fisheries of varying sizes and ambition are springing up around the country, from Cape Ann in Massachusetts to Santa Barbara in California. There are about 30 nationwide, including three in New York.
Port Clyde Fresh Catch was born in crisis. Fishing is woven into the warp and weft of daily life here, a place where the water seems more dominant than the land. The village’s working waterfront still resembles a Wyeth, alive with aging trawlers, lobster traps and weatherworn shacks dwarfed by evergreens.
But looks can be deceiving: Until recently, the picturesque occupation beloved by “people from away,” as summer residents are called, was on the verge of collapse. Of Maine’s 5,300 miles of coast, only 20 miles are working waterfront, with tiny Port Clyde, originally named Herring Gut, home of the last surviving ground-fishing fleet between Portland and the Canadian border.
At the time Mr. Libby and colleagues joined forces, they faced the decimation of signature New England species like cod and flounder, largely because of overfishing and nets that damaged the seabeds, including those from an increasing number of “big box” industrial trawlers that can catch up to a million pounds of herring a day.
Overfishing continues to be a major issue; the allowable catch for cod is projected to be cut up to 70 percent for next year, said Peter Baker, the director of Northeast Fisheries programs for the Pew Environment Group. The steady decline of fish resulted in increased federal regulations, including limits on the number of days at sea.
Overfishing was one factor limiting fishermen’s profits. Another was the traditional way they sold their catch: through auction houses, which set wholesale prices. “You never knew what the price was going to be,” said Mr. Libby, who caught the fishing bug digging for soft-shell clams as a child. “My best season, I made $1 an hour.”
He and his colleagues had a choice: They could “give up and work at McDonald’s,” he said, or get together and try something radical.
Joining forces was hardly an easy sell. “Fishermen are independent,” Mr. Libby said, juggling a cellphone in one hand and a pick for plucking 30 pounds of redfish from an iced bin in the other. “Maybe you don’t like people, so you want to sit out in a boat by yourself. But the whole ‘I want to be the Lone Ranger’ stuff doesn’t work when things get tight, when people are in a lot of financial pain. Then you either have to look for alternatives, or you quit.”
They eliminated the middleman, processing their fish and shellfish themselves and then selling or shipping directly to consumers. The idea emerged after Mr. Libby and his family heard a farmer give a talk about community-supported agriculture. The group started with orders for sweet winter Maine shrimp from members of the Unitarian church in nearby Rockland. That eventually led to tailgate filleting demonstrations on the back of the Libbys’ pickup truck. “Nobody got rich,” said Kim Libby, Mr. Libby’s sister-in-law. “But it was a good shot in the arm for paying the fuel bill that week.”
The Port Clyde group was environmentally proactive, redesigning their nets to allow more juvenile fish to escape. Instead of catching a high volume of a single species, the group sought a more diverse catch and received a price closer to the cost of production. That in turn allowed them to fish at a smaller scale.
Ted Ames, a retired fisherman, a MacArthur Fellow and a founder of the Penobscot East Resource Center, said he considers community supported fisheries a promising ecological tool that can help build a constituency for conservation measures like a 30-mile intracoastal protection area for spawning fish limited to small boats. “Not only do C.S.F.s give people the freshest seafood,” he said, “they give local fishermen a chance to be stewards of the resource.”
Cape Ann Fresh Catch in Massachusetts, now the country’s largest community-supported fishery with 650 members, started with whole fish only, much to some customers’ trepidation.
“There’s 10 pounds of fish,” remembered Mary Reilly, an owner of Enzo, a rustic Italian restaurant in Newburyport, but then a home cook. “There were weeks I was tempted to chuck it in the trash, ” she said. “But these bright little eyes were staring at me.”
Like advice to the lovelorn, many community-supported fisheries offer online recipes and how-to videos. On the anxiety front, perhaps none matched Mr. Libby’s when he faced 1,500 pounds of gray sole with no idea how to fillet it. “We thought we’d go hire some fish cutters,” he said. “But there weren’t any.” (He has since trained a team).
Growth has been dependent on all sorts of factors, including geography. While Port Clyde, isolated on an peninsula about 45 miles northeast of Portland, has cut back on some of its deliveries because of distance, business is booming out of the commercial fishing port of Gloucester on Cape Ann, 45 minutes from Boston. The group, begun by the Gloucester Fishermen’s Wives Association, formed many years ago, buys from some 30 boats using hooks, gill-nets, trawls and traps, and collaborates with a local wholesale distributor and processor.
Though sustainability is part of the business model, how that plays out on the water is more complicated. Some fishermen are businessmen first, and environmentalists second or third. Writing on “The Pescavore’s Dilemma” in the magazine Edible Boston, Roz Cummins, a Cape Ann member, lamented the prevalence of cod in the group’s first year of distribution.
And not every fisherman uses sustainable fishing methods. Niaz Dorry, coordinating director of the Northwest Atlantic Marine Alliance, argues that the issue isn’t the type of gear so much as the scale. “What really matters is who is behind the wheel and where they put their gear,” she said.
In Gloucester, the setting for “The Perfect Storm,” by Sebastian Junger, many houses have widow’s walks. Underlying two cookbooks the fishermen’s wives have produced are stories like those of Angela Sanfilippo, the group’s president, whose husband, John, was rescued at sea in 2005 after his boat, the Giovanna, was engulfed in flames.
Sharing recipes “has always been the dream of the wife,” Mrs. Sanfilippo said. Since the 1970s, the fishermen’s wives, many Sicilian, have routinely offered cooking demonstrations at church suppers and the like. The wives have always cooked and eaten a variety of species, including squid and hake, because “the husbands would bring them home,” she said.
Fishermen should not be the only ones taking responsibility for marine conservation, she said. “The consumer needs to do their part,” she said. “If all they want to buy is cod, haddock or flounder, that’s all the fishermen are going to want to catch.”
Along with the elevation of triggerfish and monkfish, once considered bycatch, the era of the celebrity fisherman could be dawning. The Walking Fish Cooperative, a community-supported fishery in North Carolina, has started giving fishermen like Linwood Chestnut, a 37-year-old flounder gigger, video cameras to document their experiences for the Web. “I hope people see where their fish comes from and what hard work it is to get them,” said Mr. Chestnut, whose trade is nighttime spearfishing.
The most heartening news may come from young people like Mr. Libby’s 32-year-old son Justin, who had abandoned thoughts of fishing, until Fresh Catch offered a steadier income.
“We didn’t want to be the last ones,” his father said of the heritage that was once the vibrant lifeline of coastal communities. “We still could be. But we’re trying like hell not to be.”
In the days between the 2012 Republican and Democratic Conventions, a group of eighty farmers, ranchers, grocers, produce distributors and food activists met in Carbondale, Colorado. They hunkered down in a big tent on a farm nestled below the drought-stricken peaks of the Rocky Mountains as dry winds gusted around them. Like many who spoke at the conventions, their goal was to discuss how to create jobs and help rural economies ravaged by the economic downturn get some rebound.
But unlike the Democrats and Republicans who offered top-down plans for righting a capsized economy, these rural Westerners spoke of "collecting small donations from individuals, aggregating them, and then using them as catalytically as possible" to support food and farming microenterprises all across the country. Their approach is radically different than that which the federal government took over the last two years in dealing with so-called "food deserts," providing Wal-Mart and other big box chains with a half billion dollars of incentives to open more of their food super-center in low income areas. So far, few poor people have had their hunger vanquished or their nutrition improved merely by access to supermarkets overloaded with cheap calories....
Those attending this "Slow Money" event included liberal venture capitalists, Tea Party farmers, back-to-the-land libertarians, college-age anarchists, and fiscally-conservative Republicans, but all seemed to be in agreement on one thing: they cannot wait for the government to fix either the food system or the economy; "we" must do it ourselves.
"If four million Americans contribute $35 per annum to the NRA," asks the Slow Money website, "will one million Americans contribute $25 per annum to the Soil Trust to begin to fixing our economy from the ground-up?"
The Soil Trust, a crowdfunding strategy to be launched this October by Slow Money, is seeking slower, smaller and more local means of investing in strategies that will provide both rural and urban communities with greater food security. It will do so while creating jobs with live-able wages at the same time. Spearheaded by Slow Money founder Woody Tasch and Marco Vangelisti of the NorCal SOIL network, the Soil Trust is particularly interested in linking local food producers who build soil with micro-investors who build social capital.
If this seems to you to be some pipe dream, think again: Slow Money's strategies have already led to eighty-six completely local investment deals during the last three years. Over the same time period, more than $19 million has been raised for one hundred and thirty nine food micro-enterprises. These initiatives have involved Slow Money-style investors from thirty-six states and nine countries.
Kerry Nelson of Ploughboy, Inc. in Salida, Colorado runs just the kind of independently-owned business that Slow Money's Soil Trust is hoping to help. A hybrid of a grocery, community kitchen and local food distribution hub, Ploughboy features some two hundred and fifty food products from seventy-five producers, 80 percent of whom farm or ranch within one hundred miles of Salida.
But to get such a business launched in a small Western town was no small feat. Kerry reminded those in attendance at the Sustainable Settings farm in Carbondale that Salida is no Boulder or Aspen when it comes to mobilizing capital for green businesses. Salida sits in Chaffee County, Colorado, where per capita income for non-migrant residents has ranged between $19,430 and $24,032 over last 5 years. Even in the best of times, recent household incomes have averaged only $$34,368, with multiple family members working out of the same house, garage or workshop. Kerry Nelson put it bluntly:
"The town I work in is drastically different than most other places. One thing that really surprised me was how different it is to start a business in a small place."
But Ploughboy has not merely done well for itself; its community kitchen has begun to spawn other micro-enterprises, like an already successful artisanal bakery. The question that consumes Kerry Nelson is whether such efforts can gain momentum through Slow Money-style food financing strategies.
Earlier in the year, Woody Tasch keynoted a similar gathering in an unlikely spot--the Community Center of Elgin, Arizona--population 161--far from the Bostons, Santa Fes, Seattles, Durhams and Berkeleys where such "locavesting" discussions are all the rage. But within two hours of the meeting being launched, residents of three border counties spontaneously pledged $150,000 if they could be matched with farming, ranching and food processing innovators within the same region.
That's good news for Santa Cruz County, where the official unemployment rate in its county seat of Nogales is twice the national average, and the unofficial rate (including undocumented residents born in Mexico) may be three times as high as that countrywide indicator. It's not surprising that Nils Urman of the Nogales Community Economic Development Corporation took a keen interest in what four other southern Arizonans were proposing at the Community Center as projects that might create jobs and produce food in or near Nogales.
Urman and I recently facilitated the "Pitching to Peers" economic showcase featuring a half dozen farmers, food processors, nurserymen and ranchers at the first-ever Border Food Summit, September 16th to 18th on the outskirts of Nogales. Food producers, marketers and working lands restiorationists from the border counties of Texas, Arizona and New Mexico told their stories to some 250 attendees, hoping to attract marketing assistance, loans and equity to keep their dreams afloat. Their micro-enterprises varied in scale, structure and products--from Arevalos Family Farms, Borderland Restoration L3C, Double Check Ranch and Good Food Allies, to La Semilla Food Center, Rezonation Farm Institute for Natural Beekeeping and Sleeping Frog Farms. But all of these operations had one thing in common: they were intent on rediversifying food production through novel means of financing their work.
Although there is no way to predict the long-term benefits of the Border Food Summit, one thing is for sure: many in attendance are "hungry for change" in our food system, and in our economic system at large. With the food production of over 1500 rural counties damaged by this summer's drought, something will need to change to keep food prices rising beyond the reach of America's most food insecure families, the ones who often live in the very communities where our food is being grown.
Gary Nabhan, a pioneer in the local food movement, is co-editor of the 65 page report, Hungry for Change: Borderlands Food and Water in the Balance, now available on line at several websites, including www.garynabhan.com. Register or read more about the Border Food Summit at www.swmarketingnetwork.org.
What’s to love about food co-ops? So much! Co-ops have a cool way of doing things differently. They’re people working together for better food, stronger communities and a healthier world. And cooperative grocers are making a big impact. A new study, Healthy Foods Healthy Communities: The Social and Economic Impacts of Food Co-ops,* quantifies the impact food co-ops have as compared to conventional grocery stores. The study’s compelling results demonstrate the many ways that food co-ops do well while doing good.
Unlike their conventional counterparts, co-ops are owned and governed by member-shoppers and rooted in principles like community, voluntary and open membership, economic participation and cooperation. Because of these principles and practices, food co-ops inherently serve and benefit the communities where they are located. For example, the study finds that for every dollar spent at a food co-op, $0.38 is reinvested in the local economy compared to $0.24 at conventional grocers.
Supporting Local Food Systems and Sustainable Foods
Though “local” has popped up in conventional grocery stores in recent years, retail food co-ops are leaps and bounds ahead of the pack. Where conventional grocers work with an average of 65 local farmers and food producers, food co-ops work with an average of 157. Likewise, locally sourced products make up an average of 20 percent of co-op sales compared to 6 percent at conventional stores.
Years after creating the market for organic foods, co-ops are still the place to find them. Of produce sales at food co-ops, 82 percent are organic, compared to 12 percent for conventional grocers. And, organics make up 48 percent of grocery sales in food co-ops, compared to just 2 percent in conventional grocers.
Local Economic Impact
The economic impact that a grocery store has on its local economy is greater than just the sum of its local spending, because a portion of money spent locally recirculates. For example, food co-ops purchase from local farmers who, in turn, buy supplies from local sources, hire local technicians to repair equipment, and purchase goods and services from local retailers. To some extent, conventional grocers do too, but the gap is still significant. For every $1,000 a shopper spends at their local food co-op, $1,604 in economic activity is generated in their local economy—$239 more than if they had spent that same $1,000 at a conventional grocer.
The average co-op earning $10 million per year in revenue provides jobs for over 90 workers. In total, 68 percent of those workers are eligible for health insurance, compared to 56 percent of employees at conventional grocers. Co-op employees also earn an average of nearly $1.00 more per hour than conventional grocery workers when bonuses and profit sharing are taken into account.
Grocery stores—co-ops and conventional alike—generate a significant amount of waste. What sets retail food co-ops apart is what they do with that waste. Co-ops recycle 96 percent of cardboard, 74 percent of food waste and 81 percent of plastics compared to 91 percent, 36 percent and 29 percent, respectively, recycled by conventional grocers.
* The study behind this report was commissioned by National Cooperative Grocers Association (NCGA), the organization of grocery cooperatives that brings you this site. NCGA partnered with the ICA Group—a national not-for-profit consulting firm with expertise in cooperatives, economic development, and business research.
This year’s Social Venture Institute Hollyhock brought together a number of leaders working on building local economies, from Business Alliance for Local Living Economies (BALLE) to Simon Fraser University’s (SFU) community economic development program.
We were curious to know what local economy means in today’s globalized world, and what these front-line localists are seeing that gives them hope.
What follows is an edited version of our conversation with four inspiring women.
Katja Macura, digital and business strategist, board member of LOCO BC
Why is the local economy important to you?
When I think about my own community, my family and friends, the people who I interact with in my community, I want them to be successful, so I will go to their store and buy their stuff. I think it’s also important because I want to have convenience where I live.
I think there is a role for global corporations or globalization as long as we always recognize that things come from somewhere, ideally there are lots of local economies, and we don’t have to get hung up or paralyzed if you can’t find something local. Instead, we can think bigger picture, like how does this business support people to have good lives in their community all along the way?
Companies can struggle, especially smaller companies trying to balance local economy and the need to grow. So, how do you fit the values of local into your growth plans and how do you interact with your suppliers even if they’re not local to create lots of thriving communities? That (approach) would lead to more global resilience.
We can’t really talk about localization without talking about globalization. It’s not talked about anymore, but 20 years ago when we were talking about globalization some of the things we were really afraid of was that people would end up feeling isolated, and end up feeling like they didn’t belong to their communities because they weren’t having those market exchanges anymore, which are also social exchanges.
That’s now happened, that has passed, there is an intense concentration of power, and a lot of people don’t feel like they have control over their personal lives, and almost everyone feels like they don’t have control over their economy.
For me, the local economy movement is so incredibly important (as a response to this).
One of the ideas I’ve heard that really resonates with me is a global exchange of ideas and knowledge, and local exchange of products and services, and to me that’s a very hopeful and pragmatic idea.
California just passed a cottage food industry bill, which means people can use their home kitchens for commercial food processing. This is completely amazing, because it means new entrepreneurs can enter the market with very little to no start-up costs. So this is a huge thing in economic development, by removing barriers through policy.
Co-operatives and credit unions also give me hope. Co-ops circulate money in the local economy, they’re local, and studies show they last twice as long as other forms of business.
Amy Robinson, founder of LOCO BC
Tell us why you wanted to form LOCO BC?
Mine is a personal story about working in sustainability and business.
Talking about social entrepreneurship is often about green business. In the whole sustainability world, as it became more mainstream, nobody was really talking about ownership and community — the social and economic side, and theBALLE movement helped open my eyes to that.
I started LOCO and I think people are getting it because it’s about community. We’re trying to educate them but it’s not by bringing them to workshops. I talk a little about why you should join LOCO but in some ways it’s sort of an experiential thing, you’re going to become part of our local economy because it’s about community and about relationship.
For me, a lot of it is our society wants to divorce money and values. We think it’s a good thing that you endorse money and values, and I think it needs to come together. I think a lot about how that creates power in the world.
We really are trying to bring together people and have fun. We launched our membership in 2011, and we have 100 members. The movement is growing a lot.
Can you define local economy?
For me, it’s about businesses that are creating value in their community. We don’t have a tick box for exactly what that means; it’s about local employment, its place based.
It’s also about an economic reality that is global. We don’t have all the answers, we’re trying to figure out how we define local, and support local suppliers but also recognize that a lot of stuff is made overseas.
Even big corporations can help create benefits in our community. It’s about creating wealth, rather than just making money. It’s making sure the profits are spent locally and as much as possible we’re supporting local industries.
What are you seeing in the local economy movement that gives you hope?
For six years, I was the executive director of the Santa Fe Alliance, a local living economy network (in Santa Fe, New Mexico) with about 600 members. We were started by a group of really concerned citizens after 9/11, after the event that rocked our world, it rocked us to our core. It was a group of concerned people who came together and said "How can I do something in my own backyard?"
The (George W.) Bush administration was saying “spend, spend spend,” and these folks said we need to spend, spend, spend, but do it locally, and do it mindfully, and that’s where we started in 2002. It’s now the 11th anniversary of 9/11, and I’ve seen this movement go from a small core group of really concerned conscious citizens moving it, to businesses embodying it, to communities truly embracing it, and local leaders emerging within it.
I think the biggest challenge we see to the local economy is policy. If we can work on changing some policies on the local, state/provincial and federal level we can have more direct impact on the ground. I think we need to start thinking about better incentives for locally-owned businesses, I think they need a voice, a tax credit or job credits.
On the upside of that, I think that we have a lot of business owners who are engaged in these issues, and in my community I am seeing a lot of business owners get involved and lobby their own municipal leaders, and state leaders. I think the deeper we go with business owners who have a stake in their community, the better off we are. I feel like the business owners are the way to go.
And the hope for me, that I see, is the growth is happening, and we’re starting to see some actual results. There are studies coming out, and we’re starting to connect people with meaningful work in local jobs, and we’re seeing communities really galvanize around this idea, and we’ve moved so far beyond “buy local” because we can’t just save the economy by spending, spending, spending — we’re changing entire culture.
Upton Sinclair’sThe Jungle , a grim portrait of pestilence and inhumanity at a fictionalized Chicago meatpacking factory, lent new meaning to Otto von Bismarck’s famous remark that it’s better not to see how sausage is made. But these days, there are new manufacturers—retro-entrepreneurs who craft things by hand—who just can’t wait to tell you how their sausage is made.
“The pork comes from Mosefund Farm in New Jersey. The beef is from the Pastures in New York state. The duck is from Hudson Valley Duck, up in Sullivan County. And the rabbits are from KNK Poultry in Edmeston, New York,” recites Scott Bridi, the 36-year-old founder and owner ofBrooklyn Cured , a two-year-old sausage-making startup. “We’re all about utilizing all parts of the animal, not just the pork chops and the prime steak. So we’re using shoulder meat, we’re using trim, and we’re transforming it into something awesome.”
Bridi didn’t set out to be a businessman. A theater major who left a career in publishing in search of something more psychically satisfying, he was drawn to the food industry by his creative impulses, not the profit motive. But he is in some ways the new face of American manufacturing.
Try as the Obama administration might, the bulk of the blue-collar factory jobs that have been migrating overseas for decades aren’t coming back. Those companies that do relocate their production lines stateside in the years to come are more likely to staff them with robots than with humans. To the extent that there will still be people producing things in the United States in 2020 or 2030, many of their businesses are likely to look something like Bridi’s—small, personal, and devoted to a niche market that will pay a premium for uniqueness and authenticity.
The question is whether these shaggy liberal-arts entrepreneurs will usher in a new era of middle-class prosperity or remain bit players in the nation’s economy, cloistered in urban hipster havens like Brooklyn, San Francisco, and Portland. That depends on two factors. One is whether those enclaves’ obsession with locally sourced, sustainably produced goods—caricatured hilariously on the TV showPortlandia —catches on and sticks in Middle America. The second is whether the masses will be able to afford it.
Brooklyn’s example offers reasons for both hope and tempered expectations. The borough, once home to sprawling factories like the Domino sugar refinery in Williamsburg and the Eberhard Faber pencil plant in Greenpoint, has been reshaped in the past two decades by an influx of artists and yuppies fleeing Manhattan’s stratospheric property prices. Many still commute to jobs in the city, but others have seceded from the professional ranks to start their own small, local enterprises—making jewelry, crafting furniture or props for TV sets, roasting coffee. Their products have both fed wealthy New Yorkers’ demand for custom-made, non-mass-producible goods and created new demand for those items among the middle class.
Take Bridi’s sausage business. He grew up in a food-loving Italian family. But had he not lived in today’s Brooklyn, where “artisan” has become an honorific, it’s unlikely it would have occurred to him to leave a stable office job to become a cook. And to make the leap from cook to entrepreneur required a support system and distribution network that didn’t exist in the city a decade ago.
Startups like Bridi’s usually can’t afford their own factory or retail space, and unlike Silicon Valley tech ventures, they’re unlikely to attract big investors. Instead, they do as starving artists do, sharing space in converted factories and warehouses and banding together to sell their wares at farmers markets and street fairs. Bridi produces his sausages at a shared commercial kitchen space in Brooklyn’s Sunset Park neighborhood and sells them at weekly events like theNew Amsterdam Marketin Lower Manhattan andSmorgasburg , a “flea food market” in Brooklyn.
In relatively short order, Brooklyn Cured has built up a local following and earned favorable press inlocal food blogs(another part of Brooklyn’s artisan ecosystem). Bridi now has one full-time and three part-time employees, and says his business continues to grow. His meats are sold at specialty food stores and restaurants around the city, plus five farmers markets.
That’s well and good for Brooklyn, but what about the rest of the country? Not every city, after all, has such a concentration of wealth and expensive taste as New York. There are artisan entrepreneurs in former Rust Belt hubs likeDetroitandSt. Louis , sure, but it’s unclear whether they’ll be able to build up the critical mass needed to form a Brooklyn-like local ecosystem. And people in Atlanta and Phoenix whose mortgages are underwater are probably going to be sticking to Oscar Mayer sausages for the foreseeable future.
On the other hand, there are a few big businesses whose success points to a broader, national trend toward locally sourced foods and crafts. One is Austin, Tex.-based Whole Foods, whose growth into a major national grocery chain has created mainstream demand for locally grown, organic foods. Another isKickstarter , the crowdfunding site that allows startups to raise money online from donors. Similar sites will allow supporters to actually buy shares in small private companies once the JOBS Act kicks in next year.* (As I explained in April, local businesses along the lines of Brooklyn Cured are likely to beamong the main beneficiaries .) And a third isEtsy , the Brooklyn-based online marketplace for handcrafted goods—a sort of eBay for artisans.
Etsy’s economic potential would seem to be constrained by its rules, which prohibit commercial vendors from selling their wares on the site. Still, vice president Matt Stinchcomb tells me that more than half a billion dollars changed hands on Etsy last year, a figure the company has already matched in 2012. And its online community has spread far and wide from its Brooklyn roots, helping to fuel the success of people like clothing designerNatalie “Alabama” Chanin . In a throwback to the garment business’s pre-industrial roots as a cottage industry, Chanin crowdsources her production by hiring laid-off seamstresses from her Alabama hometown. Each garment is numbered and signed by the woman who made it.
Of course, any given artisanal manufacturer can only grow so much before it ceases to be artisanal. Etsy is already grappling with how to accommodate sellers who have become so successful on the site that they’ve incorporated and hired full-time workers. And Brooklyn Cured may make some of the tastiest meats in town, but if a business like Bridi’s expands too rapidly it will lose the homespun appeal that made it successful in the first place.
He’s aware of the conundrum. Asked how big Brooklyn Cured would be in his wildest dreams, Bridi says, “I’ll be honest, I don’t know. … We’ve been contacted by Whole Foods, and that could be a good thing. But I don’t know yet if that’s a good thing. I do know I don’t want to have a factory of nameless, faceless employees. I’m not going to wake up in the morning excited by that.”
From a purely economic perspective, Bridi’s attitude might be inefficient, as my colleague Matt Yglesias haspointed out. For artisan manufacturing to drive a real economic recovery, it would require a lot of local companies like Brooklyn Cured to turn into national producers like theTillamook County Creamery Association , or even multinationals like Starbucks. That’s possible, of course. But if that doesn’t happen—if the main effect of the artisan trend is simply that more people end up making things they’re proud of and selling them online or at the local market—at least we’ll be better off than we were in the time of Upton Sinclair.
This month, Slate is exploring how to reinvent American manufacturing. We'd like to hear your best ideas for that. Please submit them here.
Correction, Sept. 27, 2012:This article originally stated that Kickstarter would allow for small-scale investments in startups once the JOBS Act goes into effect. In fact, Kickstarter has said that it will not change its policies, which allow for donations but not equity investments.
When most of us think about cool, alternative companies, we think small.
But one of the coolest companies I’ve ever found is a huge company – the largest department store chain in the U.K., with 35 department stores and 272 grocery stores. Its revenues are more than $13 billion, bigger than Monsanto’s. It’s 100 percent owned by its employees.
And get this: Its stated purpose is to serve employee happiness.
The John Lewis Partnership Values Fairness
The company is the John Lewis Partnership, which I write about in Owning Our Future: The Emerging Ownership Revolution. The book is the story of my quest to find places where a new kind of economy is bubbling up – what I call a “generative economy,” one that isn’t about maximum financial returns for a few, but about building a world where we all can thrive.
Ownership designs form the foundation of this economy. And what I found is that generative ownership isn’t just about small, local, founder-run companies. It’s possible to keep the soul of these companies alive even at large scale, long after the founder is gone.
Values are at the core of every business. The John Lewis Partnership is built around the value of fairness. The founder who created its democratic structure a century ago, John Spedan Lewis, believed that traditional ownership was unfair because dividends paid to shareholders for doing nothing were obscene when workers barely earned subsistence wages.
He decided to make service to employees the purpose of his company.
To see if this firm could possibly be for real, I visited a few of its stores—like the Waitrose grocery store on King’s Cross in London. I met a meat counter worker wearing a white linen Fedora and a bow tie – the most dignified butcher I’d ever met. He told me about his sister, Carol, who also worked there and had just been diagnosed with cancer. The company had been really good to her, he said. “There’s a budget set aside for people like this. She’s been off for three months, and they’re holding her job.”
Committees for Financial Assistance, Partnership Councils & Pensions
When employees at Waitrose and other JLP stores face a family emergency, they can seek a grant or loan from the Committee for Financial Assistance. That committee, composed of and elected by employees, controls a special budget, making decisions outside the chain of management. Help from that fund — plus the commitment to hold Carol’s job — took “the money side of worries away,” John said.
I also visited the department store Peter Jones, entering through an arched doorway with the legend inscribed in stone, “Here is Partnership on the scale of modern industry.” There I encountered a mid-level manager named Harry Goonewardene, who served on the Partnership Council, a governing board that is elected by employees and works alongside the Board of Directors.
He carried himself with an air of self-possession that was arresting. He was impeccably dressed in a dark suit and had the dark olive skin of someone from the Middle East — from Sri Lanka, I was later told. He lacked that harried, pinched sense one often sees among floor managers at other low-price retailers. I asked him what the Partnership Council discussed, and he said that at the next meeting, they’d be looking at an adjustment to the employee pension plan.
Each year, the company contributes to pension accounts a sum not far below employees’ annual pay; employees aren’t required to contribute anything. But they aren’t eligible until after five years of work, and people wanted that shortened to three. “A committee has been looking at this, and we’ll take it back to constituents and present a plan,” he said.
By “constituents,” he meant the workers themselves.
Employee Ownership, Profit-sharing & Bonus Pay
John and Harry are among the 76,500 employee-owners of the John Lewis Partnership. If the ultimate perquisite of being an owner is the right to pocket some of the profit left after the bills are paid, then these employees are genuine owners.
Each year, after the firm sets aside a portion of profits for reinvestment in the business, the remainder — generally between 40 and 60 percent of profit — is distributed to employees. One clerk named Emma told me her recent bonus was 2,000 pounds [$3,264]. “I spent some on a holiday in the Canary Islands,” she told me. “It was my first holiday in four years.”
Every employee at JLP, from shop clerk to the chairman, gets a bonus representing the same percent of individual pay.
As one manager told me, “In the worst year, it’s 8 percent, in the best year, 24 percent” of salary. Last year, the annual figure was announced with fanfare on the floor of the company’s store on Oxford Street, where a partner held up a poster bearing the numbers “18%” and employees clapped and cheered. That bonus amounted to about nine weeks pay.
What’s revolutionary about the John Lewis Partnership is that employees are not legally outside the firm, negotiating with it. They are the firm. They’re members of the firm: they’re owners.
Harbinger of the Future
Imagine a day when more and more firms are employee-owned.
This is more than a fantasy. With the pending retirement of many Baby Boomer-owners, we’re approaching a wave of sales of closely held companies that’s projected to go on for 20 years – with 750,000 or more of these businesses sold each year.
According to a study by White Horse Advisors, only one in seven of these company founders expects to pass the business to family. An age wave of ownership transfer is coming. With the right tax incentives and support structures, we could see a massive increase in employee ownership in coming decades.
Now that would be a different kind of economy: a generative economy, one that might offer dignified jobs for all.
We live in a competitive world. Yet much of our competition is team-based, requiring cooperation among team members. The biologist Edward O. Wilson describes the resulting tensions as a central dilemma facing all social species – humans as well as ants.
Economists haven’t quite caught up with the implications. Further, they haven’t quite caught on to the reality that cooperative enterprises play an enormously important role in our economic system, one that is likely to grow in decades to come.
Whether set up as worker-owned businesses, consumer memberships, financial institutions or marketing/distribution networks, co-ops pursue more complex goals than maximizing profit. They often put a high priority on democracy, education and the sustainable development of their communities.
Since 1930, cooperative enthusiasts have proclaimed October National Cooperative Month to help publicize their efforts. This year, the United Nations proclaimed the International Year of Cooperatives. The month that begins today promises a grand cooperative convergence, with a number of important events scheduled worldwide.
From Oct. 6 to 11, the city of Quebec will play host to an International Summit of Cooperatives, informally described as the “Davos of the Cooperative Movement,” a reference to the annual gathering of the global elite officially known as the World Economic Forum in Davos, Switzerland.
In 2011, the membership and entrance fee for the Davos meeting was $71,000. Registration for the 2012 International Summit on Cooperatives is $1,300. The conference program reveals a lineup clearly aimed at the international business community. The list of sponsors is topped by the Canadian government and features many big names, including Microsoft, I.B.M., Google, McKinsey, Ernst & Young and Deloitte.
The summit Web site challenges the common assumption that co-ops can’t grow out of small neighborhood niches, contending that the 300 largest cooperatives worldwide (including the famous worker-owned Spanish manufacturing concern Mondragon) generate total revenue equal to $1.6 trillion, “an economic power equivalent to the world’s ninth-largest economy in 2008.”
The summit also offers a cooperative leadership training program, particularly significant since most business/management programs give this topic short shrift. The only institution in North America offering a master’s of management specifically for cooperatives and credit unions is St. Mary’s University in Halifax, Nova Scotia.
Even in the United States, known for its huge agribusiness corporations, cooperatives account for 80 percent of dairy production. And they are moving into the ice cream sector.
In 1999, several former Baskin-Robbins franchisees who were cut loose by the parent company decided to form their own franchise operation, the Texas-based KaleidoScoops cooperative. They offer their owner-members relatively low start-up costs along with the opportunity to shape company policy.
I e-mailed them last week to ask how they plan to celebrate National Cooperative Month. Greg Ziolkowski, the president, reported that they are planning a members’ convention in Dallas to go over financials, marketing plans and new ideas.
Cooperatively scooped ice cream seems like an idea that should make both humans and ants very happy. I hope they’ll be scooping some at the international summit.
We also want you to know a bit about us: the company and people behind these services. Founded in 1998, we work to champion the success of small organizations – businesses, associations, and nonprofits – by providing easy and affordable ways to build successful, lasting relationships with customers, clients and members.
What does this mean for us in practice? It’s about expert support and education. We've got free local seminars in over 20 markets across North America and the UK, an online learning center, and free personal coaches to help you become an expert in online marketing.
It’s also about the power of the network. We believe in the power of associations and have a number of partner programsto support groups like BALLE networks.
We’ve got a lot to celebrate at BALLE right now: new web and social media tools that will help us spread Localism far and wide, new members and new energy, and we’re sending off the first group of Local Economy Fellows back to their communities to share knowledge, inspire passion and continue to transform their communities with what they learned while part of our two year Fellowship program. We feel immensely proud of the work, the accomplishments, and the people we’ve grown close to over the last twenty-four months.
We knew these were pioneers in their own right, but together — combined with shared resources, ideas to try in their own neighborhoods, and peers to conspire with — they knocked our socks off. New funding, national media attention and even our first national political candidate — these innovators wowed us daily with their passion, ideas, and impact. The success of this first cohort has led the BALLE local economy fellowship to become the cornerstone to our work connecting local leaders in this movement and, what we believe, is simply one of the fastest ways to accelerate localism.
When we brought together a dozen localist leaders from across North America to learn, connect and share we had no idea what kind of transformation they (and we) were in for. Prior to the Fellowship, from Phoenix to Philadelphia, BALLE's most innovative and pioneering leaders were working in isolation. Even though they were members of the BALLE community, they were siloed in their regional work. These leaders and their organizations were making tremendous impact in their communities — changing consumer behaviors, improving public policy, creating good green jobs, training new farmers, and building relationship economies. But, they were reinventing the wheel each time. They didn't have peers to go to for advice and support. They were going it alone. We hoped that by connecting these leaders, they would be stronger together, advancing their individual work and the localist movement. And we were right.
In just the first six months of our pilot year, six programs were replicated community to community, more than $500,000 in new funds were raised as participants shared program proposals and made introductions for each other, and leadership development empowered some participants to seek advice and others to show more strength.
Most importantly, the fellows, who had been working in isolation, had found their peers — and many of them didn't even know they had peers! Now they see themselves as something bigger than just their organization and the community it serves. They see themselves as a team and support network, working together towards a common goal of real prosperity for all.
A few years ago, I co-authored a post here that featured the small town in which I grew up in Pennsylvania. I tried not to be nostalgic, but the town did have many of the design features that help define sustainable, smart growth: a walkable street plan with short blocks and lots of alleyways, some moderate mix of uses and densities, easily accessed daily destinations like schools and libraries, parks and playgrounds, a grocery store and small restaurants, and a lot of greenery. All of these features could have been strengthened, but all in all, not a bad small town model.
A tale told too often
What I didn’t write about was local business disinvestment and downtown decline. I think it’s a cautionary tale, and unfortunately not a unique one across America.
For seventy years, my family ran a small business in the town just across the river, where most of the local commercial activities were located along the half mile-long Main Street. These included men’s and women’s clothing stores, shoe stores, jewelry stores, hardware stores, Woolworth’s and J.C. Penney’s department stores, optometrists, a movie theater, drug stores, and the like. Often, professional offices or apartments were located on the second or third floors. There were strip shopping centers a few miles away, but for the most part, the town thrived. Several things happened by the late-1960s that changed all that and quite deeply (and, as it turned out, fatally) challenged that model, spinning small downtowns everywhere into decline.
First, the interstate highway system was completed. No longer did people need to travel secondary roads that took them through commercial areas in small towns to get somewhere else, and the routes out to more “open” land were made quicker. So open land was where the newest thing landed like a space ship: the enclosed mall. Where better for shopping than air-conditioned, fully weather-protected spaces that pumped in canned music and canned fountains, where one could find national chain stores – and better yet, tons of free parking?
Second, local demographics and tastes or “lifestyles” changed. In many small towns there began an outflow of newly educated baby boomers looking for brighter lights and better jobs, leaving an aging population behind. At the same time, in the 1960s and ‘70s suburbia exploded, even in small towns. Why live in older housing stock with a neighbor just 30 or 40 feet away, when one could buy a nice, new house on a bigger new lot, in a bright new subdivision beyond the edge of town? And once living out there, wouldn’t it be easier just to drive out to the strip shopping center or the mall, rather than go into town and hassle with parking, in order to get to the drugstore or buy a new shirt?
Finally, local economies changed. Many small towns that had depended upon a local industry or natural resource as their biggest economic component and employer (think steel, coal, textiles or small manufacturing) saw the economies of such sectors shrink or the industry relocate elsewhere where labor or capital were cheaper. At the same time, big banks were swallowing small local ones, changing local financial relationships that had lasted fifty years or more.
The results of all these trends, taken together, included newly un- (or under-) employed workers, shrinking small town local economies, and struggling small businesses that had trouble obtaining operating loans and credit. Better to try to sell out if one could, or maybe just go out of business.
As noted above, this is a tale told often, in perhaps thousands of small towns across America. It affects more than just the economies of these places, as mall-sprawl, in-town disinvestment, and highways and new subdivisions have created spirals of new land development that impact farm, forest, water, air, greenhouse gases, and socio-cultural stability. But is there any way to reverse course? Can we – should we – today try to take advantage of all that “sunk capital” in the form of infrastructure, all those historic buildings, the social and cultural connections and advantages offered in these kinds of communities, their “good bones”? Well, I’m not one for throwing stuff out (just ask my wife). Indeed, the designs of many of these places seem pretty darned close to the sustainable designs many of us now embrace.
The problem, however, is how. People disinvested in these downtowns for a reason - actually, for the multiple reasons detailed above. Can these places get investment back? The answer for some is probably not. If a natural resource-based industry stopped producing, the reason was likely that the resource (in my own instance, Pennsylvania hard coal) was mostly played out (and so, unfortunately, was the scarred, strip-mined land above and around it). Certain other industries (for example, textiles) went south for a while, then to Central America and Asia. American steel mills are shadows of their former selves.
After all, by mid-century, there will be another 100 million Americans. While there are fewer of the big industrial giants than there were before, there may be medium or small ones looking around for a place to land. The U.S. still has a $15 trillion economy, and more than one fifth of it is in manufacturing. There are some 30 million small businesses in the U.S. Then, of course, there is the rise of the service and “knowledge” businesses, which can locate pretty much anywhere.
Using existing assets to leverage renewal
What can small towns do to increase their economic competitiveness, to attract industry and new businesses to town, or to recreate themselves? Should or can they do things differently this time, so as to protect themselves against another round of disinvestment in the future as lifestyles or business forms and profiles change, or the next big (commercial) thing lands with a thud?
Focusing on community assets is the first key to attracting investment attention. Is there a river to which the town can be better connected, or are there other natural resources nearby to be enjoyed – mountains, lakes, hiking and nature photography, fishing and hunting – which can help “sell” the town, and to which transit, biking, or walking connections can be better made? Are there solid buildings ready to be re-occupied, maybe in imaginative ways? Are there good educational or medical resources nearby -- a school, a college, a technical institute, or a hospital? These are community assets which might be leveraged – maybe even in imaginative financial ways (see further, below).
Changing zoning to help make the town more commercial- (and mixed use)-friendly can also be beneficial: are there businesses not currently allowed “by right” which should be? Can density/intensity downtown be boosted a little, and some additional housing be accommodated? Can residents of the area be “invited” back downtown in some way? Once the regulations are right, it’s easier to reach out to developers or market the town to business brokers.
In their view, just doing the same thing as the last time around leaves towns that have already experienced commercial and economic decline vulnerable to yet another wave of disinvestment when the newcomer manufacturers decide a few years later, based on the bottom line and the near total mobility of capital these days, to pull up their stakes and move where the grass is even greener – or at least cheaper - yet again.
Instead, these authors suggest it may be time to opt for a more sustainable approach to reinvestment and commercial renewal. They offer a variety of solutions, some of which apply to larger communities, cities and regions in distress. But one idea worthy of note here is that a community of any size could develop a “green community wealth building” approach (my emphasis). This strategy would look to create forms of business ownership anchored directly in the community itself.
This approach would use financial investments directly provided by local private institutions (for example, the so-called "eds" and "meds' - the hospitals and specialty clinics or colleges and universities in town or nearby, though this could also apply to key banks or a town’s largest businesses), as well as public entities, to foster locally created, green businesses with different forms of ownership and not the usual business objective. From non-profits and employee-owned firms, to public enterprises and neighborhood-owned businesses, such enterprises could produce goods and services in town, in sustainable ways. There may even be charitable foundations in the region or state willing to help jump-start such activities, with technical start-up assistance or investment.
All of the above takes some hard thinking in small towns that find themselves today in pretty rough circumstances. It also takes good planning, intensive outreach, and steady leadership by politicians and the private sector. Finally, it takes good old fashioned salesmanship and marketing – and ultimately, not a little luck.
But I say it’s all worth it.
Of course, not every small town commercial center can come back; some may be just too far gone, or unfortunately just don’t enjoy the circumstances (location, human capital, or proximity to even modest investment opportunity) that can help them move forward. On the other hand, many still do have an awful lot to offer, in both urban form and just plain human possibility. To them, I wish all the best - because they just may be among the best places for green community-building in the future.