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Woody Tasch: Complete Interview

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global oneness project Woody Tasch: Complete Interview We're pouring billions of dollars of capital into a leaky vessel in order just to keep everything from collapsing-- --but we don't really know what the fundamental problems are. This is the first time that I can remember-- Woody Tasch - Point Reyes Station, California - Author, "Slow Money" --the first time, maybe ever, but certainly during my lifetime-- --that people are asking what could be fundamental questions about the future of capitalism. There was always this assumption that economic growth and technology-- --and rising standards of living would just kind of pull us through whatever the problems were. Now, all of a sudden, this latest shock, I think, is the first time we're getting serious questions about the limits of economic growth-- --kind of the limits of our impact on the planet. And the fact that it happened through this one speculative bubble called subprime and the CDOs and all that-- --it really doesn't matter what it is that triggered it. It was going to happen sooner or later. I guess that's a long way of saying it. I think this has been brewing for several decades. This tremor that we're feeling right now, it's hard to know how deep it's going to go. But I think it's the beginning of a real discussion, let's say, over the next decade-- --over what we have to do to fix the structural problems. And one of those structural problems is the speed with which capital is circulating around the planet. And that speed is, in itself a symptom, it's just made possible by the disconnection of capital from social and environmental relationships. So if you sever those relationships, money is free to zoom around as fast as anybody can make it go-- --until the chickens come home to roost. There are 2 aspects to the term slow money. The first one for people who have heard of slow food, they kind of immediately glom onto that part. And slow food, for those who don't know, is a beautiful social movement that started in Italy about 20 years ago-- --in response to McDonald's opening in Rome. There's now about 85,000 people who belong to Slow Food International. It's an NGO that basically is promoting small-scale organic, artisan, heirloom-- --there's a whole series of nested values around biodiversity and food tradition-- --and kind of using food as a vehicle for reconnecting people to their communities and bioregions. It's a really beautiful movement. In the U.S.--I always hasten to add--it's just starting to really be understood in its full ramifications. In the U.S., it has tended to, unfortunately, be pigeonholed as a kind of a white tablecloth, a little bit more elitist-- --people who have the money to buy food and can tell where their food came from, but it's a lot deeper than that. I think over the coming years it'll become clear in the United States. So "Slow Money," if you just take that piece, is just the obvious, "How do we create capital flows that support that?" It's one thing for a group of people who can afford to buy food in certain restaurants to do it-- --but the real challenge for us as a culture is to steer meaningful amounts of philanthropy and venture capital and other forms of capital-- --to support local food systems, small-scale, truly diversified--not false diversification but truly diversity-promoting agriculture in this country-- --and I won't rattle the numbers off now unless you make me, but the numbers are rather astonishing. You're talking about 0.1% of this and 0.5% of that of budgets-- --that are going to anything remotely relating to small-scale sustainable agriculture in this country. We're still 99.99% invested in industrial agriculture at a very large scale. So that's all the slow food, slow money piece. The other part of the slow and money piece is really just the idea that the speed of capital is, by itself-- --above and beyond just the ramifications for food systems--a critical issue. And so if you look at things like--it's really across the board, but take one indication. In 1960 there were 3 million shares a day traded on the New York Stock Exchange--3 million with an "M." Today there are, depending on how you count, about 5 billion. So it's thousands of fold increase. During that same time the population has gone up 2½ times, let's say-- --and GDP has maybe gone up--actually I should know this number, but let's just pick a number--10 times, let's say. That's probably close. Maybe 15 times. But the rate of exchange has gone up thousands of times. So the speed of capital has, if you think of a nuclear explosion and you just imagine that going on in capital-- --there's just been a proliferation of capital instruments, speed of capital. $3 trillion a day goes through currency markets. I think a couple of trillion dollars a day goes through fed wires. I mean, there's just many, many trillions of dollars a day zooming around the planet. So the idea of slow money in that context is just raising a much broader fiduciary question-- --which is if money is speeding around so fast, should we be surprised that we don't know what the hell it's doing-- --and that the complexity has gotten way out of control? So it's a much broader question than just food systems when you look at it that way. Another way of saying that a little more simply is that the bifurcation of social purpose and so-called fiscal prudence is at the root of the problem. In other words, if our goal as a culture is to make as much money as we can so we have more to give away-- --and hopefully clean up the problems with the philanthropy, that may have made sense in the 20th century. You could argue that it did. But in the 21st century, that idea of just letting money go as fast as it can-- --taking some of the surplus and trying to clean up the problems is no longer appropriate for the 21st century. We have to find a way to invest with much more realistic return expectations for the benefit of future generations. So you can see 2 big kind of parts of the slow money concept. I think the biggest opportunity, if you want to look at it in the positive-- --that we have right now is to radically change people's awareness of the purpose of capital markets. So if you think of the capital markets we have now as having started before the industrial revolution-- --having started when new continents were being explored-- --and the goal was to create vehicles that would allow investors to pool capital and have some protection-- --that made a lot of sense in 1500 and 1600 and 1700-- --when continents were big and the path to progress was to explore. If you kind of fast forward to where we are now-- --the net results of that are markets that are organized to promote consumption, innovation, risk-taking-- --and all of those things are dependent on extracting resources from the earth. Again, there's a lot of different ways to talk about this. A lot of people have talked about the subsidy of stored sunlight and fossil fuel-- --and we're extracting it at a horrific rate. We're taking fossil fuel or stored sunlight out of the planet each day. I think the number is each day we're using 10,000 years or 10,000 days-- --it's a lot, whichever one it is, to store. So we're using up this subsidy in the form of fossil fuels. So our capital markets are inextricably linked to this. The idea that that's the only way to make money is just kind of a notion that arose because no one ever thought of anything else. We didn't know that cigarette smoking caused cancer, we didn't know there was such a thing as smog. All these different things that happened during the 20th century we learned as we went. Well, we didn't know that there might be another way to have capital markets organized. It was just around innovation, risk-taking, extraction and consumption. So now that we are finally bumping against true limits and asking questions about true limits-- --it is the natural time to ask questions about different kinds of capital markets. Now, that sounds very abstract, but if you just think about something very concrete like restoring an old house-- What do you do with an old house? You could just knock it down and build a new one-- --or if it's not too far gone, you can buy it and restore it and create economic value through the restoration. So that very simple metaphor, I think, can get you on the train of thought that says-- --"By restoring things, not by necessarily consuming them, but by restoring them, we can actually create economic value." And embedded in your question was, "Is it happening?" or "When is it going to happen?" It is happening. It's just not happening in an organized fashion. There are many--tens of thousands in the United States alone-- --small entrepreneurs who are starting businesses that have these general values embedded in them. They don't want to just grow for the sake of growth. They don't want to end up being a multinational company. They consider serving their local community more important than serving distant global markets. They're very concerned about environmental impact and social justice and equity and the wealth gap and a whole bunch of different things. There are many, many entrepreneurs starting companies that are concerned about this-- --but there's no organized capital market to provide them capital-- --and that either means they're stymied in their ability to grow their company-- --or it means they take capital from the old-fashioned sources of capital-- --which in almost every case impel them to grow and end up sending them out into the existing public markets-- --which is a whole 'nother thing we can talk about a little bit if you want. But it is happening. I would say if you look at the local food systems as one more specific indicator than what I just said-- --there are local food enterprises springing up all over the United States-- --community supported agriculture and farmer's market are the most obvious indicator of that-- --and while they have grown dramatically in the last decade, they are still a tiny dot in the food system. There is tremendous opportunity to grow them. I'll just say one more thing on CSAs while I'm going on this. Community supported agriculture is, to people who know it, almost so obvious that they look past it. It's, "Oh, I belong to a CSA," meaning maybe a few hundred families chip in-- --and buy 1/100 or 1/200 of the share of the produce from that farm. And it is, in almost all cases, a purely voluntary thing. Often there's nothing written down. It's just a handshake between the farmer and the family. It is probably the purest expression of--I don't want to say anti-globalization-- --you can say anti if you want--just say other than-- It's a direct personal relationship between producers and consumers that relies on voluntary social contract. The quality of the food is better, the environmental footprint and impacts are better. It has all kinds of qualitative benefits to everyone who participates in it. And so I think that's an example of something that spontaneously is happening. To me, the question of whether the big companies can be reformed and then how much they will be reformed-- --and all the questions of greenwashing and accountability and transparency and shareholder activism-- --and all of those different things, that is going on. My energies are now focused on a complementary but different sphere-- --and we can discuss it if you want some more about do we think that's going to work and how is it going to work. What I know is that there's a dramatic need to focus time, energy and capital on the next generation of entrepreneurs-- --the small businesses that are not necessarily going to be "tomorrow's Walmart"-- --because I don't know if there will be a tomorrow's Walmart to your question. Again, I'm no economic historian and we can conjecture all we want on whether those are dinosaurs that are going to die. There's a certain logic that says yes, these are linear ways of thinking that are reaching a point of absurdity-- --and they're not going to be able to continue. Ask the question, "When is McDonald's going to stop growing?" There are 31,000 McDonald's on the planet. Can we sustain 50,000? Can we sustain 20,000 McDonald's in China? There's water issues, there's grain issues, there's a million issues and all different kinds of questions about the sustainability of that trajectory-- --and all of the big companies are on that trajectory, which is growing, growing, growing, no end in sight, no company that's too big. Whatever that is, I know what I need to do is work with the entrepreneurs who are growing the next generation of small, independent businesses-- --because those businesses represent diversity. Even if you only view them as a safety net to the questionable sustainability of the big stuff-- --or whether you view them as a successor generation that needs to be in place to inheret the failed legacy-- --either way, we need to devote resources to this next generation. Sometimes I also think of a formula. I found this to be useful when people are thinking about it, so think about the following formula-- 98.6% Google plus 1.3% Stonyfield--I'll explain Stonyfield in a second--plus 0.1% Butterworks equals 100%. What the hell does that mean? It's a playful way of saying, basically, 98.6% of our financial selves, if you will, are focused on high-tech, virtual stuff-- --some of which is really cool and really important. I'm not saying this in any way to scapegoat Google in any way. I'm just saying it's an easy way to frame it. 1.3% is Stonyfield. What's Stonyfield? Stonyfield is an organic yogurt company based in New Hampshire. It's now the largest organic yogurt manufacturer in the world-- --probably around $350-$400 million in revenue now, part of Group Danone from France-- --but kind of leading the way for a--if you want to say--mid-sized getting organic product into the mainstream. And then what's the 0.1% Butterworks? 0.1% Butterworks is a farmer named Jack Lazor and his family up in Vermont-- --35 years on one 300+ acre farm making as much yogurt as they can produce from their herd-- --growing their own grain, could be considered an icon of sustainability. It's about as sustainable a food enterprise as I've ever seen-- --and he has a $1 million yogurt business that he's grown over 35 years. He sells in the New England region, and it is a fantastic product. Anybody who likes yogurt, I will argue this is as good as you can get in a commercially purveyed yogurt of any kind. So if you take that continuum--Google, Stonyfield, Butterworks--and you could plug in anything you want in Google-- --let's put Walmart in there for a second, just given this discussion, instead of Google. It'll be easier. So Walmart, Stonyfield--and Stonyfield is selling to Walmart, by the way; they're putting their yogurt on Walmart's shelves--Butterworks. Whether or not Walmart is going to collapse, to me, isn't the issue. The issue is we have to push resources from the left side of that equation to the right side. And if we only have 0.1% all the way on the right, if we get it to 1%, that's a tenfold increase. If we get it to 2%, that's a twentyfold increase. So a modest rebalancing will create sort of a flood of resources to this whole network of small businesses that need it. If I were really trying to summarize all of that, I would say whatever's happening on the Walmart and Google end-- --we need to be investing aggressively to promote diversity-- --because the so-called diversification we've had in financial markets represented through all these crazy securities-- --which were supposed to make things safer--everyone forgets, we almost forget-- --they were all invented to minimize risk, and they ended up creating false diversification and increasing risk. Real diversity, real biodiversity, cultural diversity, which is what long-term health and wealth depends on-- --is only going to be maintained in our communities and bioregions if we push the money out-- --and truly decentralize smaller scale ways. Either way, whatever happens to those big things--the Walmarts and the Googles and the rest-- --whatever happens there, we'll be way better off if we have more diversity in place. Imagine that I'm speaking to a room now of a few hundred people and before the speech starts, I say the following-- "By the way, did anybody walk here tonight?" and maybe one hand goes up out of the 200. And I say, "Well, you did virtually nothing for the economy." "You just wore the soles of your shoes out a little bit." "Did anybody ride a bike here?" and maybe 1 or 2 hands come up. "Well, you did a little bit more for the economy." "You bought the bike, the bike's going to need a new tire, blah, blah, blah." "Anybody take mass transit here?" Depending on where you are, sometimes you get no hands on that one, sometimes you get some hands. "Well, if you took a bus here, now we're getting somewhere." "Buses are expensive--insurance, you've got to employ the bus driver, etc." "Anybody drive here?" 95% of the hands go up. "Okay, now we're talking about some serious economic activity." "Everybody knows how expensive it is--cars, gas, insurance." And then everyone thinks it's over and I say, "But did anybody get in an accident on the way here?" Everyone laughs and I say, "Oh, it's too bad because if someone got in an accident-- --now we're getting into the realm of economic heroism because you'd have the ambulance, you'd have to go to the hospital-- --all the insurance claims would start flying." I said, "And if that was a really serious accident and you almost died and you have to go in the intensive care unit-- --and when you came out, you left your family, your life went into turmoil, you got divorced-- --the kids had to go into therapy, that is a superhero economically because the capital-- So when you go through that little exercise, what becomes apparent to people is economics-- --economic growth, dollar flows, which we call the economy, is not synonymous with human well-being. In fact, much of the activity that we measure in those dollar flows is actually destructive. So if you get away from that slightly playful story-- --and think about things like producing tens of millions of cars and all kinds of military armaments and cigarettes-- --and all of the things that we measure that are key to economic growth-- --these things are key, these are central, and they are of dubious long-term value in terms of sustainability and health-- --I don't think it should take too long for people-- --especially in today's world, where we know about parts per million in the atmosphere and some of the limits-- --for people to say, "Jeez, economic growth isn't synonymous with well-being." It's an important component of certain parts of our lives, but it is no longer synonymous with well-being. We can't just continue to try to grow our way out of our problems. We have to find other ways of creating economic opportunity and wealth that are not dependent upon destructive activities. If you were organizing food markets from the ground up-- --you would be looking at--maybe the most fundamental thing would be organic matter in the soil. Anybody who knows anything about farming knows--I'll assert this-- --that the quantity of organic matter in the soil is critical. And what does that mean? Really healthy soil might have 5% organic matter in it. Soil that has been farmed industrially, meaning large-scale with tractors and cultivation and synthetic chemicals-- --might have 1% organic matter in it, on its way to less than 1%. So if you were organizing our economy based on the long-term health of the soil-- --you would not be doing much of what we are doing. But they're organized around markets. What does that mean? We need to produce lots of food cheaply and lots of food that sits on shelves for a long time. I'm not saying those qualities in themselves are all bad. We do need to produce a lot of food and we do need to get it into a lot of mouths and we do need it to be able to sit on shelves-- --so again, it's a question of balance. If the whole food system just lurches towards the long shelf life, cheap thing-- --then you get soil which is going from 5% organic matter to 1% organic matter, on the way to being completely depleted. And I think for people hearing this who don't know about agriculture-- --they might think that sounds a little alarmist, and it isn't. It's really shocking how dissociated the general citizenry is in America to what's going on in our farmland-- --and I think the reason for that dissociation is that the supermarkets are full of food, so it looks pretty good. And it is amazing. There are--I forget the number--10,000 to 20,000 new food products invented every year by all the food companies-- --new cheese doodles and new this and new that-- --so every year we get all kinds of new products and the supermarket is chock full. But what's going on out in the land is, let's say, the exact analogy, the exact metaphor, to carbon in the atmosphere. In fact, the two are related. Maybe I should just spend a second and close that loop. But if people are finally beginning to realize that 380 parts per million of carbon in the atmosphere is bad-- --400 is worse, 500 or 600 might be disastrous, the same thing is happening in the soil. We are depleting organic matter in the soil pretty much in exactly the same dire way. It's only since World War II that industrial agriculture has been operating on this scale, so we've kind of been lulled into it. It seems like it's working pretty well, but without trying to get bogged down in the details-- --I would just ask anybody--even if you don't know anything about biology or chemistry--to just think about the following-- If we are growing all of this food, all of these high-yielding varieties of grains on our land by dumping chemical fertilizers on the ground-- --and dumping pesticides and herbicides on the ground, which short-term does work-- --that's why we have all the food, but what's it doing to the microbes in the soil? What's it doing to the actual web of life in the soil? And the answer is it's killing it. Just think about it. If you take a lot of chemicals of any kind and dump it into a little space-- --what's it going to do to all the microbes and all the little things that live there? Answer: Long-term it's going to kill them. Short-term it would be the equivalent of you taking a protein supplement and a workout or taking steroids--steroids is a great example. You take the steroids, you pump iron, you get really big, it's amazing. Long-term your body falls apart. So this is a slight exaggeration but not too big of an exaggeration to be untrue. If you take chemical fertilizers, pesticides and herbicides that we use in industrial agriculture-- --and think of them as a kind of steroid, it's a chemical supplement that allows short-term boosts of productivity that are very dramatic-- --but over a period of several decades--we're only talking about decades, certainly a couple of generations at the most-- --we are taking all the fertile relationships out of the soil that it took millenia to build-- --and the long-term consequences are just as dire as 500 parts per million in the atmosphere. Now, when that's going to happen, we can debate it. There are things that are happening right now in terms of soil erosion, dead zone in the Gulf of Mexico-- --there are things that you can measure right now that are very scary. But the actual consequences haven't quite come home yet. In other words, we're still getting the yields, there are diminishing returns-- --and again, people who look at the details, if you look at trends of yields per acre in China-- --or aquifer depletion--I haven't even mentioned water--it's all related. If soil does not have high content of organic matter, it doesn't hold water-- --so you get more run-off and more erosion from soil that's not high in organic matter. So all these things are tied together. It's an amazing thing because people do not think of agriculture as harming. They think of farming as--farming and harming: there's a poem. They think of growing food as a positive thing, that's not harming. But given what I just said about the use of fertilizers and microbes and whatever-- --if I say, "You're killing trillions of microbes to grow your food,"-- --everyone's like, "Oh, come on. Get over it." But the reality is the way we grow food is destructive. The real truth of the matter is is that our species has never learned how to live sustainably. I mean, really, let's just cop to the problem. We've never learned how to live sustainably. When there were 250 million of us running around killing wild boar, we didn't have much impact. If you really look at what's happened population-wise, it's more dramatic than people can even-- --going from 2 billion in 1945 to 6.6 billion today. It's our lifetime. It's this lifetime right now where everything kind of got out of control. We're still in it, so it's hard to see it. When we went 10,000 years ago from hunter/gatherer to an agriculture-based society-- --we didn't actually know what the hell we were doing. We were very clever in figuring out how to start growing certain kinds of grains and vegetables-- --but we didn't have a clue what the long-term ecological consequences were-- --because again, there didn't seem to be any when there was 500 million of us, even 1 billion of us. Now there are 6.6 billion and in order to try to be on this treadmill to stay ahead of the diminishing returns-- --we have to keep going faster and faster and putting more chemicals on and growing more and more. I would say this generation--I'll just say the generation from now to 25 years from now-- --will be a revolution of consciousness when people will realize that the way we grow food has actually inadvertently become destructive. It was totally inadvertent. No one did it on purpose. And again, think of cigarette smoking--good metaphor. No one knew it caused cancer but then gradually we figured out it caused cancer. Even when we figured it out, it was hard to stop. So it's the same deal. We're addicted to certain forms of behavior that started before we knew about them. Gary Snyder's comment about food being where we explore our harming of the world is not a frivolous comment. It's basically if you really understand what it takes to extract fertility and turn it into food for human consumption, it is a very delicate process. I just referred to the existence of a thousand billionaires and a billion thousandaires-- --trying to be kind of a catchy way to make us realize that the way the modern economy creates wealth is unsustainable socially-- --as well as environmentally, meaning people tend to think about the global economy as if it's spread everywhere and it isn't. Perhaps 20%of the planet--perhaps--about a billion people or so have been direct beneficiaries of globalization. I think there might be a billion people on the planet that have never made a phone call. It's some number like that. Never made any kind of phone call. There are a billion or 2 billion people who are living on less than $2 a day or whatever that number is. So the reach of the modern economy is still very widely imbalanced. Obviously, it hits certain urban pockets and suburban pockets and certain countries-- --and those countries are beneficiaries of tremendous wealth. John Dore, one of the leading venture capitalists in the world-- --has referred to this generation of venture capitalists as having created the largest legal accumulation of wealth in history. It was kind of a throwaway remark when he made it. Now it's widely used. The point is that, especially if you live in the Bay Area or New York or Boston-- --you live in some of these pockets where there's so much affluence-- --that you forget the fact that it's only benefiting a relatively limited number of people on the planet-- --and, in fact, from the beginning of time until today, we've created about a thousand billionaires. My question would be, "Do we have time to create the next 10,000 or how many are we trying to create?" And if you look at the way those billionaires use their wealth-- --it is somewhat distressing to find that a very small percentage of it is used philanthropically. If you just say, to make it easy, think about someone who has a billion dollars and takes 100 million of it and puts it into a foundation-- --and then the income of that 100 million, meaning 5 million, gets used to make grants-- --billion, 100 million, 5 million. So the way we are using the wealth that we're creating is not proactive enough to address all of these questions-- --and I think part of the embedded message of "Slow Money" is a more integral approach-- --that we have to actually use the money to create wealth and economic opportunities in ways that are not so imbalanced-- --because we're not going to have time to clean up the imbalance in the year 2100. If you zoom back from "Slow Money," all you see is the financial component to what you might call the slow movement. Around the planet in different ways, NGOs and activists are beginning to understand that detaching somewhat from the frenzy of global markets-- --whether they be financial markets, consumer markets, etc., enhances quality of life-- --that going slower--slower, smaller and local--does not mean unimportant, provincial and silly. It means that if you slow down, you're actually able to enjoy life more. And that's a very simplistic thing, but I've certainly experienced it in my own life. So "Slow Money" is, let's say, the financial manifestation of that. Could it actually be done with money? It's one thing to have slow food instead of fast food. Start thinking about money. Can we actually slow some of our money down, and what would happen if we did?

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Duration: 29 minutes and 25 seconds
Country: United States
Language: English
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Views: 175
Posted by: global on Mar 11, 2009

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