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Woody Tasch: The Purpose of Capital Markets

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global oneness project The Purpose of Capital Markets 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. Woody Tasch - Point Reyes Station, California - Author, "Slow Money" 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. And 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 the 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 and risk-taking, extraction and consumption. So now that we are finally bumping up 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. 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?" And 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. And 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. And 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 just a direct personal relationship between producers and consumers that relies on voluntary social contract. The quality of the food is better, the enviromental 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.

Video Details

Duration: 5 minutes and 9 seconds
Country: United States
Language: English
Genre: None
Views: 159
Posted by: global on Mar 9, 2009

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