Viva Magazine: Capitalism has led the world into deep crisis, therefore the world is seeking solutions, alternatives. Is capitalism in its pure, individual form on the brink of extinction? And are there new models of economic organization emerging?
David Barrie: Capitalism is most definitely not on the verge of extinction. It's thriving. Just look at the recent listing of Chinese internet company Alibaba for $25bn on the New York stock exchange, the widening pursuit of profit through the ‘democratization’ of finance through digital currencies like Bitcoin, the burgeoning markets for luxury goods around the world and unprecedented rise in a new middle class across the world and their buying of lifestyle goods, services and near limitless demand for new housing. However, what you are seeing just now is a change in how people think they are valuable, how they can make more of their lives, and what makes them happy. Rich and poor people have more time on their hands. Privatization of public services means that people need to be more resourceful. The need of the technology sector to monetize engagement of the public in the Internet has led to promotion of a culture of online networking, sharing and exchange of experience. In part, I think that this is a generational thing. In part, a worry on the part of young people in their twenties of a lack of resource both for themselves, but also their peers. In part, a result of the Internet, its business model and relationship to advertising. What you’re seeing is a will to utopianism, instigated by the panic a few years back over Peak Oil and the bleak dystopia of an age of jihadism. There’s also a love in pop culture for folk, Fleetwood Mac and Hope, at a time when formal political culture seems too cynical. As a result, new models of capitalism are being invented and becoming more necessary, appealing and mainstream: be it people making money by sharing goods and services, companies granting their staff shareholdings, or entrepreneurs starting up enterprises that put a social, not just a financial value, on what they do.
V: New economies, new economic models are not based only on property and profit, but also on community, connecting and cooperation. Why is this so important? What are the benefits?
DB: Community, connecting and cooperation are important because they are valuable forms of human transaction that don’t necessarily involve cash and are gratifying in their social relations – I do wonder whether it’s an accident, by the way, that we seem to be valuing these things at a time when technology and e-commerce are turning us into a ‘cashless society’. In this new economy, power is acquired by relationships, networks and gets away from the old paradigm of “winners” and “losers”. It’s what one writer has called ‘The Power of We’. I’ve actualized this in a lot of my work: be it mobilizing communities of people in deprived towns and cities to drive change to their environment, create new markets for food that people have cultivated across a city or founding enterprises based upon community purchasing of goods or co-operative private financial investment in start-up and growth enterprise. There is a value to these new economic models but they need to be established with solid governance and a robust and clear shape and vision so that those who participate understand and respect the rules. There are plenty of democracies which have sought to introduce more equitable arrangements into their systems – such as devolving central government to local power – but failed, allowing powerful forces to dominate, marginalize, divide and rule.
V: We are witnessing the birth of new business models, new production models and usage of goods and services. What are the most effective practices in your opinion?
DB: There’s circumstantial evidence that seems to suggest that operating with values of community, connecting and cooperation are worthwhile. For thousands of years, there have been societies that have functioned effectively on people giving and exchanging goods and services with one another, rather than money. Countless online markets create value through communal connections and recommendations, markets like Ebay and Gumtree, and appear to be popular and robust. In some countries and regions, such as Spain and Emilia Romagna in Italy, co-operatives and networks of independent enterprises have worked robustly and sustainably together for many years, enabling local economies and communities to be resilient. Founded in 1973, the Park Slope Food Cooperative, a retail store in Brooklyn, New York, generates tens of millions of dollars in value and surplus revenue each year. The co-operative retail store that I co-founded in central London in 2011, The People’s Supermarket, is now five years old and supporting a strong working and shopping community. In my opinion, the most effective practices are production models based upon subscribing customers or consumers of a service, perhaps in the form of a membership. It is a way of working that instantly monetizes engagement, generates cashflow and establishes purchasers of a good or service less as customers and more as shareholders or citizens of a venture and its transactions.
V: You are a big promoter of social entrepreneurship. How would you define it and what is its core? What are the main differences between so called neoliberal entrepreneurship, which strives for high profits, and social entrepreneurship?
DB: I define social entrepreneurship as the act of leading a venture that is both financially and socially profitable. In a social enterprise, in my opinion, these objectives work together and mutually constitute profit’, whereas in the standard neoliberal order of the entrepreneurial day, it tends to be financial profit first and only. Looking at the private enterprises that my new angel investment network in London is evaluating, what is interesting is that ecommerce and social media are making private entrepreneurs intensely socially-minded just now. From a television documentary series that I made several years ago on the dying fortunes of the Vidal Sassoon chain of hair and beauty salons, private enterprise may often take a highly social and paternalistic view of its workforce and fortune. And from my work as a researcher many years ago for strategy consultants in mergers and acquisitions, large corporations may place a value upon this. However, none of this constitutes a ‘social enterprise’. Social enterprises have a different definition of profit, often a blended value of the financial and the social. As a result, they often work to eccentric business models, ‘socialize’ profit-taking and approach certain functions like marketing and sourcing very differently to the conventional, private, profit-seeking business.
V: In social entreprises, what is the main advantage of reinvesting for social effect?
DB: Many private companies reinvest their financial profits, or buy-back their shares from the stock market, so social enterprise doesn’t have a monopoly on either the effectiveness or value of this kind of behavior. Generally speaking in social enterprise, financial surplus is reinvested since a primary or principal dividend to the consumer is not a financial but a social one. So, for instance, The People’s Supermarket was a co-operative. It was a membership organization. In effect, its members made collective decisions on what the store should purchase. By reinvesting financial surplus, the venture was returning a dividend to its members by subsidizing the cost of food, enhancing the value yield and so future returns of goods and services.
V: Is social enterprise an effective, plausible way out of our current economic crisis, or safety net for society for coming crises?
Both. Social enterprise provides an opportunity to service people’s needs in a sustainable and equitable manner, but it can also provide shelter from the ravages of capitalist markets. If you’re asking whether social enterprise is in itself a route out of crisis, a systemic answer to lack of competitiveness, low productivity, poor management and speculation in capital markets, the answer is (of course) NO! In my experience, it can provide an outstanding opportunity to certain communities to the provision of certain needs – access to healthy food at affordable prices for poor and marginalized communities of people at the center of a world city, for example. However, it is very challenging to start and scale a social enterprise, and in general it demands initial public or private sector investment, and it is difficult to find sufficient growth capital to scale. New innovations are coming to address this, such as markets that specialize in trading in shares in social ventures and offer opportunities for sizeable external equity offers and IPOs. A visionary mayor or Government could aggregate and foster a social enterprise economy from a series of diverse providers of goods and services at a neighborhood level. I think you’re also making a mistake to attach social enterprise exclusively to the idea of economic crisis. It can be a strategic response to the market for a particular service. What’s more, the opportunities it exploits often link to the liberalization of markets and privatization by Government of the delivery of public services.
V: Do you believe that social entrepreneurship in long term can lower the gap between the poor majority and rich minority?
DB: I believe social enterprise can provide poorer people with greater quality of life and value return for investment of their time and energy. It can also create virtuous collectives that involve both rich and poor people in common cause. So I believe that social enterprise can increase ‘social capital’, ease the challenge of inflating cost of living and go towards helping ‘level the boats’. However, the challenge of growing to scale makes it hard to see social enterprise being able to wholeheartedly address on a systemic level some of the fundamental measures required to deliver economic justice – higher standards of education, a greater supply of affordable housing, countering tax avoidance and de-risking loan finance. Also, meritocracy is key to enabling economic justice and there are levers way more mainstream and central to public life that enable this to happen, such as the granting and protection of human rights, tax and welfare reform.
V: Seven years ago you founded an urban agriculture initiative in Middlesbrough. More than thousand people has farmed, produced vegetables. At the end of the harvest, there were more than eight thousand people who prepared and shared the meal. What were the motivation and main reasons that people joined the project?
DB: People joined the project since they thought that left-over space in the city should be put to more productive use; informal ways for communities to ‘get together’ should be encouraged to support pride, self-respect and feelings of community; growing food was part of the working class tradition and historic poverty of the place and something that everyone could be good at. There was also a call for the design of a more equitable and sustainable food system for the town, one that granted people greater sovereignty over the supply of food to the town and decreased the scale of food imports.
V: What were the next steps of this initiative, the evolution?
DB: First, I asked many different people in the city whether they would be interested in growing food. Second, I found out which public agencies were teaching cookery to people. Then, I investigated who might be interested in hosting and managing a public meal. With a team of designers, I then produced an initiative in which people could grow food, learn to cook with and then share the harvest. I wanted elements of it to be jubilant and fun, not least since only this kind of thing happens in movies, or Italian hilltop villages, not former steel and chemical manufacturing cities. Also I wanted people to be able to participate in a process that felt like a natural, evolutionary experience. I lined up over eighty organizations, companies and individuals who wanted to be involved and grow food in planters, public parks, school gardens, even small growing pots in car dealerships. I raised finance from public and private organizations for each component part of the process, on the basis of saving them money on delivery of existing services but also the value of investing in worthless land. In Spring 2007, people planted food in small, medium, larger and extra-large containers on over 280 sites in the city. As food became available, people joined cookery classes from trained chefs. In the Summer, the final harvest was cooked and eaten as part of a larger event, curated by artist Bob and Roberta Smith, on the theme of food and art. The city’s new urban farmers cooked and artists exhibited and sold works linked to food. 8000 people attended the event. 1000 had grown food. The event has now been repeated for seven years; and sufficient new interest in horticulture was ‘seeded’ that a new training center has been built in a central park, supported by £10m finance from Government.
V: The People’s Supermarket is also very interesting project. What are the main principles of this food cooperative? Do you believe that the model can be transferred in all urban areas in the world (i.e. in Slovenia)?
DB: The People’s Supermarket is a co-operative grocery shop. Anyone can shop in the store but for payment of £25.00 per year and the donation of four hours volunteer time per month, members of the co-operative can earn a discount on the cost of certain food. This is the operating principle. Ethically, the venture is driven by the will to make healthy food more affordable for people in the city, source food from independent suppliers and maximize efficient waste management – for instance, cooking unsold food and selling it as takeaway meals. The model can be transferred in all urban areas for sure. We adapted a model pioneered by the Park Slope Food Coop in Brooklyn, New York. What needs to be addressed to make it happen is coverage of operating costs, initial stock and systems. The venture requires some employed staff. 80% of start-up costs were paid for by volunteer labor and recycling of materials, with some of the running costs financed by public agencies and private foundations.
DB: Yes - very much so.
V: The concept of time banks as a different mean of volunteer work was developed in the 80s by dr. Edgar Cahn. But the concept is not very popular or successful (yet) – why do you think is so?
DB: Because it is perceived to be a form of volunteering, giving and ‘worthwhile’, these values attract the interest of only a certain number of people, and do not help create a wider cultural or social phenomena. It needs to be positioned as a lifestyle choice and marketed as fulfilling an aspiration, enabling people ‘to be who they want to be’ and maximizing their power.
V: How to convince society and individuals that they can regard time as a currency?
DB: Devise a mobile application to help them manage their involvement and choice.
V: Social entrepreneurship, corporate social responsibility, co-working, crowdfunding, contours of new economies, that are based on benefit for local communities and connecting people, more and more new ideas that are beneficial for society are emerging every day … Are you an optimist?
DB: I am a militant optimist. The future of the world will increasingly be based upon new values but it would be a massive loss if this had to mean a loss of materialism. Material, artifice and fantasy are key values that make life worth living. They allow you to dream; be the person you are not; they generate color and pleasure. The trick is to develop social entrepreneurship, co-working etc in such a way as they appeal to consumers, drink from the same fountain as shopping, fashion, art and expression and become a natural part of people’s everyday lives. To treat them as grey, virtuous religion is to make them utterly unappealing and consign them to the margins. We need to find ways and means by which private enterprise can embrace social values and promote them. As the global economy becomes more and more influenced by the West Coast of America, this is happening in any case, with technology building these values into new products and services available via the internet and mobile. Hipsters the world over are sharing these values in their entrepreneurial ventures. Governments are increasingly demanding from companies that they embrace social values as part of their license to operate. Private enterprise may profit from them in an old school capitalist way. Provided that they don’t lie, that is fine. The more engagement in the values of the new economy the better. We are simply the early adopters.