Steiner

A New Purpose for Philanthropic Services

June 24, 2014

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by Kelley Buhles

“Where do natural resources come from? Did humans buy them from somewhere?

What about our knowledge and abilities? Did we also buy those? Or are they on loan to us?”

John Bloom, RSF’s Senior Director of Organizational Culture, recently posed these questions to staff. The response was a long stretch of thoughtful silence, it was clear these weren’t easy questions.

Perhaps that is because it isn’t often that one is asked these types of questions; they are often delegated to the philosophers and spiritual practitioners of our time. Yet, if we take the time to search within ourselves for the answers, what we arrive at can dramatically change how we frame our relationship to the world around us.

Can we begin to explore the idea that the bounty of life, our ability to physically engage with the world, and our mental capacities to imagine, reason, and learn are all gifts to us? How differently would one behave in the world if we started to see everything we have as a gift, rather than something we earned? And if we can, how might that transform our relationship to money?

The Philanthropic Services team at RSF has been working with Rudolf Steiner’s thinking around the vital role gift plays in our lives. We observed that gift is typically left out of modern economic thinking. As part of RSF’s work to transform the way the world works with money, we also feel it is important to transform the way the world works with gift. We are excited to announce a new purpose statement for our philanthropic services department:

To cultivate giving as the source of economic life

As a transformative intermediary we:

·        Move the field of philanthropy towards a gift economy

·        Support and honor our client’s deepest intentions

·        Integrate gift money into catalytic capital

·        Facilitate the circulation of gift money

With this framework we can start to build a new understanding of the role that gift plays in economic life. Gift moves at the beginning of the cycle, rather than being something that happens at the end, once an individual has accumulated adequate wealth. By seeing gift as the primary igniter of economic activity we can start to understand what Steiner said in World Economy, “We cannot arrive at a healthy economic process unless, in the first place, it is made possible for people to have something to give and, in the second place, unless they have the good will and intelligence to give what they have.” (Lecture 5)

This transformation of our understanding of the world from something we have earned to something we are gifted with can inspire us to live into the spirit of interdependence with each other. Ultimately it can transform our understanding of the primary purpose of economic life, from meeting our own needs, towards working together to meet each others needs.

Kelley Buhles is Director of Philanthropic Services at RSF Social Finance

The Poetry of Transformation

April 29, 2014

RSF_30th_purpleThis article was originally published in the Spring 2014 RSF Quarterly.

by John Bloom

One beautiful aspect of transformation is the evolutionary element of continuity. Nature is alive with these mysterious metamorphic processes, from seed to leaf, from DNA to a human being. If one can accept that even in a world full of intentionally disruptive activities there is an underlying connective thread, then our task is not to react to “revolutionary” events as isolated, but rather to understand them instead as symptoms of this deeper process. In the grand scheme, one could call this the evolution of human consciousness, and there is poetry to its path—though not always an easy one. For example, what if we took the performance of the stock market as a barometric measure of the human spirit? What would that really say about us as individuals, our relationships, and the culture in which this investment marketplace is embedded? Even if I have no shares or investments, am I really separate from the stock market? And, how could I hold that thought if I really believe (and I do) that we are fully interdependent and interconnected?

It is not an accident that I chose the example of Wall Street. At RSF we often cite it as the antithesis of what we are trying to accomplish through our purpose of transforming the way the world works with money. What we call our theory of change—to make every transaction direct, transparent, personal, and based on long-term relationships—is actually our theory of transformation. We know that, no matter how active and thoughtful we are, we are not going to flip the human-institutional-behavior-money-transaction switch over night. We understand that each individual has to take him or herself through a process and practice. And we know there are more people who have come to this realization, and many more working to get there. From this perspective, our clients join us as a community of practice and as transformational activists/participants.

Given the challenge of gathering a thirty year perspective on the evolution of RSF Social Finance (and I have been honored to be part of RSF half that time), the question that arose for me was: How does an organization committed to transformation lead by example? This question, of course, brings one back to origin stories and historical data. This information is important, and RSF’s emergence in 1984 through the loan to the fire-destroyed Pine Hill Waldorf School is well storied. Many more stories have transpired over the last thirty years as a browse through our RSF Quarterly and Annual Report archives would show. Both inwardly and outwardly much has changed. We are now nearly forty staff, our loan portfolio is approximately 50/50 non-profit and for-profit and the character and quality of those loans have grown more complex. Where once Waldorf schools were our anchor borrowers they are now less than half. For an organization founded to further the work of those directly connected to Rudolf Steiner’s work, it could feel to some that we have not only changed, but also left anthroposophy behind. This is not at all the case. Many of our early clients assumed Waldorf schools defined that relationship, but we have now stepped far more fully into supporting the evolution of an associative economy—as Steiner imagined economic life should unfold—through such efforts as our quarterly pricing meetings.

Despite the allure of talking about all that we have accomplished, I find myself drawn to trace what I would consider the more character-based aspects of the organization—not so much what it has done, but rather who it is and what it stands for as an expression of its being. If one follows this thread of core values and practices, the steady evolution of a spiritually inspired financial organization, and specifically the inspiration of Rudolf Steiner’s work, becomes visible in a way that speaks of continuity—a kind of poetry of transformation.

There is a bit of the then and now in how I will approach this exploration. And, there will be some language that seems a bit esoteric as RSF was first and foremost a financial arm of the Anthroposophical Society in America, founded to further Rudolf Steiner’s work. In addition to this founding commitment there was a vision for working in a new way in finance and with money. Here is a selection from “The Foundation’s Ideals ” from the 1985 brochure:

To serve as an objective third party in transactions between donors, lenders [investors in current parlance], and receivers of financial resources. Interest in the intentions of others is its primary focus.

To foster:

  • A threefolding of social life that reflects the threefold organism of the human being
  • Increased understanding of the fundamental social law and its working in society
  • A spirit of determined cooperation in the financing of the work of the anthroposophical movement

[Steiners fundamental social law is, in abridged form: the degree to which we work to meet the needs of others, our needs will be met. Steiner was asking us to recognize the primacy of interest in the other over self-interest]

Fast forward to the present. Here are the first two of RSF’s current operating principles all of which were developed collaboratively by current staff, none of whom would likely have seen the original brochure. All twelve principles can be found on our website along with our purpose and values.

  • Transformation: We are committed to working with those who seek to transform their relationship to money and with those who seek to redefine the core assumptions of our economic and financial systems. We strive to lead by example.
  • Service: We co-create RSF Social Finance with our stakeholders – staff, board, investors, donors, borrowers, grantees, asset managers, partners, and friends. Through listening, we try to discern what is being called for next in a spirit of service. Long-term relationships are of primary importance. We place high value on intention.

I could do a detailed analysis between the earlier brochure statements and our current operating principles, but am hoping that the focus on intention, interest in our clients and the world, determined cooperation/co-creation, and a view of working with money as a tool for cultural change stand out immediately.

In researching this material, I found myself taken aback at how much significant outward change, growth and visibility could happen, and at the same time, how slowly and steadily RSF’s core being has evolved to becoming reflective of founding ideals, yet more linguistically true to those currently doing the work. It has also become accessible to an increasingly broad audience.

So how has RSF, an organization committed to transformation, continually transformed itself in a way that garners trust and engagement for public benefit? Such an organization listens thoughtfully and learns deeply through its interest in others. It holds that wisdom is held in the wider community rather than only by the organization itself. At the same time it reflects on what the world is asking, the opportunities it presents, and, in the spirit of inquiry, asks how its core principles can be practiced and developed through service. As an organization, RSF works at knowing itself while deepening its connections to its spiritual well-spring as a way to best prepare to be of service to the world.

Money and financial transactions are RSF’s tools. So we continue, thirty years later, to benefit from Rudolf Steiner’s insights, from the insights of RSF’s founders, and from the gifts of wisdom and resources from staff and clients, so that personal and organizational change invite and lead the cultural and financial system transformation needed for a regenerative future.

John Bloom is Senior Director of Organizational Culture at RSF Social Finance.

30 Years of RSF Social Finance

April 7, 2014

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RSF_30th_purpleWe are thrilled to kick off our 30th anniversary celebration this month with the latest RSF Quarterly, which reflects on RSF’s transformation since 1984. Read insights from John Bloom, RSF’s Senior Director of Organizational Culture, on what it means to be inspired by the work of Rudolf Steiner and how we remain committed to transformation. Guest essayist and author Charles Eisenstein expounds on investing in the ecological age and how such investment could be rethought of as gift. RSF community members share how they’ve transformed the way they work with money. Also, take a look at how we have grown over the last 30 years in a History of RSF timeline.

We would like to thank all of our clients, partners, and friends who have been a part of reaching this exciting milestone as a leader in the growing field of social finance. Keep an eye out for more 30th celebration news, here, on the Reimagine Money blog.

To download an electronic copy of the Quarterly, click here.

RSF Funds Development of Sebastopol Charter School’s New Campus

March 27, 2014

RSF Social Finance (RSF) is pleased to announce a new loan to The Charter Foundation, the fundraising organization that supports the K-8 Waldorf-inspired Sebastopol Charter School. RSF was selected by the Foundation as their lender of choice to finance the acquisition of a 20-acre property and the construction of a permanent, unified campus for the entire school population on the new site

charter_ribbonsSebastopol Charter School was founded by Greg Haynes and Ursula Kroettinger, two former Waldorf school administrators who wished to bring Waldorf education to their community without the financial barriers of private school tuition. Waldorf education, developed by Rudolf Steiner in 1919, is an arts-rich approach to education that focuses on teaching the whole child – head, hands, and heart. Waldorf schools have traditionally been private and more readily accessible to middle and upper class families. However, a shift is occurring: according to the Alliance for Public Waldorf Education, the number of Waldorf-inspired public schools has risen quickly, from around a dozen in 2000 to over fifty in 2014, making this education model available to far more children regardless of family income.

“RSF is inspired by the work of Rudolf Steiner and we believe in the importance of supporting creativity and human spirit,” says Ted Levinson, Director of Lending at RSF. “We have a long history of supporting Waldorf education in private schools and seeing these values transferred to the public education system is an important step in developing the next generation of inspired leaders.”

As one of the first Waldorf-inspired charter schools in the nation, Sebastopol Charter opened its doors in 1995 to its pioneering kindergarten class. Each subsequent year another grade was added as the previous class advanced, until the first 8th grade class graduated in 2005. With the school’s rapid expansion, The Charter Foundation was founded with the mission of establishing and supporting a permanent, Waldorf-inspired charter school.

charter_music1“Since the school’s founding nearly two decades ago we’ve searched for a permanent campus site that would provide our students the spaciousness to move with freedom and to explore and learn through their natural environment,” says Chris Topham, Executive Director of Sebastopol Charter. “Since that time, RSF has been a key partner in helping us realize that dream, first providing the backing needed to develop our current urban campus, and now supporting our efforts to take our school to the next level at our new, unified campus.”

RSF initially provided a loan to the Foundation in 2000 to help build the school’s downtown campus, housing the third through eighth grades, while the K-2 program is housed on a separate site leased from the chartering district. The downtown facility, now owned free and clear by the Foundation, has served its purpose as a temporary home and investment property while the school searched for the ideal site for its new home. This new RSF loan has been used to acquire a 20-acre parcel of land, and will support the development of the first phase of the new campus which will finally unify the entire school.

Sebastopol Charter School has been successful in recruiting and retaining high quality teachers, providing a full and rich Waldorf curriculum including strings, handwork, woodwork, Spanish, games, social inclusion and eurythmy, and attracting a dedicated and informed parent body. As a result, Sebastopol Charter is now widely regarded as one of the leaders in public Waldorf education nationwide. Its success has encouraged scores of other public schools to offer a Waldorf-inspired education to any child, regardless of the ability to pay.

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About The Charter Foundation

The Charter Foundation is the fundraising organization for Sebastopol Charter School, a public charter school in Sebastopol, California. Established by the school’s founders in 1998, the Foundation is charged with the mission of supporting Sebastopol Charter School in providing both a full Waldorf program and in establishing a permanent, unified, and spacious campus. www.thecharterfoundation.org

Heart’s Guidance: An Economic Imagination, Part II

January 21, 2014

Click here for Part I


by John Bloom


As an organ, the human heart plays leading role in maintaining human life forces. And, it works in a fully integrated system. It is an arbiter between the intense circulatory exchange in the fine capillaries at the extremities and need for constant vortical movement as the blood moves through the heart’s chambers. Blood, exhausted after delivering its nutrients along the way to the periphery, returns to the heart-lung center to be revitalized—a systolic, diastolic rhythm of constant exchange. There is no part of the human organism that is not permeated through circulation, and just about any stoppage in that circulation has significant health consequences. I am certainly not the first to use the circulation of blood as simile for the circulation of money. This is an illuminating but partial picture. Circulation is meaningless without the management capacities of the heart, its sensitivity to our inner and outer-facing nerve-sense system, and the forces of our metabolic system. Simply put, the heart embodies interdependence, serves as guide and guardian, harmonizer for human life, and thus supports our capacities to think and act. This complete and unalterable interdependence has much to tell us about economic life.

How the heart models service is in stark contrast to dominance of self-interest, a concept intractably nestled in the modern evolution of economic thinking. Self-interest as currently fostered and practiced has become debased from the moral, and I would say religious, framework that says that it is in your self-interest to be interested in and help others. As economic experience has become ever-more embedded in the materialism and consumerism of the marketplace, interest in the other has converted into competitive fear of the other. Money is the measure of man; thus, I am better the more I can extract from the system for myself. This is a powerfully destructive thought.

It is fascinating to me to consider that the heart is naturally moral. It does not deny one part of the body over another unless it needs to allocate healing resources for an interim period. It does not judge, it simply recognizes need and responds. It seeks sufficiency, and its actions are all guided by the impulse to restore balance—all for the purposes of circulation and meeting the needs of the whole throughout a very diverse organic system. Many natural systems are like this. Nature is moral, but somehow we have allowed the anti-social power of money to corrupt this moral element in human nature. It doesn’t feel right. Just as self-interest gives the lie to how truly interdependent we are, money supports the illusion of independence and serves as a measure of fittest in the Darwinian notion of survival. If the money was won through competition, what was lost along the way? These are not propositions of the heart. They are propositions of the head; rationalizations for historical patterns, and cynically, justifications for essentially immoral behavior in the financial marketplace. The heart does not speculate, it anticipates and regulates, not as an exercise in control, but rather in service to the whole.

So what is capital, and how does it serve in the heart imagination? One could say that capital is the materialization of spirit, spirit brought into matter through economic activity. This may seem a stretch, but consider the following. Economic life evolves from the work it takes to transform natural resources into practical goods. Of course, the transformation is not magical, rather it is often hard won through trial and error, through the application of physical and mental creative powers. The invention and evolution of the plow, or any machine for that matter, demonstrates the additive, transformative power of applied consciousness across generations and geography. A second development is how these powers are harnessed and organized for efficiency and production through the further application of intelligence. This applied intelligence in combination with the production of goods and services is what gives rise to capital.* Capital is to the economic realm what intelligence is to the individual. Since intelligence is not material, that is, it has no physical substance, it is by its nature non-objective. Its value appears as practical activity in the world. Capital is spiritual, while its value, its measure, derives from its application at a specific time and place.

The role of capital in the heart economy is like that of oxygen to the human heart. Oxygen is carried through the blood even as that stream is also collecting the carbon dioxide waste, which it returns to the world through breath. This self-regenerative system is the key to the imagination of a heart-centered economy.

I offer this imagination as a starting point for changing how we think about and live our economic life through our daily transactions. Can we see that we are part of a great circulation? Can we see that we are part of both the destruction and regeneration of natural systems, and that in our economic world we are never separate from each other, from wealth or poverty of resources, even though we have been conditioned to think that way? If, in our own body system, we were to establish “political” boundaries and protect them as we do, we would die an instant death. Boundaries are important, just as cell membranes are important. They are permeable; they protect, and contain, but in the end it is the circulation that is the most vital. And it is the workings of human heart, the servant of the circulatory system that demonstrates the wisdom we need to transform money, the financial system, and economic life. Not only by, but also from the heart we can learn how the world can support our lives as we work consciously to support others’.

* This essay is inspired by Rudolf Steiner’s insights into economics. In his 1922 lecture cycle, now published under the title Rethinking Economics: Lectures and Seminars on World Economics, he goes into great depth on how these two essential capacities, labor and intelligence, create value.

John Bloom is Senior Director of Organizational Culture at RSF Social Finance.

Agriculture and the Sacred

October 18, 2013

This essay was originally published in the Fall 2013 RSF Quarterly

by Robert Karprobertkarp (2)

To live, we must daily break the body and spill the blood of Creation. When we do this knowingly, lovingly, skillfully, reverently, it is a sacrament. When we do it ignorantly, greedily, clumsily, destructively, it is a desecration.” — Wendell Berry

In ancient times agriculture was intimately connected with the sacred. We find evidence of this in a host of texts and in many traditions which survive to this day.  We know, for example, that for the indigenous people on the American continent, the corn plant is believed to have come into being through a long process of cooperation between human beings and the gods, and to grow corn is still a sacred activity for many Native American people today.

If we try to discern the ultimate source of these traditions, we discover that people in ancient cultures experienced the natural world much differently than we do. Where today we might see, for example, simply a corn plant (tall stem, tassels, ears, husks, silks, kernels, etc.), they saw the body of a spiritual being whom they felt to be the ultimate source of the unique traits and gifts of that particular plant species. These spiritual beings endowed all creatures and all creation with a special kind of dignity.

It was thus not enough for ancient cultures or indigenous people to simply plant a corn seed at the right time in the right soil, and then cultivate the plant during the growing season until harvest. Growing corn also required prayers and rituals that would invite the spiritual being of corn to participate in the growth of the plants and so bless the people with her radiant wisdom and health giving powers. Maintaining this sacred connection with the gods through agriculture was at the heart of the life of ancient cultures and echoes of this religious feeling toward nature survived in indigenous and rural farming communities for centuries.

In his lectures, Rudolf Steiner indicated that the gradual loss of this way of experiencing the world among the majority of the world’s population was an inevitable and necessary part of the evolution of human consciousness. This loss paved the way for a much clearer way of seeing the physical world, and eventually led to the discovery of the physical laws of matter and to modern technology. Through this process of evolution, we have also come to experience ourselves more and more as unique individuals independent of nature, culture, race and one another. With this independence comes freedom: the freedom to choose our own vocations, community and ideals—as well as the feeling that we are responsible for our own actions. This sense of individual freedom and responsibility is the gift, the silver lining, you could say, of materialism.

The healthy age of materialism has long since passed, however, so that today we bear witness primarily to the shadow side of materialism rather than its gift. We have become so enamored of our seeming power over nature, that we are undermining the very fabric of life on earth. This is perhaps nowhere more evident than in agriculture. Practices like confined animal feeding operations (CAFO’s) and genetically engineered plants and animals (GMO’s) betray a consciousness completely devoid of any remaining sense of the spiritual dignity of organisms, creatures and species.

There is a silver lining, however, to this era of post-materialistic devolution of values. In the depths of the crisis brought on by these destructive trends, a new, individualized, eco-spiritual consciousness of the world is emerging. From thousands of humble, everyday people—farmers, eaters, scientists, educators, artists and business people—a grassroots awakening to the ecological and spiritual realities that sustain the earth and her creatures is taking place. This new consciousness, I would suggest, is the ultimate source of inspiration for the growth of the ecology movement of the 1960’s, the health food movement of the 1970’s, the environmental movement of the 1980’s, the organic farming movement of the 1990’s, the local food movement of the 2000’s, and a host of other allied movements too numerous to mention. It is also, of course, the inspiration for the biodynamic movement which seeks to demonstrate the many practical ways this new consciousness can bring renewal to the earth and to the practice of agriculture.

Yes, the sense of the sacred is reemerging in the food and agriculture movement of today, as the quote from Wendell Berry at the beginning of this article so beautifully expresses. But, this new consciousness of the sacred is not the same as that possessed by ancient cultures. This awakening is not embedded in hierarchical, collective religious practices or cultural norms, but rather has emerged as a natural extension of healthy scientific inquiry and in the context of a cosmopolitan confluence of diverse philosophical perspectives and cultural traditions.  This new sense of the sacred is thus rooted in and sustained by a contemporary sense of individuality and freedom of thought.  In this otherwise deeply troubling moment in human history, this awakening, this growing movement toward a reunion of agriculture and the sacred, can give us hope.

Robert Karp is the executive director of the Biodynamic Farming and Gardening Association and is a long-time social entrepreneur in the sustainable food and farming movement. Robert has helped start numerous innovative food projects, including community supported agriculture projects (CSAs), farmers’ markets, institutional buying projects and farmer-buyer-consumer alliances. He is also the founder of New Spirit Farmland Partnerships, LLC, the former executive director of Practical Farmers of Iowa, and former board chair of the Michael Fields Agricultural Institute.

An End to the Age of Entitlement: Land Ownership, Use, and Community Reconsidered

July 26, 2013

This is the first post in a three-part series by John Bloom challenging the modern economic approach to land. Here, Bloom proposes a new approach that views land as resource rather than commodity and focuses on stewardship rather than consumption.

Ask the question: What is my purpose in this lifetime? What resounds is a picture of culture and consciousness at work in forming me. That each of us has the privilege of asking him or herself such a question reveals an important aspect of what it means to be human. However, when I look about me in the world, I realize all this inquiry is meaningless without paying particular attention to the earth we all stand on and cohabit. While each of us wrestles, if we choose, with the question of purpose, we rarely ask the deeper questions about the meaning of land, our connection to it, and the reality that it is our shared commons—even though we have been conditioned not to think of it this way in Western culture.

Modern economics has parsed land in a way quite destructive and unimaginable to many indigenous cultures—certainly to America’s first peoples. This market-centered methodology is founded upon a materialistic worldview that values things, commodities, and quantification above all else. Ownership of land and its attendant control has become an end in itself that has been used to justify some extraordinary means including rendering the land infertile in the pursuit of profit from it, or distorting its value by using it as a kind of root cellar for capital and generator of appreciated development value. This may seem harsh judgment, but both conditions have rendered much productive land unusable and inaccessible, either through industrial farming or overdevelopment. Both are anathema to anything like a regenerative economy. Superfund sites and real estate speculation are more a commons of economic distress in the sense that we all share the costs of their consequences. The long-standing imperative to own and control land as property has its parallel in the competitive drive for control of markets and economic life in general. This age of entitlement must to come to an end along with its destructive practices. From the perspective of the land, we are all commoners, even if we would prefer not to think of it this way.

As a counter imagination, wise stewardship of the land and natural resources upon which humanity depends might render a more mutual and compassionate interdependent community—a true commonwealth. Farmers working with high integrity sustainable practices understand this. Their ultimate purpose is building soil fertility. Land trusts are founded on the principle of protecting and stewarding land on behalf of the commons. Neither the farmer nor the land trustees treat the land as a commodity. To do so would be an abrogation of their missions and the high purpose of their service. And thankfully there are many private landowners who operate in solidarity with these principles—but not currently enough to rescue the earth from commercial abuse.

I am proposing here to recast the question of land ownership in light of two other critically important but less attended to elements, namely, use and community. Imagine these three—ownership, use, and community—as the primary elements of the human relationship to land, and, from a different perspective, the aspects of consciousness and praxis that the land is calling forth from us. Each of these elements has its particular qualities, practices, and ethic, and yet they are inseparable. Use and community are often subsumed within our concept of ownership, a situation that no longer serves the economic future in which ecological limits and the diminished capacity of land (and all natural resources) to support human needs are becoming painfully evident.

Change will require a new consciousness, one that transcends conventional polarity and dualistic thinking that are the hallmarks of the bicameral mind. Instead we will need to cultivate what was called in ancient Greece and Buddhist practice the middle way, a path that recognizes the both-and, holds the extremes of the polarity and that which mediates them. This requires a certainly flexibility of mind, and I would say feeling. In this threefold picture, each of the three elements are of equal importance and serve as tension holder and balance to the others. Collectively they are a unified system; each with its unique character completes the others. Like the three primary colors from which all other colors emerge, ownership, use, and community are the primary elements of a whole relational system. While this may seem a highly theoretical approach, my hope here is demonstrate quite the opposite—it is both directly practical, a bearer of collaboration rather than competition, and a possible tool for healing our centuries long violent relationship with the earth and each other. This last hope may seem arrogant and overreaching, and it is with all humility that I propose it. But I do not know how else to frame a counter imagination to the dominant paradigm of land ownership.

Continue to read Part II

John Bloom is Senior Director, Organizational Culture at RSF Social Finance.

Between Land and Money: An Economic Consideration, Part III

February 28, 2013

This is the third post in a series by John Bloom on money (global) and land-based (local) economic systems. While we are largely accustomed to the former, this historical analysis makes the argument for a new kind of economy, one which raises the profile of land-based systems to benefit and balance the global economy as we know it.

In my last post, I discussed the evolution of the American version of economic life: an industry of limitless production fueled by commoditized land and labor, growing economic inequality, and volatile market fluctuation.

Numerous economists have observed the cyclical patterns of boom and bust, the disparity of wealth and poverty that seem an endemic part of the industrialized and global economy. But, none has addressed it as directly as Henry George with the publication of Progress and Poverty in 1880. In the book, which caused no little controversy, George argued that land and natural resources should be owned in the commons, and that private ownership and the control of rents was one of the major contributing causes of impoverishment of the many at the hands of the few. As a remedy, he proposed a single tax on the value of land. This tax would return to the public the monetary resources that in some senses were sequestered in the land and in private hands. He hoped to free up enterprise and enliven the diversity of the free market by eliminating production taxes. He argued that the single land tax would provide adequate revenue for the government’s needs. It was simple and brilliant, and a threat to those in power. What George was trying to do was find a monetary equivalent for decommoditizing the land, to make it in the community’s interest to make sure that the land was rightfully used and stewarded for future generations. George’s was a land-based economy in which the community benefited from the wealth generated by the increasing value of land. He was mostly concerned with the multiplier effect of manufacturing and production on the value, especially in cities, and less concerned about the role of land in agriculture since it was not subject to the same kind of dynamic of development.

Henry George’s approach to economics represents a view that land and all natural resources are not economic unto themselves. That is, they do not enter the economic stream until someone works on that resource; the product of that work is economic. Rudolf Steiner in his lectures on Economics given in 1922 put forth a similar concept and elaborated further that this work on the land generates one kind of value. He also identified a second kind of value stream: that which emerges when intelligence is applied to labor. These dynamically related principles lie at the heart of economic life, lead naturally to the division of labor, and the capacity to arrange that labor in such a way as to achieve efficiency and surplus capital. In some ways we have lost sight of the first value stream as our consciousness and technical capacities have developed. The land-based stream has been devalued as it tends toward place, and stands against the imperative of capital and global markets.

Steiner’s insights into evolving economic life, which he saw as global in nature, run counter to the prevailing market money paradigm in which everything down to genetic structure is owned and commoditized. Steiner stated that all the essential elements of the economy—land, labor, and capital—were phenomena not commodities. Economic life as we experience it emerges from the interactions between them, and is embodied in people’s capacities to recognize and meet each other’s material needs. For example, it was an invention of industrial society to be able to attach a price to someone’s work. It was as if to parse an individual’s capacity into machine-like component of production. In essence, Steiner also said that capital is not a singular thing, but instead could be traced in movement through its various functions. The value of that capital would be realized in how it could serve initiative and enterprise in the economy. In his far-reaching view he felt that treating capital and money as a thing would lead to a world of speculative or virtual rather than real value.

In her study of economic life, especially in an urban environment in the late 20th century, Jane Jacobs developed a vision of self-sustaining regional economies based upon what she called import replacement. Hers was a vision of small to medium-scale entrepreneurs and manufacturers who would find ways to make things locally that the community needed but had gotten by importing them. Her imagination was of a vibrant diverse and interconnected economy that depends on outside inputs only in so far as they enable local innovation. She indicated that this approach would sustain the local entrepreneurship, the job market and the rest of the local economy, and at the same time reduce the environmental degradation that results from extensive transportation of goods. Her vision also includes that which both Hamilton and Jefferson missed—a mindfulness of organic systems that looks at waste as an integral part of the economic whole and which finds innovative ways to transform that waste into new value. From a financial standpoint she realized that money kept in local circulation as a result of import replacement would have significant added value for the quality of community life. It should come as no surprise that her work has become a prime inspiration and philosophical framework for the local living economies movement. Jacobs crafted an economics of place in which land and regional natural resources play an important part, but her take on land itself in relation to economic value is not directly addressed.

Each of these visionary economic thinkers saw the economy as a whole system, and each brought a new perspective based upon the reality of their respective times. The purpose of narrating these various views of land and money is to tease out of them some sense of how we can actually live in a dynamic tension between the two, and to resurrect the shared reality and importance of land and natural resources, not as economic in and of themselves, but as part of a livable economic future—and before it is too late to do so. And further, to revise our understanding of capital; to the extent that it represents applied intelligence, it serves as something of a mediator, moderator, and motivator of the two.

Between Land and Money: An Economic Consideration, Part I

February 14, 2013

This is the first post in a series by John Bloom on money (global) and land-based (local) economic systems. While we are largely accustomed to the former, this historical analysis makes the argument for a new kind of economy, one which raises the profile of land-based systems to benefit and balance the global economy as we know it.

I recently visited the newly created Paterson Great Falls National Historic Park on the Passaic River in northern New Jersey. There stands a sign inscribed with the following: “Alexander Hamilton envisioned the great potential power of these scenic falls for industrial development.” Of course, this is intended as an encomium to the first Secretary of the Treasury of United States, and to the economic vision that he enacted on behalf of the hard-won and newly formed country. The Falls are magnificent, powerful expressions of natural forces. One can feel in the current an energetic transformation of the water as it falls seventy-seven feet, turns frothy white, and sends an uprush of mist and air.

A panorama of Paterson Great Falls. Photo courtesy, John Bloom

The sound the Falls generate is a kind of white noise to the heavy highway traffic flowing by Paterson. Looking up from the effluence to its surroundings brought with it a chilling reminder of fallen industry in a town that the poetry of William Carlos Williams celebrated and economic history left behind.

Hamilton was an economic visionary. He saw nature as an underutilized economic resource and perceived the driving needs and opportunities of young untapped markets. Political revolution and the desire for independence constituted a seedbed for America’s version of the Industrial Revolution. This drive headed the US into the interdependent web of the global marketplace. For Hamilton, fixing the major structural debt problem in post-revolutionary America’s finances by stimulating industrial manufacturing was both motivator and strategy. Paterson, under Hamilton’s guidance, became the first industrial park. This venture was accomplished by the Society for Establishing Useful Manufactures [S.U.M.], a private corporation founded by Hamilton in 1791 with other investors. The success of the venture was supported by a New Jersey governmental decree of local and county tax exemption in perpetuity along with the rights to hold property, re-engineer the natural waterways, and raise additional capital. Not a bad deal—it became the working model for government-driven economic development to this day—except that we are running out of natural resources to exploit. The history of S.U.M. is a bit checkered and instructive. Having supported the engineering and construction of the industrial infrastructure in harnessing the power of the river, they faltered in their actual manufacturing business and five years later became instead property manager and executor of water rights for all the ensuing industrial development. Their work amounted to collecting rents.

While Hamilton operated in the name of public service, and he did much to right the economy, private enterprise was the game. The history of Paterson’s Great Falls was about new industries including textiles (especially silk), handguns, rope, continuous sheet paper, submarines, locomotives and, later, airplane engines. The industrial park along with its surrounding services, shops, and residential quarters became a place of industrial innovation and manufacture, expanding jobs suited to the skills of the influx of new workers from Europe, and was an easy access upriver economic partner to the vibrant marketplace of New York City. Well after Hamilton’s time, this growth also harbored the cross-streams of cultural, economic, and political worldviews that evolved in the later stages of the Industrial Revolution. By then, the human and social consequences of capitalism were in evidence. In 1913 in Paterson, with much wealth created but in private hands, jobs created for many but at the sacrifice of worker well-being, there was a protracted silk factory workers’ strike—it represented the voice of labor striving to find its place in the growing economy. It was an inflection point marking a downturn in Paterson’s economic arc, and a reflection of how disconnected capital could become from public service in the name of profit seeking.

The sub-story to this economic development was the untaxed right granted in perpetuity to industry to use the Great Falls as an energy resource with little regard for the resource itself. With the application of capital and ingenuity, energy was extracted from the water and transformed into power, power into manufacture, manufacture into markets, markets into capital, capital into wealth, and wealth into power. This is a story of economic manifestation in which God-given abundant natural resources are seized and under the control of capital, power, and polity. This disregard for the inherent gift of nature to all and the arrogation of private and privileged rights to determine its use is a one-sided self-interested, and shortsighted economic vision. The widespread implementation of this same vision has brought us to the brink of ecological miscarriage. While the natural gravitational flow of the river is used to generate the currency we call capital or money, nothing of that value is returned to nature itself.

In the story of how natural resources are used for profit, between land [representing all natural resources] and money, is an economic paradigm in need of reassessment and intervention. They are not the same. Their sources are different, their character is different, and to quantify the capacity of the land to support life, even to call it economic, is to sell its sustaining value short. In Paterson, what all that industry returned to the water by way of manufacturing and toxic waste was far from restorative, an insult to the living water and ecosystem. Hamilton’s fundamental economic assumption was an unlimited supply of raw materials and labor, inexpensive transportation and ever expanding markets. It was essentially a materialistic view, one in which man’s role was to dominate nature. His vision lacked any sense of or need for regeneration, and imperiously ignored any wisdom to be found with the processes of nature itself. There was, even until the mid-twentieth century, no need or incentive to consider used nature or waste as an economic resource in need of ingenuity and reinvestment. Paterson’s economy held through World War II but began to fade thereafter as did much of the textile industry and manufacturing in the northeast United States. The money economy and its attendant wealth accumulation sought ever-cheaper labor and production costs, and, tragically, cared little about the waste of people and place it would leave behind.

The polluted de-natured Passaic flows on as a man-made emblematic shadow of one end of capitalism. When capital or money is extracted from nature without regard for nature’s regeneration, without respect for its living system, nature is left to die. Capital moves freely about the world, across space and time; land and natural resources are rooted in place and geologic time. In a materialistic economy, time is money, and money used in this way sadly has no patience for the evolutionary pace of nature.

John Bloom is Senior Director, Organizational Culture at RSF Social Finance.

 

Strong Vision Helps Pine Hill Waldorf School Persevere and Lead

September 24, 2012

Building the Next Economy

Fire is a defining element for Pine Hill Waldorf School—as both metaphor and history. In a sense that’s true for RSF as well.

The old New Hampshire farmhouse the school had occupied since shortly after its founding in 1972 burned to the ground in 1983. Determined to rebuild, the school formed a fundraising team. Among those they approached was Siegfried Finser, who at that moment was reviving the Rudolf Steiner Foundation (now RSF Social Finance) as a social investment vehicle.

“Our situation ignited the rebirth of RSF,” says Arthur Auer, then a Pine Hill teacher and now director of the Antioch Waldorf Teacher Training program, located during the summer on Pine Hill grounds. “Forces and people coalesced and created a comprehensive school master plan and one of the most striking examples of Waldorf school architecture in the U.S.”

INSPIRATION

“I saw an education for children where their whole beings were tended to and cared for—bodies, minds, spirits—and people coming together who all wanted that,” recalls Sherry Jennings, who has been a Pine Hill teacher from the beginning. “I was very inspired to tend that flame.”

She notes that Pine Hill was at the forefront of a surge of interest in Waldorf schools, which numbered only about a dozen at the time, most of them started in the 1940s. “Parents were looking for a new kind of school community, where they could be part of it and have connections with other adults who shared similar values.”

A similar “hunger” arising again today gives the school fresh inspiration, she says. “We’re coming full circle, in a way. I see that parents are really longing for deep connections.”

INNOVATION

That intense parent connection to the school was an important aspect of an innovative $1.1 million rebuilding package that included $500,000 in pledge loans and loan guarantees through the newly minted RSF and an innovative parent bond program. To spread costs, parents of new students were required to purchase a $1,000 bond that could be redeemed upon graduation; at that point many opted to donate their bond to the school, producing an ongoing asset-building stream.

With Pine Hill as a model, RSF has continued to support Waldorf schools, not only by providing capital but also by helping them to build communities willing to commit financial and other resources to a project’s success.

At Pine Hill, the school community also was integral to designing the new building. The architect interviewed teachers, friends, parents and children, and the children drew pictures of what they thought the building should look like. The result was a building that appears to emerge from the land itself.

“We wanted the building to arise out of a sense of place in the forest, on that granite hilltop,” Auer says, “and we wanted it to be not just environmentally friendly but also to fit into the environment. Its main gesture is a big heart of an auditorium in the center and two classroom wings embracing the children as they stream into the building.”

The auditorium was completed several years later in a second building phase, and unbelievably, a second fire struck as the last coat of finish on the stage was drying. It destroyed the auditorium and damaged both classroom wings. Insurance covered the cost of rebuilding, but “that fire was extremely painful,” says Auer. “That building was built with love by a whole team of parents.”

Now Pine Hill is building again, and again with help from RSF. The Children’s Village, an early childhood education center that fulfills the school’s master plan, is taking shape next to a biodynamic community farm. “We’re really excited about The Children’s Village,” says Jennings. “This is a space where we can protect and honor the needs of the really young child. We’re also doing publicly accessible parent education, which is a way to contribute to the whole community.”

Pine Hill child care center

IMPACT

“Without RSF we would not have been able to develop as full a master plan and model school,” says Auer, adding that the impact is not just local: The Children’s Village speaks to other Waldorf schools about the value of establishing their own early childhood education centers.

“One could become very anxious about taking such a risk in a recession,” Auer says. “But I think The Children’s Village is the right decision, to have the courage to go outward and serve the community. Others might say this is not the time to do it, but we are not doubting. Having gone through two fires has proven that Pine Hill has a strong body of life forces. I always have had confidence that those forces will prevail and bring us through to another new phase.”

VITALS

Organization name Pine Hill Waldorf School
Impact area Education & the Arts
RSF relationship Loan recipient, RSF investor
HQ Wilton, New Hampshire
Annual budget About $2 million
Employees 20+
Students 180 children, 125 teacher trainees (summer campus)
Communities served Local area and Waldorf education nationally

 

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