Life-giving corporations to support community: what’s possible?

By Michael Meegan and Michael Prince

“Most of the great political struggles of the past 5,000 years can be reduced to the simple question: who will own land, water and the other essentials for living — and to what end?”
From David Korten’s Foreword to Owning Our Future by Marjorie Kelly

1. Introduction

Aboriginal people are increasingly involved in setting up corporations resulting from determinations, major agreements, trusts and other corporations.  The western corporation with its western governance compliance obligations, cultural
values, assumptions and skill requirements is almost inevitably and necessarily the legal basis of the associations that aboriginal people are, in many cases, required to set up. The ‘cultural gap’ between this model and Original communities can be problematic.

In this space the aspirations of traditional owners are often lost among the non-replaceable rules or other governance expectations found in the rules of the various corporations.  This phenomenon is not peculiar to indigenous or Original communities. Private and public company directors, not for profits and government bodies also often struggle with the tension between performance and revenue generation, and meeting stated cores values and mission statements.

In her 2012 book, Owning Our Future: The Emerging Ownership Revolution, author, Marjorie Kelly, argues that a primary cause of the 2008 Global Financial Crisis was the continuing dominance of the “Extractive” ownership model of the western corporation, focused on its fundamentally “extractive” purpose of “maximising financial profit”; privileging financial wealth generation above other purposes, values and priorities.  She argues our global future requires a fundamental shift of values and practice FROM the dominant Extractive model TO a more diverse range of ownership designs that are fundamentally more Generative: whose fundamental purpose is “creating the conditions for life”. This involves a values shift:

  • from maximising Profit to Sustaining Life
  • from Growth to Sufficiency, and
  • from Individualism to Community

She then elaborates five key elements of generative ownership design (described below) and uses this new Extractive/Generative distinction to describe numerous compelling examples of where this new more diverse “Generative Economy” is already emerging alive and well. In line with this shift in values, these new Generative ventures are profit making rather than profit maximizing.

In this book, Kelly introduces a rich vocabulary for thinking about economic ownership models, the values they embody and purposes they serve. Our hunch is this enriched, more explicit vocabulary (with examples) offers opportunities for those of us who are making choices and giving advice about community and economic development in the context of Original communities.  We think this enriched language can support us to:

  • more clearly articulate and surface our convictions and intentions when setting up corporations (generative or extractive) and
  • create entities uniquely suited to their own context and more capable and accountable to actually deliver on their founding intentions.

For the authors, this paper is a beginning not an end point. It is an invitation to a conversation about how the ideas in this book could be life giving for the communities we belong to and/or serve. From some early conversations with colleagues we think there are real possibilities. Let’s see what you think.

FairMarket, which of course is the central marketplace for FairCoop members to buy and sell; in fact one does not have to have had any dealings with FairCoop before to interact with the market; to buy it is sufficient only to have some Faircoins (which can be bought at www.getfaircoin.net) and to sell one only has to apply for an account and have a Faircoin wallet address in which to receive funds.  These low barriers to entry, plus the fact that almost any good or service, including non-physical informational or downloadable goods, can be bought and sold using the platform, mean that people who are excluded by the current system, such as refugees, economic migrants or stateless people who are unable to open bank accounts (and thus unable to participate in online commerce) can, as long as they have a means of accessing the internet, start taking advantage of this worldwide platform to participate in an alternative economy which could potentially be both a lifeline, and a way out of the the trap in which the incumbent system has placed them.

The FairCoop team is pleased to announce that the FairMarket has now officially entered its beta phase, which means that it is fully functional as a market, and we invite interested individuals and organisations to come and test it out, either as sellers or buyers or both.

To give some background on the project for those who have not been following its development, and with apologies for repetition for those who have, FairMarket is only one piece in a much larger jigsaw, that of the FairCoop ecosystem, which is a global open cooperative designed to ‘build a new system in the shell of the old’. The full details are at the website, but in summary we aim to create a network of services which allow anyone to break with the current capitalist hegemony either partially or entirely, should they choose to: a self-managed network of mutual support where commons takes precedence over profit and there are no barriers to entry other than being in harmony with the FairCoop principles of Integral Revolution, P2P Organisation

Where do we look for hope that we can shake off dead ideas and adapt to the new environment we’re in the process of creating?

We look for hope right there in the despair. Every person who can’t get a job at a big corporation is another person who gets to figure out how to create and exchange value in the real world. Every person who can’t get a loan is another person willing to consider how alternative currencies, favor banks, and the commons work. Every town whose economy has been trashed by a corporation is another community about to learn that the only things you need for a thriving economy are people with skills and people with needs.  The moment we stop optimizing the digital economy for the growth of capital, and optimize it for the circulation of value between people, everything will start to get better really fast. https://blog.p2pfoundation.net/douglas-rushkoffs-vision-new-better-world/2016/03/15

In this paper & presentation we offer:

  • • Some observations about the current context in which we are working;
    • A brief introduction to the key ideas from Marjorie Kelly’s book;
    • A few of our thoughts about how these ideas might be useful.
    • An invitation to talk with us more to share you own own thoughts and experience.
    2. Context
    The financial position and context of Aboriginal Corporations is diverse.
    Aboriginal communities have been on a long journey to get recognition of native title and
    access to financial resources.
    The demands around getting native title recognised, setting up agreements and benefit
    management structures require traditional owners to set up western corporate structures
    3
    based on legislative requirements and technical/legal advice from “technical experts” with
    typical western corporate and commercial assumptions and values. These are usually more
    implicit that explicit.
    To a certain extent, this is inevitable and, indeed, necessary to assist traditional owners in
    relation to the agreements they make and the distribution of benefits arising from those
    agreements. However, the primary emphasis of much of the work done is on the
    technical/legal/compliance requirements and not on the more fundamental questions of
    Identity: of guiding purpose, principles and values.
    Under the urgency and weight of these compliance expectations how much time is set
    aside:-
    • for conversations that enable intention and purpose to be clearly articulated
    alongside the corporate compliance obligations.
    • for reflection on what individual and collective aspirations lie in the hearts and
    minds of the traditional owners, the aspirations that “their” corporations are
    created to serve,
    • to intentionally create an entity explicitly designed to deliver on those aspirations
    and be held accountable to do so.
    Beyond the compliance obligations:-
    • What is the corporation’s fundamental purpose (s) and guiding values and principles
    and, therefore
    • What particular form of economic development/ ownership design might actually
    enable and nurture these ends/values?
    • How do we ensure that dealing with the necessary Company, legislative and trust
    compliance expectations serves and doesn’t stifle the core purpose and spirit of the
    corporation and community.
    This tension is ever present and many readers will be familiar with the challenges
    associated with corporate design and its implementation. Our hunch and hope is that ideas
    and approaches described in Kelly’s book have something to offer here.
    QUESTIONS:
    • How would you describe the context in which you are working?
    • What’s similar and different to what we describe here?
    4
    3. Summary of Key Ideas from Owning Our Future
    “Redesigning the models of ownership that form the base of our economy
    isn’t a mechanical, legal exercise. Ownership designs embody a worldview
    and a set of values. The dominant designs of our day are built around
    values of individualism, growth and the pursuit of maximum financial wealth.
    An emerging ecological sensibility is shaping a new set of core values, such as
    sustainability, community, and sufficiency. This value shift creates the
    seedbed for new kinds of generative ownership and a profoundly
    new kind of economy. Instead of being rooted in the ethereal world of finance, this
    new economy finds fertile soil in the living earth and in human community.”
    Marjorie Kelly
    By introducing us to the distinction between Extractive (maximizing financial profit) and
    Generative (creating the conditions for life) ownership design Marjorie Kelly provides us
    with richer, more explicit language to observe, think and talk about the forms of social and
    economic development that might best serve, might bring most life and sustainability to
    Indigenous communities.
    She argues for and describes a fundamental shift of values and practice that she sees is
    already occurring on a significant scale around the world: This is a shift FROM the
    dominant Extractive model of ownership design TO a diverse range of ownership designs
    that are more Generative. This involves a values shift:
    • from maximising Profit to Sustaining Life,
    • from Growth to Sufficiency, and from
    • Individualism to Community.
    Based on the many and varied examples she describes, she then elaborates five key
    elements of generative ownership design that she notices are present to varying extents in
    the many compelling examples she describes. Each of these is an imperfect “work-inprogress”
    each evolving and adapting to suit their own unique and particular context.
    The Architecture of Ownership – The Design of Economic Power
    EXTRACTIVE OWNERSHIP GENERATIVE OWNERSHIP
    1. Financial Purpose: maximising short
    term profits in the short term
    1. Living Purpose: creating the conditions
    for life over the long term
    2. Absentee Membership: ownership
    disconnected from the life of the
    enterprise
    2. Rooted Membership: ownership in
    human hands
    5
    3. Governance by Markets: control by
    capital markets on autopilot
    3. Mission-Controlled Governance: control
    by those dedicated to social mission
    4. Casino Finance: capital as master 4. Stakeholder Finance: capital as friend
    5. Commodity Networks: trading focused
    solely on price and profits
    5. Ethical Networks: collective support for
    ecological and social norms
    (from Owning Our Future, page 18)
    In1 Owning Our Future, Kelly develops this distinction and framework around Extractive
    and Generative ownership design out of a long professional history of working in the
    corporate social responsibility/ethical governance field, and from extensive research and
    case studies from the field. She is not creating a blue print theoretical framework that
    ‘should be’ imposed on all, but a “pattern language” that supports us to observe, see what
    is already emerging in our own context, and support the further development of unique
    forms of economic development and governance that work in each particular context.
    The diverse forms of what she calls generative ownership are most often private
    ownership, but with a purpose of serving the common good. Generative ownership models
    include cooperatives, employee owned firms, community land trusts, community banks,
    credit unions, foundation-owned companies, and many other models that root control in
    the hands of people who have a natural interest in the health of their communities and
    local ecosystems. These are in contrast to the dominant ownership models of capitalism,
    which Kelly calls extractive.
    Extractive ownership features Absentee Membership and the rapid speculative trading of
    Casino Finance, built around the purpose of maximizing the extraction of financial wealth.
    This creates a disconnect between the common good and the global banks, corporations,
    and financial markets that control the means of living.
    For Kelly: “Ownership [design] is the gravitational field that holds our economy in its orbit,
    locking us all into behaviours that lead to financial excess and ecological overshoot.”
    Generative ownership, by contrast, has the purpose of creating the conditions for the
    flourishing of life. It features rooted membership, in the living hands of employees,
    families, communities, and others connected to the real economy of jobs and homes and
    human life. It features Mission-Controlled Governance that keeps firms focused on social
    mission, Stakeholder Finance that allows capital to be a friend, and Ethical Networks
    that provide collective support for social and ecological norms. Most of these enterprises
    are profit making, but they’re not profit maximising.
    Just three amongst the many case studies Kelly explores are:
    1 The following paragraphs summarising Kelly’s ideas a significantly drawn from David Korten’s excellent
    Foreword to the book.
    6
    • The Community Forests of Mexico: a global leader in forest stewardship by
    granting ownership rights to local communities, many of them indigenous, tribal
    people – like the Zapotec Indians of Ixtlán de Juarez in southern Mexico. Community
    members have incentive to be stewards of the forest, since forest enterprises
    employ 300 people doing work such as harvesting timber, making wooden furniture,
    and caring for the forest.
    • The Manufactured Housing Park Program, first devised in New Hampshire and later
    spread across the United States: this uses a cooperative ownership model to help
    people in mobile homes and other kinds of manufactured houses purchase the land
    on which their homes stand.
    • The North End Lobster Co-operative, one of more than 20 Lobster cooperatives
    found in the US state of Maine: Started in 2002 Coastal Enterprises, Inc (CEI), a
    community development corporation (CDC) helped a group of 5 lobster fishermen
    obtain $380,000 in financing to secure shared waterfront property to give them
    access to the sea. The co-op now has 24 lobstermen as members, and activity from
    this property that supports more than 40 families.
    Please see Attachment 2 below for further information on these examples and for more
    information about different categories of generative design.
    In this book, Kelly’s central theme is that the architecture of ownership defines the
    purpose of the enterprise and largely determines whether it will operative in an extractive
    or generative mode.
    QUESTIONS:
    • Where do you see more GENERATIVE and EXTRACTIVE economic ownership
    models happening in the Australian Indigenous context?
    • What’s most useful or significant for you about Kelly’s ideas? What do you
    agree/disagree with and why? What do you want to find out more about?
    4. So what? The Power of New Language & Different Conversations
    “Language was the first technology of humans – but like other technologies
    not fully understood.
    People thought it was merely a tool for describing the world,
    and didn’t know that it was a tool for creating it.”
    Walter Truett Anderson – The Future The Self
    As citizens and practitioners there are some things about this book that resonate strongly
    with us. In this section, we attempt to describe what some of these “things” are, and
    then, offer some initial thoughts about how, where and why these things might make a
    practical difference in the way we all might work.
    7
    The Power of New Language
    Language is powerful. We use it to describe reality and to create new realities and
    possibilities. It can reveal new ways of seeing things and conceal or limit what we can see
    and create.
    By naming and exploring the differences between Extractive and Generative Ownership
    designs, Kelly introduces us to a significantly richer vocabulary for observing, thinking
    and talking about ownership design and economic development, the values they
    embody and purposes they serve.
    This new language is “revealing”: it gives us richer language and vocabulary for
    observing, understanding, and making sense of what’s happening around us in the
    global, national and local economy and why. It helps us see things more clearly and,
    perhaps, assists us with the choices we make. It helps us see more clearly what is and is
    not working in the dominant growth/maximising financial profit driven economic
    worldview; and the assumptions and models that under pin it. It also helps us understand
    what are the prevailing unconscious assumptions and models at work in Indigenous
    economic development.
    It potentially gives us a common language to think and talk with others about appropriate
    models for economic development. It allows us to think and talk bout these issues with
    greater rigour and clarity.
    Connecting Ends & Means – Aspirations, Purpose & Values with the Mechanism
    Kelly’s language, system, purpose, values and design elements provides us with a frame for
    talking about what is most important to us (aspirations and values) and helps us link these
    explicitly with economic development models that serve our most deeply held human
    values.
    For communities this creates a framework for ensuring that economic development serves
    their deepest aspirations.
    For Advisors, it offers a framework that moves us beyond compliance. It gives us a way of
    clarifying what communities really want and co-designing ownership design that genuinely
    serve these more fundamental ends.
    Kelly’s language provides us with a language “bridge” through which indigenous
    communities and advisors can better understand and articulate what is of most
    fundamental importance and how we get there (what technical form it takes).
    Conserving & Transforming Culture
    Kelly’s description of purpose, values and five key elements of the generative model
    provide a potentially useful framework for indigenous communities to clarify amongst
    themselves what they really want. Kelly’s language could potentially provide a helpful
    8
    “bridge” between “conserving” traditional values and “transforming”: identifying
    appropriate and necessary cultural adaptions that need to be embraced to sustain life for
    the future.
    The question then is to what extent the values of the Generative Economy (Sustaining Life,
    Sufficiency and Community) provide a starting point that is more naturally aligned with
    “traditional” indigenous values. From that starting point, the values of the Extractive
    model vs the Generative model and the five elements of both provide a framework for
    thinking and talking about what is important and wanted in the current context: what
    needs to be preserved and what might need to change and to clarify what choice
    traditional owners want to make.
    Hope, Alternatives & Possibilities
    Beyond the new language for thinking and talking, Kelly demonstrates and give us hope
    that there IS an alternative to the Extractive Ownership model (if that what is wanted). It
    is NOT the only game in town, and more than that, there are many diverse, partial and
    imperfect global examples of generative alternatives emerging in this new economy.
    It is not just pie-in-the-sky idealism.
    For some the answer may also lie in first understanding, and then looking beyond an
    either/or discussion around the extractive vs the generative models. For example, can
    Directors of publically owned companies instill generative principles alongside the desire
    to maximise profit?
    QUESTIONS:
    • Which of these ideas could be useful for you?
    • How else might these ideas be of use to you?
    5. Conclusion & Next Steps
    In these few pages we have tried to give:
    • An overview of what we see in the current context of Indigenous social and
    economic development;
    • A brief introduction the key ideas from Kelly’s Owning Our Future book;
    • Some initial thoughts about how these ideas might be useful to those of us working
    in these field: those in leadership roles in indigenous community and corporations,
    and those of us providing advisory and consulting services to communities and
    organisations.
    As we said at the start, for us, this paper is a beginning not an end point. It is an invitation
    to anyone interested to further conversation about how the ideas in this book could be life
    giving for the communities you belong to and/or serve.
    9
    So, if this has triggered some energy and interest, please contact and speak with us; let’s
    have a conversation.
    During the writing of this paper we had conversations with a range of experts who work in
    the native title or connected fields. We invited them to read Kelly’s book and offer their
    thoughts about the potential relevance and usefulness of her ideas to our field.
    Some of their initial thoughts are included on the following couple of pages, along with
    their contact details in case you want to have further conversation with them.
    Finally, in closing, let me again quote from David Korten’s Foreward to Marjorie Kelly’s book:
    “Behind the workings of our economy lies the invisible issue that few of us focus on — the
    issue of ownership. … Our well-being, indeed our future as a species, depends on restoring our
    relationships to one another and with the land, the water, the sky, and the other generative
    resources of nature that indigenous people traditionally considered it their obligation to hold
    and manage in sacred trust. The architecture of ownership is key.”
    Thank you, and we look forward to picking up the thread of this conversation with those of
    your who are interested.
    Michael Meegan — Email: mmeegan@ymac.org.au Mob: 0408 954 487
    Michael Prince —- Email: michael@aashaconsulting.com.au Mob: 04027 275 977
    10
    Attachment 1: Comments from Colleagues
    Congratulations on your excellent paper and the important conversations it will spark. Some brief
    comments from me:
    • From my experience as a financial advisor on behalf of Aboriginal groups in many negotiations
    with mining companies, there is always a strong emphasis on maximising financial outcomes,
    but also a very high value on other vital factors such as cultural heritage protection,
    education, training and employment, and business development opportunities. Maximising
    financial outcomes is usually not seen as an end in itself, but as a means to achieving economic
    independence. These aspirations are more reflective of the generative ownership model
    advocated by Ms Kelly.
    • I also note, and as you’ve highlighted, there are Western private ownership structures that are
    focused on promoting the aspirations of the member communities (e.g. cooperatives, employee
    owned firms and the like), whilst not necessarily maximising financial outcomes. These
    structures are not commonly encountered and often are not well understood by outside
    advisors. There would be much benefit in raising awareness of these structuring opportunities
    when establishing traditional owner ventures.
    • I’d be very happy to participate in any ongoing work in this field.
    Barry Lewin
    Managing Director
    SLM Corporate Pty Ltd
    Level 15, 330 Collins Street
    Melbourne VIC 3000
    Phone: 03 9244 9644
    Mobile: 0419 302 493
    Email: Barry.Lewin@slmcorporate.com.au
    It has been an immense privilege for me to work with and learn from Indigenous
    communities throughout Australia for the last two decades or so. In my journey I have
    never met an Indigenous person who is not concerned about providing for a better future
    for their peoples, particularly the next generation to come. That is almost always front of
    mind, as are the ways and means of holding in a healthy balance core values of caring for
    country, culture, kith and kin, with profitable participation in the real economy.
    Marjorie Kelly’s seminal book, ‘Owning The Future’ provides some invaluable direction
    about how that balance can be achieved.
    I commend Michael Meegan and Michael Prince for kick starting a discussion aimed at
    applying Marjorie Kelly’s seminal thinking to the Australian native title context.
    I look forward to continuing to join in this important conversation as our collective
    thinking matures, and to it being applied ‘on the ground’ if and when communities so
    desire it.
    I am convinced this generative movement will, in the years to come, serve to contribute
    in some measure to a state of reliable prosperity for all native titleholders across the
    country.
    Peter Seidel
    Partner – Arnold Bloch Leibler
    Level 21, 333 Collins Street,
    Melbourne Victoria 3000
    & Adjunct Professor of Law
    School of Law, La Trobe University
    Phone: 03 9229 9769
    Email pseidel@abl.com.au
    11
    Attachment 2
    Generative Ownership Design – Categories & Examples
    As she explores and describes her many examples, Kelly suggests it may be helpful to think
    in terms of a single family of generative design, within which we can describe a number of
    different (and at times overlapping) categories and subcategories. She tentatively offers
    the following four broad categories of generative ownership design as a possible a starting
    point for further work by others.
    1. Commons Ownership and governance. Here, assets are held or governed in common.
    The ocean, a forest, land, a park, a municipal power plant (like Hull Wind) is held or
    governed indivisibly by a community.
    2. Stakeholder ownership. This is ownership by people with a human stake in a private
    enterprise – as opposed to a purely speculative, financial stake. It includes
    cooperatives, partnerships, credit unions, mutual insurance companies, employeeowned
    firms, and family-owned companies. But for these to be generative, their
    purpose must be life serving (not all mutual, employee, or family ownership can be
    considered generative).
    3. Social Enterprise. These organisations have a primary social or environmental mission
    and use business methods to pursue it. They can be nonprofits, subsidiaries of
    nonprofits, or private businesses. Social enterprises sometimes blur the line between
    for-profit and non-profit.
    4. Mission-controlled corporations. These are corporations with a strong social mission
    that are owned in conventional ways (often with publicly traded shares, yet they keep
    governing control in mission-orientated hands. They include the large foundationcontrolled
    companies common across northern Europe. A family or a trust can also be
    in control.
    For Kelly, “these different enterprises use different ownership designs toward similar ends
    – to create the conditions for life. Generative design, in essence, means kinds of ownership
    that have a Living Purpose, with at least one other design element/pattern that serves to
    hold that purpose in place (otherwise, what you have is not a design but only good
    intention).”
    Just three examples of some of these categories are:
    • The Community Forests of Mexico: a global leader in forest stewardship by
    granting ownership rights to local communities, many of them indigenous, tribal
    people – like the Zapotec Indians of Ixtlán de Juarez in southern Mexico.
    Over the last 30 years, the problems that bedevilled other forests in Mexico, like
    deforestation and illegal logging, have become relatively unknown at Ixlán because members
    12
    have incentive to be stewards of the forest, since forest enterprises employ 300 people
    doing work such as harvesting timber, making wooden furniture, and caring for the forest. In
    this design of commons governance, the forest is not walled of as a pristine preserve, nor is
    it clear-cut to enrich absentee owners. It’s a working forest, with control in the hands of
    those with an incentive to look out for the long-term interests of both the human
    community and the natural world.
    This is Rooted Membership at work – operating hand in hand with Living Purpose.
    In Mexico today, I discovered, community forests represent an astonishing 60 to 80 percent
    of all forests. Worldwide, more than a quarter of forests in developing nations are managed
    by local communities, with environmental sustainability working hand in hand with the
    economic and social wellbeing of communities
    • The Manufactured Housing Park Program, first devised in New Hampshire and later
    spread across the United States: This uses a cooperative ownership model to help
    people in mobile homes and other kinds of manufactured houses purchase the
    land on which their homes stand.
    The process works a legal transformation in the nature of their property. Manufactured
    homes previously viewed by banks as personal property (like a car or a boat) became real
    estate. That means they get better loan terms. It also means, as studies show, that residents
    plant more flowers, attend school conferences, enjoy higher property values, and move less
    often. Here again is rooted membership at work – bringing a transformation in a human
    community, through locally rooted, collectively held ownership.
    At the heart of it is Living Purpose. And the design is fed by Stakeholder Finance, where
    capital becomes a friend, not a master. This resident-owned community model was devised
    by a financial institution This loan fund has nearly $70 million under management. And it
    pays investors up to 4 and 5 percent interest annually, at a time when bank certificates of
    deposit are paying a fraction of that.
    • The North End Lobster Co-operative, one of more than 20 Lobster cooperatives
    found in the US state of Maine: Started in 2002 Coastal Enterprises, Inc (CEI), a
    community development corporation (CDC) helped a group of 5 lobster fishermen
    obtain $380,000 in financing to secure shared waterfront property. The co-op now
    has 24 lobstermen as members, and activity from this property that supports more
    than 40 families.
    “A lot of these guys used to fish on the town wharf,” they tell me. They had to haul their
    own bait and fuel every day. When they went to buy bait, he continues, “they’d be taken
    advantage of by wholesalers.” Owning land gives them guaranteed access to the water, as
    well as a secure pace for winter storage of boats and traps. They’ve built a bait cooler onsite
    allowing them to store a ready supply. Buying bait collectively, they get better prices.
    They’ve also arranged for a lobster buyer to come regularly to the co-op – in the busy season,
    every day – so that lobsters are moved efficiently.