The Economy is Not Gravity: Understanding the Choices that Shape our Lives

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Transcript

In November of 2021 Faith + Finance hosted the second webinar in the four part Building a Loving and Just Economy series. This is a transcript of the full conversation.* Register to attend the next sessions in the series here

Rosa Lee Harden: Hello, I’m Rosa Lee Harden, Executive Producer of Faith + Finance. We work to gather people of faith so that we can begin to think about, talk about and get engaged in the work that aligns our money with our faith. We believe that money – and how we use it – has moral and ethical implications and that we, as people of faith, tend to ignore that reality. I know I do. We believe that it’s important. Not only in our own lives, but the lives of all of us on this planet. That we, as people of faith, in congregations of all persuasions, begin to learn about and speak out about the moral imperatives about how money can and should be used for the common good.

You’re joining us today for the second in our series of four webinars we are hosting this fall. We’ve already had one that engaged,  in very broad brush strokes, what we’re up to at Faith + Finance. And in the next 20 in December, we will be talking about why we believe we need to focus more particularly on the common good. That discussion will be moderated by Lindsay Smalling and will include a stellar group of folks: Peter Block, Anne Snyder, and Jennifer Bailey. Then in January, we’re convening a group of practitioners who will talk about the actions they are taking in their communities to see change happen. Stuart Yasgur, Coté Soerens and DeAmon Harges are already confirmed for that conversation. 

Today, we’re excited to have a conversation that we call The Economy is Not Gravity. I believe that one of the reasons we don’t spend much – or any – time and energy in  congregations talking about how to use or change the economy for good, is because we don’t think there is anything we can do about it. We think the economy is like gravity, a force of nature. We just have to live with it. Even though the economy systematically moves resources from the pockets of the poor and the middle-class into the coffers of the uber-rich. And even though the economy has created infrastructure that denies basic home loans to people based on the color of their skin. Even in spite of that, we seem to believe that there is nothing we can do. We’re excited to have a group of three folks with us today who do not believe that this is how it has to be. I can’t wait to hear their conversation. 

First we will hear from Eve Poole. Eve is a theologian who works in both theology and economics. She has worked deeply in each of those fields at a major accounting firm and at the highest echelons of the church of England. Eve has a wonderful book with the great title Capitalism’s Toxic Assumptions, Redefining Next Generation Economics. She will spend some time walking us through some of those toxic assumptions that we are all stuck to.

We also have Andre Perry, a Senior Fellow at the Brookings Institute whose book Know Your Price is a vivid illustration of the evils of redlining and their lasting impact on American society. Andre is currently engaged with a project with Ashoka looking to create new and morally just economic architecture.

Finally, moderating today’s conversation is a friend of Faith + Finance – Felipe Witchger. Felipe’s work mobilizes the Roman Catholic community to move its money toward good, with a particular focus on new models of what business ownership might look like in a more just economy Felipe. Along with Elizabeth Garlow created an organization called Laudato SI Action Network to put the teachings of Pope Francis into practice. I can’t think of a better person to guide this conversation. So with that, I’m going to turn this webinar over to Felipe. 

Felipe Witchger: Thank you so much, Rosa Lee. It’s a real pleasure to be with you all. I’m really excited to engage in this big conversation about understanding the forces that be in the world. And so to start us off Eve, I hope you can share some opening remarks.

Eve Poole On the Toxic Assumptions of Capitalism

Eve Poole: Hello, and good evening from Edinburgh in Scotland. I have a Scottish granny. I think everyone should have a Scottish granny. My granny suffered from very bad headaches. And when she was a girl, it was quite normal when you went to the doctors to be prescribed bloodletting as a way of getting rid of your headaches. And bloodletting is something that was very well thought of in the Middle Ages and was keeping going – certainly in Europe, and I imagine in North America as well – for quite a long time before people thought maybe bloodletting wasn’t the best way to get rid of headaches. And the technology got really quite complicated. Let me just show you how sophisticated they got. Here’s a very low-tech scarification. This is the sort of thing you also use on your lawn, but they used to use it on people’s forearms. And they would go up and down – hard enough to open some blood. And that would release the pressure on you. And they had this excellent bit of kit here. I don’t know if you can see it. It’s a rather alarming French thing from the 1920s and it is full of these nasty blades. So, what they did was they got your forearm and they’d stamp it. And again, that will get all the blood out. But thank God for science, because now if you go to the doctor because you’ve got a headache, they give you aspirin, because what normally happens in science is when the facts change, we change how we deal with things. 

And the reason I wrote Toxic Assumptions is because, for some reason, economics, even though it thinks it’s rightfully scientific, is totally stuck in the dark ages and a bit like bloodletting and scarification, hasn’t changed its mind, even though the facts have changed. So I want to use my very brief slot this evening to try and tell you everything that’s wrong with capitalism in less than 20 minutes. So to do that, I’m going to have to use a few props. I’m pleased to come back to, in the conversation, about anything I’ve skated over or been a bit vague about. I have seven toxic assumptions to get through. So I shall make a start with the first two. 

Here I have a very beautiful fish oven glove, and I have a trophy because I want to start by talking to you about utility and about competition, two of the key wheels and pillars of capitalism. 

So first of all, utility. Utility is the idea that the markets are perfectly placed to help us all maximize our own utility. And as long as all we do is crack on utilizing things and trying to get perfect utility – there’s nothing wrong with that. And that’s one of these laws of nature – the economy is gravity ideas – where there should be nothing morally complex or weird about trying to maximize your own utility, which is why I brought a fish. Because, you know, what happened in the Grand Banks up in Newfoundland, they’ve only been able to start fishing cod again in the last few years. For a whole generation they were unable to, because everyone maximizing their own utility had meant that they fished out the cod. We know, coming fresh from COP that’s exactly what’s happening, tragedies in commons all over the place. People randomly just maximizing their own utility is killing off the planet. It is just not a law of nature. It is very, very, very foolish. 

So the idea about utility and competition is that if everybody is competing to maximize their own utility, the markets should work perfectly, but competition for me is a very foolish idea. Now I imagine most of us played games of various kinds at school and at college. And there’s nothing wrong, I’m sure, with competing to win in a game of soccer or football or whatever, or you might favor, but the idea that we must compete to win market share and see off the competition and then maximize our competitive positioning, all that jargon as much more about strategy having been invented by people who were more interested in battles and wars than it was about economics and business. Because the problem about competing to the death in a zero sum game, as you end up having no customers and no competitors in order to actually create a market, whether efficiencies and economies of scale in order to flourish.

So competition is a really stupid assumption because there are two key reasons why the science is not robust anymore. The first one, we all know about if we’re watching our Oscar movies, because A Beautiful Mind showed John Nash’s beautiful thinking about game theory. And we know that coopertition, that jargon word, is a much better way to maximize outcomes, because if you share information rather than hoarding it in a zero sum competitive game, you will get a better solution set and better outcomes for everyone. So the mass is not in favor of competition or costs in spite of all our anti-trust legislation. 

And the other thing about competition is it’s based on something which feels really normal to those people who’ve been running economies, particularly in the west, for many hundreds of years because it feels really normal for men under pressure to think in terms of zero sum games, because that is what happens to a male body under pressure when adrenaline and cortisol drive a fight or flight reaction. What they found at UCLA when Shelley Taylor and her friends were doing research in the naughties was that that fight or flight research had been done on male specimens and had not really included any other kinds of results because the ones that they were getting from women seemed to be a bit, you know, the moon and hormones and a bit puzzling. And so they just kind of decided they were daft data and kind of backed them out. When they went back to look at that data, they discovered that women were reacting rather differently under pressure because – rather than testosterone being relevant around the production of cortisol and adrenaline – for women oxytocin was coming into play, which you may know as the love drug – the nurturing, breastfeeding drug. And that drives what they have called a tendon befriend response, which is much more about maximizing information by the classic female gossiping and chatting away to everyone  which is so pilloried in advertising and movies, which of course the game theorists would applaud because it’s about information sharing to maximize outcomes.

So those two core assumptions, the idea about utility, which leads to tragedies of the commons and the idea of competition, which is rubbish mass and very sexist and are two of those laws of nature, which really are well past their sell by date. 

The next two are about people. And the first one, I’ve got a CCTV camera here, is agency. And agency theory is one of these classic assumptions in economics that is about the problem you have when you have the owners of capital and you have the workers, and this is why Marx wrote as vividly as he did on this. This is why we have trade unions. Why we have HR, why we have all these processes and scrutiny and checking work strokes, and videoing people and making sure that they come to work and meet objectives and have contracts for employment, because there is an assumption in classical economics that you have to force the workers to comply because otherwise they’re automatically out of alignment with the owners of capital. So if you are a business, then you have to force these recalcitrant people to work because otherwise they’ll only skive and steal from you. 

Now coming straight out of COVID, we’ve had a really good demonstration of that thing being a toxic assumption because lots of people had to work from home. Did we all lie in bed all day? Did we all start vandalizing our neighbors’ fences? No, actually people worked even harder than normal and did community service for all the neighbors taking them food when they couldn’t get out. So that idea that people are recalcitrant and naughty is not only anti- Christian, it’s just not true. So agency theory and everything that’s come from that is one of these toxic assumptions. 

Agency theory, of course, has given birth to the most dreadful thing, which is this idea about executive stock options. And this is because of this other toxic assumption, which is the shareholder. So I have Santa here because, and I hope there are no children on this call, Santa doesn’t exist. And the thing about the shareholder is I’m not really sure that the shareholder exists either. So recently in that shareholder spring shareholders weren’t even allowed to get into AGMs. They have very few legal rights. They’re allowed to vote at AGMs, if they’re allowed. They’re allowed to be notified about AGMs. They’re allowed to sell their share, but there’s very little else they can do with the business. But in the seventies and eighties, it became very fashionable to have – the only business of business is business – and shareholder value and all these things. But actually the average time for which a share is now held, because of automatic trading, is about 11 seconds. So blink and you miss them, the shareholder, but we use them as a Santa Claus figure to say, if you do not behave, you will get no presents. And it just feels to me that that’s absolutely nonsense and we should stop being silly about that right now. 

So my last two toxic assumptions and in fact, I’ve got three to go. So hold your horses. Here’s a really good one. This one, my puppet, looks a bit like Dumbledore, maybe the Archbishop of Canterbury. I’ll get it to give you a wave. This is the invisible hand, very important because the idea about all this competition, there’s utility, all this stuff going on. And making sure you’ve maximized shareholder value by aligning everyone with stock options and all that stuff around agency theory is because if you do leave the market to it, as a law of nature because it’s gravity, then the invisible hand will sort it out for you. Hooray! Now the invisible hand kind of made sense when Adam Smith was writing about it in Edinburgh in the 1700s because most people believed in God. So when they heard “invisible hand,” they thought, oh, he really means God, that’s fine. But actually, when you think about it, the invisible hand makes no sense. So people get very romantic about these pictures of starlings and those murmurations and shoalings and the sea and all those amazing things where the sort of self-organization of nature. But if you’re a pilot, you know that quite often, your jet engine sucks up all these wonderful flocking birds. And sharks get a great feast when they’ve got all these lovely shoaling fish, they come straight into their mouths. And so self organization doesn’t necessarily have a positive teleology. 

And the problem about this idea about the invisible hand is it just lets the powerful take over because the problem about these lovely markets is they’re only as good as the messages that are going into them about supply and demand. And, quelle surprise, if the only votes in the market are coming from the rich and the powerful, then the poor and those who have no say in the market just get left out. We know that to our cost. So the invisible hand is just a collusion, really with the rich and the powerful. And it’s a very convenient myth that the free marketers would prefer us to believe in, but really is not a law of nature. There is nothing true about it at all. 

So my last two are quite practical. One it’s almost coming up to sort of Thanksgiving time and Black Friday. Here’s my sale banner because one of the other things we must all believe in is the absolute truth of market pricing. Now in the good old days, when we had the medieval scholastics, there was this idea about just price, which is that you had a certain amount of money you needed to pay for the materials and the labor. And then you added a profit margin. And most of the arguments and theology were about just price being about the sort of profit margin that would be appropriate. But of course, in the last 10, 20 years, we’ve lost sight of that entirely and we’ll price anything. I mean these tiny million pound handbags you can’t even fit your phone in and fish pedicures – crazy, crazy stuff that we don’t frankly need, but there’s a market for it. So let’s just fleece these people by charging them through the nose. And the problem by deciding that the equilibrium price, this market price is the right price and therefore the just price and therefore a law of nature means that we have crowded out all the discussions about externalities, which again, COP is making us think about really keenly at the moment, which is the actual price. Because if you are buying a dress for $10, someone is paying for how cheap that dress is. So where in the supply chain is that price really being felt. So again, market pricing I think is a collusion with the despoilation of nature and of communities and something that we should absolutely not believe in anymore.

My final one, again, a very practical one is about ownership. This is a share certificate. And it’s the share certificate for a limited liability company. And I don’t know what the statistics are like in North America, but in the UK 98% of all companies that are registered in the UK are limited liability, either companies or partnerships, 98% is somewhat of a monopoly for one business model to have. And the problem about limited liability is it means that no one ever pays. You can take any risks you like, because you will never go to jail, you will never have to pay for the downside of any decision you’ve made. Limited liability was absolutely crucial for these massive infrastructure projects, like building canals and railroads and things like that, but for it to be the automatic business model for every single new business venture is crazy. And as Felipe and others, I know we’ll mention, it’s also just a really rubbish business model in terms of not only risks, but in terms of getting value out of collaboration. So that is a very quick canter through my seven toxic assumptions. I hope you will ask me questions about them because that’s really quite a short summary of quite a big topic, but I hope it served to show you that the economy is not gravity. And what happens with flat earth thinking is facts normally come into play and change our minds and in science, that is how the rules work and it should be how the rules work and economics. And now that we know that so many of these things are not actually true, we should stop believing in them. So thank you. Back to you, Felipe.

Felipe Witchger: Thank you so much, Eve. You’ve so much to think about there and wrestle with so many different levels. So grateful for that quick overview that opened up this conversation today. Andre, we’ll turn it over to you to kind of give us some of your own background and some of  what you want to tee up for discussion today.

Andre Perry On His Research and Book: Know Your Price, Valuing Black Lives and Property in America’s Black Cities

Andre Perry: First I wanna thank Eve for ruining my belief in Santa Claus. But I certainly agree with her on so many other points that you will see in my presentation. So many of the assumptions that are held, are really held to discriminate against Black and brown people all across the country. I talk about value and you will see, and certainly Eve punched this point, that most value is socially constructed. That it is derived from the beliefs and mores of the people determining their priority or priorities. And so what I want to do is go through a little bit of the data that is found in my book, Know Your Price, Valuing Black Lives and Property in America’s Black Cities available wherever fine books are sold.

And so I’m going to share my screen. Here we go. Hopefully you can see my screen and you’ll see here a picture of the home I grew up in. It’s 1320 Hill Avenue in Wilkinsburg, Pennsylvania. And Wilkinsburg is a small Black majority municipality surrounded by Pittsburgh on three sides. And you can see, the home is boarded up. It’s been abandoned for quite some time. It’s technically worth a few thousand dollars. You can pick this home up by agreeing to pay taxes on it to the borough of Wilkinsburg, but the home is worth so much more to me. 

And like you said, we should always have stories of grandmas in our presentation. This woman in the upper right-hand corner, her name is Elsie Boyd. I call her Mom. As the story was told to me, when I was born a deal was made, between Mom and my maternal grandmother, that she would take me in. At the time, my biological mother was poor. She was probably abused. She had a child at 15 and had me when she was 17. And during the time, the steel giant US Steel was pulling out of Pittsburgh and it created an economic shock that really devastated the entire Pittsburgh area, but certainly the Black and Brown community specifically. Because we know in general, in normal times, the Black unemployment rate is about double that of the white rate. But in perilous times, the rate is much higher. And so Mom did what a lot of matriarchs did in Black communities. She took in kids. As you can see here, she took in a lot of kids. Some would stay for a few weeks, some would say for a few months, my brothers and I would stay until we graduated from high school. One of the reasons why is, in this picture here, this is my father. He was a heroin addict and he was in and out of prison. And eventually he was murdered inside of a prison right outside of the city of Detroit. And it was told to me that he died because he made a lot of bad decisions. That his collective decisions facilitated him to go to jail and it was somewhat an issue of just desserts. But I wanted to look at the overall socioeconomic environment that surrounded those choices and look at the policies that also are a reflection of our choices.

And so I started looking at where mom and my father lived. I’m going to give you a very, very brief history lesson. He and my mother lived in areas where the federally backed Home Owners Loan Corporation drew red lines around Black neighborhoods –  deeming them unworthy of investment in much of the New Deal legislation that occurred during the thirties. But redlining was a practice that continued through the seventies. 

They also were displaced by highway construction. When it was determined where to place highways that made up the federal highway system, they barreled through Black neighborhoods – displacing people, decimating commercial corridors – it really devastated Black communities. Staying with urban renewal, you saw a lot of displacement because of this promise of urban renewal that never occurred through the demolition and destruction of communities. They also lived in areas where there was significant predatory lending. And so a rent to own schemes and high interest rates and all these different things assuming that because Black people were more hazardous, they should pay higher interest rates. And then there were restrictive racial housing covenants. So Black people could not leave these communities because there were white only ordinances all around them. 

I wanted to look at how all these things impact today’s markets. And so on this chart, you’ll see the concentration of Black people in a neighborhood. And you’ll see the home prices in those neighborhoods. And we looked at both Zillow as well as census data. And so on that x axis, that’s the share of the Black population. And you can see in areas where the Black population is less than a percent, on average home prices are around $340,000 according to Zillow, about $306,000 according to census data. And it’s a pretty linear phenomenon. Whereas the percentage of the Black population goes up, prices go down and so much so that homes in areas where the share of the Black population is 50%. Those homes are, on average, priced at about half as much as their mostly white counterparts. Now a lot of people will say that’s because of education, that’s because of crime that those price differences are there. But those are the things you can control for it in a study. And that’s what we did. We looked at the absolute price difference, but we controlled for structural characteristics. So the square footage of the home, the number of rooms, all the physical manifestations. And then we control for neighborhood amenities. So education, crime, walkability, all these fancy Zillow metrics. 

Again, we wanted to get an apples to apples comparison between homes in Black neighborhoods and homes where the share of the Black population is less than a percent. And what we found was that homes in Black neighborhoods, after controlling for education, crime, all those different things, homes in Black neighborhoods are still underpriced by 23% – about $48,000 per home. Cumulatively that’s about $156 billion in lost equity. $156 billion. And this is occurring all over the United States. 

Wherever you see a green circle, that’s where homes in Black neighborhoods are priced higher. Wherever you see magenta, that’s where homes in the Black neighborhoods are priced lower. Now, just to give a perspective, homes in Milwaukee, Wisconsin it’s about 34%, 36,000 per home. And this is occurring all over the country. In Metro areas, Lynchburg, Virginia, 81% difference, 81%. So if you helicopter a home in a Black neighborhood in Lynchburg and put it in a similar situated neighborhood, in terms of all the other social amenities, except for it’s a white population, it would increase in value by 81%. Rochester, New York, 65% difference; Jacksonville 47%; Detroit, the largest Black city in the large metropolitan area, 37%.

There are places where homes and Black neighborhoods are priced higher. In Nashville, Tennessee plus 10%; Wichita Falls plus 16%; Boston, Massachusetts plus 23%. I always have to explain though that Boston is no less racist than Lynchburg, but the home prices are higher. 

I just always want to put the $156 billion in perspective because, you know, what does that really mean? It’s a big number, $156 billion. It would finance more than four million Black owned businesses, based upon the average amount Black people use to start up their firms. It would have paid for more than eight million, four-year degrees. Based upon the average amount of a four-year public education in the United States. It would have replaced the pipes in Flint, Michigan, nearly 3000 times over. Most of you know about the tragedy in Flint and the water crisis there. It would’ve covered all of hurricane Katrina damage nearly. And it’s double the annual economic burden of the opioid crisis. It’s a big number. 

When things go wrong in Black neighborhoods, what do we do? We blame Black people. Thich Nhat Hanh, the Vietnamese philosopher, once said, “when you’re growing a head of lettuce, you don’t blame the lettuce. You look to see if the soil’s rich, if it’s getting sunlight, if it’s getting rainwater, you never blame the lettuce.” 

I put that last bullet about the annual economic burden and opioid crisis because all through life, I heard not just in my own family, but through other Black men who were in prison, that they made bad decisions. That they were at fault – not the policies that extracted wealth and opportunities from those families every single day through normal practices. This is why I say that there’s nothing wrong with Black people that ending racism can’t solve. We have got to stop blaming Black people for the tragedy, the policy violence, that occurs every single day through normal practice. 

I’m going to show a brief clip in closing. This is representative Al Green of Texas. I was asked to participate in a hearing around home appraisals. They wanted to examine whether or not there was discrimination in the pricing of homes. Remember how I said earlier that all valuation is socially constructed. And then in the case of home valuations, know that appraisers, while it’s not the only thing that determines the value, appraisers who are explicitly charged with determining value are 90% white in the United States. 90% white. Now I want you to look at this exchange between representative Al Green and members of the appraisal industry – those who regulate appraisers when asked a very basic question: do we feel that there’s discrimination in appraising? 

“If you think Black people are being discriminated against when their property is being appraised, would you kindly raise your hand. One person on the panel? If you think that, for fear that I’m not communicating well, if you think that Black people are not being discriminated against when their property is being appraised, if you think they are not being discriminated against kindly raise your hand. Okay. Hands now, we’re getting some consternation, I see.” 

Now that was, that hearing was two years ago. And since then, if you follow the news, you’ve seen there’s been a reckoning in the real estate agent  industry where the appraisal industry itself has released statements saying they found racial bias, the organizations charged with regulating the industry found racial bias. The data was overwhelming. But that was two years ago before the reckoning of 2020. Now obviously that video did not age well.  Their actions did not age well for those members on that panel. But I, and I don’t show this to shame people, but I do say this, that when we present these facts, people will deny facts. And now this is another moral decision that people are making – a moral, ethical choice to deny facts, to deny suffering, to deny wealth stripping, to deny theft. Because that’s what that $156 billion represents – theft. These are the choices that we should be concerned about. These are the choices that have significant implications on families all across the country.

And so I’m looking forward to having this conversation because you could see the overlap between Eve and my work, because this idea of market pricing, for instance, makes no sense, but the people on the panel will say, oh, well, it’s an issue of supply and demand that’s what it is. And so we’ve got to end this charade. And so thank you. I’m looking forward to a robust conversation. 

Q&A with Felipe Witchger, Eve Poole, and Andre Perry

Felipe Witchger: Thank you so much, Andre. First of all, I just appreciate your vulnerability and storytelling, where you come from and helping to set the context around every one of our communities that has had this history of exploitation violence, but sharing your own story. I think giving us the context that we live in today in America with that beautiful Senate hearing or unfortunate reality, that kind of drives it home. I’m so, so grateful for that right now. 

I just want to take everybody in the audience just to take a moment to sit with what we just heard and to begin to formulate some questions that can help guide our discussion. And I’ll be sharing a few of mine in a second, but I want to just give people a second to pause and put things in the chat, things that stuck out to them, things they want to highlight from Eve and Andre’s remarks. And then we’ll begin this discussion about the choices that shape our lives, understanding them. And then also thinking about this bigger question.

Just to begin, let’s start where you just ended, Andre, about market pricing and valuation. Eve, you attack that assumption head on. Do you want to begin our conversation there? What makes sense to you, given why we have the reality that Andre just described here in the United States? 

Eve Poole:  I think it goes back to Edinburgh again and David Hume and skepticism and our obsession with facts. You see this cashing out all over the place, whether it’s about you know, the selfish gene or materialism or whatever. And this is the problem with, I think because we’ve forgotten everything we learned about things we can’t count. We only look at what we can count and because it’s a bit difficult to figure out what the real price of petrol is – which we just make it as cheap as possible – because then that means we can keep the shareholders happy. But when they did try very hard to figure out what gas in America costs, they figured out that when you add on the military costs, when you look at the subsidies, when you look at all the wars that are being fought, when you look at, you know, the problems we have with economic degradation and the fires and all this stuff, people couldn’t afford to drive if they were actually paying the proper cost of gas or the gas station.

And I think this is exactly the point about homes and communities and just looking at market pricing. It’s not looking at the real cost. And we’re getting better in the supply chain within retail, thinking about fair trade and thinking about what happens to clothes. It just ends up in landfill and fast fashion, but we’re only really starting that journey. And for me, it’s a great privilege to have the scales fall from your eyes around market pricing. And to think that’s just the start of it really is, is trying to get ever more elegant at trying to track and understand the secondary tertiary, way down the line ramifications for whole communities, as well as the whole world and the whole planet about what things actually cost and therefore what price is the right price. And some of that is about consumers needing to pay more. I think we’ve all got used to cheap stuff. But if it’s cheap, it’s probably bad. 

Andre Perry: Yeah. You know, I certainly have some thoughts on this. One. I think that oftentimes when we put things in strict economic terms, issues like growth become a driving force and there’s just too many nefarious ways to get growth using these terms. I used to run schools at the University of New Orleans when I was a professor there. I worked in an education school and we ran four charter schools after hurricane Katrina. And one of the questions I used to get asked all the time is what’s the fastest way to close the Black, white achievement gap? And I used to say, well, the fastest way to close the Black white achievement gap is to stop educating white people. Now, obviously I would never advance a policy like that. But the reality is we do equally nefarious things for growth all the time. And in the case of education, we fire teachers, we take away people’s civic rights in those contexts.

And in the case of growth, we often base whether or not we invest in people on whether it’s going to add to GDP, for instance. We should be investing in people regardless of growth. And particularly when it comes to things like housing, there are basic human needs and rights people should have, and we certainly have the material wealth to supply those needs at a global scale. But we don’t because the reality is, we have this belief that some people are better than others. That there’s a way to interpret my data on the housing prices that when that 23% it’s, you know, not to get too technical, but it’s like a standard deviation lower. In a word, when you look at education, it’s almost as if people see twice as worse education than there actually is. They see worse crime than there actually is. Their perceptions are baked in the pricing, which, and so if you have a dim view of Black people, you’re going to distort the market in a way that results in these insane prices. And so for me, again, these are values that we are exercising in the, but they come out on the wash of price, but we’re really witnessing who we value and who we don’t value.

At least in the American context, in this case, it’s, it’s Black people. It just comes down to the wash and the price. And so certainly I think even I will I mean, we, I mean, I’m not an economist, but I do economic modeling. I use a lot of numbers in my research, but I’m really not data-driven. I’m community driven and I use data to help communities. And too often data is used as a way to sustain racial hierarchies, to sustain class hierarchies. And, and that’s what we’re seeing, I mean, trickle down economics, come on. There’s been a lot of research coming out in the last two, three years about the failure of trickle down theory. But I can tell you that there were economists, thinkers who thought it was a horrific idea at the time, and yet they were dismissed. But the hierarchies that developed these models had an interest in maintaining that power. And so you can’t divorce these belief systems from these models.

I mean, even my model, I’m very biased. I want to see Black communities grow and benefit. I’m very upfront with it because people are dying because of wealth hoarding, because of these completely fraught models, people are dying. I work at a great think tank and I love it, but I’m always clear that we have to look at our own models that come out of these mainstream institutions to say, we’re, we have to be seen as part of the problem. What are we going to do to adjust? And so a lot of my work is part of that adjustment. 

Felipe Witchger: Thank you, Andre. I think you brought up a bunch there that I want to build on. I’m not an economist, and I think this is a problem that I think many of us confront more explicitly, especially people of faith and finance like us. In Economics 101 I was taught the basic theories of neoclassical economics alongside the schools of thought that are critical of the mainstream. Neoclassical is our dominant theory that is taught about 95% of higher education institutions around the world. But there are alternative schools of thought and it’s been systematically out-rooted. Eve brought up Marx a little bit and kind of name, a little bit of the dynamics there and the logic. So how do we disentangle the types of theories we engage with? I think it’s helpful to say there are starting points to different theories. There’s assumptions. There’s a logic and there are different objects of focus in those theories. 

So Andre, you were just saying one of the starting points you bring is the death, the crisis we’re in right now, the anti-Blackness that we face in our culture, in all of our institutions. I think that’s a particular starting point. Eve, you did a great job of helping us name the assumptions that are implicit in new classical economics throughout your piece. I think there’s a different set of assumptions. We can focus on different theories, focus on different objects.  Let’s take on Marxian economics as an example. Every labor hour, every hour produced has some amount of surplus value that’s created that the boss gets to appropriate, right? And whoever that boss is, it might be the board of directors. It might be the CEO. They get to choose what happens, in that dynamic, to the person who’s creating that value, that labor power. There’s an exploitation dynamic that happens because we don’t have agency over allocating where that surplus gets allocated. Right? There’s no agency as us, as the worker, as a person creating that productive piece. So in Marxian economics, we talk about that in New classical, going on, we talk about market value, price, recession, economic, different things. So all those objects are important to talk about how different theories go about it.

People say, what are the pathways to reforming capitalism or economic theory as we have here. What are some of the solutions and policies? So I want to go to that in a little bit. But I just wanted to kind of open up some of the different theories that we can use to analyze things. And I think it’s important to name some of the people, like Eve here, who’s helping build alternative theories. You mentioned other folks, Doughnut Economics takes a different starting point, right? Kate Raworth has gained a lot of traction in terms of ecological sustainability, basic human needs. So you mentioned Andre just about human dignity as a starting point. What if we said basic human needs are a starting point that we should provide for all? And in Catholic social teaching and all of our faith traditions have that basic human dignity and human rights as a fundamental starting point our UN system has that as a starting point. So we’ve agreed in certain systems, but our economics hasn’t kind of taken that in, in the mainstream context. So I just thought I would. Open up some of those pieces  to see if there’s more questions that are arising here and I’ll turn to those in a second, but  turn it back to even Andre here for other pieces to react to that.

Eve Poole: If it helps, there’s quite an easy way to, cause I was a theologian and coming into economics was a really bad idea because I’m a girl and a theologian. So that’s a really disastrous combination. I kind of get off a little bit because I’m Scottish. So maybe because I’ve lived approximate to where Adam Smith was, that vibe might help. But generally I think it was Mitchell in the chat who asked about the reception. I’ve generally been written off as some nasty feminist because in one of my chapters, as you know, on competition, I talk about gender. So therefore you could write the whole book off and say she’s a ranting woman and therefore we should ignore her in toto.

I think you can talk about, you know, Kate Raworth, development economics, you can talk about behavioral economics, you can talk about Marx. You can talk about a whole lot of different schools, but I think in some ways it’s really straightforward. You know, if you go off to some remote corner of the world as a visitor or on a trek, some child will be there trying to sell you some water or to swap you something. It is incredibly fundamentally human nature that if you have some kind of surplus, some gift, some ability, some skill, some asset you will tend to treat it for benefit. And we know this has just always been the way things are. And of course, when you have communities building up and you have organizations deciding to make lots of rugs to sell to the tourists, or have lots of camels that you could have them all have rides on, you know, you start getting organization. And so one way of understanding schools of economic thought is just to look at that sort of intervention along the scale. So at one end you have no intervention at all. That’s classic free market, Neo Chicago school economic theory, which is that all you need for markets to flourish is a rule of law so that people don’t rip each other off and so that contracts stay legally in place. And apart from that, you just stand well back. And as you’ve heard from me, I just think that is a protection racket for the powerful. But that is where an awful lot of very classic economic thinking is situated at the other end of the scale, you have Marx and more extreme versions of Marx, which is that we can’t trust individuals just with the rule of law. So actually what we need to do is be very paternalistic and have the state ownership of all assets to make sure that we can have control over how we divide those up. The problem is they end up being the same thing, really, because then the powerful colonized the state and you ended up getting corrupt regimes and you don’t get the even flow of information that you might have at this end of the spectrum to help.

So neither end of the spectrum exists or is helpful. And what you find is that communities arranged themselves somewhere on that spectrum. And that includes gray economies as well. So economies that aren’t official ones, wherever you go in the world, there are black markets, there are gray markets, there are all kinds of other markets. And really when you boil it down, it’s all about supply and demand. It’s all about messages. And I think that’s where I would want to get straight back into conversation, because you’re only as good as your messaging, the supply and demand messages. And if half the people on the planet aren’t involved in market, then none of their messages get in.

And that’s at the heart of all the policy violence that you talked about, Andre, is this about excluding people from messages about supply and demand so the market cannot cater for them. And I know development economics and things like Bill Gates trying to get everyone on Windows in the third world. Concern like a really bizarre move, but it’s actually about trying to give people access so that it is fair because you have more votes if you were involved in market.

And there is unlikely to be anywhere on the planet where there isn’t a market of some kind operating, whether it’s an economy of scale, whether it’s joined up, whether you can actually operate in it and trying to understand that kind of basic behavior reminds you that it’s all about moral choice. And when you have power in market and you have votes, then it’s about figuring out who could you be exercising your solidarity with in order to make sure that their voice is being heard, their needs are being met. 

Andre Perry: You know, I’m so glad you made those comments because for so long I’ve been asking, where is the voice – the moral, ethical voice in these big discussions about markets? Because we saw, at least in the United States, this immoral force of Trump and I can say this, that he represented a valueless sort of extreme utilitarian sort of perspective, that whatever benefits me. He commanded the narrative for the United States to certain extent, but for the world. And we didn’t have that counter conversation, that moral counterweight saying, no, this is about community. This is about advancing democracy. That is one of the reasons why I love revisiting Martin Luther King Jr and that period, because he spoke in moral terms. He certainly talked to the economy. He talked to war. And he did it through the moral language of the church. Malcolm X and others spoke eloquently about morality.

Its not that I’m against econometric modeling. That was the word I was looking for. We do it based upon various theories, but even those theories have a moral, ethical backbone to them that we need to start talking about. We’ve baked in exploitation in our growth models every single day, and we’ve made them normal. We’ve normalized that in the United States. When we talk about full employment which is when you theoretically have more jobs than people. And your unemployment rate is 3%. Was it? Oh, the economy is great. But when you look under the hood of that full employment, you see that Black employment unemployment is double to triple of cases. You look at wages in the country and you see these big differentials. And so when we talk about full employment, what we’re saying is Black people can be the sacrificial lambs for full employment. That Black labor is in service to white growth. That’s what that means. And we’ve just accepted those terms as being okay.

One of the questions (I get is) how do economists respond to my work. You know, they respond. I mean, they get technical, we get into debates about how to measure price. My work has been pretty much accepted by most reasonable economists across the left/right continuum. Even those who disagree, they say, oh, it’s not about 23%,it’s more like 9%. I always say I’m not doing this to necessarily refine a model. I think that’s important. I’m doing this because we have neighborhoods that are literally dying, people suffering. And it’s not their fault.So, what is it? What are people doing? Everything you told them to do. They’re going to school, they’re going to college.They’re purchasing homes. They’re not developing wealth. They can’t start businesses because most people in this country started their businesses using the equity in their home. You got less equity, you’d have less startup capital. So we’re doing everything that we’re told to do and it’s not paying out. And you can’t just go pull yourself up by your bootstraps over and over again. It makes no sense. And so for me, this is not, I’m not in this at all for being the best researcher in the world. I do this because I also understand the rhetorical power of numbers. I know the rhetorical power of narrative and I want to see change. And it’s not that I’m tilting numbers. I’m just saying there’s an alternative perspective on how we price things that actually makes more sense when you look at the conditions on the ground.

And so for me, I entertain debate, but I don’t go to these debates about my research. I fact check and do all the necessary due diligence to make sure the research is tight. But I get into this to have a conversation of values that is woefully absent in the discussion about the health and wellbeing of people all across the world. We need to talk about value in a moral, ethical sense. And for me, like I said, most of value is socially constructed. And so the use of  economic terms is really an abdication of our responsibility to deal with the suffering that we see right before us. 

And the audience listening, I mean, we all have choices and, and for me, it’s about now, do we have the courage to stand up to blatant discrimination. Now I’ll be very brief, I named my book Know Your Price based upon my favorite play in the whole wide world, Two Trains Running. In the play, the main character Memphis is about to have his property seized through eminent domain by the city of Pittsburgh. In which the city of Pittsburgh offers them $15,000. And he says, no, I’m not selling my property for $15,000. ‘I got my price. I know my price.’ I’m paraphrasing, but it’s a refrain throughout the play. There is another character, Hambone, who is struggling. He says, I’ll paint your fence if you give me a ham,’ he asks the proprietor. And he paints the fence. He never gets his ham. Throughout the play he says, ‘Give me my ham, give me my ham, give me my ham.’ Now we don’t know if he had mental illness before he started painting for his ham, but he eventually goes mad and dies demanding a ham. Now there’s actually a happy ending. I know people are like, damn, that’s pretty bad sounding. But the happy ending is after wrestling with the city, the restaurant owner, Memphis gets $35,000 and it’s assumed that he’s getting the white rate or the market rate. But the moral of the story is, you’ve got to know you have worth. And what I try to do is give people the price to stand on, even if it means going crazy and dying. What we need now is more courage, more willingness to stand up because the models that have been presented, that have dominated the world landscape, are so deeply flawed. And we’re seeing the research come out, which makes it more clear. Where are you going to stand on these issues? Where are you going to stand? And so I do this modeling because I really just want to mobilize people to have a conversation about value in a much deeper way, so they can see the consequences of this exclusionary paradigm that dominated the world scene for too long. 

Felipe Witchger: Thank you, Andre. I love that. That’s building that courage piece. And what can we do? In light of the realities, in light of the abdication of responsibility, you mentioned in light of this moral frame that we need to start from, in light of the unlearning we need to do about so much here. One thing I’ll propose, and one thing I’ll share, I work a lot with Catholic asset stewards, primarily with congregations of women, religious nuns who have been on the frontiers of divestment whether in South Africa and apartheid or the front lines of community investing or whether it’s affordable housing and others. More recently, I think they’re trying to blend this question of reparations. I think many in the United States and Canada have been aware of their violence and extraction running Indian schools and how their own history is there. They want to pay reparations for that. And how do you do that in a way that also takes into account where they’re at today and then kind of how they become asset stewards. 

For investors – this is from Adasina Capital – they have an incredible racial justice fund. It just kind of helps point to the spectrum of investment options we have: 

  • Everything in traditional public and private markets, to me and to them, is extractive. And that’s because it has capital supremacy. Capital’s interests are always at the top and it always prioritizes maximizing financial returns without concern for social or environmental things. 
  • And we have ESG: environmental, social, and governance. That’s more aware, it’s less extractive, it considers some social impact. 
  • Then we have impact investing, which I think is trying to do no harm. It’s trying to prioritize the social, while considering the financial returns for the investor. 
  • And there’s sustainable investing – here is the reparative. It’s the regenerative, it’s the livable future investing we’re directly investing, prioritizing the community wealth, building the asset building for communities of color that have been extracted from for so many years without focusing as much on maximizing shareholder return.

So this is just one framework of the broad spectrum of the different ways I’m encouraging more faithful asset stewardship to move from the left side of things where I think we have, usually, the overwhelming majority of our assets to the right side of things where I think we can begin to pay it forward.

So Andre, you’re doing a bunch with Ashoka. I’d love to hear about that. Eve,  I know you have many ideas and things you want to point us to, in terms of, what can we do. Give us a little sense of that Eve and then come back to you, Andre. 

Eve Poole: Yeah. I mean just building on the, what do you do with investments? You know, I think you can sit here and listen to all of this and just feel utterly powerless and think it’s all so complicated and big and dreadful. It’s impossible to fight it. It is impossible to get involved and change things. And it reminds me of that lovely story in the Old Testament about Naaman who had leprosy. And he’s heard, or I think one of his servants has heard about this holy man, Elijah, he might be able to help. And so he puts on a massive show and he gets all his horses and all his armies and all his treasure. And he goes over to see Elijah to try and beg for some healing. And Elijah sends out a servant to see him and says go and wash in the river and Naaman and is furious because that’s not what he’s after it all. And he imagines that this holy man will come out looking fantastic, like my lovely wizard puppet, and there’ll be a big party and there’ll be a big ritual. And these are all right strops. So he leaves because he’s not having that nonsense – getting in the river. And eventually he’s persuaded, of course, that he should at least try just going in the river and washing three times. And of course this leprosy goes and he’s never even met Elijah. 

And so there’s something about the simplicity of what we need to do. So one of those things absolutely is about investments. Because as I said, it’s all about votes. It’s all about messages of supply and demand. And if suddenly there is a market for vegan meals, or there is a market for ethical investment, or there’s a market for fair trade coffee, then there will be supply to meet that demand.

There’s something about taking your job really seriously. So I’ve just been rattling around, this is an old one of mine, but you’ll probably recognize this kind of thing, a bank statement. This is a UK bank. And you probably get this electronically or physically every month and you probably just file it. Well, this is your report card to St. Peter. And I think you need to start taking it really seriously, because this is your voting record. And every single transaction is either you voting for mammon or voting for God. 

So for me, the best place to start, rather than freaking yourself out by thinking about Chicago school and huge political structures and COP26 and all that sort of stuff, is to just start being really curious about your own habits. And a lot of that is just Googling the hell out of everything on your bank statement to understand who owns this company and where are they invested and are they signed up to ethical trading initiatives? Are they paying a fair wage? Do they pay their taxes? Do they even have a supply chain or admit to using factories in China that are disallowing and disappearing or corrupting people and doing dreadful practices around everything. There’s something about making yourself really uncomfortable about those really tenacious, cheap things you’ve got on your bank statement and trying to understand is there a better way to turn that from a kind of red to a number and then from an amber to a green.

So a lot of it, I think, is highly pragmatic. And that is also about where are you getting income from – other investments or pensions that you need to be checking out to understand what your mandates are about how money moves around. Are you volunteering your time, your talents, are you using all the resources you have really well?

I think that if we start just washing in the Jordan regularly on that stuff, then that starts spiraling out. And there’s a really interesting fact, it’s based on UK data but I would imagine it would hold in America as well, about shopping locally. When I was over in Cape Cod one fall they had an initiative in the local church there where they asked you to pledge $50 a month to three of your favorite local institutions. So it might be a hairdresser or a coffee shop or a flower store. But they said, we want you to vote with your cash to keep them going. Because they were finding, in small communities people go past the flower store and they go to the supermarket to get a cheap version of what they could have got from the flower store, and then all of a sudden the flower store has gone out of business. So there is something about voting with your cash.

The New Economics Foundation UK found that if you spend a pound locally and you go into a massive chain store, like a supermarket or a big global chain, then your pound or your dollar ends up being worth, in the UK it was 36 pence – the equivalent of 36 cents. So that’s a massive diminution because that money goes straight to headquarters, it goes offshore, it goes wherever it goes. They find if you paid that pound to the local fishmonger, the local grocer, the local hairdresser, whatever – there’s a halo effect locally and it becomes worth £1.76. That’d be equivalent to $1.76. I’m looking at the statistics on it, because the money circulates and there was a lovely video major in lockdown of a little boy on the Shetland islands, in the very north of Scotland, putting that to the test. He went out shopping with his mom and they’ve all got their masks on and they’re very careful. And he goes into a shop and he pays his pound to the person who’s buying coffee from that person, then nips out and goes to a shop next door to buy some flowers. And then that person goes and buys some milk and then they go. And you can see the money physically circulating around the community instead of just being spent.

So there’s something really interesting about that word ‘spent.’ Your money is never spent – it travels. So being really curious about where your vote is going and where that wealth is moving helps you make better decisions about your own behaviors. And as we know from systems thinking it’s those little nudges that consumers make that are most likely to make the biggest difference rather than hanging on in the hope that governments will legislate because that takes too long and there’s often the wrong legislation when we finally get it. 

Andre Perry: There were a couple things that I wanted to respond to about what we can do. But it really ties in to Eve’s point about investing locally. One, I’m doing a project with the social impact organization Ashoka. And so what we’re doing is we want to invest in the people who are most proximate to the problem of housing devaluation and get their ideas.

Too often, we invest in the muckety mucks of the world, and I include myself in that, to help fix communities. And what’s problematic about that is my capacity is built, not the local leaders who actually have probably the best view of the issue and probably can offer the best solutions. So what we did, Ashoka and Brookings, we partnered to do a collaborative challenge where organizations can get up to $100,000 to work on their ideas with others in a collaborative effort to learn around how we should end devaluation. So if there’s anybody out there who’s interested in ending devaluation and you need some seed capital for it, we found a way to get it to you. It’s a Google, Brookings, and Ashoka collaborative challenge, and actually there’s going to be another webinar on this very issue. And so stay tuned for that. We just launched it. And so there’s that. 

In addition, I also think what we need to remember is that reparations didn’t come from the federal government. It was moved to the federal government through local action. And so I really believe that we should be striving for reparations that our local level. And make it so that it can make its way up to the federal level. I say this all the time, and it’s a big argument, in the reparations world, should we define reparation very strictly as a congressional act in which there is a racial reconciliation commission; there’s a check, particularly for slavery, cut that comes from the federal government; and a few other things. But the point of it is should it come from the federal government solely or principally? And I say that that’s not how it will work. Redlining came from Baltimore, it came from Richmond, Virginia. It came about because of churches, universities. And how we’re going to get justice is by making justice happen at the local level. And so it includes buying locally, supporting local organizations because the money will circulate more and in those spaces, but it also means this overall investment in local economies.

But again, this is an area where narrative has really influenced our thinking on this. We talk about regional economies and tradable sectors and not about small businesses. And, by the way, 95% of Black businesses are sole proprietorships. Only 2% of Black businesses are employee firms.

And so how can Black people actually participate in a regional economy if we’re not investing in them so that they can scale. And so for me, it is about figuring out ways to invest locally. And, this is the kicker, we’ve got to make investments directly to people. Because of devaluation, there’s less resources.   And let’s always remember that we were robbing people every day. We need to restore that value, putting money back in the pockets of local residents. 

Now we do need to invest in place because of devaluation, neighborhoods need investment. But if you invest in place and in brick and mortar and not in people…in the United States, we see Opportunities Zones essentially give tax breaks for the wealthy to invest in brick and mortar. But what happens? Property values increase and people eventually are pushed out because wages are not keeping pace. And so that’s why I say always invest directly in people first. You do need to invest in a place, but not to the detriment of people. And then finally, as a sort of framework, we have to divest from racism. And the housing issue – we are completely invested in an evaluation model that compares homes to determine price and compares homes to others in a particular neighborhood.

Now, the problem with that is if you do that in neighborhoods that have been historically discriminated against, you essentially just recycled it, the discrimination over and over again. You never get out of it. And that’s what’s happening in the United States. So home values never really reflect what’s going on and they reflect our perceptions of Black people.

And so for me it is about a new era of establishing repairative strategies. It’s about elevating a repairative culture. Establishing a repairative culture that will then bubble up. Because, I’m under no illusion. Particularly in an era of Amazon. The wealthy of the era have power that even the wealthy of the steel or the industrial boom did not have. And one more thing, I’m running my mouth here. We do need to have conversations less about money and income and more about power. How do we build power among people who have been historically disenfranchised? Because I don’t believe Elon Musk is going to change his perspective anytime soon. You’ll never make a head case or heart case with him, in my opinion, to do the right thing. But we can mobilize and organize local residents to fight. To get people to pay their fair share of taxes.

And by the way, the tweet was so disturbing this weekend that Elon Musk put out. When Bernie Sanders tweeted the house, we need the very wealthy to pair their fair share. Elon Musk actually tweeted out something to the effect of I’m surprised you’re still alive. Now with someone with that much power who can actually hurt people in so many different ways, that statement tells you the willingness of people to exercise their power. It was a flex, no question. And so we have to stand together to say no more. That’s why, again, this is about talking about building power among those who have been historically disenfranchised. So let’s have those conversations and not only about wealth. Yeah. Wealth as a form of power. Income is a form of power. But, you know, there are other forms that we need to discuss 

Felipe Witchger: Andre, I’m glad you brought us to power. And I think it also, I want to come back to a question we had about limited liability and overkill, but I think the way power is structured in business, the way power is structured in organizations, even in non-profit organizations we structure power dynamics in a certain way. A lot of my work is in cooperatives and employee owned businesses and perpetual purpose trusts and steward owned businesses, which is trying to restructure power for reciprocal relations between stakeholder groups. 

I’ve been reading this book about being a good ancestor, thinking about long-term time horizons. How do we think about a hundred years? Not just, you know, the next 10, 20 years. I think you’re asking us similar questions. How do we restructure the extracted power dynamics implicit in business, implicit in real estate that you just named so well that continue to perpetuate these racist paradigms and this extraction. The cooperative movement has gained a lot of steam in the United States, largely with federal legislation that helped set up credit unions and electric co-ops, and structured things democratically. Now we’ve lost a lot of that democratic participation inside those organizations so we don’t have the kind of reciprocity mutualism that we like to see. But there is a whole new generation of think social purpose co-ops that are doing that quite well. Platform co-ops. In the movement for Black lives, they have a cooperative economics working group.

I’m trying to help put forward these funds that we can invest in. There’s one called the Equitable Economy Fund that started a co-op and incubator of cooperatives to invest in. There’s another one called Kachuwa Impact Fund that has a non-speculative valuation on real estate. It’s kind of a real estate investment trust combined with a mutual fund. And it’s invested in Harlem Capital and a bunch of the Black led fund managers that have come out of the past few years, raising private equity funds to build wealth for Black communities and communities of color. I offer these to give folks a sense of where you can deploy your resources if you’re interested in moving toward capital reciprocity, which structurally changes those power dynamics in those firms where the boards aren’t solely comprised of the investor shareholder and not just maximizing capital’s interests, but trying to have reciprocity between different stakeholders in the firm structure. 

But taking us back to the starting point where Eve was sharing about limited liability companies. Is there any more you want to share on that, Eve? 

Eve Poole: My point started off being about unhealthy monopolies because I don’t think limited liability is so unconscionably dreadful, there should never be any of them. It’s just that, as a prevailing model, it’s not really robust enough for all the different sorts of enterprise we now have. And it is an economic risk to have one main model. So when I set up my own business, because I left Ashridge Business School to have children. And I was needing to contract back to them to finish off some pieces of work. And, as a charity, they have to contract with other entities. So I had to set myself up over a weekend as a business. And maybe if I’d had months and months and months to investigate, I could have found an alternative, but I could not find any professional services firm that was willing to do anything other than either a PLC or a limited liability partnership in the UK. I had no choice because there were not the templates, they weren’t the professional services firms who could give me advice. There was no structure around it. So what’s been really good over the last 10, 15 years is that there is so much more professional help available to people about the alternative models. And what I would like to see is an awful lot more research on the merits of different models.

Because I think we all instinctively know that cooperatives are kind of a no brainer. I mean, it’s like it’s much more complex in terms of decision-making, but there are enough of them that have been going for hundreds of years, that they’ve kind of nailed that. And we can absolutely see that if you centralize power and use the device of shareholders, then you just get yourself into really hot water very quickly about the corruption that model introduces.

And as soon as you have automated trading and you don’t have Robinhood taxes, you have a machine that goes out of control very quickly and financialization of that model, which is really where it all ends up. So I’d like to see a bit more research into alternatives in order that we might generate more professional services that would support alternatives. But because it just seems to me that their days have come and there are better business models for the challenges the world faces. 

Andre Perry: You know I think there is a broad issue here that the wealthy have used their wealth to manipulate tax code and other regulations to essentially hoard wealth. And we’ve got to really unpack a lot of these things. I mean, LLCs, tax code, all these areas where the wealthy have just used to say, I’m not going anywhere. I don’t have to contribute to the overall general wellbeing of the democracy. I don’t have to be responsible for my deeds. So we need to really look deeply about how wealth has been used in this country to maintain an exclusive growth model. And I mean, it’s just getting worse and worse with every generation. 

Now I will never say that we are worse than what we saw during the slave trade. That was the ultimate form of exploitation. However, you can easily argue one, there still forms of slavery. Not the form of chattel slavery that we’ve seen in the past, but we also see a level of dependency that is just getting out of control. And when it comes to a lot of venture capital, they’re just getting outsized attention. If we had the kind of government programs that were well-funded, we wouldn’t need all these separate social impact endeavors. We wouldn’t need them because people could go to college, they could get healthcare in the United States. Some folks in Europe are like, what? you gotta pay for healthcare? Yeah, you do. You get, you know, people actually pay thousands of dollars in some cases to have a child that we need. People pay to go to college to get educated – that we need. You know what’s mind blowing about that is that in the K-12 arena, primary, secondary school, everybody gets a grant to attend a public option, everybody, because we agreed that it’s basic. Everybody needs it. Society needs it. Individuals need it.  Well, what’s the difference with doing that in higher ed? Now it’s not a luxury. We need you to go to college. So why are we having people take out enormous amounts of loans to do so except to maintain a power structure in this country? It makes no sense.

And so, for me, there are so many areas. In terms of LLC tax code, higher ed policy, that we need to really say, okay these assumptions are wrong. It’s so out of touch, they were really never in touch. I mean, in some way, you could argue that some of these things were created during a time where they kind of made sense, but they were still exploitative in nature. But now we have to realize our power and this dismantling of that architecture of inequality, because this is why these systems are so in place, you don’t have to bat an eye and they’re producing disparate outcomes. 

Felipe Witchger: Thank you so much Andre. I’m just so grateful for Rosa Lee (Harden) and Kevin (Jones) and the whole Faith + Finance community network for gathering us. I’ll turn it back to you, Rosa Lee for concluding pieces here.

Rosa Lee Harden: Thanks to all three of you for this. I am not quite sure why this has become my life’s work to talk about these things. There are times that when we look at these pieces that it gets so huge that I wonder what we’re even doing. I start thinking, I think the economy is gravity, let’s just give up on this. But when I hear the three of you talk about the work that you’re doing, it energizes me and invigorates me and just gives a lot of strength for the journey. So thanks to each one of you, Eve, Felipe, Andre and thanks to everyone who tuned in today. There are a lot of great questions here, a lot of things to think about, and I know we didn’t get to all of them. Our newsletter will have a recap of this conversation. Share the video with your friends. I’ve been texting people saying, okay, you’ve got to watch this. You can find that link at faithfinance.net. And if you have any direct questions for any of us, you can email us at info@faithfinance.net.

I’m just so appreciative. I do see every day more and more people coming to this conversation, coming to this realization. And I really believe that something’s about to catch fire here and we’re going to see some, some change beginning to happen. So thank you all so much. Look forward to seeing you on another webinar or in person.

*This transcript has been edited for clarity. 

Join the Faith + Finance Community for the Next Conversation in the Building a Loving and Just Economy Series

The third webinar in the Building a Loving and Just Economy series will take place on December 7 at 1pm Eastern (10am Pacific). This session will be focused on the topic of “Beyond Rugged Individualism: What Is the Common Good?” Join Moderator Lindsay Smalling of 60 Decibels, Anne Snyder of Comment Magazine, Jennifer Bailey of Faith Matters Network, and author Peter Block as they discuss the role of community in building an economy of interdependence and mutuality. Register here

The fourth and final webinar in the series, Toward a Just and Loving Economy, will happen on January 11, at 1pm Eastern (10am Pacific). Join Stuart Yasgur, of Ashoka, in conversation with changemakers Coté Soerens, Seattle, Washington, and DeAmon Harges, Indianapolis, Indiana. Register here