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OUR CORE VALUES

OUR CORE VALUES

Capital in Flow

“Money is the most universally motivating, mischievous, miraculous, maligned, and misunderstood part of contemporary life.”
— Lynne Twist

“The question of socialism or communism or capitalism or between the left and right – I think the important question is between the industrial society and the earth-based society. And I say that because I believe that capitalism and communism are really much more about how the wealth is distributed, if it trickles down or is appropriated at the beginning to those who have worked for it. But, you know, someone has to question where the wealth came from. What right does society have to the wealth? What is the relationship between that society and the land from which it got its wealth? Those are the questions that should be asked.”
― Winona LaDuke 

 

Eight men now have the same wealth as half the planet; 3.5 billion people. This is a great injustice for many reasons, not least of which is that this keeps capital sequestered away from many more productive uses. What is the purpose of wealth, and how should it be put to the highest and best uses?

We all have an unconscious and largely uninterrogated relationship to money that shapes how we interact daily with ourselves, others, and the planet. When we begin to ask deeper questions about the purpose of capital, we understand that money is no more than a social contract that has evolved over centuries to its current form. 

Money, as we know it today, is only 50 years old. In 1971 at Bretton Woods the US determined it would go off the gold standard and become a fiat currency. Simply put, this means that the value of currency was no longer tied to some tangible “intrinsic” value (like metal in the ground). Instead, it only had relative value — meaning, we could make up as much of it as we wanted, and we have. The amount of global currency in circulation has increased significantly in the last few decades.

Strangely, however, the velocity of money (the rate at which money circulates in an economy) has been trending downwards over the last decade or more. As inequality increases, the rich cannot spend their money fast enough, leaving many of the assets circulating at a much slower rate. 

The only criteria for currency is that it be: a store of value, a medium of exchange, and a unit of account. How we account for value, store it, and exchange that value in the future will look very different 50 years from now than it does today.  Some estimates put the total economic value of the derivatives market at 10 times the size of global GDP, more than $1.2 quadrillion — a truly incomprehensible number, for something we invented and for which there is questionable value.

Money is an abstraction of value. That value is determined by a collective set of social agreements about what we deem valuable (and what we do not). At SheEO, we want to put capital to work for businesses creating real value in the world: solving real, global problems while also recognizing the value of our social, cultural, ecological, and spiritual capital that undergird everything else. 

How do we do this? Ventures receive a 0% interest loan that is paid back over a total of five years. This means that 20% of the loan is paid back each year and can be put to work supporting an additional Venture. This creates a perpetual fund with capital that is in constant flow. Our initial vision is to have $1 Billion of financial capital in perpetual flow, to benefit all of humanity, now and for generations to come.

Reflection question: Where am I holding onto and blocking money from flowing to its best use? How can I be more open-handed today to ensure that all may not simply survive, but thrive?

 

Resources:

BOOK Decolonizing Wealth — Edgar Villanueva 

ARTICLE Here’s all the money in the world, in one chart — MarketWatch

SITE The Value of Everything — Mariana Mazzucato

BOOK Who Cooked Adam Smith’s Dinner? — Katrine Marcal

BOOK The Making of a Democratic Economy — Marjorie Kelly and Ted Howard

BOOK Doughnut Economics — Kate Raworth

ARTICLE Velocity of Money — Investopedia

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