[INTRODUCTION]

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"Donnie Maclurcan (DM): We're already building a system beyond capitalism. I think it's on its way. I think it's going to be much more equitable. I think it's going to be a sustainable system that truly connects with our deepest wisdom – that we need circular systems, money, of power, of resources. And the best way we can get there is to look at what's working. Build on that. Move our money. Move our investments. Move our purchasing. Move our attention. Move our bodies. Work with these organizations that are building that path and move our support in all sorts of ways for these entities. And together, we're going to be that 3.5% that's going to see that shift to a system. As Charles Eisenstein says, "The more beautiful world our hearts know is possible." 

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[00:00:44] Jenny Stefanotti (JS): That's Donnie Maclurcan, Founder and Executive Director of the Post Growth Institute. And this is the Denizen Podcast. I'm your host and curator, Jenny Stefanotti. In this episode, we're talking about how to move beyond capitalism now. You might recognize Donnie's voice, hH=e's been on the podcast twice now. First time was a conversation on post-growth economics. It's one of the most listened to conversations we've ever released, and this is an important follow-on to that one. 

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There we talked about what it would look like to have a market economy that wasn't capitalism, that was truly purpose-driven, that actually achieved, over the long run, the objectives that we have for humanity and the planet. And this one looks at where that market economy exists now and the ways in which we can transition our attention, our money, our labor out of the extractive economy that's deeply problematic to one that is fundamentally circular, and regenerative and all the things that we talk about on the Denizen Podcast. 

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This is the first hour of a really remarkable two-hour and 45-minute conversation we had, with a lot of brilliant people from the community asking Donnie questions after this interview. If you are interested in this topic, please don't hesitate to email me. I'm happy to send you the full conversation. 

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As always, you can find show notes and resources on our website, www.becomingdenizen.com. There you can sign up for our bi-weekly newsletter where I send the latest content to your inbox along with announcements from our partners, many of whom work at the forefront of the topics that we cover on the podcast. 

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I know everyone loves Donnie. So I trust that you will love this conversation. 

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[INTERVIEW]

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[00:02:24] JS: When it comes to the economy, we are actors in it in so many different ways in where we choose to work, where we invest our money, where we spend our money. And, really, when I think about a theory of change into a new system, I get excited because we all have a role to play in that through all of these behaviors. And in many ways, we're implicitly condoning and voting for a system that is quite broken, that we know is broken, by those behaviors. 

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And so, the objective of the conversation today is really to start to talk about what we can do now. What's happening now? What are the exemplary organizations now that actually embody this new variation of the economy that we talk so much about? And how can we think about shifting our own behaviors? Whether that's our time, our energy, our money in that direction. 

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I wanted to start the conversation to talk about what capitalism is. Because I think a lot of times, the way that we're talking about capitalism in the next economy, people tend to think capitalism is markets. And if we're not talking about capitalism, then we're talking about socialism or communism. But that's not what we're talking about here. Let's just start by how you would define capitalism, Donnie, so that we can start to get clear on what we mean when we say beyond it. 

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[00:03:39] DM: Absolutely. Thanks so much, Jenny. I see capitalism as a system that is primarily driven by the principle of capital accumulation. A system primarily driven by the principle of capital accumulation. That is to say, if I invest capital, I am seeking to gain a return that allows me to accumulate more. And that is the fundamental principle that sits underneath the logic of how the capitalist market works. 

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[00:04:08] JS: I think this is important. Because when we talk about capitalism and some of the things that are fundamental to it, they're more fundamental to a market and not necessarily to capitalism as we're talking about it in this conversation, right? We can have a market economy that isn't capitalism. And I think that this is important. 

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So you still have things like exchange, and private property and production by private actors. But the distinction is the role that capital actually plays in that economy. 

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[00:04:38] DM: Yeah. The distinction is the capital players. And also, what's the underlying logic? And so, I think when we're talking today about how, right now, there are many avenues, projects, organizations that are showing us a path towards a post-capitalist market economy, we're talking about organizations that you'd be familiar with that operate in ways that engage with capital. 

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For example, they do capital raises but they use debt mechanisms as we'll explore probably a little later on. They have workers. They pay staff.  All of the things that we, like you said, ascribe to our understanding of a market economy. But they happen outside of the notion of capitalist accumulation. 

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And whether that's accumulation through rent on land, or whether it's profit through dividends from companies, or whether it's capital gains when you sell a stock. These sorts of activities are particular to capitalism in comparison to what might be a post-capitalist market. There are lots of companies, organizations, and projects that operate without the notion of capital accumulation as their driving logic.  They put purpose ahead of profit and are actually purpose-driven, but still operate within the existing capitalist market system. They are showing us a path forward where you don't have to have that incentive for capital accumulation as the primary driver of your market logic. 

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[00:06:02] JS: And so, I think that it is important to understand that these organizations can take different structures and forms.  They share this characteristic about the role that capital plays in them. And that it's not about – I think an important distinction is extracting capital from the firm, right? It's not to say that there isn't a return on the deploying capital into an entity, right? 

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[00:06:30] DM: Right. Right. 

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[00:06:31] JS: So let's get clear about that. Because I think that's important. 

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[00:06:34] DM: Yeah. And if we just zoom out for a second here, when we're talking about the big picture, I think we're talking about extraction of capital. And particular here, extraction of money from circulation in the real economy. The real economy being the economy of productivity where people are actually doing work, doing productive things. 

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And we see in a capitalist system a constant extraction of money from common circulation into the speculative economy of stocks, of land and other assets, which are, in many ways, speculative in terms of their value. And that extraction of money from common circulation is actually what sits underneath the unaffordability for individuals to have a place to live. It's what makes it difficult on a daily basis for people to have other basic needs in terms of food, shelter, these sorts of things in particular because of what happens with the indebtedness that we all feel at the hands of capitalism if we're not on the side of the accumulators. 

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And also, the important piece to just raise at this very beginning about the organizations, and businesses and projects that we're going to be exploring today is, often, they're looking at this through an equity lens and thinking how do we respond to a system that has not only extracted money from common circulation but done this through an exploitative lens typically and historically through a lens that has marginalized and exploited certain populations over others that has a racialized aspect to it. Many people talk about racialized capitalism to understand that capitalism is in itself fundamentally racist. It reflects the racist lens of so much of our social systems. 

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The groups that are looking beyond capitalism are not just looking beyond an economic system that's problematic with respect to the economic dynamics. But they're looking at the circulation of money, power and resources as part of a whole package for a system that's fundamentally broken in so many ways but has so many pieces, that if you can pull them out of the capitalist lens and say, "Oh, yeah. You can have a market that's not capitalistic, that has debt, that has money, that has workers, et cetera. If you pull that out, you can say, "We've got a lot to build on. What can we do to extend? What's there? Accelerate. What's there?" And to really help shift us to move to a sustainable but also a much more equitable economic system. 

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[00:09:06] JS: I want to double-click on the point about debt because it's so important. Can you just explain that really quickly? And then we'll get into the details. 

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[00:09:13] DM: Yeah. Absolutely. And it's so tricky. Because sometimes we want to jump into what's working and some of the companies and organizations and what you can do about it. But it's tricky unless we unpack like why is it that capitalism is fundamentally inequitable. And why is it there's no way that capitalism can ever deliver an equitable outcome and a sustainable outcome? 

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And a lot of the environmental movement has really done a good job of highlighting ecological limits to economic growth and to a system where capital accumulation is central. But there's another piece that's maybe been a little bit underdone in the literature and in the movements. And that is we're all familiar, I suspect, with how debt is constantly putting a really, really extreme level of pressure on a lot of households, on governments around the world and on corporations to a greater extent over the last 15, 20 years. 

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But what's less known is how the expansion of debt in our system is actually built into the DNA of capitalism. And it's built-in. And we're going to get into the weeds a little bit here. So I'll try to keep it brief. It's built into the very way that capital accumulation causes an expansion of debt in our system. 

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Here's how it works. The first thing is whenever you and I take out a loan of any kind wherever we are in the world because – and this is an interesting point. All of the world's banking systems operate on the same principles and the same essential tenets of law. And that's across even Islamic banking through to Western forms of banking. There's still a notion of, when you create a loan, you actually create both money and debt at the same time. 

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If you, Jenny, go and take out a million-dollar loan, or a hundred thousand dollar loan, or ten thousand dollar loan for anything, you will see the equivalent million dollars of money that's added to the global economy, essentially, it's the money supply. But you'll also see the equivalent million dollars of debt, or a hundred thousand dollars, or ten thousand dollars of debt depending on the size of the loan. 

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Imagine the world as a whole. Let's say there's a million dollars of money and a million dollars of debt in the system. And when I say in the system, somewhere in a bank account. And maybe there's a small percentage of it that's actually in cash. But in a bank account, somewhere there's a million dollars. 

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You go take out a hundred-thousand-dollar loan. Now there is, all of a sudden, $1.1 million dollars in the global money supply and this $1.1 million of debt. Because when you took out the loan, you said, "I will repay this." The bank gives you a hundred thousand dollars to pay whoever you're purchasing something from. And now, there's an extra hundred thousand dollars that you owe plus the interest, which we'll get to in just a second. The money and debt supply grow whenever we take out new loans. 

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Now in a capitalist system where the primary goal is to accumulate capital, we see the extraction of money from common circulation. So you and I buying things in the marketplace leads to individuals who own those corporations or own the land on which we're renting property, for example, will accumulate that money and they won't put it back into the system as fast as they'll take it out. 

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We've seen this. The wealthiest individuals and some companies have been sitting on ever greater amounts of cash in their bank accounts. And because of money and debt – because there's always at least the same amount of debt in the system as there is money. Because if we go back to the earlier point, debt is created at the same time as money. When money accumulates in our system through this capital accumulation, capital gains, debt has to accumulate elsewhere. 

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And there's only three places that can accumulate it. It can accumulate in corporations, households and governments. And so, whether it's central banks or commercial banks that are lending money into existence. In a capitalist system, the money accumulates with the wealthiest individuals and corporations. The governments typically struggle and are mostly indebted around the world. And in doing so, the debt accumulates elsewhere. 

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And here's an interesting thing that happens. Because you've got all of this debt accumulating with households and corporations around the world, typically small businesses, how do those people get out of debt? The answer is because there's not money that's coming over to them freely through wages, or taxation, or these sorts of things. Because the common result of capitalism is for that money to accumulate. The answer is they have to go into more debt, which is why, especially during a financial crisis, we are seeing an increase in the money supply because central banks are having to lend more money to basically bankrupt governments and individuals who are needing more loans, et cetera, et cetera, is the trickle on effect of banks lending out their money. 

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The point here is debt always expands in a capitalist system. And when you have a whole lot of people who are interested in working to try to survive and you have a lack of money that's circulating, you see a deflation in wages, which is why, around the world, wages have stagnated or even deflated consistently over the last, well, almost 100 years. 

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And then if you go to the other side of the equation, you wonder, "Why does the stock market keep going up when the economy is in such crisis? Why are asset prices and home prices in certain places in the world going up when there's so much struggle?" That's a simple outcome primarily of the fact that money is accumulating. And these investors and people who are accumulating the money say, "Where am I going to put the money?" And so, they put it in, often, non-productive spaces like stocks. 

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So you get this dynamic where you get deflation with respect to wages and inflation with respect to assets. And that creates the separation that underpins inequality globally. And the phenomenon I just described is amplified when you look at global North, global South and who gets exploited in that. It's amplified across racial lines. It's amplified across gender lines. 

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And essentially, in a capitalist system, there is no reproach. No matter whether you have a regulated market approach or a system that is free market, there is no way to get around this dilemma of capital accumulation. Because any system that didn't have that wouldn't be capitalist. And there's, therefore, no way to address the inequality that's baked into capitalism. And that's not to even touch on the sustainability problems that capitalism creates.

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[00:15:47] JS: Thank you for that. The answer to this is not to correct for it on the back end, right? Piketty is calling for a wealth tax, which basically says, "Here's our economic system. It's inherently unequal. We're cool with that. We're just going to tax the wealthy and re-distribute." 

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I would just love to quickly hear your thoughts on why that is not an acceptable answer to the inherent structural inequality that is baked into the system that you just so eloquently articulated. 

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[00:16:18] DM: That's such a great question. And the short answer is there's no way out of that dilemma through taxation because the extractive siphon that's built into capitalism, primarily driven by capital gains, will always be larger than what wages, welfare, subsidies, scholarships, donations, insurance and compensation payouts, penalties. Any of these ways we try to get money to go back into common circulation will always get outpaced by the capital gains. Otherwise, it wouldn't be capitalism. 

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That's why it's so important to come back to capitalism like you said, Jenny, not as some kind of market approach. It's a system in which the primary principle is the notion of capital accumulation. And so, when you have that accumulation, you get this problem of extraction that cannot be addressed by any kind of liberal proposal when it comes to monetary policy, liberal proposal when – progressive proposal when it comes to taxation. It definitely can't be addressed by philanthropy. 

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And just to put this into real clear terms. If you are a wealthy individual and you are talking about a system that would require a common circulation of the money that you are extracting. In other words, let's say you're a Bill Gates, or an Elon Musk, or a Warren Buffett and you're taking out probably three to four billion dollars per year in dividends because most of your money stays in stocks. You're really selling those off for cash. But you're getting three, four billion dollars in dividends. That means, in order to not be contributing to extraction in the system, let alone looking at the capital gains that your stock price might ultimately lead you to make, you would need to be donating and giving back in taxation in any other way the whole three to four billion dollars. 

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If you did that, then what would be the incentive to actually ever invest in the first place? It wouldn't be capitalism. In other words, it's a truism. Capitalism is by its very nature extractive. There's no way to get around that dilemma. But the reason why it's problematic is because capitalists will say, "Oh, but a rising tide lifts all boats. We can all benefit. There's trickle down from one angle." And for others, they'll say there's value creation that we all benefit in. But what they miss is that in a capitalist system, debt will always expand, which will put this pressure on wages in a downward sense and assets in an upper sense. And that is fundamentally problematic. 

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That's why it's so difficult from Nairobi through to San Francisco. It's fundamentally why it's so difficult for people to access housing. For people to have their basic needs met on a range of different factors because it's baked into the DNA of an extractive, exploitative system. 

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[00:19:16] JS: What that leads us to is to say that the reform has to happen deep into the DNA. Not in the policy on the back end. But deep into the DNA of the economy, which happens at the firm. Right? 

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And so, the core premise here is that, a beyond capitalism economy still has market exchange. It still has private property. And it still has profit. But the profits are contained within the firm and reinvested, as I understand it. 

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[00:19:48] DM: Absolutely. We're talking about a system in which money, wealth and power circulates. And like you said, that doesn't mean changing the notion of profit. It means what happens with the profit and why you're seeking profit in the first place fundamentally shifts. 

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This is where we're going to get into some examples of how so many of the world's exciting companies really are looking at this ownership question. But it's fascinating to me to know that we've had two things happen that I think relate to this conversation. One is that there's been an invisibleness to this extraction. Because the standard approach in the newspapers that I read and the news that I encounter is that the focus of wealth inequality is often relating to wages. Look at how much of a salary that person has. Or look how big that person's stock, their overall wealth is. And it misses the piece of what happens with capital accumulation that is often a silent invisible piece. 

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How many people know how much money gets extracted from their local economy through profit extraction? Versus you may have heard about the salaries that people get, "Wow. Look at how big that salary is for that health insurance company executive here in the US," for example. 

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What we miss is, well, what's happening behind the scenes in terms of the silent investors? The absent shareholders, as Marjorie Kelly puts it. We've got this invisibleness on this one hand of extraction. But we've also got the invisibleness of business models around the world, like Bosch, like IKEA, like Newman's Own here in the US, like edX, the education company, like HomeGround Real Estate. These companies we will probably look at in just a moment are circulating their profits. Not extracting them. Reinvesting them to fulfill the purpose of the organization. 

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But it's a story that's also invisible. Most people around the world, when they hear the word non-profit, think of a traditional charity model and don't realize that the majority of the world's non-profit organizations shift it to a business model over the last 30 years generating on average around 4.7% of a country's GDP. And that happened in a way that was invisible. Why? Because the standard lens to look through an economic lens to look at the market is to say, "Oh, we have the market in which –" and in parentheses we say "the for-profit market", government and civil society. 

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But those got blended so much over the last 30 years in particular because lots of non-profit executives around the world, from Uzbekistan, to Mozambique, which has, by the way, a very high level of non-profit enterprise. They went and said, "We don't want to be beholden to grant makers and governments anymore. We're going to go into business." And that's exactly what they did. They set up subsidiary companies. We'll probably talk about BRAC as one of the most incredible examples of an NGO that is a not-for-profit enterprise running tons of incredibly innovative businesses to fund their social activities. And that is changing the landscape and opening up the way for a post-capitalist market economy that's just so unbelievably exciting in terms of what's possible. 

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[00:23:06] JS: Well, let's get into the examples and then we can extrapolate what that implies in terms of a model at a more theoretical level from that. You mentioned BRAC. Let's start there. 

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[00:23:15] DM: I love BRAC. But to get to BRAC, actually, I have to tell a quick story about something that happened that opened my eyes to the BRAC model. I was in a conference in 2009 up in Brisbane in Australia. And it was a community development conference. Most of us were community workers there. And the keynote speaker, which was surprising for us, was the head of an engineering company. 

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This was the final day. They gave the keynote. They talked about the engineering firm, which had 50 employees, a turnover of 17 million Australian dollars. And it was a company that was in civil and construction engineering. They're building bridges. They're training surveyors. These sorts of things. 

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And my Yuma, as Rod, the CEO, told us, is a particular kind of engineering business. He said these words that essentially changed the course of my life. He said, "And we're not-for-profit." 

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Now I had never heard of a not-for-profit engineering company. And I'd been working in the non-profit sector for some time. I went up to him afterwards and I said, "What do you mean you're a not-for-profit engineering company?" He said, "Well, we're an indigenous mob. When we decided to set this up, we said we're not going to try to make a whole lot of money out of it because that doesn't fit with our indigenous principles. So we pooled our capital to create some startup funding. We said we're going to lend that money in for a set amount of time to the company and then take it back at a fixed rate in terms of the returns and then exit that investment when it was needed." And so they set up as a not-for-profit. 

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And that blew my mind because I had, like many others, thought of non-profits as that group that was mainly in the social service sector and never considered that they could operate in an area such as engineering. 

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Well, what my colleague, Jen Hinton, and I discovered was that there is not one sector or type of activity in the world where there isn't an example of a purpose-driven company that reinvests its profits and runs a successful business at the same time. 

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And I was working for a group at the time called The Fred Hollows Foundation. And again, this invisibleness that I had missed when I'd been working for 10 years with this group, was that this group that focused on avoidable blindness and, essentially, cataract surgery and replacing intraocular lens with people with cataracts around the world funded a considerable part of its work by setting up lens factories in Eritrea and Nepal that manufactured the intraocular lens that you put in to replace a cataract. And as a result, generated enough profit to be funding many of the activities with the surgeries. 

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Jump ahead a few years, and I discover BRAC. One of the world's largest NGOs with income of over a billion dollars that services hundreds of millions of people. It's got over 120,000 employees. It's sort of in the range of Microsoft with respect to the size of its workforce. Mostly women. Works to service health care, education, finance. All sorts of development outcomes that are quite typical for us. But funds its activities primarily through running businesses. From banking services, to craft stores called Aarong. To dairies, to artificial insemination, agricultural businesses. To silk manufacturing businesses. So many social enterprises, that if you don't know about BRAC, check out brac.net. They're an incredible example of a purpose-driven organization doing amazing work. 

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They use things like lean principles in their activities. They run a relatively flat organizational structure, which comes back to this notion of the circulation of power within organizations and in societies. As I mentioned before, it involves a largely female-led workforce and is an incredible example of what it means to actually run a business that's not-for-profit in the aid and development sector but for that business to be a business rather than a typical charity-dependent non-profit. Over 80% of BRACs billion dollars comes from running its own income-generating activities. 

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[00:27:33] JS: And just a quick question. What does this look like in terms of structure? Is it a non-profit that owns a for-profit entity? 

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[00:27:43] DM: Yeah. And there's a few different models for these kinds of entities around the world. You have consumer cooperatives. You have trusts or foundations that then own subsidiaries. In BRAC's case, there's a foundation and then there's a range of subsidiary businesses that all feed profit into the overall foundation. 

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But essentially, the commonality between all of these models, whether it's a government enterprise, whether it's your local municipal internet service through to a big foundation-owned business like the Guardian Newspaper or Mozilla Firefox. Whenever you have these situations, the common principle and the common practice is that no money is getting extracted to investors that are equity holders in the company. 

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You can have investors who lend money in through debt. So they loan you the money. But there's a fixed return. No one's getting super rich out of any of these companies with respect to what's happening with the profits. 

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[00:28:37] JS: Yeah. And this is a critical point, right? Putting capital into a firm for a return turn happens. But putting capital into a firm does not make you an owner of the firm. I think this is really important. Shares have both economic rights as well as control over the firm. And so, some of the more interesting models are decoupling those things. And so, control does not reside in the investors who have some sort of economic rights. And there's all kinds of creativity that could come into what different financial instruments might look like to fund companies that meet these criteria. 

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[00:29:14] DM: Absolutely. And that's where models like steward-ownership that we're seeing roll out throughout the world might be of interest to people. There's also some incredible models. Like in the Netherlands, there's the world's first – named in this way that is, the world's first post-growth entrepreneurship training program that Melanie Rieback is running through Radically Open Security. Her company is a not-for-profit online security firm. And there, she is incubating businesses from around the world from I think six different countries across three or four different continents, including Africa, Asia and North America. 

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And so, what she'll do is she's looking at companies that don't have equity holders and are not interested in a constant linear growth model. But then finding what is the local legislation or the national legislation that will enable that company to sit within that structure. And sometimes, as you said Jenny, it separates out voting rights from ownership rights in terms of equity ownership rights. And other times, it'll fit neatly under a trust structure or a not-for-profit structure that already exists. 

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[00:30:18] JS: IKEA is a really interesting example that I want to make sure we talk about because that's a name that everybody knows. Tell everybody more about how IKEA is structured and why it represents this new model. 

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[00:30:27] DM: Yeah. Absolutely. Yeah. And my guess is that there'll be some people who'd say, "IKEA, hold on a second. I read some bad stuff about them with respect to their ownership." Or, "They don't pay taxes." 

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And, look, I've spent a long time looking into IKEA. And at the end of the day, it's not that murky. It gets covered in a lot of murkiness. But here's the simple thing. In the – I think it was the 70s. Ingvar Kamprad, the owner of IKEA, who himself, by all accounts, was a pretty humble kind of person. Lived in a small little house by the end of his life and had a little vehicle that he'd been driving for 30 years. And was fascinated by productivity and really was driven by this purpose of ensuring that everyone had furniture that was something that they could use in their life and was also a resilient kind of furniture. 

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And interestingly, around the 70s, he was worried about a hostile takeover. And I'm moving through some of the facts here a little quickly. But he shifted over the ownership rights of IKEA to a foundation that he and his family then continued to control. 

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And it was interesting. Because even until just up until his death a few years ago, Forbes' richest list was putting him as one of the richest people in the world. And his lawyers kept writing and saying, "Hold on. Why do you keep adding Ingvar onto the list? He doesn't own IKEA." 

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And sure enough, the proof was in the pudding. When he died, no family member got any inheritance because it was a non-profit. It was structured with a foundation at its center. 

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There were some licensing fees. If you want to go and search, you'll see there's some money that goes over to the foundation through the licensing of the name IKEA. But essentially, I sat down with the heads of sustainability of IKEA a number of years back and something interesting happened. They didn't know who I was, or where I was coming from, or that I was passionate about their business model. And I just said to them, "What is it about being a non-profit? Does it change with you having worked at other companies before this? Does it change the way that you address sustainability?" And they said almost unanimously in unison, "Absolutely." And I said, "Why?" And they said, "Because we don't have shareholders that we're beholden to." 

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So we can start a conversation about sustainability and fit it much more gently and integrally into our organization's vision. And that's very different when you've got extractive shareholders who are saying, "You need to maximize profit." 

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We see the same with Bosch, the engineering company, that has well above the industry level of innovation R&D expenditure. Why? Because they don't have money constantly being extracted through shareholder dividends. 

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As a foundation-owned business, they are able to have more money to invest. But they also have a different motivation and vision, which is why we have the Bosch Papillion Project that's just been launched in Belgium, which is a significant shift for those interested in checking it out. Bosch Papillon. Like the butterfly. 

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That is essentially opening up the rental market for the goods that Bosch provides on a 10-year lease basis at low cost by industry standards that I think is going to revolutionize things and really open up the circular economy conversation to say how do we marry social services, like addressing affordability issues, with good, non-obsolescent technology and models where the profits from the sales of goods and services go back into the system, so we're not creating the inequality that sits under so much of the over consumption narrative that gets pushed then by the wealthiest who want us to consume, consume, consume and grow, grow, grow. 

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There are models that are starting to emerge that show how we can move to a full circle economy where money, power, and wealth and resources are circulating in ways that fulfill all of our needs. 

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[00:34:34] JS: I'd love to hear, what other examples are top of mind for you? 

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[00:34:38] DM: Oh, gosh. I love Greystone Bakery on the East Coast of the US. Their open hiring policy, if you haven't checked it out, is amazing. That anyone can go no matter what their background or record and sign up for a job. And they'll open a space for you. I mean, that's just incredible. 

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I think that the worker self-directed non-profit, which many of us, I imagine, are interested in worker cooperatives and groups like Mondragon come to mind. But this notion that you can have a worker self-directed non-profit, which has been really driven by the sustainable economy's legal law center out of Berkeley in the US. Whereby, a non-profit board will divest a lot of the decision-making to the workers so that you can actually control the future of the organization. Not through a hierarchical model. But a decentralized model. 

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And on that, there's probably one of the best examples is Buurtzork in the Netherlands, which is an incredible health company that has over, I think, 10,000 employees that's working in home visitation for health care and health service delivery that's holistic. But the teams of nurses that go to the homes under this non-profit structure have a lot of control over the way the service gets delivered. It's a really decentralized model. 

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Another example, I guess, of this edge of what's called sociocracy. Very exciting approach that's been around for hundreds of years. But it is really now coming to light of how we can decentralize decision-making and give people power back over the work that they're doing. Let people make the decisions who are closest to the work rather than these sort of hierarchical boards that so often define all sorts of firms across the spectrum. 

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[00:36:24] JS: I'm curious about some examples, particularly in the financial services and banking sector. Because I feel like this is one of the decisions that we make but has the most spillover where we put our own money. 

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I went through a process of exploring all these different options of where to put our money.  I think we have to be banking with a bank that's aligned with our values and not putting it into one that's fundamentally extractive. 

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And I remember you mentioning in a conversation Amalgamated. It wasn't the one we went with. But it was a top contender. And I know it's one that a lot of progressive organizations use. And I remember you saying in a conversation that that actually doesn't fit the bill. We wound up putting our money into Beneficial State Bank.

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But I would love to just hear more because I feel like the examples that you've given are great case studies but aren't necessarily things that are top of mind and say, "Okay, you could do this today to be supporting the next economy now." 

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[00:37:19] DM: Absolutely. and I'm so glad you went with Beneficial because they are a foundation-owned bank that actually is a B corp. And so, B corps, for those unfamiliar, is a certification system that is linked off into a legal structure. Like a benefit corporation. Just as a quick aside here. Because the B Corp movement is one of the most exciting things happening around the world but it's often still linked with businesses that are extracting money from common circulation. 

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But there are exceptions like Greystone Bakery and like Beneficial State Bank where you have a subsidiary that is a B corp. Because it's considered a for-profit but then it's owned by a not-for-profit at the top. Beneficial's different from Amalgamated. Because Amalgamated has a portion. It is a union-backed bank that has, I think, still a majority – 

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[00:38:04] JS: Actually – you know what? Let's sidebar for a second. Because I think that this is an extraordinarily important point. Because so many people are familiar with B Corp certification. People probably don't know that there's this distinction which is a public benefit corporation, which is how you might structure an entity instead of a traditional Delaware C Corp. These are the things that are more at the forefront of the evolution of capitalism. 

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The B Corp certification is where you have to score above a certain number across a handful of things that pertain to your business practices. That takes into account the environment. It takes it into account equity. There is a really important governance piece. I know it's evolving. It may be that you actually eventually, in order to be certified, have to be incorporated as a public benefit corp or have something else baked into your governance structure around, essentially, stakeholder orientation of capitalism and not a shareholder maximum orientation. But it's still marginal, right? It still doesn't get out of this fundamental problem that we really outlined at the beginning of the conversation around extracting capital from a firm. 

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[00:39:10] DM: That's right. If you talk to the average B Corp aficionado that I talked to, they're fantastic allies when it comes to so many of these conversations. But where the rubber hits the road, so to speak, when we talk about capitalism or not is that when you talk to them about whether or not the businesses are still making profits for private individual shareholders, typically the answer is yes. 

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And that's where the great case of Interface, one of the sustainability darlings and a really great vision of an organization that Ray Anderson put forward. And this is a carpet business that was doing some really incredible work and continues to, in terms of the circular economy. Reducing its water usage. Reducing its footprint across a lot of different ways with respect to its global carpet business. It was still maximizing returns for shareholders. Taking out patents. And essentially, creating extraction in a system that has historically benefited individuals and the white elite within our society. 

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Coming back to what you can do right now, one of the most incredible untold stories around the world, because we have people obviously calling in from different parts of the world, is the Credit Union Movement. Here in the US, we have over 120 million people. And just put that into perspective of – what? It's about 350 million people in the US. And not all of them are of age that they can have a bank account. 

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So we have 120 million plus people who are members of credit unions. That is they are members of not-for-profit institutions where no private individuals own the bank. You put money in and the profit goes back into reducing the cost of loans, increasing your interest on your bank account. It's often providing philanthropy for other groups within your neighborhood. 

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And the credit union story is strong in parts of East Africa in particular. Just coming back to the US here, around 10% of the equity of the overall amount of money that's in banks, around 10% was held by credit unions before something very interesting happened. 

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A woman named Christine Christian back in – I think it was 2009, just after the crash, said, "I'm going to move my money out of Wells Fargo. Put it into a credit union. Put up a post on social media saying I'm tired of them gouging me with fees." And was a big part of saying 1% of equity in banks move over the following six to seven years to credit unions with a move your money campaign. 

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The really interesting thing about banking, and where you bank and why moving your money is such an important piece here is. Because let's say you just have a hundred dollars in the bank. And they've been many times in my life where I've been in that circumstance and I would say, "I've got no economic agency." But the reality is you have a lot more agency than you realize because of what's called fractional reserve banking. The ability for banks to lend out more than they hold in reserves. 

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If I have a hundred dollars in a bank, they can lend out in certain countries, let's say, seven times that amount. They can make a $700 loan to someone. But if I move that money over, now not only do they not have that ability to lend out $700. But the new bank has the ability to lend out $700. My shift of a hundred dollars is actually the equivalent of a $1,400 action in terms of agency. 

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Where we have our money is such an important part of this equation. And it's why I love groups like RSF Social Finance here in the US on the West Coast. They've never lost a cent for people who've got money invested with them over the last 30 years. But they only return 1%. Somewhere in that vicinity. 

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You're going to barely keep up with inflation. In fact, you'll be under inflation most of the time. But they only invest in not-for-profits and social enterprises that are for-profit. And essentially, you can know that if you've got an IRA here in the US, like a retirement account, that your money is somewhere doing good in the productive economy as compared to where the majority of pensions around the world are, which is in the speculative economy. 

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If you work in a hospital and you put some money into retirement or the government takes some money for what is called an Australia's superannuation or a pension in other parts of the world, typically, what happens is that goes to some broker who will purchase some kind of mutual fund, or stock, or bond on what's called the secondary market, which means your money did not go to actually creating anything new. You just bought a piece of a certificate saying you own a piece of this company. But you're not actually investing in anything productive and new. That's the huge power here. 

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And Michael Schumann writes about this in such powerful ways. Explains that when you move your money back into productive avenues that are often locally grounded, there is so much ability because so many of those places have been starved for so long of capital they're constantly trying to get loans from different places. Think about your communities and how difficult it is for small organizations to often survive or scale. 

When we bring our money back locally in search for avenues, which aren't just some ethical mutual fund that often includes Alphabet, and Google and these companies. Because there's such a dearth of ability to actually analyze what does it mean to be an ethical company and then to connect that into the stock market. 

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When we move our money back to these local places or investments like RSF Social Finance supports. Or what's particularly strong and exciting right now, the movement to move money into black-owned businesses, and women-led businesses, and trans-led businesses, these things are so important. Because coming full circle, the problem is capitalism, is it extracts money from real circulation in the real economy. The more we can move money back into circulation, the healthier our economy can be. 

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[00:45:07] JS: Okay. So tell me why Beneficial is so great. I know. I did the research. I want to hear your perspective. 

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[00:45:14] DM: First of all, they're a foundation-owned business. And making that decision as one of the few banks in California to say, "We're going to set up as not-for-profit," is really important. 

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The second is Kat and Tom –Tom, being Tom Steyer, who ran for president as some may remember in the US – have a vision. And let's be clear here, Tom Steyer and Kat – I'm forgetting Kat's last name at the moment. 

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[00:45:38] JS: Taylor. 

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[00:45:39] DM: Kat Taylor. Thank you. They made their money – Tom in particular, made their money through investments. And I think he ran a merchant banking company. And I think they are part of this generation of business owners that are looking at their legacy and saying "Hey, we benefited –" and I don't know if they've gone this far yet to accept this. "But we benefited off a system that has, in this country in the US, been built on the backs of slavery. Being built on the back of exploitation. Be built on a rigged system that has constantly benefited the wealthy in terms of, for example, capital gain things being taxed at lower rates than wage labor." 

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And they've realized we need to do something about it that isn't just feeling good for us but actually is going to mean that our net position reduces. And they're doing it faster than the Gates and others of the world who are giving pledge of – by the time they die, their money's going to be gone. And they're actively looking to put that money into – I know that Kat has just recently said, black-owned businesses are what's important to her as one of the things she wants to support. 

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And so, I think the values of Beneficial State Bank itself are neatly fitting with the founders of that non-profit. And everything that I see them write about and what they're doing as a foundation and as a bank so far has matched up with what my understanding is, when you shift that structure, you create the space to actually do things more than just lip service. You can actually do things that are driven not by the profit motive, but by purpose as you define it within that organization.

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[00:47:18] JS: Now let's contrast this to Amalgamated. Because I think this is really important. When you're doing the research, superficially, they look quite comparable. Amalgamated doesn't invest in anything that's bad for the world. They focus on things that are good for the world. They seem pretty rigorous in the way that they do that.  But again, the distinction is really once you get under the hood and get into the DNA of those organizations. 

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[00:47:42] DM: Yeah. I mean, I remember talking to a friend who was pushing Amalgamate. And he said, "And I'm a shareholder." I was like, "Well, hold on a second. So you're extracting." And it's hard for people to think, if you believe that capitalism is fundamentally fair, then it takes time to understand that it's fundamentally not. 

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If you're open to the possibility that capitalism is fundamentally inequitable, then you can have a different kind of conversation about how you're participating in that. And so, many of us, especially, I speak as a white male with significant privilege. I have not owned any shares for 25 years. But what I do on a daily basis is I am still part of a capitalistic system. I still purchase, in many ways, from companies where my money is going to that extractive mechanism. 

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It's not about some kind of rigid purism here. But it is about having conversations about what the root problem is. If the problem is fundamentally extractive, then you can't address that by hiding the extraction piece and saying, "But look at all of the outcomes with respect to the work the organization is doing to further this, this and this." Because then you're failing to miss the invisible piece that's bringing the whole system down. 

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[00:49:00] JS: Yeah. I've been wanting to write for a long time a blog post called the 800-pound gorilla in the room. Because there's this whole industry of mission-driven, impact and social enterprise that has this win-win narrative, right? This is good for the environment. It's good for the stakeholders. It's good for business. Everybody wins. And we continue to keep winning and extracting value from the rest, right? 

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That's the invisible part that you're referring to. That continually is not part of the conversation. And really, a lot of what I wanted to get to the bottom of over the course of this inquiry was investigating that entire landscape. 

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[00:49:40] DM: Absolutely. And I think this is where the work of Doughnut Economics, Kate Raworth's work and the work of – gosh. Everything from eco-feminism to post-development that's driven out of India. And bringing full circle with things like Gandhian economics and Vinoba Bhave. And the Community Land Trust model, if you've heard of this. Folks around the world, this notion that a piece of land can be put into trust and then people will own the house that's on it without owning the land itself. That's a model that came out of Gandhian Economics and Vinoba Bhave's experiments back in the 50s. 

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And so, I think that what's exciting today is that the more people understand the power of ownership as the central piece within the capitalist problem, the more you realize, "Wow. There are so many ways." I can move my money. I can move my purchasing. I can actually go out and look at the back of labels and say, "Who owns this company?" And do some research. 

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You can move your attention in terms of where you're looking within the system and seeing where do I want to support certain causes? Are they not-for-profit? Are they for-profit? Are they extracting or are they circulating money in the system?  You can move your time in terms of – one of the greatest success stories of a horrific period in our history over the last few years, and this was repeated back in 2008 with the crisis, is how many people around the world, not just in the global North, moved over from profit-driven companies into purpose-driven companies? And said, "I'm not going to work for that kind of company anymore even if it means taking a significant pay cut." 

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And we can do that. We're seeing a huge push of extremely highly talented individuals moving into what previously were areas that struggle to get talent because they didn't have the incentive to pay people. We're seeing that purpose-driven motivation change the dynamics of the market economy. And without wanting to sound sort of Marxist in a notion of some kind of inevitability, I do believe that there is an arc. Just sort of drawing on some MLK Jr. thoughts here and using a little license. I feel like there is an arc of an economic universe that bends towards not-for-profit and circular business through worker cooperatives, through steward-ownership models, et cetera. To a future where we're going to see the circulation of money and resources because those business models are increasingly competitive. Because the consumers around the world, the individuals are looking for real ethics to be lined up with not just more greenwashing. Not more ethical washing. But actually does your company feel ethical? And that's I think something that's going to come through more. And we're going to sense which kind of companies we put our support behind.

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[00:52:37] JS: Well, there's so many certifications out there. But there is no one, not that I know of, that is certifying the definition that we're talking about here. 

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[00:52:46] DM: There isn't. But there's the Future Fit Foundation that I think is getting the closest. If anyone's interested in looking at their 23 benchmarks, it really starts – I think it's the step beyond B Corp certification. 

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[00:52:57] JS: Okay. I have not heard of that. But I will look at it. Because when we had a really amazing conversation about certification in the cradle-to-cradle space or in the circular economy. Cradle-to-cradle, which has a slightly wider lens than just the circular economy. And I'm just fascinated about it. Because when you do have, as you just mentioned, the desire to behave in alignment. 

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But then a tension fundamentally for businesses who are profit motivated and capital extraction motivated, you get the ethical washing that will invariably happen. And so, the third parties are very interesting to me because they have the right incentives. They can provide that signal and standard for the market. 

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There's another really important example that I recently surfaced that you didn't know about, which I also wanted to raise, which is something I think very tangible that everyone could do in addition to moving your money. 

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Many of you know or have seen the backlash against WhatsApp and a significant shift over to Signal and Telegram. And I think there's a privacy argument to be had for Signal versus WhatsApp. But I also find it as this incredible example of putting your time and attention into a highly extractive version of capitalism that is Facebook versus one that actually represents everything that we're talking about here, which is Signal. 

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Signal is a foundation that owns the LLC. And fascinatingly, it was actually formalized by a $50 million endowment from one of the founders of WhatsApp who left Facebook and left $850 million on the table over disagreements about where the company was headed in terms of monetizing the product. 

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[00:54:43] DM: Yeah. It's a great example. And in fact, what it does is, Jenny, I think it gives us another piece in the puzzle. If you wanted to run all of your online activities through not-for-profit forms like circulatory business models in terms of what happens with the profit, you can do it. 

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You've got Mozilla Firefox. You've got Ecosia, the search engine. You've got CiviCRM. You've got pretty much all of the WordPress, Drupal, et cetera. So much of the open source movement is foundation-owned. And that's a really important point. Along with money, the online space is such a powerful way to shift our attention and efforts to help move away from these companies that are not only extracting money but data and other things. That essentially then leads to – I mean, we know that the data extraction happens in order to essentially move to a more profitable model, which means more extraction, et cetera. We can help close and break that loop by moving our attention, and our advocacy and our support. 

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[00:55:45] JS: Thank you, Donnie, so much. Such a pleasure. I love that, in this conversation, we really surfaced the entities that actually exist that embody these next generation models of the economy and really the ways in which all of us can take part in supporting a transition to it. I thank you so much for your time. I'm always so grateful for your contributions to our conversation. 

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[00:56:06] DM: Thank you, Jenny. And what a privilege. And just a recap, there's plenty of great things happening around the world. We're already building a system beyond capitalism. I think it's on its way. I think it's going to be much more equitable. I think it's going to be a sustainable system that truly connects with our deepest wisdom that we need circular systems of money, of power, of resources. And the best way we can get there is to look at what's working. Build on that. Move our money. Move our investments. Move our purchasing. Move our attention. Move our bodies. Work with these organizations that are building that path. And move our support in all sorts of ways for these entities. And together, we're going to be that 3.5% that's going to see that shift to a system. As Charles Eisenstein says, "The more beautiful world our hearts know is possible." 

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[OUTRO]

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[00:56:51] JS: Thank you so much for listening. And thanks to Scott Hansen, also known as Tycho, for our musical signature. In addition to this podcast, you can find resources for each episode on our website, www.becomingdenizen.com, including transcripts and background materials. 

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[END]

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