REconomy: A Transition Perspective
on the Economy We Need
Live Local – Buy Local – Invest Local
The scale of change we need to see if we’re going to fight climate change will require changes in every aspect of daily life. REconomy is the Transition movement’s practical approach to local economic transformation and it starts with a new set of questions.
- What if our economy focused on meeting the needs of people first and foremost, while providing stable jobs, building local wealth, reducing income inequality, and increasing community resilience?
- What if our businesses (and investments) served a mission greater than profit?
- What if, instead of extracting resources, businesses participated in lowering our carbon footprint and regenerating our ecosystem?
REconomy has its roots in the work of Transition Town Totnes, which brought together community stakeholders to develop a shared economic vision. They mapped the market potential of local “resilience building” economic sectors (energy efficiency, renewable energy, local food, and social services like child and eldercare) and developed a business incubator to support local entrepreneurs in meeting community needs.
That was just the beginning! REconomy took hold in lots of different actions including new business financing mechanisms, alternative currencies, sharing strategies, and more.
REconomy is not just for business people. It’s for everyone who buys, banks, or invests. Learn more about Reconomy:
- REconomy website
- 25 Enterprises that Build Resilience
- Sample REconomy PPT presentation
- Start a Local Entrepreneur Forum
- Teleseminar Enterprises that Build Resilience
- Teleseminar: Community-Supported Entrepreneurism (Jay Tompt, Feb 2017)
Benefits of Buy Local
When you buy from a local, independent business, almost half of every dollar stays in the local economy (compared to less than 14% for chain stores). Your money supports more local jobs and more local businesses. Local stores donate more in your community per sales dollar than national chains. (Learn more about the “multiplier effect”.) And if you are buying locally grown food, you’re helping to build a local food system and probably getting fresher, more nutritious food.
Benefits of Bank Local
It may seem like every financial institution is basically the same, but that’s not true. We have only to look at the home foreclosure crisis of 2010 to see the difference. A few big banks were responsible for a majority of the home foreclosures that devastated communities in the Twin Cities. According to the Pew Research Center, more Americans are renters now than at any time since 1965. The transfer of property during the recent Great Recession is largely to blame.
Community banks made fewer speculative loans before the recession and had fewer foreclosures. Community banks are critical to small local businesses. They approve 3 times as many small business loans as big banks. And they often provide customers with the same services as a large bank but at a lower cost.
Invest Local – YES, You Can!
Is your checking or savings account invested in a mutual fund? Do you have an IRA or a pension through your workplace? Most people have never given much thought to where that money is invested. You might be surprised to learn what your money is doing. And you might be surprised at the level of risk it is exposed to. (If you lost your retirement funds in the last big stock market crash, maybe you won’t be surprised.)
We can get information about where our money is invested (see the REconomy resource page) and we can choose to reinvest it in ways that build our community and reflect our values. We can do that through community banks, the MNVest investment portal, investment clubs, direct loans, cooperatives, sharing networks … so many opportunities!
And don’t forget sharing …
What’s Your Plan?
What matters most to you? An excellent book to help you start to think differently about money and your relationship to it is Your Money or Your Life, by Transition Whidbey member Vicki Robin. Financial conditions are constantly changing so specific recommendations in the book may no longer be valid, but the overall message can still resonate.
Folks in Transition Longfellow spent a year and a half examining the issues of money and investing as a small group. It can be easier to think through issues when you are talking with other like-minded people. Here’s the curriculum for their Sustainable Finance-Sustainable Life class.
Are you primarily concerned about …
- Saving money? The sharing economy not only allows people to get the goods and services they need, it also creates relationships that strengthen the community. The Sharing Solution is an excellent resource for thinking through the practical and legal issues involved in sharing. Also, check out the website Shareable.
- Healthy local food systems? Explore organizations like Slow Money and Slow Money Minnesota that direct loan and grant capital into local food systems. See Locavesting: The Revolution in Local Investing and How to Profit From It, by Amy Cortese.
- Preparing for more extreme weather events and financial instability? Peak Prosperity focuses on preparedness, including financial preparedness. They identified a way to invest in productive sustainably-managed farmland, as well as new solutions like CircleUp that enable direct investment in smaller enterprises.
- Getting out of the stock market? The Peak Prosperity podcasts on local investing, with Michael Shuman and Bruce Seifer look at ways to find financial returns outside of the stock market. Also read Michael Shuman’s comprehensive book: Local Dollars, Local Sense: How to Shift Your Money from Wall Street to Main Street and Achieve Real Prosperity.
- Increasing equity and reducing racial disparity? You may soon have an opportunity to bank with Minnesota’s first black-led credit union, Village Financial Cooperative.
- Promoting development in distressed communities? The Twin Cities is home to Sunrise Banks, a B-corp Community Development Financial Institution (one of only 100 in the nation) tasked with promoting community development in distressed urban and rural communities. Your banking dollars are going right back into your community.
Bring the Ideas of REconomy to Your Community
A lot of exciting shifts are happening to reshape our economy. Here are some great examples of what groups of people are doing to have an impact in Minnesota and elsewhere in the world. (Transition Twin Cities does not endorse any particular project. This is for informational purposes only.)
Transition All St. Anthony Park began a Local Dough Investment Club as a spinoff from their monthly Transition Your Money discussion group. It’s an “investment club with a conscience.” The 25 members of Local Dough contribute $100 monthly, meet quarterly, and share knowledge, contacts, and research to invest in co-ops and other generative enterprises. The group is not seeking new members right now, but it may in the future.
Minnesota is home to more cooperatives than anywhere else in the U.S. Co-op Investment Network (CoIN) is an investment group for folks who want to promote cooperatives. Northeast is the beneficiary of local investing through the Northeast Investment Cooperative (NEIC).
Local investment networks (LIoNS) allow ordinary citizens (non-accredited investors) to invest in and support new and small business ventures by creating relationships between businesses and individuals in the network. For example, when the 2008 recession hit, Milwaukee, Wisconsin found bank loans for small businesses to be virtually inaccessible. A small group of women started Fund Milwaukee. They’ve now facilitated more than a million dollars in investments.
Take a look at the Circle of Aunts and Uncles operated by a Transition group in Media, Pennsylvania. Their network offers low-interest loans and social capital to under-resourced new and existing entrepreneurs with the goal of creating “a more equitable, compassionate, sustainable, and vibrant local economy.”
The sharing economy is alive and well in Minnesota. (The media often confuses the gig economy (using your own car to drive for uber), with the sharing economy, but here we’re going to talk about actually sharing.) You can participate in a service exchange network called Hour Dollars, or sharing of resources like a tool sharing, or seed sharing. Transition Longfellow has started a Community Sharing Library on their website. Got something you don’t use all the time and would be willing to share? Post it and others can check it out. Several people from Transition ASAP started a shared coworking space called Co-Creatz.
Some communities have created alternative currencies, like the Berkshire Buck in Massachusetts and Bay Bucks in San Francisco. These currencies can only circulate in the local economy, which makes them less prone to inflation and recession. (In Totnes, England, the mayor is paid in this local currency.)
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Resources found on this website are for informational purposes only and listing does not constitute endorsement. Transition Twin Cities does not receive any financial support from companies listed here.
The Economy is a Justice Issue
Many would say the economy is the biggest justice issue we face. It is intimately tied to jobs and immigration, resource depletion and inequity. That discussion is much too big to cover here.
While we can offer practical local resources and international Transition resources, you would do well to research the future of our fragile economy on your own. Here are a few partner organizations and related individuals who can provide insight through the Transition lens of energy, climate, and resilience.
Professor Nate Hagens is a fellow at the PostCarbon Institute and a professor at the University of Minnesota. He teaches a fascinating class called Reality 101: A Survey of the Human Predicament. You can find the video series here.
The PostCarbon Institute believes that the energy, environmental, economic, and equity challenges (the E4 crises) we face are interrelated facets of one essential truth.
See the REconomy How-to page for organizations you can partner with to move economic justice issues to the next level. Immediate action on economic inequality helps families today; investing in our communities helps everyone face the challenges ahead of us. If you are looking for more information or a speaker on a REconomy-related topic, contact Transition Twin Cities.