Tuesday, June 26, 2012

San Francisco: "SFMade"

2012-05-10 "SFMade touts local products" by Andrew S. Ross
If you're in the mood to go shopping in San Francisco this weekend, look for the SFMade sticker in store windows.
You'll find a range of items manufactured by San Francisco companies, from apparel and fashion accessories to house and garden wares, food and mattresses. And 10 percent of your money will go to an organization that has put the "made in San Francisco" label on the national map.
Two years ago, when SFMade started out as a manufacturers' organization, it had just 12 member companies. Now, it has 325 members, with a combined workforce of 3,500, a pop-up shop inside the Banana Republic store in Union Square, another outlet scheduled to open at SFO next year and a bulging file of press clips, courtesy of write-ups in the New York Times, Fast Company magazine and British newspaper the Guardian, among others.
"We can now leverage SFMade as a collective brand," said Executive Director Kate Sofis, who got a shout-out last year from Bill Clinton at a Clinton Global Initiative event honoring local economic development and job creation initiatives.
As the organization has grown, so have its services. It helps manufacturers find commercially zoned space and guides them through the city's tortuous permit process. "We spend a lot of time at the Planning Commission," said Sofis. It also provides educational workshops and other advisory services, including access to capital and to retailers who favor locally made products.
SFMade's budget also has grown, to $500,000 a year, with funding from city agencies, banks and other companies, including Google and Levi Strauss.
Sofis said her organization's main goal remains job creation. Going forward, "We want to focus on growing the footprint of the companies we have and nudge up their employment base."
-- Check out SFMade's website for a guide to Saturday's shopping opportunities. As part of SFMade Week, there's also a factory tour Sunday of Rickshaw Bagworks, whose CEO, Mark Dwight, founded the organization (sfmadeweek.org).
Shoppers from abroad: China has had its eyes on American banks for some time, and now it's got one.
The Bank of East Asia (U.S.A.), with five Bay Area branches, in San Francisco, South San Francisco and Oakland, is being bought by the state-owned Industrial and Commercial Bank of China. It's the first time the Federal Reserve has allowed a Chinese bank to acquire a U.S. property, and follows agreements reached by Treasury Secretary Timothy Geithner and Fed Board Chairman Ben Bernanke with Chinese leaders at the U.S.-China Economic and Strategic Dialogue in Beijing last week.
The Industrial and Commercial Bank of China, ranked by Forbes magazine as the world's biggest bank, and the fifth-biggest company in the world, sits on $2.5 trillion in assets, and earned $33 billion in 2011. As Forbes noted last month, "The Chinese banking system is now the third largest in the world behind the U.S. and Japan, and yet it has largely been confined to doing business at home." Until now.
The Bank of East Asia (U.S.A.), with approximately $750 million in assets, is a subsidiary of Hong Kong's Bank of East Asia. While it is headquartered in New York, where it has three branches, much of the bank's business is conducted in California. In addition to the Bay Area branches - the San Francisco offices are in Chinatown and the Inner and Outer Sunset - it has five others in Southern California, mostly in and around Los Angeles.
San Francisco is no stranger to China's state-owned banks. Shanghai's Bank of Communications, the country's fifth-largest with $700 billion in assets, has had a branch in the Financial District for six months.
The public-private group ChinaSF helped the bank set up here in November. "At first, it will be mainly focused on bringing Chinese companies into the U.S. and serving their needs here," Ginny Fang, former executive director of ChinaSF, said at the time.
Perhaps its horizons have broadened.
More treats: If you miss SFMade Week, there's always San Francisco Small Business Week, which kicks off Monday with a gala "Flavors of San Francisco" event at the Metreon. That means there will be some good eats in addition to networking opportunities.
During the week, there will be conferences, award ceremonies and workshops on a range of topics, from local manufacturing and the advent of B corporations to government contracts and doing business in China (sfsmallbusinessweek.com).
Cleaning up: We already have one small-business winner to announce. Fleenor Paper Co. of Stockton has been named Northern California Small Business of the Year by the federal Small Business Administration.
CEO Rebecca Fleenor and VP John Rochex will be receiving the award at an event next week.
The 50-year-old family business manufactures environmentally friendly packaging and paper products for a variety of industries, including construction, automotive, moving and storage, and food service.
And it's not all that small. With 300 employees in its five manufacturing plants, plus offices and distribution centers in the United States, Canada and Mexico, its sales are projected to reach $60 million this year.
No "showrooming": One of the bugbears of brick-and-mortar businesses, big and small, is the unfair playing field on which Amazon.com continues to play.
Rep. Jackie Speier, D-Hillsborough, will be hearing from some of those businesses on Friday, including Safeway, Gap and Target, plus local enterprises such as Chain Reaction Bicycles of Redwood City and Woodcrafters of San Carlos.
Speier has sponsored bipartisan legislation that would allow states to mandate the collection of sales tax that out-of-state online retailers, like Amazon and Overstock.com, are still able to evade. This being election season, her bill probably isn't going anywhere for a while, although a California law is due to take effect in September.
It might be interesting to hear from Target, which last week announced it was pulling Amazon's Kindle e-reader from its 1,700 stores to combat the plague of "showrooming," encouraged by Amazon, whereby shoppers check out the goods in brick-and-mortar stores, then go online and buy them cheaper, and without paying sales tax.
The public hearing takes place from 10 to 11:30 a.m. at City Hall in Redwood City, 1017 Middlefield Road.

SFMADE labels placed on Rickshaw Bagworks products in San Franicsco, Calif. on Wednesday February 17, 2010. Photo: Jessica Pons, The Chronicle / SF

Monday, June 25, 2012

2012-06-25 "Yes, There Is an Alternative to Capitalism: Mondragon Shows the Way; Why are we told a broken system that creates vast inequality is the only choice? Spain's amazing co-op is living proof otherwise" by Richard Wolff from "[London] Guardian" newspaper
Richard D Wolff is professor of economics emeritus at the University of Massachusetts, Amherst, where he taught economics from 1973 to 2008. He is currently a visiting professor in the graduate program in international affairs of the New School University, New York City. Richard also teaches classes regularly at the Brecht Forum in Manhattan. His most recent book is Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It (2009). A full archive of Richard's work, including videos and podcasts, can be found on his site [http://www.rdwolff.com/]
There is no alternative ("Tina") to capitalism?
Really? We are to believe, with Margaret Thatcher, that an economic system with endlessly repeated cycles, costly bailouts for financiers and now austerity for most people is the best human beings can do? Capitalism's recurring tendencies toward extreme and deepening inequalities of income, wealth, and political and cultural power require resignation and acceptance – because there is no alternative?
I understand why such a system's leaders would like us to believe in Tina. But why would others?
Of course, alternatives exist; they always do. Every society chooses – consciously or not, democratically or not – among alternative ways to organize the production and distribution of the goods and services that make individual and social life possible.
Modern societies have mostly chosen a capitalist organization of production. In capitalism, private owners establish enterprises and select their directors who decide what, how and where to produce and what to do with the net revenues from selling the output. This small handful of people makes all those economic decisions for the majority of people – who do most of the actual productive work. The majority must accept and live with the results of all the directorial decisions made by the major shareholders and the boards of directors they select. This latter also select their own replacements.
Capitalism thus entails and reproduces a highly undemocratic organization of production inside enterprises. Tina believers insist that no alternatives to such capitalist organizations of production exist or could work nearly so well, in terms of outputs, efficiency, and labor processes. The falsity of that claim is easily shown. Indeed, I was shown it a few weeks ago and would like to sketch it for you here.
In May 2012, I had occasion to visit the city of Arrasate-Mondragon, in the Basque region of Spain. It is the headquarters of the Mondragon Corporation (MC), a stunningly successful alternative to the capitalist organization of production.
MC is composed of many co-operative enterprises grouped into four areas: industry, finance, retail and knowledge. In each enterprise, the co-op members (averaging 80-85% of all workers per enterprise) collectively own and direct the enterprise. Through an annual general assembly the workers choose and employ a managing director and retain the power to make all the basic decisions of the enterprise (what, how and where to produce and what to do with the profits).
As each enterprise is a constituent of the MC as a whole, its members must confer and decide with all other enterprise members what general rules will govern MC and all its constituent enterprises. In short, MC worker-members collectively choose, hire and fire the directors, whereas in capitalist enterprises the reverse occurs. One of the co-operatively and democratically adopted rules governing the MC limits top-paid worker/members to earning 6.5 times the lowest-paid workers. Nothing more dramatically demonstrates the differences distinguishing this from the capitalist alternative organization of enterprises. (In US corporations, CEOs can expect to be paid 400 times an average worker's salary – a rate that has increased 20-fold since 1965.)
Given that MC has 85,000 members (from its 2010 annual report), its pay equity rules can and do contribute to a larger society with far greater income and wealth equality than is typical in societies that have chosen capitalist organizations of enterprises. Over 43% of MC members are women, whose equal powers with male members likewise influence gender relations in society different from capitalist enterprises.
MC displays a commitment to job security I have rarely encountered in capitalist enterprises: it operates across, as well as within, particular cooperative enterprises. MC members created a system to move workers from enterprises needing fewer to those needing more workers – in a remarkably open, transparent, rule-governed way and with associated travel and other subsidies to minimize hardship. This security-focused system has transformed the lives of workers, their families, and communities, also in unique ways.
The MC rule that all enterprises are to source their inputs from the best and least-costly producers – whether or not those are also MC enterprises – has kept MC at the cutting edge of new technologies. Likewise, the decision to use of a portion of each member enterprise's net revenue as a fund for research and development has funded impressive new product development. R&D within MC now employs 800 people with a budget over $75m. In 2010, 21.4% of sales of MC industries were new products and services that did not exist five years earlier. In addition, MC established and has expanded Mondragon University; it enrolled over 3,400 students in its 2009-2010 academic year, and its degree programs conform to the requirements of the European framework of higher education. Total student enrollment in all its educational centers in 2010 was 9,282.
The largest corporation in the Basque region, MC is also one of Spain's top ten biggest corporations (in terms of sales or employment). Far better than merely surviving since its founding in 1956, MC has grown dramatically. Along the way, it added a co-operative bank, Caja Laboral (holding almost $25bn in deposits in 2010). And MC has expanded internationally, now operating over 77 businesses outside Spain. MC has proven itself able to grow and prosper as an alternative to – and competitor of – capitalist organizations of enterprise.
During my visit, in random encounters with workers who answered my questions about their jobs, powers, and benefits as cooperative members, I found a familiarity with and sense of responsibility for the enterprise as a whole that I associate only with top managers and directors in capitalist enterprises. The easy conversation (including disagreement), for instance, between assembly-line workers and top managers inside the Fagor washing-machine factory we inspected was similarly remarkable.
Our MC host on the visit reminded us twice that theirs is a co-operative business with all sorts of problems:
"We are not some paradise, but rather a family of co-operative enterprises struggling to build a different kind of life around a different way of working."
Nonetheless, given the performance of Spanish capitalism these days – 25% unemployment, a broken banking system, and government-imposed austerity (as if there were no alternative to that either) – MC seems a welcome oasis in a capitalist desert.
We can learn from our neighbors in Santa Cruz

"Made in Santa Cruz"

[57 Santa Cruz, CA 95060]
Store tel. [831-426-2257]
Catalog tel. [800-982-2367] [831-423-5665] 

"Santa Cruz Organic"

Monday, June 18, 2012

2009-06-11 "Buying Local: How It Boosts the Economy" by Judith D. Schwartz from "Time" weekly newsmagazine
"Buy Local"—you see the decal in the store window, the sign at the farmer's market, the bright, cheerful logos for Local First Arizona, Think Boise First, Our Milwaukee, and homegrown versions across the states. The apparent message is "let's-support-local-business", a kind of community boosterism. But buying close to home may be more than a feel-good, it's-worth-paying-more-for-local matter. A number of researchers and organizations are taking a closer look at how money flows, and what they're finding shows the profound economic impact of keeping money in town—and how the fate of many communities around the nation and the world increasingly depend on it.
 At the most basic level, when you buy local more money stays in the community. The New Economics Foundation, an independent economic think tank based in London, compared what happens when people buy produce at a supermarket vs. a local farmer's market or community supported agriculture (CSA) program and found that twice the money stayed in the community when folks bought locally. "That means those purchases are twice as efficient in terms of keeping the local economy alive," says author and NEF researcher David Boyle.
 Indeed, says Boyle, many local economies are languishing not because too little cash comes in, but as a result of what happens to that money. "Money is like blood. It needs to keep moving around to keep the economy going," he says, noting that when money is spent elsewhere—at big supermarkets, non-locally owned utilities and other services such as on-line retailers—"it flows out, like a wound." By shopping at the corner store instead of the big box, consumers keep their communities from becoming what the NEF calls "ghost towns" (areas devoid of neighborhood shops and services) or "clone towns", where Main Street now looks like every other Main Street with the same fast-food and retail chains.
 According to Susan Witt, Executive Director of the E.F. Schumacher Society, "buy local" campaigns serve another function: alerting a community about gaps in the local market. For instance, if consumers keep turning to on-line or big-box stores for a particular product—say, socks—this signals an opportunity for someone local to make and sell socks. This is the way product innovations get made, says Witt. "The local producer adds creative elements that make either the product or materials used more appropriate to the place." For example, an area where sheep are raised might make lambs wool socks and other goods.
 The point is not that communities should suddenly seek to be self-sufficient in all ways, but rather, says Boyle, "to shift the balance. Can you produce more locally? Of course you can if the raw materials are there, and the raw materials are often human beings."
 And what about that higher cost of local goods? After all, big-box stores got to be big because their prices are low. Susan Witt says that the difference falls away once you consider the increase in local employment as well as the relationships that grow when people buy from people they know. (Plus, one could argue, lower transportation, and therefore environmental, costs, and you know what you're getting—which as we've recently seen with suspected contamination in toys and other products from China, can be a concern.)
 There's also the matter of local/regional resilience. Says Witt: "While now we're largely a service-providing nation, we're still just a generation away from being a nation of producers. The question is: what economic framework will help us reclaim those skills and that potential." Say, for example, the exchange rates change or the price of oil rises (and it has started to creep up, if not at last summer's pace) so that foreign-made goods are no longer cheap to import. We could find ourselves doubly stuck because domestic manufacturing is no longer set up to make all these products. While no community functions in isolation, supporting local trade helps "recreate the diversity of small businesses that are flexible and can adjust" to changing needs and market conditions, says Witt.
 Another argument for buying local is that it enhances the "velocity" of money, or circulation speed, in the area. The idea is that if currency circulates more quickly, the money passes through more hands—and more people have had the benefit of the money and what it has purchased for them. "If you're buying local and not at a chain or branch store, chances are that store is not making a huge profit," says David Morris, Vice President of the Institute for Local Self-Reliance, a nonprofit economic research and development organization based in Minneapolis and Washington, D.C. "That means more goes into input costs—supplies and upkeep, printing, advertising, paying employees—which puts that money right back in the community."
 One way to really make sure money stays in the community is through creating a local currency. Christian Gelleri, a former Waldorf high school teacher in the Lake Chiem area in Germany, has launched a regional currency, the Chiemgauer, equivalent in value to the Euro. According to Gelleri, the Chiemgauer, accepted at more than 600 businesses in the region and with about $3,000,000 Euros worth in circulation, has three times the velocity of the Euro, circling through the economy an average of 18 times a year as opposed to 6. One reason for the fast turnaround is that the Chiemgauer is designed to encourage spending: there is a 2% demurrage fee for holding onto the bills beyond three months.
 As an economic principle, velocity has been considered a constant. According to Gelleri, it was stable in the 1950s, '60s, and '70s but starting in the '80s velocity has decreased as more money has been diverted to the financial sector. This scenario may benefit financial centers, but money tends to drain away from other places. Gelleri says that both the Euro and the U.S. dollar have slowed way down. "In the last several months velocity has declined sharply because there's less GDP and more money," he says. "The money doesn't flow. More money is being printed, but it's not going into circulation."
 As the nation limps through the recession, many towns and cities are hurting. "Buy-local" campaigns can help local economies withstand the downturn. Says Boyle: "For communities, this is a hopeful message in a recession because it's not about how much money you've got, but how much you can keep circulating without letting it leak out."