The Education of Michael Shuman
added 02/21/08
This edition of the Board President’s column is in the form of a book report.
Your board has been reading The Small-Mart Revolution: How Local Businesses are Beating the Local Competition, by Michael Shuman, co-founder of the Business Alliance for Local Living Economies (BALLE) and currently vice president for enterprise development at the Training and Development Corporation.
As I mentioned in the January/February 2008 issue of the Co-op News, Shuman’s thesis is that communities pondering their economic future face a choice between TINA and LOIS. TINA – “there is no alternative” – involves a race-to-the-bottom effort to lure businesses to the area that are competing in the global economy. LOIS stands for “locally owned, import substituting” enterprises.
Shuman’s thesis is that, when you factor in invisible subsidies (especially tax breaks) and consider how efficiently TINA businesses extract wealth from the places in which they operate, a community is far better off betting its future on locally owned businesses that seek to substitute goods and services imported from other places with those produced by one’s neighbors.
By no means does Shuman claim that TINA businesses are incapable of social responsibility. But, he contends, “[k]inder, gentler, friendlier and, and greener businesses can only go so far in reforming themselves before the brutal logic of globalization precipitates a move abroad that undoes all of this progress …. These dynamics underscore why social responsibility must include local ownership. And why it’s so disheartening to see a proliferation of nonprofits, books, green directories, conferences and declarations proclaiming social responsibility without ever a mention of the issues of ownership or control.”
Know what else is disheartening? The word “cooperative,” which should figure so prominently in a book like Shuman’s, is missing from the index!
“[N]urture more enlightened shareholders,” Shuman counsels LOIS businesses at page 61, conceding that “[s]ome owners of LOIS businesses—family members, partners, friends, colleagues and other investors—can be just as brutal in demanding that managers pay attention to the short-term bottom line as the faceless stockholders of publicly traded companies.”
Not all such shareholders of small businesses are of that mind, of course. But this is an author who clearly needs to learn that the ultimate insurance against “brutal” shareholder demands for wealth extraction is to organize the business so that the shareholders and the customers are exactly the same people. And so he shall.
It is Michael Shuman’s good fortune that the “book club” pondering his Small-Mart Revolution is the board of a $65 million/year cooperative grocery business. We didn’t just tell him that cooperatives have a key role to play in the economic transformation he so persuasively advocates. We’ve invited him to Hanover to see for himself.
The excuse is an invitation to address our Annual Meeting on April 27, 2008, and to participate in some related activities we are organizing. And, naturally, we are hoping that a distinguished guest whose message so closely aligns with the Cooperative Principles will prompt many of you to join us for what promises to be a provocative and community-enhancing Sunday evening. (See page 7.)
But consider it an opportunity to teach as well as to learn and, we hope, to begin a long-term exploration with Shuman—and his collaborators from the world of “place-based” economic development—of how cooperatives in general, and ours in particular, can save their communities from the depredations of unrestrained globalism.
Oh, and one last thing. Some of you might be wondering how the board of a big organization like ours has time to turn itself into a reading group. Well, thanks in part to the Policy Governance paradigm under which we operate, we’ve become notably disciplined about focusing as a board on what really matters—like the future and our role in it—as opposed to thinking up ways to substitute our judgment for that of management on day-to-day store operations.
We still don’t have time for Jane Austen novels or the new book about the Civil War from Drew Gilpin Faust, president of Harvard. But as you are picking up those volumes from your local bookseller, consider buying a copy of The Small-Mart Revolution, which has a provocative introduction by Bill McKibben. What if every board of every organization in the area started reading Shuman’s book and pondering its implications for their work? It’s an intriguing prospect.
