Proponents of the so-called New Economy are taking stock of who owns Vermont now — from businesses to banking institutions to energy to land. But the bottom line is: New Economists want Vermonters to own Vermont.
The New Economy movement is a people-driven approach to economic development geared toward quality of life at a local level and on a global scale. Instead of assuming the value of limitless, money-driven growth, the new economy paradigm promotes careful choices about when and how — or even whether businesses and the economy should get bigger. When ownership is local, the impact of those decisions are more likely to benefit communities, proponents argue.
Friday wrapped up the second annual New Economy Week, a series of events promoting and exploring those ideals held across the U.S. and Canada organized by the New Economy Coalition. More than 30 events around Vermont were coordinated by the Donella Meadows Institute, based in Norwich.
The Institute reports that in Vermont, well over half the state’s energy assets are owned by Canadian interests, and over 50 percent of mineral rights in the state belong to a Swiss company. Yet the majority of land is held by Vermonters. Sixty-four percent of Vermont banking deposits are held by institutions headquartered out-of-state.
These statistics matter because ownership matters, according to author and activist Marjorie Kelly, who delivered the keynote speech in Montpelier last week. The talk drew more than 30 people for a three-hour presentation, panel discussion and brainstorming session.
Kelly outlined the concept of ownership as fundamental to a “systems” approach to economic development. Rather than looking singularly at any one business, industry or issue, the New Economy espouses a holistic approach to systemic change to prioritize people’s health and happiness, sense of place and environmental sustainability.
In the New Economy, monetary profits are a means to those ends, not the end goal itself. It’s the difference between an “extractive” versus “generative” business model, she said.
By way of example, Kelly told the story of New Orleans-based Ruth’s Chris Steak House. Years ago, when a major hurricane knocked out power to the city, leaving freezers full of very expensive steaks thawing rapidly in the New Orleans heat, the Steak House fired up the grills and fed the rescue workers.
The company later went public, controlled by a CEO with responsibility to shareholders rather than the community. In 2005, Hurricane Katrina put the business in a similar situation. The ownership responded by closing the doors and moving out of town, Kelly said.
“He knew his responsibility was not to the community, but to the stock market,” she said. “He had to get his earnings up quarter after quarter, and nothing else really mattered.”
Kelly said there is a discernible difference in a company’s relationships depending on its ownership structure. “Ownership rooted in the community behaves differently,” she said.
To address the concept of business ownership, the panel discussion Kelly moderated included Paul Millman, co-founder of Chroma Technology in Bellows Falls. The 100 percent employee-owned high-tech firm produces optical filters. Other employee-owned businesses in Vermont include Gardener’s Supply Company, PC Construction, Chelsea Green Publishing and King Arthur Flour.
But subverting the dominant paradigm isn’t just about business. It’s infrastructure, too.
Vermont and the New Economy
“It’s not likely we’re going to survive well on this planet 100 years from now if we’re dominated by major corporations,” Kelly said. “We’re now creating the seeds of a different kind of future.”
In Vermont, the New Economy finds fertile ground. But just how much of Vermont’s economic landscape the New Economy can or should occupy is an open question.
Sen. Kevin Mullin, R-Rutland, chair of the Senate Committee on Commerce and Community Development, views the New Economy as a valuable part of a larger whole. Mullin said he has no reservations about a successful Vermont business that wants to grow by selling itself to an out-of-state financier, or transforming into a publicly funded enterprise. He wishes more companies like Casella Waste Systems, which started in Rutland as “two brothers with one truck who worked harder than anyone else,” would emerge and follow the same path.“Every few years, we have somebody describing what their vision of the new economy is. The reality is, when you focus on the economy, you have to focus on every aspect of it,” Mullin said.
“The rest of the state (outside Chittenden County) isn’t worried about growth,” Mullin said. “We’re worried about decline.”
Frank Cioffi, president of the Greater Burlington Industrial Corp., said he welcomes any energy and attention on economic growth and entrepreneurialism, no matter the business model. He said members of his staff attended several events throughout New Economy Week.
“I have a positive opinion about what they’re doing,” Cioffi said. “I think it’s helped in a lot of cases keep an enterprise going in the state, and kept people working here.”
Cioffi said he’s seen New Economy-style values regarding people, place and community take root in Vermont, and spread to businesses that don’t officially subscribe to the movement. That’s particularly true with energy efficiency, he said. And high-tech companies tend to place high value on employees with the skills and knowledge to advance their businesses.
“Every entrepreneur has different values, different visions, different missions,” Cioffi said. “There’s certainly room for a lot of creativity. That’s sort of Vermont in and of itself.”
In her keynote, Kelly said that so far, Vermont is ahead of the New Economy curve. She cited the number of progressive organizations, the quantity of community foundations and the state policies that earmark money for local investing.
“Places like the Vermont Employee Ownership Center and Vermont Businesses for Social Responsibility are pretty rare,” Kelly said. “Appreciate what you have here.”
Pat Moulton, Secretary of the Agency of Commerce and Community Development, emphasized similar attributes of Vermont’s economy in an interview Friday. For example, she said, the Genuine Progress Indicator, a measure of “living wealth” that is not limited to monetary metrics, is incorporated into Vermont’s first-ever statewide Comprehensive Economic Development Strategy.
Moulton said the New Economy seems to “fit” with Vermont’s progressive history of pursuing environmental conservation, social justice and income equality. “How to spread the benefits of the economy so that everybody wins is at the core of a lot of our thinking in Vermont,” she said.
Moulton said it’s likely that, eventually, it will become the predominant way of thinking.
“But remember, it’s a global economy,” Moulton said. Vermont needs to keep social principles in mind, while staying competitive in business around the world.
“Finding the right balance is part of the challenge,” she said.
CORRECTION: The Donella Meadows Institute is based in Norwich, Vt.