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Chapter 7 - page 2

The chief obligation likely to be placed on community enterprises in the type of local economies we are hoping to build will be the acceptance if a business makes profits as a result of the community's help and sacrifice, those who own it should accept that its profits are not theirs alone to do with as they wish. They are, in part, the community's profits too and should be used with that in mind and should certainly not be spent or invested outside the community's boundaries. This is one of the things I had in mind at the beginning of this chapter when I wrote of the need to strike a new balance between community and personal goals. While some writers define community enterprises as businesses owned and controlled by community groups, I regard any business as a community enterprise if it supplies the wants or needs of a community and its owners accept that they have a moral obligation to balance their community's interests against their own.

It could be argued that if a local firm makes its profits in the mainstream economy using labour, capital and environmental goods provided by the community on a full-cost basis, its owners ought to be free to use its profits as they wish. But what is full cost? Isn't every successful business in the world today making additional profits because it has access to many, many factors for which it never pays the full amount? Indeed, the industrial system might never have developed - and would certainly not have developed in the way it has -had businesses not been subsidised on a massive scale by taxpayers, the environment and society. All firms therefore have social obligations which I suspect extend far beyond whatever they pay in taxation and which, if they recognise, they cannot discharge in the mainstream system because of the constraints imposed on them by the forces of competition.

Competition can work against society in other ways too. Take the grocery trade. Under the conventional, profit-driven approach, the owners of every grocery shop are under permanent pressure to increase their turnovers even if this means forcing rival shops to close down. This is because the conventional business world works on the basis of dog eat dog rather than live and let live and any shop which does not behave accordingly is likely to be weakened and then swallowed up by one of its competitors. But a business system which leads to rival shops closing down is scarcely likely to advance the community's interests as it will mean a loss of choice and convenience for some people and a step towards monopoly for them all.

What we need, then, is a system which allows a grocer who believes his vocation is to serve the people of his area rather than to maximise his profits to stay in business. Such a trader would have a very different approach to his work and extract very different satisfactions from it. He would pride himself on his standard of service, the quality of his goods and their range of choice. He would accept that only a certain amount of groceries could be sold in his district and that if he sold more, fellow-grocers, whom he would regard as colleagues rather than competitors, would sell less, damaging their prospects and those of their families and, should they go out of business, making life difficult for people who found it more convenient to shop with them. Consequently, if he needed to improve his income, he would try to find ways of doing so which would not harm his neighbours. Perhaps these would involve buying-in goods imported from outside the community such as coffee or tea in a less processed state and processing and packing them in his store, capturing as much added value as possible for himself, and hence for the community. Alternatively, he might find another activity altogether which could be run alongside his main business and which no-one was already carrying out.

A change in the way shopkeepers and other businesspeople are paid by the community for their work might give them the freedom to work this way, as Dorit Seemann has found with her wholefood business in Hamburg. Like most new businesses, Seemann, who was at different times a bookseller, a kindergarten teacher and a shipping manager before she began selling organic food, found she was losing money when she opened Der andere Weg (The Other Way) in 1986. This was because if she put a sufficiently large mark-up on the volume of goods she was selling to cover her overheads, her prices immediately became uncompetitive. The conventional solution is to grit one's teeth and try to cover whatever losses come along in the hope that sales will increase by enough to make the business profitable before one's capital and credit facilities are exhausted and the bank or unpaid suppliers put the business into liquidation. Unlike most new businesses, however, Seemann did not adopt this approach. Her other way was to invite each of her customers to help cover the shop's overheads by paying 50DM as a monthly subscription and those who did were able to buy goods from it at their actual cost. Enough people took up the idea to make it work and according to Seemann⁸, this radically altered her relationship with the people she supplied because, instead of setting her prices at the highest level she felt her customers would tolerate, the challenge was now to buy as well as she could on her subscribers' behalf and to make the shop and its services as attractive and convenient for them as possible. The tension inherent in the shopkeeper-customer relationship had gone: Seemann was now her subscribers' agent rather than their adversary. Her customers benefitted because anyone who spent more than 150DM at the shop in a month was able to make a substantial saving and had every incentive to do all their business there. Subscribers felt they were part of the business and the level of pilferage dropped. Two years later Seemann was able to open a second shop and the business is still expanding.

The potentially malign influence of competition on one level and its absence on another presents community-scale economies with a problem. In the world economy, competition is the main method of ensuring that businesses do not make excessive profits at the expense of their customers. In a local economy, however, competition of sufficient intensity for this method of profits control to be effective is unlikely to be possible. Some other system has therefore to be found both to regulate the forms which competition can take in activities in which a reasonable number of similar businesses operate and also to prevent monopolies and oligopolies making excessive profits in activities where they do not. The need for such a system is not new and in the Middle Ages, the crafts guilds regulated competition between members' businesses while the problem of monopoly was tackled by governmental and ecclesiastical authorities through the concept of the 'just price', an idea which may soon acquire a new lease of life in a community context.

Production in the early Middle Ages was not geared to accumulation and profit but to guaranteeing the existence of every member of society. For St. Thomas Aquinas, the period's leading thinker on how a balance between personal and community interests might be struck, trade was not the sin it had been for earlier Christian theologians but was dangerous as it tempted its participants to sin. Aquinas, who died in 1274, taught that a man had the right to sell his stock or output for enough to maintain his status in society and to keep himself and his family in reasonable comfort but anything beyond that was sinful profiteering. Trading for the sake of gain was wrong.

Aquinas's approach enabled just prices to be calculated. "Prices were only marginally affected by the action of free and uncontrolled market forces.... Two factors - public need of the article and due return for its manufacture and transportation - were sufficient criteria for determination of the just price" the Russian mediaevalist, Professor Aron Gurevich writes in his Categories of Medieval Culture⁹. "Determination of the just price was in the hands of responsible and respected people who were mindful that the norms of truth and general justice were here involved."

A good example is the 1367 Statute of Kilkenny which set out in detail how a just price should be calculated. "It is ordered that the mayor, sovereign or other chief officer of the town should call before him two of the most discreet men of the place, as well as the merchant to whom the said wares belonged, and the sailors of his ship. The merchant and the sailors were to state, on oath, the first cost of the goods and the expenses of transportation. Then the mayor or chief officer of the town, and the two discreet men, were to name a price at which the wares must be sold."¹⁰

Other measures were also used to prevent profiteering. For example, London had a regulation to prevent anyone buying up cargoes of essential goods in order to corner the market. Thus when a shipment of coal arrived it had to be sold retail for the first eight days, each family being limited to fifty basketfuls. Only then, in order to empty the boat, could any remaining coal be sold wholesale. And naturally, the shipper's retail margin was determined on a just price basis.

The other regulatory force of the period, the crafts guilds, first appeared around 1100 in Italy, the Rhineland, Holland and Belgium and spread quickly. They were both social and commercial in character. On the commercial side, "the crafts guilds ... were concerned with maintaining a steady volume of business for their members. Their chief aims were a satisfactory standard of workmanship, and a fair price for its products, and the restriction of the number of apprentices a master might keep, the hours he might work and the tools he could use" Antony Black writes in his book Guilds and Civil Society.¹¹ "The general aim was to prevent the expansion of one man's business at the expense of others." In some guilds, if a member was able to purchase raw materials at a bargain price he was expected to share his good fortune with his fellow members and many guilds required that workshops be open to the street so that it was possible to check that regulations were being observed.

Opinions differ on whether the guilds maintained a fair balance between their members' interests and those of the wider community. The current consensus seems to be that the guilds became more self-serving as attitudes slowly changed in the decades immediately before the Renaissance. However, there is no doubt that the guilds were of great non-economic benefit to their members because they conferred social status and provided, as a result of the oath that members took to each other and the frequent communal feasting, a network of colleagues and friends who could be relied upon for practical and monetary help at times of sickness, poverty and death. Black says that the guilds enabled work to take on the character of a vocation and Gurevich can scarcely contain his enthusiasm for the system:

Belonging to a guild was connected with a complex of emotions which a man shared with other members: pride in his guild whose reputation and authority he would jealously defend, participation in meetings and general decisions, assertion of his dignity as a fully-fledged burgher vis a vis the town patricians and the nobles, and a feeling of superiority vis a vis the unorganised craftsmen, the apprentices, pupils, servant - the common people of the town. A master craftsman sought and found in his work not simply a source of material prosperity: his work gave him satisfaction in itself. Hence his work and his product could be a means of achieving artistic pleasure. Perfection in a craft was handed down from generation to generation, forming a tradition of excellence and pushing the productive and the artistic possibilities of the craft to their utmost limits. A craft was a skill, and a skill was artistry. The free work of a master craftsman within a guild was a means of asserting his human personality and heightening his social awareness.

The union of productive, ethical and aesthetic principles in the work of the master craftsman gave this work very high social significance. It provided a basis for the development of the human personality to the maximum possible in the corporate society of the Middle Ages. The burgher was a citizen of his community, an owner, a working individual. The multilateral nature of his social relations raised him above the representatives of the other orders of feudal society.

A modern organisation that has unconsciously adopted some of the features of a craft guild is the Briarpatch in San Francisco, an informal network of small businesspeople who, as their by-laws state, 'are in business primarily to serve people' rather than to become rich. Significantly, in the original, the word serve is underlined. Another guild-like feature is that members' financial records are 'open to all for examination: employees, customers, suppliers and anyone else who is interested' an echo of both the concept of a just price and of the open-to-view workshops guildmembers had to maintain.

The network takes its name from the Uncle Remus stories in which, while Brer Fox and the other animals led serious lives and depended on their cunning, Brer Rabbit had a wonderful life of fun and play in the briarpatch. It was set up in 1974 by people who had campaigned against business and government in the social, political and environmental upheavals in the United States in the late 1960s, and then, in the early 1970s, found that they were in business themselves. "We didn't want it to be just business as usual. We didn't want to be like Dow Chemical [which made napalm for use in the Vietnam War]. We wanted to do business in a different way" says Roger Pritchard, an Englishman who joined the network early on and who is now a small-business consultant and part-time co-ordinator of the 50-member East Bay Briarpatch which operates in Berkeley and Oakland, across the Golden Gate bridge from San Francisco.

"We had a common ethic of honesty and openness, sharing, dedication to excellence in whatever we did, the idea of having fun in our business and basing it on what we cared about and were good at, and a policy of taking care of people who did business with us. We found that this was not the way business normally worked so we needed to support each other in making those principles work for us in business." This meant that they had to set up their own organisation "but one with no officers and no prestige because for us, prestige equalled politics" Pritchard says.

Briars aim for right livelihood, which Pritchard says:

There have only been three co-ordinators since the Briarpatch was set up. Claude Whitmyer held the post when I visited San Francisco at the end of 1993. "Because the support of the naturally large family and the clan or community has been lost to us, we must consciously recreate it as the first phase in finding our right livelihood" he says. "There are three effective steps to begin the process. First, focus on the people in your life; second, find the right people to support what you want to do; third, give back more than you get."

Briars define themselves as people who:

1. Have an insatiable curiosity about the way the world works.

2. Seek to do the work they love and make a living at it.

3. Believe it is more important to provide the highest quality product or service than to get rich.

4. Prefer co-operation to isolation.

5. Prefer honesty and openness to deceit and secretiveness.

6. Believe in self-reliance and social responsibility.

7. Believe in simple living and environmental preservation.

8. Believe in openness and the sharing of resources.

9. Have been in business long enough to have a track record.

10. Believe that joy is essential to a fulfilled life.

Although would-be Briars are expected to be in sympathy with these ten points and there is no formal screening process, Pritchard can only remember one person who was manifestly out of place but turned up meeting after meeting. "It was hilarious" he says. "Normally, there's no problem because there's no prestige attached to being a member."

The network holds a 'brown-bag' lunch in San Francisco on the first Wednesday of each month to which anywhere between ten and 25 members come along. They sit around in a circle, eat whatever they've brought in their bags, and talk about what their business needs are and what help or ideas they can offer other members. Less regular activities include parties, classes, workshops and seminars. A directory of members is available and 'when there is the energy necessary' a newsletter.

A lot of problems are solved at these lunches and by what Whitmyer calls his 'telephone ministry' which gets between twenty and fifty calls a month. Women, who make up 59% of the Briar membership, apparently find these phone contacts particularly useful. However, for anything more intractable, a volunteer consulting team is available free of charge to call out to businesses on Wednesdays, The team helps fifty operations in a typical year. "You can learn at lot from these visits without being told anything just by looking at things like how clean the premises are and the state of the books" Pritchard comments. The success of these three types of advice and support has been remarkable: only 5% of Briar businesses fail in their first three years in comparison with the US average of 80%.

Page 3 of Chapter 7

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