Relational goods, stocks over flows, systems over networks: a webinar on the strange economy of the Messina district

2020-09-08T12:00:00Z

Messina is a small city in Sicily, overlooking the eponymous strait that serves as the island’s gateway to mainland Italy and Europe. Sicily’s economy and society have long been crippled by high unemployment, inefficient public services, corruption and organized crime. Yet, over the past ten years or so, a small cohort of about 120 enterprises in Messina, working closely together, have managed to build a solid, long-termist, fair, human-centric economy – and achieve stability and prosperity in the process. They call themselves “the Messina advanced cluster”.

To get where they are now, they had to re-invent a lot of economic concepts. The familiar ones (“maximizing shareholder value”, “correct market failures” etc.) were simply not working out for Sicily, and for their goals. So, as they re-built their local economy, they developed their own economic thinking, with concepts such as “relational goods”, “stocks as autonomy”, and “systems, not networks”. Even their innovation is weird: solar panels made out of the pulp of waste oranges? A People’s Energy Company?

In this online event, you will learn how they built this incredible success under very difficult conditions, and how their way of thinking might help you along your own journey.

Featured Participants

Gaetano Giunta - Fondazione di Comunità di Messina

“In the early 90’s, after the mafia murders of the most important Italian anti-mafia judges and a long period of killing, in Sicily we thought we could change the world only with the enthusiasm of our activism. We tried, but we didn’t completely succeed. We understood that to have a real change we also had to change the economy.”

Alberto Cottica - Founder, Science Fiction Economics Lab

“Economics, as we know it currently, has pivoted from being a place where you could imagine new and better worlds to a discipline which re-enforces and improves itself in a single model. “Blue sky” innovation of economic systems is now done in strange places. Science fiction is one of them.

Another one is local communities who attempt to reboot their economies in more humane and long-term resilient ways. Among these, the advanced social district in Messina stands out for depth of vision and effectiveness of implementation. Their economy is so strange – and yet so logical – that it would not be out of place in a science fiction novel!"

5 Likes

cool. Looked up the name Horcynus Orca. Apparently is from a poem by https://en.wikipedia.org/wiki/Stefano_D'Arrigo , which has no translation in English…

Not a poem, more a very strange novel. It’s the Italian equivalent of Joyce’s Ulysses. Or something.

1 Like

can you ask him why they chose this name for their foundation and what it means to him? What parallels he sees between what they do/how they operate and the novel. Maybe at the end of the interview

Alberto- 120 businesses and 400 people is slightly over three people per business: how in the world can they influence a city of 231,000 in the center and 450,000 in the greater area?

  • By increasing economic freedom. Providing a port of call for idealistic, entrepreneurial people: a ready supply of business partners and brothers- and sisters-in-arms. All this in a southern Italian city, with a strong presence both of the “steady government job” culture and close-to-the-mob doubtful businesses.
  • By increasing economic diversity. The cluster includes a cultural foundation, a museum, a research center, a people’s energy company and several social cooperatives.
  • By increasing inclusivity. The social cooperatives provide jobs for mentally ill people – and for thos, jobs are not just a source of income, but a source of healing human relationships.

Of course, if you are going to measure economic impact by GDP, the advanced cluster’s is small. But this is the Sci-Fi Economics Lab: we know better than to measure that way. Taking different roads is the whole point. :slight_smile:

2 Likes

I Googled “Messina Advanced Cluster” (in English and the only references were to you talking about them. Please provide the Italian reference, which maybe I can have Google translate.

Your descriptions use a good deal of specialized terminology which I’d like to have defined more concretely and with examples so as to understand it better.

In principle I agree: the way our economy works at present is not only soulless; it also has a hard time adapting to change without causing a good deal of pain, especially to workers, who are laid off from companies in old industries and abandoned, while then new companies in new industries hire other workers with new skills. Then the cycle repeats. A number of European countries have tried to protect workers by writing laws which make it a lot harder and/or more expensive to lay workers off – this does not help – all it does is prevent companies from adapting to new technologies. What would be needed (in theory) would be a cluster of companies which, amoeba-like, could as a whole constantly morph around the edges such that workers’ skills and aptitudes would be enhanced and managed so as to bring in and use new technologies, which would not be so rule-bound that adaptation is stultified.

This would be more in the field of business management than in economics as such, although certainly if it became anything like the norm it would have significant Micro and eventually Macro effects, such as blending working and training, reducing unemployment, increasing innovation, localizing change, etc.

But I get ahead of myself – is this what this “cluster” has in mind? I worry about politicization – if everyone involved is a leftist, then on one hand I can see why it would be hard to make progress in the general business community; plus this would make it hard to become big (I resist the idea that large companies are by nature incapable of being managed in a human-oriented way). But maybe that is not a factor. One reason I mention it is because as far as I can tell, all communally-oriented organizations so far have been held together by some form of faith or ideology – the examples are monasteries, especially those that manufacture products such as wine or liqueur or beer, or the Israeli kibbutzim, the various mostly 19th century socialist communities and then again those of the 60s, not to mention various now-failed or discredited Communist experiences, all of which have ended without issue once the fervor inevitably fell. This might mean that humans are incapable of communally-oriented organizations unless supported by ideology, which on one hand would not be a very complimentary aspect of humanity, but on the other would mean we should not waste effort trying to create such communities and then ironically labeling them “long-term”… But perhaps there is a new “company social glue” of management practice that these people have found – if so, what is it?

Some thoughts

  • There are different forms and motivations for business activities e.g evasive entrepreneurship as a response to institutional failures. If those institutions are captured by the one ideological narrative or part of the political spectrum, by definition any response will be opposition. Whether or not that fits into boxes of “right” or “left” I have no idea/ feel is just rhetorical bundling a lot of the time.

  • The choice to optimise/ introduce new technologies to replace humans is not a neutral as I understand it. It rests on certain ideological foundations/ political leanings and or value systems e.g what the metrics of success in business that will be shared by some parts of the population but not others?

  • Doesn’t economics come down to human behaviours - in which drivers such as value systems are fundamental? Or rather, aren’t there difference between some schools of economic thinking being how they model human beings/factor human behaviour into their reasoning?

NB: I am not an economist. and my understanding of formal economics theory/ thinking is superficial at best.

  • “Evasive entrepreneurship” is a way around economic institutions in order to make money; it can have productive, unproductive or destructive effects, but it may sometimes lead to salutary change in hide-bound institutions. So, if the Messina project is an example of evasive entrepreneurship, if it is being held up as an example to emulate one would have to show that is is productive. And yes, it could be built around any ideology or none – I just picked leftist in my question because it seemed more likely.
    -Any business that does not make money dies – generally pretty soon. So yes – it is absolutely materialistic – but as Adam Smith points out in 1776, a business that succeeds by making money for its founder in a free market must by definition be providing something that people are willing to part with their hard-earned money for, so they are voting with their money that it’s beneficial to them. And yes, this of course applies to all kinds of illegal and immoral activities as well as ones we find uplifting, because there are humans involved. But I am straying… Replacing humans with machines literally began with the industrial revolution – weaving machines replacing skilled weavers in the UK in the early 19th century led to the “Luddite” movement that smashed factory technology. There are two factors involved here that are in conflict with each other: one is that the new technology is more efficient and therefore increases the productivity of the industry – more product at less cost. Downside is that previous workers get thrown out to starve. The secret to this conflict is that THE MACHINES ALWAYS WIN – who can resist paying less for the same product? So the only realistic way to solve this problem in a humanistic way would be to tax the industry of part of its increased productivity (Bill Gates calls this a “tax on technology”) and use it to fund re-training for workers whose skills have become obsolete. Because the worst possible response is to try to prevent workers from being laid off – this just leads to you having an industry with expensive obsolete technology that cannot compete with other places that have the newer more productive stuff. And even if you are REALLY stupid and prevent those other places from selling their better, less expensive stuff to your country, you end up in a downward spiral of unproductivity – and of course this is precisely what unites Mr Trump and Emmanuel Macron, whom I otherwise admire… which is also another discussion.
    -Yes, economics is, as I like to say, a branch of social psychology – but that’s not entirely true – it mostly sounds cool – what is more true is that macroeconomics is a branch of cultural anthropology; in other words, it is the institutions of culture that determine how humans interact in the economic sphere – there is no doubt that this also includes a great deal of what we call “social psychology”, which is again a branch of ethology, which is the study of animal behavior under natural conditions… Behavioral economics is exemplified by the work of economics Nobelist Daniel Kahnemann (who is a social psychologist), and some others: Dan Ariely, Dan Pink – all of whom have TED talks, because the idea that economics is really psychology appeals to a lot of TED-talk people. And I mock it because I mock everything, but actually I have a lot of respect for what they have accomplished. And as for someone who has looked at economics from a cultural perspective… The first was Thorstein Veblen in his 1899 book “The Theory of the Leisure Class”, which I VERY highly recommend. It includes all the flaws and personal foibles one might expect from an anthropology-oriented book written in that era by a dandy with Veblen’s idiosyncrasies, and it still is a tour de force – nothing else compares.The other one I know of is David Graeber’s books, starting with the 2001 Toward an Anthropological Theory of Value, passing through Debt: The First 5000 Years and as of 2018 “Bullshit Jobs”. Graeber is always interesting and thought-provoking and pre-conceived-opinion-exploding, though he is an anarchist and much too left-wing for my opinion of what is advisable and workable in the modern world. There is a whole pretty mainstream “school” of “Institutional economics” founded by Veblen. Nobelist Elinor Ostrom is my favorite – she is the other non-economist who won a Nobel in economics – she studied political theory, but ended up designing communities and the local management of local natural resources – I highly recommend her eight Principles for Common Pool Resource institutions. Sounds vaguely Buddhist…

Hey, Alberto! Maybe Ostrom could be a focus for a scifi econ project – although she attracts a lot of airy-fairy community-oriented folks who don’t have the rigor she brought to her studies which made her so well-respected.

Guess it depends on what you mean by “soon”: Tell that to planet VC fuelled Startup :slight_smile: As an entrepreneur who’s guiding ethos is that business viability = bring in more money than you spend, that scene looks really weird seen from here.

  • Jokes set aside, don’t things sort of get weird when you bring the financial sector/financialisation into the mix? Also, yes if you are operating outside of la la land you need to stay economically viable - but what that actually entails depends on how you set up your business and the environment in which you operate. Climate change/Pandemic = massive chaos = primary bottom line is resilience to shock…?

  • The efficiency/ productivity arguments depend on laws and governance at least to some extent, don’t they? If you have to take into account the negative externalities of the work you do on e.g planet and that has to be baked into your cost/price.

  • Also, there are cases where you don’t get lower costs as technologies advance as in the case of healthcare. The costs to everyone of supposedly efficient management of provision of care services supposedly enabled by technological progress are now visible in a way they haven’t been. We have a really nice example in the comparison between Finland and Sweden. Finland: “resilience is non-negotiable, the war taught us you need to have bunkers filled with survival equipment to keep the population safe, and yes we can continue to use those old masks past their best before date - they work fine with a bit of touch up”. Sweden= “it’s not cost-efficient to have stuff that we don’t use lying around, and also let’s replace ultrasound machines that were working just fine with new machines that cost a fortune and don’t work nearly as well and end up stuck in the cellar of the hospital because the staff hated them but didnt have the energy to pick a fight with management”.

Hi, Nadia!

“Soon”, of course, is dreadfully simple… and vague – it is “before the money runs out”.

The interesting aspect of the COVID-19 pandemic in this context is that it is NOT what Nassim Nicholas Taleb termed a “Black Swan” event – something that is not predictable – it IS predictable and WAS predicted – it is just a relatively unlikely event in any given year. Climate change is different, because not only is it predictable, we have scientists predicting various consequences within a range. So for many companies ensuring they are capable of withstanding a rare event such as a pandemic might be too much burden to carry, unless you are referring to a plan of how to pick up pieces after everything falls apart; on the other hand, not designing so as to withstand the consequences of climate change would be extremely foolhardy. There is no “resistance to shock” as such, other than willingness to respond flexibly to threats; there is only resistance to specific statistically reasonably possible shocks.

Yes, absolutely – externalities make a huge difference – not necessarily only the negative externalities similar to those mentioned above – one kind of which requires a response and the other of which may only demand willingness and ability to be flexible – but of course responding to government responses to those externalities is critical. So if your production process is polluting it may only matter to you as a company shareholder if someone forces the company to pay to minimize or clean up the pollution.

With respect to health care: I suppose you are referring to the famous “Baumol’s Paradox” that is supposedly applicable to many services in which the technology hasn’t changed in centuries, even though the wages of workers grow in line with other jobs. I am skeptical: even for musicians, the classic case, recording and broadcasting technology has hugely increased their productivity. Medicine of course has been utterly transformed by technology. But you may be making a category error – you definitely DO get lower costs for any given technology in health care – the patents expire and other companies make a generic product for much less, etc etc. What drives up costs is the DEMAND side (for sure assisted by supply) – as our societies become richer we are willing and able to spend more and more on NEW technologies which help more of us to live longer, so we spend more on health as a proportion of our income, because we have basics like eating and shelter taken care of. The differences between Finland and Sweden have a good deal to do with different histories and institutions, as you hinted in your description.

Video teaser structure – draft

Would this work, @estragon?

Alberto

Messina is a city in Sicily, right on the strait connecting the island to mainland Italy. It is part of Mezzogiorno, Italy’s less affluent south, and as such plagued by long-term unemployment, persistent inequalities, and subpar infrastructure, despite robust cash transfers from the more affluent north. Sicily also has a more specific problem: the Mafia, whose networked criminal economy is a further drain on local resources. But in the late 90s, a group of friends mounted an attempt to regenerate the local economy. 20 years on, this attempt has blossomed into what they call an “advanced social district”: 120 organizations, spanning from breweries to construction, from social cooperatives to research centers, from energy production to a contemporary art museum. Along the way, they have come up with a unique approach to economic and social development. So unique, in fact, that it looks almost alien.

Gaetano

La storia comincia nel 1998. Siamo in piena primavera siciliana. La Sicilia è percorsa da un movimento popolare senza precedenti, di lotta non violenta alla mafia. Coalizioni progressiste usano questa spinta per arrivare al governo di quasi tutte le città siciliane. Eppure, qualche anno più tardi, questa esperiena è in via di riassoribimento.

Perché? La nostra ipotesi: perché non si è intervenuto sulla struttura economica. L’economia capitalista è, in qualche senso, simile all’economia criminale, almeno nel senso che l’ipotesi antropologica (individualismo, massimizzazione del self-interest individuale). Quindi c’era bisogno di un centro studi: ricerca-azione per sperimentare modelli diversi, con cui un’economia diversa potesse funzionare.

La logica di ECOSMED era passare dall’economia come equilibrio di egoismi all’economia come cluster locali. Ne nascono subito (2000) tre. Uno è di ricerca: Fondazione Horcynus Orca, uno strumento di produzione culturale e scientifico. Il secondo è cooperativo (Basaglia etc.). Il terzo è finanziario: un fondo di garanzia nato per la lotta al’usura, ma poi riutilizzato anche per le startup.

Alberto

The protagonists of Messina’s development story dreamed of a different, better economy, but they knew had to be viable in the present economy, or their dream would not survive. So, they developed a set of strategies that would enable them to thrive in the present, while at the same time bringing about pieces of their intended future. These strategies are remarkably simple to grasp, and they should be possible to imitate. They are:

  • Focus on stocks, not flows
  • Build systems, not networks
  • Build your system like a Dyson sphere
  • Encode human relationships in physical goods

Gaetano

on stocks Le nostre politiche sono volte soprattutto alla redistribuzione di ricchezza. Certo, ci sono sempre flussi, ma se sganci i flussi dagli stocks finisci nel welfare assistenziale, e spesso nell’autoritarismo e nella violenza (echi di mafia qui). L’autonomia delle persone dipende dal loro accesso a stocks.

on systems Il nostro è un sistema di contaminazioni, di connessioni. Ci sono due modelli: la rete ha dei nodi che comunicano. Non è sufficiente, perché le transizioni di fase necessitano di scambi di energia con l’ambiente esterno. Il sistema è un modello in cui i nodi si trasformano a vicenda, vengono a compromessi gli uni con gli altri, orientano la loro azione strategica in funzione dell’azione strategica gli uni con gli altri. Per esempio, la banca di credito cooperativo francese ha montato un fondo per sostenere le primavere arabe. Per esempio, la riflessione italiana su cosa dovrebbero fare le fondazioni di comunità è molto figlia di FDCM. Quando gli elementi di un insiemee si scambiano non solo informazione, ma dinamiche trasformative, quello è un sistema.

on Dysons spheres Sì, ci sono molte economie interne. L’attuazione delle policies consolida anche i cluster, che a loro volta sostengono la FDCM e l’hanno fatta nascere. Questo però deve essere accompagnato dall’apertura dei sistemi, se no fai comitati d’affari. L’apertura fa la differenza! […] Nessuna transizione di fase può avvenire senza scambiare energia con l’esterno del sistema. Il distretto sociale avanzato ha una sequenza genetica aperta, in cui ci sono “slots” per attori sovralocali: il comitato scientifico della fondazione, la rete REVES, etc.

L’architettura è autosimile. Scendi di scala e trovi sempre sistemi complessi.

Alberto

I particularly like the idea of relational goods – physical goods that encode human relationships. Here is an example: the district includes a museum of contemporary art of the Mediterranean. Its collection was not put together with market purchases. Every single piece was either donated or produced locally in the context of art residencies. Every piece encodes a relationship, an alliance, a gesture of support, between the museum and the artists. The collection is now worth tens of millions, but of course the museum can not sell it without vaporizing the relational capital it symbolizes. But neither is it worthless, because these relationships are the basis for new revenue-generating projects. Also, the collection itself is a tourist attractor and a generator of new relationships. The economic value of this collection is not realized by cashing out on it, but by stewarding it and growing it.

Building a new economy while being viable in old one is hard. In Messina, however, the advanced social district has some help: a community foundation, Fondazione di Comunità Messina. It was established in 2010 by organizations in the district itself.

Gaetano

FDCM è una fondazione anomale. È una fondazione erogativa che NON FA BANDI, e non finanzia microprogetti. Il modello di grant su progetti, noi pensiamo, è figlio della logica della precarizzazione dell’economia e del lavoro. Quello che FDCM fa è finanziare policies, fra di loro fortemente intercorrelate, e utilizza i suoi clusters per gestirle. Le politiche di ricerca e innovazione le fa Horcynus Orca. Quelle economiche e sociali le fa ECOSMED. Quelle sulle categorie deboli le fa il centro Puglisi, etc. Questo ci dà un impatto molto più grande e molto più duraturo nel tempo.

2 Likes

Yes, I think it is perfect.

@estragon is the teaser ready? @nadia?

waiting for it too.

Almost

it’s done and embedded into your post above!

yes, the button displays weirdly for me too…