SciFi Economics Lab papers: Messina Advanced Social District

Acknowledgements

This publication would not have been have been possible without generous contributions from:

Kirsten Dunlop, EIT-Climate Kic

Fabrizio Barca, Forum on Inequalities and Diversity

Gaetano Giunta & Giacomo Pinaffo from the Messina Community Foundation, for his endless patience and passion in explaining the ideas, principles, hacks & mechanisms of the Messina Advanced Social Cluster.

Maria Euler, Giovanni Calia, Ivan Cukerić, Owen Gothil and other members of Edgeryders community who took part in the webinar and in the discussions on Edgeryders platform, making this inquiry possible by their presence and their support.

Introduction, by Alberto Cottica

Edgeryders encountered Fondazione di Comunità di Messina for the first time in February 2019, during a seminar on technology policies to improve social justice and reduce inequalities. The seminar took place in Messina, on the northeast tip of Sicily: mainland Italy was just three kilometers away, looming across the strait depicted in Homer’s Odyssey. It was interesting in and of itself, and it tied back nicely into Edgeryders’ work on the Next Generation Internet, which was just starting.

But the most interesting thing was the place that hosted the event, Fondazione Horcynus Orca. The place felt… utopian. Built around the ruins of a 1st century BCE Roman watchtower, maintained by ex-inmates of the local mental asylum, it was a meeting place of people in several businesses, from a local energy company to a beer manufacturer. Something was going on. So I asked.

Messina hosts an “advanced social district” (distretto sociale avanzato). In Italian, “district” is associated with industry and carries the idea of production. Indeed, this is a tightly integrated network of independent companies, competing on some arenas, cooperating in others (industrial district), of which Horcynus Orca is only a piece, specialised in the arts. As I spoke to Gaetano Giunta, a physicist and a member of the small group of friends who quit their jobs to start it all in the late 1990s, I heard him mention values similar to Edgeryders’ own: freedom, happiness, beauty. Business and commerce as the weapon of choice, the main path that lead to being able to uphold them in a sustainable way.

A CLOSER LOOK

A TOOL: THE COMMUNITY FOUNDATION

Building a new economy while being viable in an old one is hard. In Messina, however, the advanced social district found its own tool: a community foundation, Fondazione di Comunità di Messina. It was established in 2010 by the organisations in the district itself and in 2013 the Statute of the foundation was registered to define its actual activities.

In 2010, activity in Messina had already reached critical mass. Gaetano and his group were able to attract a larger investment that went into the startup capital of a social economy vehicle called a community foundation (fondazione di comunità).

The practical problem arose of how to invest the money in a way that the capital would produce a revenue stream which the new foundation could use to carry its projects.

They did not want to invest in financial assets, as they thought this would betray their mission of developing the local social economy. What could they do?

Studying the problem, they realised that Italy had launched a plan of incentives to build up capacity in renewable energy generation. This was, in fact, the Italian implementation of a EU program called feed-in tariffs. It promised a long-term (20 years) subsidy to anyone installing solar panels or wind turbines.

The team reached out to the community and offered to partner up with anyone who asked: schools, hospitals, companies, small cooperatives or households. Each partner would receive and steward a cluster of solar panels. The Foundation paid for the solar panels and their installation letting the partners keep the energy generated this way, to use or sell back to the grid. The Foundation itself would receive and manage the subsidy.

They ended up installing 2 MW of certified photovoltaic energy production capacity.

To manage this front, they spun off a new organism, called ESCO (Energy Social Company) naming it Solidarity and Energy. The ESCO proceeded to use proactively the foothold gained in renewables to further green the local economy. One of the major successes was the push to increase the energy efficiency of the housing stocks, which led them to invent solar panels based on organic materials, like discarded oranges [sic]. Their efficiency is very low, but extremely cheap, and they come in colours (orange pulp is bright red in Sicily!), which made a game for all the designers involved.

Now, this was a very elegant move. In one go:

  • they greened the economy;
  • created a new local player who would further green it long-term;
  • provided a tangible benefit for the local community;
  • bought themselves a lot of goodwill;

and

  • turned a lump of “dead” money into a 20-years guaranteed revenue stream.

Community foundations definition on Wikipedia is “instruments of civil society designed to pool donations into a coordinated investment and grant making facility dedicated primarily to the social improvement of a given place”. In 2015 there were more than 1700 CFs around the world. They may be private, often endowed by an individual or a family but there are also other types of ownerships, such as Messina’s community foundation for example.

According to the same source, the first community foundation was set up in Cleveland in 1914 by Frederick Goff and operates now as The Cleveland Foundation. and some of the largest foundations operate with budgets of several hundreds of million dollars.

They are independent registered institutions, with philanthropic purposes which serve a defined territory. The Tamworth Foundation defines them by six points: “they serve a geographically-defined community, have a broadly-defined mission, serve as a grant making organisation, are supported by a broad range of private and public donors and seek charitable contributions primarily from inside the community, are governed by a diverse local board reflecting the community, build capital endowments, which are an important element of sustainability”.

Now, all of these elements are at the same time present in the structure of Fondazione di Comunità di Messina, yet all of them have a different declination, sometimes even radically different, than what goes as mainstream today, as we are going to see.

Fondazione di Comunità di Messina

Fondazione di Comunità di Messina (FdCM), the Messina Community Foundation, in its Statute from 28 March 2013 signed by Ferdinando Centorrino and Gaetano Giunta is defined as an ONLUS – the Italian acronym for a socially useful non-profit organisation.

Established in 2010, as a vehicle for social, cultural and economic engagement of the Messina Advanced Social District, Fondazione’s focus was set on expanding the local communities’ and citizen liberties starting from the socially fragile situations.

Fondazione also aimed to preserve, promote and enrich local ambient, culture, arts and historically and artistically relevant monuments.

The Founders

Fondazione di Comunità di Messina arose from a partnership between local social, educational, institutional and scientific networks and in cooperation with national and international social actors.

Together with the organisational committee, the founders and eventually members of the Messina Advanced Social District (Distretto sociale evoluto) promoted by FdCM are:

  • Fondazione Horcynus Orca
  • Fondazione Padre Pino Puglisi
  • Consorzio Sol.E.
  • Ecos-Med

The other promoters are Confindustria Messina, ASP, Banca Popolare Etica, Parsec – Roman cluster of CNCA, Associazione Culturale Pediatri.

Fondazione was born under the high patronage of the Italian Council of Ministers under the presidency of Romano Prodi, with the grant provided by the Ministry of Justice and Foundation Con il Sud. FcDM is in a structured partnership with Caritas Italiana and REVES - European network of Cities and Regions for the social economy.

The Foundation starts with an initial capital of 5.000.000 Euro. Approximately half of the amount was provided by the members and the other half by Fondazione Con il Sud. Part of the sum provided by the Foundation Committee comes from a special project: Luce è Libertà (Light is Freedom) financed by the Italian Ministry of Justice and Messina’s health authority. Its goal is to progressively render autonomous and socially included the 56 patients of the judiciary psychiatric hospital in Barcellona Pozzo di Gotto.

The History

The story begins in 1998 with a group of local enthusiasts and activists led by a physicist who created a research centre called EcosMed. It took on the mantle of championing a specific vision for local development, and over time managed to get several other enterprises up and running and working together as a cluster. In 2010, they leveraged a European policy (green certificates for producing renewable energy) and a national/regional one (a large foundation called Fondazione con il Sud was doubling capital to any Fondazione di Comunità being constituted in Italy’s Mezzogiorno) to create FdCM as a superstructure.

Gaetano Giunta, the physicist in question, remembers the beginnings like this:

“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.”

Today, the Advanced Social District has grown to be a cluster of companies (many of which co-operatives), non-profit, research and art organisations, coordinated by Fondazione di Comunità di Messina. The cluster consists of 120 local enterprises, spanning from breweries to construction, from social cooperatives to research centers, from energy production to a contemporary art museum. They were all created or consolidated in the last 20 years in or near the city of Messina and employ more than 400 people. About 100 of them went to disadvantaged people. It supports, directly or indirectly, cultural production, tech innovation (examples: immersive environments for learning and therapy, energy production from marine currents).

The Strategy

From an economic point of view, the cluster made three moves which contain the seeds of long-termism. It based its philosophy on relational goods, adopted the concept of stocks over flows and created a system instead of a network.

From the conceptual point, we can say that along the way, in Messina they have come up with a unique approach to economic and social development. So unique, in fact, that it looks almost alien.

But at the same time, the foundation has been recognised by OCSE, UNOPS and World Health Organisation as “one of the most interesting cases in the world on experimentation of welfare models and local development”.

RELATIONAL GOODS: Some goods store value because they encode relationships.

The gallery of contemporary art

Several world-famous artists in the Mediterranean area donated pieces to Fondazione Horcynus Orca, the cluster’s main art organisation. In fact, FHO runs a contemporary art museum that has never bought any piece because everything was donated or produced in-house via artist residencies. This collection is worth several millions, but of course Fondazione Horcynus Orca could not really sell it except in very dire circumstances. Instead, they use it as leverage to attract private donors.

The brewery

Messina’s local brewery, Birrificio di Messina was purchased by Heineken, that ended up closing the plant and relocating production, keeping the brand. FdCM persuaded the laid-off workers to start a cooperative to make a new brewery, and attracted a 6M EUR investment. In three years from a newco to 5 million liters a year. The new company was already turning profit in the first year.

This action has had a strong impact in the local community, a collapsing enterprise was rescued and regained success, by the effort of the community itself.

Five thousand people attended the brewery’s grand opening, because “the beer tastes very good, but it also carries the values of dignity, community resurrection and human development to purchasers”. FdCM successfully rebranded the beer to reflect its ideals.

The social housing

In Messina, 2500 people are still living in the slums created after the earthquake in 1908. FdCM, contacted by the local administration, worked on the solution of this problem. It proposed three alternatives to the inhabitants: a home bought up by the city; or buy any home on the market, with FCM providing them with 75% of the purchase value and legal assistance; move into a newly built ecological experimental condo.

At the same time the program adopts advanced solutions. Several uncommon technologies are in use, including domotics, lots of wood, pressed hay etc. Boston MIT is involved in projecting the prototypes.

In Gaetano’s words: “if you think of markets as of relational goods, you can sometimes be more efficient”.

STOCKS OVER FLOWS

The creation of FdCM marked a shift from producing income (a flow) to fund Messina’s social and civic transformation to securing the capital (various stocks) that generate that income.

The difference is in the capacity of resilience: if you are sitting on your own stocks, you are not at the mercy of short-term changes in marked conditions (or, worse, funding landscapes), and you have the breathing space to plan countermoves when difficulties strike.

A SYSTEM, NOT A NETWORK

Gaetano: “We are not a network: we are a system. The difference is that, in a system, participants are willing to re-orient their work, so as to better work with the other participants. If you are a construction company, you must not be lazy, and be open to using new technologies. If you are a social cooperative, you should avoid providing standardised services, customising them instead to give higher value to the capabilities of the people they are assisting. And so on.”

PREMISES

What can we learn from the Messina advanced social cluster about economic regeneration and resilience in the wake of COVID-19?

by Nadia El-Imam

What does it mean to be safe if we look from the perspective of resilient livelihoods? We used to do economic development policy by adopting a unique idea of what a good society looks like and everyone is supposed to conform to that. Since we are now losing faith in this model, we should encourage peripheral regions to experiment different economic systems. In the case of Messina, this seems to have come about by pioneering an approach resting on the above described elements adding a Dyson’s sphere model (the Dyson sphere is an imaginary artefact built all around a star to capture its energy. The idea is to create prosperity for every member of the system: when a client comes around wanting, say, a consultant to organize a workshop, they are immediately asked if they also need a venue, a translation service, a travel agency and so on… all parts of the system).

Over the years and in part based on the culture of the founders, they were able to come up with practices that are self-evident to them, but counterintuitive to us.

One example: they have assembled an art collection without buying any of the pieces. They acquired them all through donations or artist residencies. The collection is worth several millions now, and Guggenheim has tried to acquire it, but the foundation can never sell it without destroying the goodwill that made it possible to acquire it in the first place.

The fact that the collection cannot be sold does not mean it is worthless. It has value in two senses: as the embodiment of the relationship of mutual trust between the Foundation and artists, and as a collateral to roll out revenue-generating projects. The collection is valued not for its resale value, but for its potential to grow and catalyse more activities. You do not realize this value by cashing out on the asset, but by stewarding and growing it. This is an unusual value theory from the point of view of the one dominant today. It is an example of the kind of thinking that can emerge from mutual aid communities.

While seemingly simple and fairly easy to adopt these principles in other places, it is also easy to underestimate the complexity of local differences and embeddedness, as well as of local and regional inequalities.

One of the risks that emerge is that people are left behind in transformations, because we are not listening to communities and creating strong cultural bonds. The situation is complex, there is not the same clarity for everyone.

So how can we implement the lessons learned? What does it mean for those who wish to support economic regeneration in the wake of Covid 19 or The European Green Deal?

I am wondering whether we could create access through the mutual support groups of sharing and caring communities? How do you expand on the Messina case? How to add on top of that trans-contextual literacy in these already stand alone communities - through more flexible policy making (not waiting for the EU)? Climb the ladder bottom up and expand on it. The axes of sharing and caring communities could be the way to start. What would be the motto to use to find that intersection?

Nora Bateson says that when the systems are stuck they don’t get unstuck if someone says it, but only if the systems learn together. Experience of creating trans-contextuality - experiences with different identities, empathy, get the glimpse of the context of others, go beyond the polarisations and the idea of the democratic process. Lack of trust in society - part of the core things not working. Automatization of who we are. The idea of subsidiarity - top down, not bottom up and it is completely missing as well the dynamic ways of doing policies. We need a dynamic way of testing and designing policies and interventions. Locally driven and context dependent. Forget about the scalability.

A key aspect is that we are going to need to experiment new processes and models for working with movement building to get something to happen, and then protect its integrity for long enough that the desired results become visible . A process which embeds the means to strengthen the political/ideological movements that have supported and protected it.

An interesting example of what happens when you don’t manage to do this is the Finnish Basic Income experiment . A well thought through proposal originally came from progressive activism and was co-opted by the political platform of the liberals. They ignored fundamental elements and executed it badly. Some of these fundamental elements were giving basic income to a randomly selected sample of at least 30,000 individuals. Neither condition was met. Also, it ran for less than half of the time estimated for the experiment to succeed in meeting its main target. The result was that it did not bring significant employment effects.

Compare this to the history of Folkhögskola (Folk high schools), a Nordic model for adult education and lifelong learning that has been around since 1844. The concept originally came from the Danish writer, poet, philosopher, and pastor N. F. S. Grundtvig. The folk high school movement was an act against a conservative ideal of both education and culture. At its core was an idea to give the peasantry and other people from the lower echelons of society a higher educational level through personal inner development. It was born out of a reaction against the Enlightenment’s view of our mind as a fixed, rational machine as opposed to being embodied in the totality of our bodies and embedded in our culture. After the 1848 revolutions in Germany these ideas travelled to the Nordic countries where they were then adopted in the educational model pioneered by Grundtvig and contemporaries. Tomasz Maliszewski at the Polish Naval Academy gives a detailed account of the rich history of this institution in Sweden.

One conclusion we draw is that we need to embed the idea of Citizen Engagement as community action on experimenting local development economic models, rather than as citizen-to-institution consultation.

New arenas for citizen engagement

Because the citizen-engagement-as-consultation mindset does not look at the issue of power. Consulting citizens is one of those ideas that sound easy, but are very difficult to get the incentives aligned right for. The idea of policy experiments sounds great, but an experiment of revoking the copyright directive for Latvia, for example will hardly get an audience in the European forums. The alternative is to override them and to establish an alternative policy anyway or to invest time on the regional level because of its natural dimensions and attitude to experiment. At the periphery of Europe’s major economic players, it might be easier to try courageous solutions (and get away with things). Indeed, more than one mutant economy is showing up in unexpected places in Europe like Messina or Cooperativa Integral Catalana in Catalonia.

In practice we need to find new arenas where we can broker specific deals between communities and their local institutional and political actors around getting specific things off the ground. And create conditions for them to have staying power.

Science Fiction Economics Lab explores how to spark and nurture similar dynamics between regional administrations, political activists and groups running existing initiatives which embody different economic models. We explore how we can give enablers of a transition to a thriving future access to political power so they create the change needed? Can we shift the whole political landscape through tactical interventions and ecosystem building?

How can we help swarms develop around sticky, relevant social questions - creating conversations, relationships, and ultimately projects?

Can we learn from startup incubation and acceleration and create a structured approach to supporting civil society groups in becoming more effective in creating political change?

How can a new generation of political actors turn political campaigns towards community building principles - and can we open-source this?

A CONVERSATION

A community foundation to change the world

Gaetano Giunta, one of the founders and general secretary of Messina Foundation Community

Alberto Cottica, one of the founders of Edgeryders and head of Science Fiction Economics Lab

Nadia El-Imam, one of the founders of Edgeryders

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”.

Innovation of economic systems can get through 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. The protagonists of Messina’s development story dreamed of a different, better economy, but they knew they had to be viable in the present economy, or their dream would not survive. Their economy is so strange – and yet so logical – that it would not be out of place in a science fiction novel!

Gaetano: “The Messina experience is a local one, but it has the ambition to expand to other territories.

We believe that there is a correlation between the environmental crisis and inequality. This sounded weird 20 years ago, when we expressed the idea. Today we see exactly that, irreversible steps in the environmental crisis and so much inequality that it is even stifling traditional economic development.

We are trying to bring about a metamorphosis in humankind. This is not a 1800-style revolution. A metamorphosis is a structural transformation of relevant blocks of human life. Some of the systems humanity lives in are imbalanced.

Here are some examples.

  • Starting from 1970, the speed of technological advancement reached such a level that communities cannot build around them an appropriate culture and ethics. This creates collective stress, particularly in the local communities which simply have no say on it because technology governance happens on global scale.
  • As far as we know, our civilization is not sustainable with this kind of exploitation of resources.
  • The financial power is more and more global, democratic systems have stayed local and are displaced.

This creates literal dislocation. Five to eight hundred million migrants will get on the move due to climate change in the coming years. Most will move into cities, though I am convinced there will be a rebound. This will pose new problems to the governance of cities.

Given this context, our foundation is experimenting on new paradigms for governance, the economy etc. Our key concept is that of limit. Our key resource is what we call human development. This happens by interlinking closely the productive, cultural and welfare system. To do that, we bring to bear the territory capabilities. Part of this is talent attraction.

More specifically, we are experimenting with models that constrain the logic of profit maximization. The constraints:

  1. Expand freedom, especially that of the weakest
  2. Build social capital
  3. Protect ecosystems
  4. Supply beauty,

Operationally, we decided to stop thinking in terms of “atomic” productive units. Capitalism is based on the Hobbesian idea of competition for resources, with markets acting as a mechanism that balances the egoisms of different individuals (or companies). We move from a more complex theory of how humans operate, of which we will not speak today. What is important here to say is that we refute the logic of the atomic productive unit, and we think of units as parts of territorial clusters.

Our foundation provides economic resources to this territory, But it never funds projects: it funds permanent policies. Its pillars:

  1. Promote cooperative social and economic systems, which are very biodiverse. They have culture, finance, scientific research etc. These systems need to be able to promote alternatives in the areas of working, housing, socializing and learning.
  2. Reinterpret welfare towards personalized paths actively supporting each beneficiary in recognizing the alternatives generated by the system, and thus increase its freedom.

Fondazione Horcynus Orca is at the center of a local cluster of firms (diving center, restaurant). One level up, several clusters comprise a social district. Fondazione di Comunità di Messina is the main architectural infrastructure of the district. FdCM is a fondazione a partecipazione, a legal structure in the Italian legal system.

Nadia: “What was the historical process?”

Gaetano: “Our story begins in 1998. We were living a proper “Sicilian spring” - the island was experiencing a popular fervor rarely seen before of the non violent fight against the mafia. Progressive coalitions have used this push to win the administration in almost all of the Sicilian cities. A couple of years later, the experience faded out almost completely.

Why? Our hypothesis is that happened because our economic structure was left untouched. Capitalistic economy, from an anthropological point of view, is similar to a criminal economy. It is based on individualism and on the maximum effort to obtain the individual self-interest.

We understood that to have a real change we also had to change the economy.

We needed to study the phenomenon and the situation and we created a research centre: an action-research project to explore the different models which could make a different economy work. In 1998 we created a research center called ECOSMED. This was the first cluster and several more followed. First of all we had to solve the problem of financial sustainability and with the first problems regarding the territorial policies: the productivity gap of the most fragile, the research and development needed, the democratic practices, and so on.

The logic behind ECOSMED was to move from an economy based on a balance of egoisms to an economy of the local clusters. Immediately (in the year 2000), three were born. The research one is Fondazione Horcynus Orca as a tool for cultural and scientific production. The second was cooperative (based on the Basaglia law) and the third one was financial, a secure fund born to fight the loan sharks which has evolved in the support block for the startups.”

Alberto: “So, in 2010, the solution came together as FdCM. It created a fund that was invested in real economy operations, specifically renewable energy production. 100% of the proceedings of this operation were reinvested in these operations. This ended up influencing public policy, because initial successes made FCM an attractor?”

Gaetano: “Community foundations in the world are between two extremes. The American model is “neutral”: they collect endowments from philanthropists, and give them to the goals that philanthropists have (in Italy: Fondazione Cariplo). On the other side, you have “teleological” foundations, which have their own visions. We here are closer to this second one.”

Alberto: “For 12 years (1998-2010) the clusters pulled through without the FdCM being there. How did you finance the gap you mentioned?”

Gaetano: “With great difficulty. We had to look for grants – the market would not fund these things. But it was extremely difficult to get funders to take part in processes that are strongly innovative. We needed our own grant making instrument.

The social economy is usually focused on flows. Get finance, generate a flow of services, rinse and repeat to keep the flows running. As a consequence, it is chronically undercapitalised. We chose to take stocks seriously. But it took time for us to get to that awareness.”

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

Could you describe the concepts behind?”

STOCKS NOT FLOWS

Gaetano: “Our policies aim in the first place on the redistribution of wealth. Of course there are always flows of capital, but if you untie them from the stocks, the risk is to end on the path of assistential welfare, which is an open door to authoritarianism and violence. The autonomy of the people depends on their access to the stocks.”

SYSTEMS, NOT NETWORKS

Gaetano: “Our system is made of connections and contaminations. A network has communicating nodes and that is not sufficient because the transitions of phase need to exchange their energy with the external environment.

A system is a model where the nodes transform each other continually, reach understandings and compromises, direct their own strategic action towards a common strategic action.

For example, the actual Italian definition of what the community foundations should be doing owes a lot to what FdCM is doing.

When the elements of the whole exchange dynamics of transformation and not only information, then we have a system.”

SYSTEM LIKE A DYSON SPHERE

Gaetano: “There are plenty of internal economies. The success of the policies consolidates the clusters which gave birth to FdCM. It is nevertheless necessary that the systems must remain open, otherwise we have only the business committees. The openness is what makes the difference! […]

If you look at it from a scientific point of view, no transition of phase can be realised without the exchange of energy with the environment surrounding the system. The advanced social district has an open genetic sequence which contains the slots for actors that rise above the local environment: the scientific committee of the foundation, the REVES network and so on…

The architecture is self-similar. Descending in scale, you always find complex systems.”

ENCODE HUMAN RELATIONSHIPS IN PHYSICAL GOODS

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.”

Gaetano: “Amartya Sen used to say that the personal freedom is measured by the alternatives they have in front of them. Today young people from here do not have the freedom as the youth in other European centres because there are less alternatives for their future. To continuously provide opportunities and alternatives in a place which is so distant from cultural and artistic centres and processes of technological innovation is something we are proud of.

And you know, FdCM is a strange foundation. It is a foundation which erogates support but does not work with calls for applications and does not fund microprojects. The grant model for the projects is, in our opinion, a direct result of the casualisation of economy and labour. FdCM finances policies which are strongly intercorrelated among themselves, and uses its clusters to manage them.

Research and innovation policies are managed by Horcynus Orca, ECOSMED manages social and economic policies, Puglisi centre manages the policies directed to socially fragile situations, etc. This results in a much bigger and a much longer impact.``

THE WEBINAR

The strange economy of Messina’s social district

The transcripts are taken from the webinar on 8 September 2020

Host Nadia El-Imam, one of the founders of Edgeryders

Lecturers: Giacomo Pinaffo, project manager FdCM, Alberto Cottica, one of the founders of Edgeryders, head of Science Fiction Economics Lab

Our current economic models need rethinking. This was the general consensus at a recent Edgeryders webinar dedicated to a case study of the Sicily’s Messina district “strange” economy.

Edgeryders co-founder Alberto Cottica explained how despite the economic cycle initiated by the free trade and free movement of capital policies in the 1980s and 1990s, some people on the ground ignored the models and built small scale economies.

“There is a lot we can learn from the Messina example” - he said - “from how it originated, from its projects and funding mechanisms and the capability of remaining independent.”

The context

Giacomo Pinaffo of Fondazione di Comunità di Messina explained how the model worked, starting from the Sicilian context.

  • “…to quote data from 2018, the region had the highest unemployment rate in Italy. We’re talking about more than 20%.”
  • “And 22.5% of families live below the relative poverty line and almost 20% of the economy is black (market) and illegal.”
  • “In addition to this, there is the influence of organised crime, the mafia.”

The beginnings

“People got tired of the local situation. Everything started in the beginning of the nineties, let’s say, after the murders of the most important and most famous anti-mafia judges,” Giacomo explained.

“The citizens started to organise themselves autonomously in organisations and movements, trying to change things locally, with their own direct engagement.”

The first project

A foundation was established and the group reached out to the Ministry representative, proposing to help in reintegrating patients with criminal records, detained in Messina’s psychiatric facility, back into society.

“We went to the minister and said: this jail costs a lot to the society because you are spending thousands of euros per year per person there. And you’re not solving anything,” Giacomo said.

“We - the foundation - suggest a different possibility. If you provide us with a lump sum amount, which would be the sum of what you spend for one year per person, we assure you that we will be able to get them out of there and reintegrate them into society.”

The State agreed to let 56 people from the institute be involved in the project.

“The money the State would have spent for simply keeping the 56 persons in the facility was invested in building of photovoltaic plants, used by several public institutions and families, above all poor, living in Messina,” Giacomo said.

“We have proposed free plants and energy to the people who accepted to host the panels with the agreement that the public subsidies for them would be going directly to the Foundation. That created a guaranteed 20 years income flow.”

“At the same time, the people from the psychiatric institute were inserted in several cooperatives, agricultural, commercial, even the cooperative created to build the solar power plants.”

Their employers paid a wage based on the work done while the Foundation, using the income from the subsidies, added the remaining sum needed to reach a fair wage. Meanwhile, to help their reintegration, the Foundation has organised a dedicated support program.

What can we learn from this?

Alberto highlighted:

  1. It used the passive public spending on the health care of very serious patients to actively reintegrate some of them into normal life.
  2. It managed to reduce the consumption of fossil fuels in town.
  3. It spawned several new businesses – landscaping and maintenance cooperatives for example and so forth.
  4. It provided long term funding of the Foundation.
  5. It introduced the Foundation as a capable policy maker on the local scene.
  6. Hundreds of businesses, households, schools and hospitals with solar panels installed by the Messina Foundation have become friends and allies of the Foundation.

“In English we would call these ‘the relational goods’. They are different from traditional ideas of goods in economic theory, because their value lies in relationships” - Alberto concluded.

Second model - the social housing

“Freedom is the main objective of the Foundation. When we say development creates freedoms, we are referring to the Amartya Sen’s capabilities approach - which means expanding the opportunity of choice for the people. The weakest obviously above all,” Giacomo said.

“In Messina, there are slum neighbourhoods. They were first built in 1908 after the earthquake and grew further after the bombings of the Second World War.”

“These are very hard places to live in. The research we conducted discovered that the life expectancy of the people living there is seven years lower than the average of the rest of the city. It’s controlled by crime. It’s highly deprived.”

“These slums host around 2,500 families and on part of them, about 200 families, 700 persons, entered the project of social housing which we were asked to organise by the local Administration.”

The Foundation proposed three solutions to the people:

  1. Follow the main public program and relocate in a low rent house owned by the State.
  2. Enter one of the modern, energy efficient eco-buildings built on the sites freed by demolishing part of the slums.
  3. Buy a house taking a lump sum from the State which covered 80% of the price. The Foundation set up a microcredit institute which loaned the remaining 20% if needed. At the same time, the Foundation provided support and guidance through this process for the financially illiterate inhabitants of the slums.

“You empowered them by giving them ownership of choice” Alberto explained.

“Let’s say (you change) the mind of one person, two, 200 people, 700 people. Then, step by step, the general approach in the local society starts to change.”

Can these models be replicated? Only if the change from system to network takes place

“We see a lot of networks, a lot of entities that are cooperating among themselves but keeping their identity, their position and their activity. They are independent and autonomous. They focus on specific issues and decide to work with other entities only where they see a gain for themselves,” Giacomo explained.

“The creation of a system starts from the entities capable of changing themselves too, by modifying their own structure, adapting to the specific context, getting closer to other entities and working together on a common project and a common dream.”

“One of the most interesting questions that arise is what makes local territorial systems capable of becoming self-organising entities,” Giacomo said and added: “This is a point we would like to understand better. We would become able to see where and how we can cooperate with other territorial systems of the Mediterranean basin.”

Let’s break down some of the ways the Foundation operates

The foundation buys stocks to maintain its financial independence. “If you always need to ask for external investment, both from public or private investors, you also have to comply with their requirements” Giacomo said.

The co-operative structure does not have much appeal for the investors because of the nature of its governance. This limits the growth of many social enterprises. “It is one head one vote. It doesn’t matter how much money you have invested, you have one head, you have one vote. This has an obvious impact on the capacity to collect equity. Investors are not so happy to invest a lot of money in these situations,” Giacomo highlighted.

Stocks allow the foundation to make ten year strategic plans.

“Economy actually has directions. It is easy to recognise it in your case: it is producing more freedom for people,” Alberto said, pointing out that the idea to innovate which considered only the economic growth rate and not its direction, is flawed.

“In innovation policy… we should have missions. We should have the Apollo program, the decriminalisation of the economy and then we will create in practice more and better growth,” he explained, making reference to economist Mariana Mazzucato.

Creating things that benefit all society

The foundation supported a local brewery which all but shut down offering the workers a buyout option.

“There was the problem of keeping the people’s jobs, but let us not forget that the brewery itself was a part of the local tradition.”

Other models, discussions and thoughts from our breakout sessions

The open discussion touched on the differences and similarities between Sicily and Sweden, the Netherlands experience, the circular economy, and long term sustainability.

Ideas and examples of positive outcome from cooperative work were mentioned, such as:

The Cleveland model and the Evergreen Cooperative Initiative

The Stoneybatter Festival in Northwest Dublin

Public housing model in Vienna

The event was organised by Edgeryders’ Science Fiction Economics Lab with the support of EIT Climate-KIC as part of our work to extend the space of economic models that are conceivable and deployable to build a successful, fair civilization, while preserving the planet’s ecological balance.

BIBLIOGRAPHY

  • Sen, Amartya (1985) Commodities and Capabilities (1st ed.). New York, NY: North-Holland Sole distributors for the U.S.A. and Canada, Elsevier Science Publishing Co.
  • Tomasz Maliszewski - On the History of Folk High Schools in Sweden, https://www.researchgate.net/publication/301822378
  • Bernholz. L., K. Fulton, and G. Kasper. (2005). On the brink of a new promise: The future of U.S. community foundations. Trade report. Funded by Charles S. Mott Foundation and the Ford Foundation.
  • Gast, E. (2006). Community foundation handbook: What you need to know, New York: Council on Foundations.
  • Hall, P.D. (1989) The community foundation in America, 1914-1987 In Richard Magat, ed., Philanthropic Giving. New York: Oxford University Press.
  • Hammack, D. (1989) Community foundations: The delicate question of purpose, in Magat, R., ed. An agile servant: Community leadership by community foundations. New York: The Foundation Center
  • Magat, R., ed. (1989). An agile servant: Community leadership by community foundations. New York: The Foundation Center.
  • Nora Bateson - Small Arcs of Larger Circles: Framing through other patterns, 2016 Triarchy Press

Contributors to this publication:

Gaetano Giunta - Founder and secretary general of Fondazione di Comunità di Messina. Physicist by education, he was the Assessor for social activities at the Messina Municipality, president of SEFEA and vicepresident of MECC - Microcredit for Civil Economy and Comunion.

Giacomo Pinaffo - Project Manager at Fondazione di Comunità di Messina, has worked with the European Federation of Ethical and Alternative Banks.

Alberto Cottica - Head of Science Fiction Economics Lab. Economist and network scientist, expert on online collaboration, collective intelligence, and participatory, networked organization. Worked with governments and IGOs in various capacities; now entrepreneuring at Edgeryders; civic hacking with Wikitalia and Spaghetti Open Data. In the past a reasonably successful rock musician (Wikipedia), but he is trying to quit.

Nadia El-Imam - One of the founders and directors of Edgeryders. Leads the strategic development for Edgeryders Environment and the Climate unit and was born in Sweden to African parents, raised in Europe and Asia. She is an engineer and designer and specialises in building platforms for citizen engagement and distributed collaboration.

Members of Edgeryders community who took part in the webinar and in the discussions on Edgeryders platform, making this inquiry possible by their presence and their support. In the contributors on the platform are:

Aaron, alberto, Alessandro, alex_levene, amelia, amesteves, amiridina, andreja, angelo, anique.yael, AnneC, anonandon, Arved, atelli, augusto, Azraq, bengansky, bob, Brian_Econ, BrianW, Caszimir, chrisjcook, ckrez, dadabit, danohu, desireasflux, digiogi, dkomm, Enro, eric_hunting, estragon, filip, finnern, fjanss, FotiosKotzakioulafis, Gabriella, gehan, giacomo.pinaffo, GrahamCaswell, gyrgir, haf, hires, hubert_brychczynski, hugi, ilaria, irene_1, IvanC, J_Noga, jake, jakobskote, JasonCole, jaycousins, jean_russell, JGG , Joel1, joelfinkle, johncoate, jolwalton, Jorge, Joriam, justinpickard, JZib, Kaibeezy, kajafarszky, Karl, kevin_carson, khaoula, kravietz, LauraRoddy, Leah, LStewart, lylycarrillo, maiki, Malka, manutopik, marcosenatore, mariacoenen, MariaEuler, marina, martin, martinapolimeni, matthias, michi1, MMartin, mrchrisadams, mstn, nadia, noemi, Nskocz, oliiive, OmaMorkie, owen, patrick_andrews, petussing, phm, phoebe, Player1, poietic, ponyo, rachel, RafalRolka, Raffaele, ralmond, richdecibels, Stef-Kuypers, SteveLittle, SueRule, sz_duras, teunvansambeek, thom_stewart, ton, trythis, Ulrike, Usal, yannick, YannickFrank, yudhanjaya, zplakias, zvanstanley.

Science Fiction Economics Lab is a project organised by Edgeryders and supported by EIT Climate-KIC.

This work is licensed under a Creative Commons Attribution 4.0 International License

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