Ethan Roland: The 8 Forms of Capital

Resilient Life Public Resilient Life
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Building on top of last week's foundational discussion of permaculture, this week's podcast explores how the permaculture approach can be applied to creating value -- aka, capital -- across the full spectrum of our lives.

Chris sits down with Ethan Roland to discuss the "Eight Forms of Capital" framework he and his partners at Appleseed Permaculture have developed:

It uses the ethos of permaculture (how dynamic systems naturally operate and can work in concert with other systems) to design models for creating prosperity. They key is not to focus on just a single area (e.g., making money), but to work within several areas at once in order to create positive feedback loops that will accelerate and magnify progress to your goals (e.g., developing skills you can apply for the benefit of your community, which in turn leads others to support you professionally as well as provide valuable reciprocal services free-of-charge).

Chris and I consider this framework be quite consistent with the lens we use here at Peak Prosperity, and are finding it a useful tool for categorizing the many topics covered under "building resilience" in a way that's intuitive for many folks to understand.

Click the play button below to listen to Chris' interview with Ethan (47m:00s):

 

 

This is a companion discussion topic for the original entry at https://peakprosperity.com/ethan-roland-the-8-forms-of-capital/

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This article leaves me feeling conflicted.  The article has a wealth to useful and actionable information, but only for a small minority of people.  For most of the people I know $1000 of liquid cash is a big stretch, a $1000 for compost is almost unimaginable.  Those that do have the cash are largely oblivious to the impending reset and are spending their money on granite counter tops and landscape features.  On the one hand I have a friend who is alcoholic and couch hopping, functionally homeless, who occasionally turns tricks to make ends meet, and on the other hand I have a friend who just spent $20,000 on a patio that she will probably never use.  On the one hand I know people who are learning about edible wild plants and how to prepare raccoons  and turtles, and on the other had I know people with 6 figure incomes with $1,500 rifles they've never fired who smile at me indulgently when I as about how they're doing with their food preps and tell me that haven't gotten around to it yet.  Cognitive dissonance. 
I feel as though I'm on an atoll in the eye of a hurricane.  The first pass of the storm did a substantial amount of damage.  The forecast is that the second pass will be worse, perhaps much worse.  What I am worried about is the storm surge.  I think I may be in a position to weather high winds and flooding, but if the waves break clear over the island? 

The time is getting late.  Continue to pay down debt, invest in tools and topsoil, friends and community, check, check, check, check, check.

Do the next thing,

John G.

 

 

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John, one of the most useful things I have taken form the eight forms of capital discussion is that several of the necessary and important forms of capital cannot be bought.
We can all build social, spiritual and intellectual capital without any money at all.  In fact, some might argue that money interferes with the development of spiritual capital.

Experiential capital can be helped along by financial capital, as some experiences are more easily had if one is able to afford them, but money is not an absolute requirement to build experience.  Lots of experiences can be had, for free or even a profit, if one chooses to apply oneself in that way.

Cultural capital is something that we build with our efforts in the other forms of capital so I see that as having lots of money-less components.  I don't think money can really build cultural capital at all, but I'll think on that one some more.

Living and material capital are certainly more easily obtained with financial capital, but as Amanda Witman showed in Prepping On A Shoestring here on the site a while back, in the US at least, lack of money is no barrier to getting everything you need or want.

It just takes longer.

Everybody can be working on increasing all of their forms of capital at any time.  Even with people who profess to have no funds, sometimes that turns out to be more of a reflection of their spending choices and priorities rather than a hard-and-fast circumstance about which they have no control.

So - good news!

Anybody who wants to build capital, can.

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This, from the transcript, caught my eye:

So for example: there is an international cosmetics company we are working with right now that spends millions of dollars every year purchasing over 400 different ingredients, raw ingredients; everything from blueberries to cocoa butter to Jojoba oil to bananas from all over the world to create these really excellent high quality products.

And so what we are doing with them is we have actually…they have agreed to have a fund that is set aside that is a percentage of their buying budget every year and we are directing that fund into resilient permaculture farms and communities around the world. And in so doing, we are improving the living capital and the cultural capital in all those places, but we are also making the supply chain of this entire global company that much more resilient, because when the floods come, when the droughts come, when the earthquakes come, sites and communities that have cultural capital intact and who have been designed with permaculture throughout, will be more resilient in that situation.

And so through that we are really now getting the sense that more and more financial capital is flowing into regeneration.

I found this heartening, and was pleased to see that so many of the eight forms of capital are free. We're learning al we can, building relationships, and building skills.

And I agree wit Dr. Chris & Amanda about the fact that you can prep on a shoestring.We could not afford to truck in $1000 worth of topsoil, but we just got our own municipal compost at only $30 a yard and add our scraps to it. It just takes longer, but it gets the job done.  John, you're so right: do the next thing. Chip away at all the things you hope to get done.

Today our "next thing" was we chipped away at was removing poison ivy vines from the tree next to the wood pile, and adding more mulch under the hazelnuts - among other, non-gardening tasks. We don't live in fear if we take control of what we can change.

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Aloha! Capital is always in a state of flux it is kinetic, whereas once you have it the next day you may not and I am speaking to all the eight forms of capital. I find in myself and when I look at others none of us have achieved 8 Form Nirvana! And I have been working on this all my life and so perhaps it is not achievable in this society as we practice life in America.
In the discussion I got lost between the cultural and societal capital example of Katrina. Isn't culture the manifestation of all human intellectual achievement within a group or community? Society being the aggregate of people living together in an ordered community. Was it the culture the failed in Katrina or was it the society? To me it was a vision of Societal Capital that was bankrupt. As I watched Katrina I saw Darwin's thesis of "survival of the fittest". Even our super indebted government FEMA was caught with its pants down! Remember the head of FEMA then was a corrupt equestrian who had no prior experience that met his job description. Yet another crony appointed by a corrupt government led by a corrupt President. So in terms of Corruption Capital our national bank account runneth over! That was a scandal! Would not Katrina be filed under huge lack of Societal Capital? It was clearly lawlessness in action and reminded me of the televised lawlessness we watched everyday during the Vietnam War era. The Japanese as a culture are as flawed as any, just ask the Chinese and the Germans? The Japanese threw their culture right out the window in WW2 and clearly sided with the militarist Tojo like the German people sided with Hitler. The Italians with Mussolini and the Russians with Stalin! Today we have America with Bush and again with Obama! The plutocracy continues … Were those choices of a society or a culture?

Truly the glue that holds a society together is its laws and I will have to side with Tacitus on that score as we have 85,000 laws and regulations(Federal Registry) on top of the Ten Commandments and our government is more corrupt than ever. Subscribe to the CBO email alert and see how many new acts and laws are created every day. Perhaps we need to add another layer, another form of capital called Judicial Capital, because what we have now is clearly not working and has clearly failed the core belief system of this society. It is my observation that in order to be in control of a major US company or be a top notch well regarded politician, an alpha human, you have to have graduated from Sociopath U with a 5.0 and Magna Cum Louder!! Look at the composition of Congress and you quickly realize that Congress in no way reflects the American People. Over 50% of Congress are millionaires while only 1% of our society are millionaires. Based on Financial Capital there are only 37 members of the 535 members on Capital Hill that could be classified as a 99%er. That leaves 498 1%ers creating and enforcing laws that mainly benefit the 1%! Congress is totally unrepresentative of the 99% who actually have to work for a living. Just curious here, but show of hands of those here in this community who voted for Obama and his Hope & Change vision?

It certainly takes no real capital investment or time to quit banking at JP Morgan and quit electing the two party political monopoly. Those are very simple solutions to enhance community that very few practice. If you don't like what Apple is doing in China and the huge amount of resources that company expends on the next cool electronic fad that suddenly you cannot live without, then don't buy Apple. In fact go back to a TracFone flip phone. Consumerism is not necessarily evil just as money is not evil. It is just how we use them in excess, in debt and in addiction that is abusive. As global consumers we have more power than we think! We could really change the world through consumeristic practices alone. Consumers drive the global economies and I have always wondered why consumers have no true unity in purpose and ethics. Today it's all about "I WANT"! If we could change that mantra to WE WANT! That was the basis of the US Constitution and the Declaration of Independence. It has always been WE THE PEOPLE not I THE PEOPLE! There is nothing in the Constitution about the 1%, so how did Congress become the 1%? Think on that the next time you stand in the voting booth.

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Chris,
Point well taken, the redirect to "Prepping on a shoe string" was very useful, I hadn't seen it before.  By far the most valuable things in life do have little to do with money and perhaps I'm being overly defensive.  The article seemed to me to have a little bit of that "First you start with a half million dollar portfolio, then…" feel about it.  I am working on many of the things mentioned in the article as time and mean allow.  Some times you have to put in a little cash, some times you put in a little sweat, some time all you need to do is smile and extend your hand, add a dash of research and ingenuity and off you go.  Cultivating resilience is just like cultivating anything else.  Don't expect immediate or spectacular returns, be prepared to be persistent and persevere, some things won't pay a return, learn from your mistakes.  

I find what I get tripped up on isn't the working to build capital, but the fear that I will fail.  The fear that everything I have pulled together, built, improvised, squirreled away, will be taken, lost or destroyed.  That my family will suffer and die and that I will have not have made acquainted preparation for them. 

I share the frustration that many have expressed with the great majority of the population who seem to be unable to understand the precariousness of our situation, but I'm getting better about it.  With a little luck and grace they will plod right through the transition doing what they're told and arrive safely on the other side with little interest or understanding in what happened, hardly aware that the world has completely changed around them.  My concern is that since non-preppers seem to out number preppers by at least and order of magnitude we may simply be crushed by them as they topple over.

What I find myself struggling with is the check box on my list next to "Are you prepared to stand in front of everything you own, everything you've built, and and everyone you love with a rifle in your hands?  Are you prepared to kill?  Are you prepared to die?  I must admit to a trembling hand and feeling sick to my stomach as I reach out to check "yes" and I pray that it is true.

I'm sorry.  I keep hoping that some one will tell me that I've reversed an integer or miss placed a decimal point some were in my calculations, but so far it seems that the essential equation is correct, the human population is > the carrying capacity of a post carbon planet. The issue seems to be how do you solve for "x" if "y" equals "who the hell knows?"

Wresting with demons, preparing for the storm, not at all sure I'm going to survive,

John G.

 

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Here are some more free/low cost ideas to build living capital:

  1. Where I live, it's easy to find free horse manure - yards and yards of it.  Sometimes it's already aged, sometimes it needs to sit around for a year or two before it makes great compost.  If you don't have a suitable vehicle, you might need to pay for delivery or make many trips.
  2. My town (and probably many others) deliver wood chips from tree trimming for free.  I have about 10 yards in my driveway to mulch the garden paths.  If you let it sit for a few years, especially if you add nitrogen (pee on it?), you'll have compost. 
  3. Leaves are available free either in your yard each fall or at curbside in piles or bags.  After a year or two of sitting in the shade in a big pile (maybe with some sort of wire mesh to keep it from spreading out), you have leaf mold which makes a decent compost, especially for cabbage family crops.
  4. In many regions, black locust can be made into good fence posts.  Just find a straight section of trunk, split it if it's bigger than you need, and you're done.  If you don't have the trees, skills or times, finished posts can usually be purchased for less than metal posts and they'll last a lot longer.
  5. As mentioned elsewhere on this site, urine and wood ash can be used to make a great liquid fertilizer.  I've been using it this spring with excellent results.  When I get my irrigation system set up, I'm going to try to find a way to deliver it through the irrigation.
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Without land, or the ability to use it, rent it, or buy it, we’re unable to do, or produce anything. We are by definition “poor.”
Source.

and

“The National Interest” what an outrageous statement:

The National Interest is a deliberate distraction from a budget, that surgically sets about reducing living standards of the poor, low to middle-income earners and small businesses – the most productive sectors of our economy – while studiously protecting the assessed $484 billion total increase over 12 months in unearned capital gains (more correctly termed “economic rent”) stored in land holdings (ABS).

 
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Soil too Sandy? Load up a cement mixer truck with clay and water, turn it into a slurry and pump it all over the show.
Flea infestation? Boil up a 44 gallon drum of eucalyptus leaves to extract the oil and pour it everywhere. Distilled eucalyptus oil is expensive- think about selling it.

Consider pyrethrum daisies. Pretty and useful.

And don't forget mycelia.

The more chaotic and out of control a garden is the more resilient it will be. Deep thought there, (secondhand).

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Jumping into the discussion, I see the most valuable capital as an accumulated( with varying degrees of difficulty) resevoir of experience, which hopefully replenishes itself somewhat mysteriously like a well, and like a well needs to be protected, so that it continues to help us to live well.  The capital I'd value most would be the ability to value ourselves and others, and maybe bring the best out in ourselves and others. But obviously we've all got individual strengths and weakness. One of the reasons I'm on the site is that I assess Chris, and many of us  here, as subscribing to similar values.
I've wrestled with demons for many years too,   Jgritter and I know that you can only feel as safe as your last win. But we mustn't expect the impossible of ourselves. Maybe just a reasonable amount? And it's only recently humans started to expect to control our lives totally. Let's just load the dice in our favour and hope for the best as our grandfathers did. And, as Einstein said, maybe God dosen't even play dice!

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We can't be satisfied with sustaining a broken system. Ethan has a very mature viewpoint, realizing that all forms of Capital will be needed to regenerate our world.  I found the conversation between Chris and Ethan one of the most enlightened yet on PP.
It seems like folks with an inclusive, broad minded, understanding of the world come from an agrarian and rural background. When you live in the country and are subject to natural cycles and events, it forces you to accept realities outside of your control, and can make you very aware and very humble. 

Our drought in Texas broke today with a flood. Yes we have some damage, but the needed rains are welcome.

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well i’d have to say I’ve put a lot of all kinds of capital into this homestead… now i’m at the point where I have to replace shovels, tractors, roofs, canning jars…etc…because stuff…just isn’t made that well now…it’s not made to last very long. so much for stuff capitol.
I have a functional homestead, and now have cancer and can;'t keep it up. so I am probably going to sell it.
so where do I go now? an apartment? a condo?
one of the pp readers flew 800 miles twice to help me thru 2 chemo treatments from hell. where did she get that love and care from? I think because she decided along time ago to be a decent human being.
I don’t think a seminar makes people that way. they decide deep down to be that way.
she didn’t just say she wished me well or was praying for me…she actually saw my need and came to help out.
I was able to make it through treatment because of knowing someone cared that much…
I didn’t plan to have her in my circle…she joined it out of love. not calculation.
i’m already living the next phase of this collapse and from what I can see, it’s not something one can really prepare for. I did it all, and I got hit from the rear. still.
living life responsibly, kindly, and with humor… just makes so much sense to me from this vantage point
hold it all loosely.and start loving those around you like you wish they did…and maybe they will love back
fh

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I pray your drought has broke, but the axiom remains true. Also, the reality of those who've not been long in city pent, is as true.I spent a fair amount of the day following a steer in a circle, think listeria, but we're all grass with low density populations

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As I listened to this podcast I kept thinking of true wealth and valuation.   When the FED is distorting the money rate it has resulted in artificial valuations.   Not to be a naysayer but consider some of these farms that has goal to be anti-fragile and a system of production.  It is well-known good farm land is in a bubble driven by FED policy.   If these farms that are dependent on cash flow suddenly see the valuation of the land drop 30-40% what does this imply for operating health?  Can this culture be divorced from the FED?   Not as long as legal tender is defined as whatever the Treasury/FED says it is (i.e. something they control like fiat US Currency Notes and fiat SDR's).  What if the government sets your anti-fragile farm product prices by gunpoint like in the Dust Bowl years?
I would also like to see a definition for Capital.  It seems some capital like land is Primary and others like Experience is Secondary.  Mises definition of Capital http://wiki.mises.org/wiki/Capital

Even within an Anti-Fragile system there must a be a mechanism to allocate resources.  Would this be gold?  Wisdom of Crowds using sound money.

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Okay, let me be the first to state that I don't understand spiritual capital.  But that said, my first thought when I ran into ""Are you prepared to stand in front of everything you own, everything you've built, and and everyone you love with a rifle in your hands?  Are you prepared to kill? "
was

'Check yes, and zero your spiritual capital". 

I tend to think that those who are not at all sure that they are going to survive, probably have far more spiritual capital than others imagine.

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John, you express the anxiety of your working to prepare knowing all the while what “if the waves break clear over the island”, and the frustration of seeing your friends walking blindly into that hurricane, that most of us feel.
Your friend who has a $1500 rifle and no prepped food is a classic case of what Chris calls humans tendency to kick the can down the road.
I see lack-of-prep mentality in my family and friends, we all do; some because they lack the resources to prepare, some because they lack the insight, and some for can-kicking. You express well the frustration we all feel.
You, I, and the rest of PP are marching forward. That’s the best we can do, “check, check, check, check, check.”
Coyote