Is Crowd Sourcing the New Pan Handling?

In a radio interview I heard a farmer talk about crowd sourcing to help pay his mortgage.  He had produced a video in his kitchen with which he had convinced some people that they were taking a stand against the death of the family farm by making sure he avoided foreclosure.

Was this a sincere attempt to slow the onslaught of corporatized farming on rural communities or was it the cynical exploitation of urban nostalgia for a rural past, designed to perpetuate an irrational enterprise?

Either way, the farmer’s case didn’t make much sense to me.  Family farms are the social and commercial vestiges of a Medieval economic order.   Based solely on kinship, society is expected to rely on the descendant of past farmers to be at least as hard working and efficient as those who farmed the land before them.  Their entitlement to hold this vital land asset, generation after generation, is considered by some to be immutable.

In a world where food security is high on the agenda of many nations, and multinational corporations now dominate global agribusiness, the concept of a family farm is anachronistic.  Everything about it is wrong from a corporate perspective.  Executives can’t choose their managers and labourers and the scale is too small to be efficient.

On the other hand, long term food security depends to some degree on a diversity of producers and suppliers.  The independence of family farms, intolerable to industry, is one of their societal virtues.   A genetically engineered disaster is not going to shut down an entire crop as long as there are independent family farms growing what they’ve always grown in the way they’ve always grown it.

philanthropy-2-274x300Despite fiercely held opinions on both sides, we can all at least allow that there may be a place for the family farm in our food economy and in the fabric of rural communities.  Likewise, we can see the rationale behind the agglomeration of land under corporate management to optimize yields and export markets.

But is crowd sourcing an appropriate funding tool for anyone concerned with this issue?

Crowd sourcing is an amazing tool, in part because unlike so much of what the web offers, it appeals only to our better angels.  It can awaken the conscience or stimulate the entrepreneurial spirit.  It can acquaint people with the exigencies of life in foreign places and unite strangers in common cause.  It calls people to action on civic matters and exhorts us to put our money where our mouths are.  For many young people, it establishes the habit of giving.

But the case of the family farm made me question whether crowd sourcing is really about money.  Does its power derive from how much funding it raises, or from the spirit in which these funds are raised?

Crowd sourcing provides an independent means of working around the inability of government and financial institutions to discern or accommodate the priorities of their constituents.  It doesn’t replace or repair them, it just works around them to fill the gaps they leave.

There is nothing revolutionary about this.  A century ago, the equivalence of crowd sourcing occurred in small communities whenever they pooled resources to meet collective needs.  This analog form of crowd sourcing was scaled up and refined into the pervasive system we know as “taxation.”  It collects relatively small amounts from many people to fund collective needs such as education, security, health services, and social programs.

Back to the survival of family farms, it’s clear that crowd sourcing couldn’t produce anywhere close to enough money to push back the forces of corporate farming under a series of interprovincial and international trade agreements that reinforce them.  To take a stand and protect vulnerable family farms would require government involvement.  It would require a dramatically different policy framework and an array of new tax subventions, not a few thousand dollars from some well meaning people for one jeopardized farm.

The disparity between the scale of the problem and the attempted solution is so obvious that it calls into doubt the sincerity or the sanity of the farmer and his donors.  But here is where the power of crowd sourcing is overlooked.

People are doing what banks and stock exchanges, governments and private foundations cannot.  In the constant discourse between individuals and collective institutions, crowd sourcing is symptomatic of a massive disconnect.

It could change the way we do political math.  A vote is counted once per person.  However a politician treats an angry letter from a constituent as if many people might share that point
of view.  When someone joins a crowd sourcing campaign and sends money to fund something that no institution will touch, is it not more significant than a vote or a letter?

After all, votes are free.  They are a constitutionally guaranteed right.  Likewise letters are free or almost free (snail mail).  But donations and investments entail a financial commitment, and that makes it a more reliable signal of what people care about.

Crowd sourcing allows people to vote with their wallets, and that sends a signal that shouldn’t be ignored.  Governments and financial institutions should tune their policies and programs in response to the trends indicated by these millions of micro-investments and donations.

These aren’t frivolous gestures from privileged people.  They are ordinary people giving real money to things they care about.  And there are more of them every year.

philanthropy-1-300x279The rapidity of their growth holds even greater lessons for our institutions than the priorities implied by the things they fund.  The number of crowd funding platforms has doubled in the past three years.   They are expected to generate $5.18 billion worldwide this year, an increase of $3.60 billion since 2011.  Three billion is being raised this way in North America alone.

Although the scale isn’t huge relative to the vast amounts invested or donated by other means (Americans donated $316.23 billion in 2012, for example), it’s meaningful because it’s still in its formative stage, because it’s growing far faster than other forms of investment and philanthropy, and because it works in spite of all the other ways of pooling resources.  Remember, these platforms are growing because fund contributors and fund recipients can’t accomplish what they want by conventional means.  They exist because of deficiencies elsewhere.

Crowd sourcing will never become a substitute for public and private sector funding institutions.  But these institutions ignore crowd sourcing at their peril.

As for the family farm, funding fell short of the farmer’s goal, which was only to raise a percentage of his financial obligations for a single year.  Which shows that people who contribute money through crowd sourcing platforms aren’t just well-intentioned, they’re smart too.

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