Where Everybody Makes A Living & Nobody Makes A Killing | Stan Thekaekara
Where Everybody Makes A Living & Nobody Makes A Killing | Stan Thekaekara
“I am a great believer in peoples goodness and I feel given a chance people will behave differently, and what we don’t have now is a paradigm or a structure or market which allows people to behave differently.”
A champion activist, thinker and social entrepreneur, Stan Thekaekara in this interview candidly talks about the inspiration and struggles he has faced with his organization – Just Change. An adamant believer in the goodness of individuals, Stan highlights the Just Change model of Participative Capital, which aims to act as a platform that puts producers on a level playing field. Finally he talks about what social entrepreneurs need to do in order to invite capital which can further their own social agenda.
Stan Thekaekara, activist, thinker and social entrepreneur has worked for nearly 40 years in the field of human rights and development.
Stan’s public life began in 1974 with Adivasis in Bihar. In 1986, he co-founded ACCORD, to mobilise the Adivasis of the Gudalur Valley, Tamilnadu to fight for their social, political and human rights. In 2000, Stan founded Just Change, an international cooperative linking producers, investors and consumers in mutually beneficial ways – rebuilding the notion of community and regaining power in the marketplace.
Stan has served as a trustee of Oxfam GB and was Visiting Fellow at the Skoll Centre for Social Entrepreneurship at the Said Business School, Oxford University.
Known for his radical and innovative thinking on development economics, he has delivered numerous lectures, including the Alternative Mansion House Speech in London and the Fourth Annual Feasta Lecture at Trinity College, Ireland. He has also written extensively on development issues. Outlook Business listed him among the top 50 Social Entrepreneurs of India and described him as “the man who delights in turning textbook theories on its head”.
KHEMKA FORUM PODCAST SERIES: TRANSCRIPT OF THE PODCAST WITH STAN THEKAEKARA
INTERVIEWER: TERESA KHANNA, THE NAND & JEET KHEMKA FOUNDATION
Teresa Khanna: Khemka Forum on Social Entrepreneurship welcomes Stan Thekaekara from Just Change. Without much ado we will start with asking you the first set of questions that we have lined up today, beginning with what inspired you to start Just Change?
Stan Thekaekara: Thanks Teresa, good to be on this podcast. The story of Just Change is a bit interesting, it has to go back to you know the work that we started here in the Nilgiris with the Adivasis in 1984 and 86, where we started helping the Adivasis to reclaim their traditional lands, and then went on to help them plant tea on the land, and this changed their entire economy, but in the mid 90s when the price of tea crashed and this became a serious problem, and we couldn’t tell all the Adivasis now uproot all your tea and plant something else. And we also realized, we did a study on tea, the tea market and realized that the retail prices had not really crashed, it was only the wholesale prices, and we started looking at what could be done, and we came across fair trade and we thought that was the answer, and we started with Fairtrade but then realized that there were many shortcomings with Fairtrade. And my wife, Maria and myself were invited to the UK to look at poverty in the UK, and there we found a lot of poor people drinking tea, but they couldn’t afford Fairtrade. So and here we found a lot of people, also poor people, they say it’s a poor mans drink and a rich mans crop, so you find a lot of poor people drink tea, so we thought why don’t we directly link producers and consumers so that we could, the producers could get a better price for the tea, and consumers could get good tea at much cheaper. So that was the inspiration behind Just Change.
Teresa Khanna: So I am assuming that this is a for profit model?
Stan Thekaekara: Yes, and No in the sense that, ya it depends on how you define profit. We prefer not to use the word profit, because we want to position ourselves outside the existing mainstream economy where profit is the driver of everything. And we measure the success of everything only in terms of profit. So we prefer to use the word benefit, because we are looking at how local economies benefit because of the intervention and not just at the profit of the company.
Teresa Khanna: Thanks for introducing this concept into the discourse via this podcast because I think the time has arrived to look beyond profits and to look beyond what social enterprises can really do for communities and individuals. Going forward, since you’ve been involved in this organization for, roughly 15 years now, there must have been many challenges you faced in this duration. What have been those challenges and how have you overcome them?
Stan Thekaekara: Ok I got a list as long as my arm. The primary, the biggest challenge we faced in the initial stages was helping community groups, or getting community groups to realize that they were not powerless in markets. The second really really big challenge which we continue to face, and became, as we started expanding became more and more serious was the fact that you know we are dealing with commodity items like, tea, coffee, pepper, rice, spices and so on. And these are markets that are very very old markets and people who control these markets are inter-generational. They have picked up market intelligence over generations, and trying to break into that is not easy at all. The third big challenge which we have faced, and we continue to face and we’ve not solved it really has been the fact that we cannot take the market out of the pricing equation. People still make the choice on the basis of market prices. So we are forced to bench mark against market prices which in that sense forces us to be play the games of the market forces as well, to some extent.
Teresa Khanna: your organization aims to be driven by human values and not invisible market forces, and the pursuit of wealth at any cost. Given this kind of understanding and being in a market which is again driven by like you said prices which are outside the control of the organization, how difficult do you think it is to achieve this particular goal?
Stan Thekaekara: See I think it is very difficult, and I can’t say we’ve achieved it or anything like that. Let me give you an example, we have a number of stories, but let me give you a very very nice story of when our consumer group from Kerala, Women’s Federation, when their leaders visited the Adivasis here in Coonoor to see how tea is produced, they saw the way the Adivasis were struggling and how much hard work went into actually producing a little bit of tea, at the end of their visit and I saw the that they were uncomfortable discussing amongst themselves. And then they told us that when they came from Kerala, they came with a mandate from their federation to ask us to reduce the price of tea to give them an edge in the Kerala market. But these women after coming here and seeing the Adivasis felt they had to go back and tell their women to pay 10 rupees more per kilogram because the Adivasis were so badly off and there was so much of hard work in tea. So suddenly when relationships built up, you take very different decisions. I am a great believer in peoples goodness and I feel given a chance people will behave differently, and what we don’t have now is a paradigm or a structure or whatever market also if you want to call it which allows people to behave differently.
Teresa Khanna: Wow Stan that is inspiring, and taking a cue from your ideal approach and looking at the fact that we are embedded in capitalism which we see around us on a daily basis, Just Change developed its own model called participative capital, this is something new to us in terms of the terminology, we would like to hear your thoughts on what exactly this model is?
Stan Thekaekara: One of the things that happened was that a group of Adivasis went to Germany for the first time, and they were blown away by this Fairtrade movement and going to small shops run by volunteers in somebody’s garage and so on, selling Adivasi tea. And the moment the secretary of the Adivasi Munitra Sangam, after one meeting said ‘Stan I don’t understand this Fairtrade business very clearly, these people are buying our tea not because we are the best tea in the market or they really like our tea but more because they like us and they want to support us.’ So I told him that’s what it’s all about, it’s about solidarity, things like that. And then he says that means these people are our friends, here in Germany. I said yes that’s what it is. He said then in that case this is not fair, they should pay less for our tea, not more, they are our friends. And so brought in a completely new dimension in what we call fair which is based on relationships and so that’s how we developed the whole Just Change concept. But then one of my friends, and one of the initial and very strong supporters of Just Change, Joel Joffe from the UK, Lord Joffe was the one when I was sharing this whole idea with him in the initial stages, he said it’s a brilliant idea but it won’t work because you’ve got poor consumers at one end and poor producer at the other end. And the producer cannot wait until all his tea is sold, and the money collected and he paid back. The day he enters the market he needs money. The consumer on the other hand can’t afford to pay an advance and wait for three months for the tea to be delivered, so capital has to play a role in it. And when we first conceived Just Change we were really thinking of it being cooperative, linking producers and consumers. Joels contribution made us think of bringing in a third leg and that was the role of capital, and so Just Change today is a cooperative, we call it an international cooperative of producers, consumers and investors. So the power of capital is completely disproportionate, to the role and function and effort in production and in markets. And so we were looking to level the playing field, between capital and production and consumption. And that is when we coined this phrase called participative capital as differentiated from ownership capital which is mainstream capital and participative capital is based on the principle that you have participative rights but not necessarily ownership rights. So you participate along with labour and consumption, so all three are investors, the producer is investing his or her labour, the consumer is investing his or her consumption by consuming it and the owner of capital is investing their capital. So all three work together and whatever surplus is generated can be shared by all and not completely taken away by the investor of capital, which is what happens in the current market economy.
Teresa Khanna: Which actually brings us to the end of our podcast wherein the last question which we would like to definitely ask you is that you have been in the sector this long, you have seen the sector changing, evolving, social enterprises are now breaking new ground, what do you think entrepreneurs should be doing to invite capital which can further their own social agenda?
Stan Thekaekara: See here first I need to qualify something, I think in this social entrepreneurship sector there is a lot of confusion between social entrepreneurship and social enterprise. And both especially in the UK and increasingly now, any enterprise that does a little bit of good is considered a social enterprise. And I think we should be looking, for social entrepreneurship, not social enterprise, it’s just an enterprise it does good so it has some social relevance. But entrepreneurship is actually somebody who is bringing about change. Who’s not just doing something that generates some good or some benefit to society, but someone who is actually changing the way things work. And that is the entrepreneurial element of it. And so if it’s looking at social enterprise it can attract capital very easily and today there is a surplus of capital in the world so that’s the least of the problems, they can get it from social venture funds, they can get it from NABARD, even now banks are willing to fund people like this because there is actually surplus capital. And people are looking to lend, so if you have a business model, an enterprise which shows that at the end of the day that there is profit, attracting capital is not a problem at all. But the moment you go into the entrepreneurship model where you are actually trying to bring about change, you’re changing the rules of the game, you’re changing the way it was. And this this is where people like us find it a little difficult to attract capital because the traditional sources of capital find us high risk. We are very very high risk, because we are venturing forth, we are creating, we are innovating, we have no proof that the model will work etc etc and also our growth is very very slow because we are organic. We are trying to change century’s ways of working. So we can’t scale up the way any traditional business will scale up. So we need to find new models of aggregating capital. Completely new models, which will work on a very different value system because capital should also subscribe to the value system which you are trying to propagate. There is no point in having one value system and your producers are part of that value system, and your consumers are part of that value system, but your investors are not. So which is why we have kept traditional investors more or less at an arm’s length.
Teresa Khanna: Very refreshing to hear all of this Stan and I am sure that our audience will be equally interested, maybe disagree, and maybe a whole lot of them will tend to see your view point on this. We are very thankful to you for your forthright honesty and for telling it to us like it is.
Stan Thekaekara: In conclusion can I just make two quick comments.
Teresa Khanna: Sure
Stan Thekaekara: I think what social entrepreneurs have to recognize is that our present market is the problem and therefore you cannot find solutions within it. That causes inequality, the way the market is structured. So the market is the problem and so it can never be the solution. An alternative has to be the solution. And the second thing is a quote I just wanted to put in is one of our people from UK, one of our community groups in UK who’s been selling Just Change tea, Glen Jenkins came up with this fantastic phrase where he says that Just Change is where everybody makes a living and nobody makes a killing, and for me that is a guiding principle. So we need a market system where nobody makes a killing and where everybody can make a living.
Teresa Khanna: Wow, fantastic. On that very positive note thank you so much Stan.
Views expressed here are solely that of the person interviewed and may not represent the views of The Nand & Jeet Khemka Foundation.