The agricultural system was designed for economic efficiency, not resilience.

This means that everything from the crops we grow to the places we grow them is worth revisiting as we hurtle into a future that’ll be indelibly shaped by climate change.

Jed Wheeler at the Manzanita Cooperative joined this episode of Free Money to dive into why this matters and what he’s doing about it.

We won’t spoil the episode by telling you that his method involves a wonderful mix of hardcore crop science (domesticating native crops through gene-informed rapid breeding) and paying attention to often-ignored resources, like the nutrient-rich acorns that can be found throughout California.

Long-term investors have begun getting interested in “natural capital,” otherwise known as the air, water, soil, flora, and fauna that comprise our ecosystem. In many cases, their approach centers on mitigating the risks to these crucial resources posed by their holdings.

That said, our conversation with Jed is meant to demonstrate that there are more direct ways to invest in natural capital. Like many things that are indelibly tied to places, ther agricultural system is immensely complex and infinitely varied.

Top-down programs that incentivize certain activities — like reduced interest rates for farmers that use sustainable practices — are certainly meaningful and should be expanded. But they are quite a bit different than the imaginative work that Jed and his colleagues are doing at Manzanita.

Because think about it: mitigating the harms of an existing system is a fundamentally different activity than reimagining it. So as you listen to this episode, I hope you’ll see the way Jed is finding local opportunities to address global problems and spend some time thinking about the ways you might be able to do something similar.

Divestment has become a flash point for many institutional investors, and particularly those at college endowments.

Student demands haven’t exactly been met with open arms. The public-facing posture of these endowments naturally tends towards secrecy, since the private funds they invest in often restrict what can be shared about their holdings.

That can invite some hilarious comparisons. In this episode, Ashby makes the point that while he was doing some of his early research into Sovereign Wealth Funds about fifteen years ago, the Iranian Oil Stabilization fund was much more transparent about its holdings than the endowment of his alma mater Princeton University.

But there’s a fine line between that and calling the cops on students, which happened at Columbia University this past May.

After the Acrimony

In this Episode, Ashby and I were joined by Kelly Grotke, a founder of the Pattern Recognition Research Collaborative who has not only written about this debate, and has been involved with student groups at Oberlin, her own alma mater, and elsewhere.

Her take on the broader issue is refreshing and, to my eye, useful. In our interview, she suggests that whatever one’s position is on whether divestments are worth pursuing, the broader debate offers a “really really good and valuable opportunity for a greater understanding of the role of finance in society.”

She appreciates that the financial strength these endowments provide their institutions is a key enabler of their long-term health, but is also quick to remind us that the health of the institution also has to do with its character.

After all: “What are students going to universities for? To learn things, to have discussions, to engage with interesting issues,” she says. I couldn’t agree more. And I hope that, as you formulate your own response to these thorny issues, that this episode gives you some useful inspiration.

Additional Resources

These many be helpful things to look into after you listen to this episode:

• The Failure of Financialized Higher Ed - A piece from Kelly in The American Prospect on how financialization has changed universities.

• What I’d Tell Your Chief Investment Officer about Divestment - A piece from Ethical Capital outlining constructive steps investment offices can take on this issue. See also: Don’t Stop With Divestment.

• Identity: The Ultimate Driver of Investor Returns - A piece Ashby published last year arguing that the organizational capacities of an investor are the most important driver of their long-term returns.

This one is jam-packed with a variety of topics which range from structural differences in growth between Europe and the U.S to Joachim's fascinating concept of industry "Cassandras".

Plus, we have even more Free Money to offer, including the usual beloved banter, industry updates, and burning questions from listeners just like you. Tune in to cash out!

We also answer some exciting questions from our lovely listeners, offer gardening tips galore, and share developments both fun and fund-related!

Their experience as an intimacy coordinator gives us some amazing insight into consent and how it applies to the governance and approval we encounter in investment decision making.

Ashby's head explodes multiple times, and we're quite confident yours will too.

Happy New Year from the Free Money Fam!

Ashby's whereabouts on January 6th are also discussed, and if you'd like the answer to that burning question, you'll just have to tune in!

Thanks for joining us - we genuinely appreciate each and every one of you.

We hear from them on why the firm is necessary, how they've gone about trying to access the people they're trying to reach, and then discuss the role they see for Colorful Capital going forward. For a deeper exploration of the topics we discussed and links to various resources mentioned, check out our blog post on this episode.

Don't forget our typical helping of banter - this episode's topics feature new sovereign wealth funds, guns, and a roast of burning man. Ya know, the usual.

It honestly didn't come as a shock to us that modern American accounting practices are deeply rooted in slavery (nothing shocks us anymore). But in order to further wrap our heads around this insane concept, we spent some time chatting with Caitlin Rosenthal, historian of business and slavery.

Join the crew as we discuss what it was like for her coming out at Goldman Sachs, real experiences of what it's like to be trans in finance, and Maeve's expert advice for communicating around innovation in the industry.

We also discuss ancient spreadsheets, whether or not AI will ever have a material impact on institutional investment decisions, and the general vibes this lunar cycle.

Note: This conversation was recorded on September 1st, 2021.