What would my P&L look like?
Updated: Jul 23, 2020
Interview of Mohamed Gnabaly
– Mayor of L’Île Saint Denis (France)
– General Manager Novaedia
Have you ever thought “I wish I could pay more taxes so the government could do more…”? Me neither. More likely, we may have thought of a central bureaucracy feeding on the taxpayer’s back. In rich democracies, we easily forget what public services do for the society, and may sometimes wish for less government intervention, against our better judgment. Think I am being too dramatic? Read Michael Lewis’s essay titled The Fifth Risk [i], and you will share his amazement in discovering that maybe nowhere like in the US, is the central government loved so little for how much it does…
However, in some places, no amount of government effort seems to be enough.
On a tiny island on the river Seine (Which enfolds Paris in its meanders), L’Île Saint Denis is a unique city in many ways. It is shaped like a long arc 6,5 km long and at most 300m wide. It’s the only French river-island city. Its average income level is so low that 85% of its population lives in social housing. Located north of Paris, on the western side of France’s poorest territory, the infamous “93” [ii], it is the epitome of the French banlieue [iii].
And this piece of earth tells us all about the drama of our time, how our societies are breaking down from our own excesses [iv], and mercifully indicates where we might want to go next.
We understand well how modern societies [v] create suburban expanses of poverty. They exist in every city in the world. But we are still to understand how to respond.
Decades of governmental programmes, have done a lot to alleviate suburban poverty but failed to reduce it.
Mohamed Gnabaly is young, black, muslim, a social entrepreneur and city-mayor. Elected in 2015, and reelected in june 2020, on a citizen initiative list [vi], he is politically engaged, yet not affiliated to any political party. He’s also university educated, trilingual, French, with roots both in Senegal and Algeria, a husband and father. Whichever way you look at it, he will defy any label or category. A native of the “93”, he and 4 of his best friends, now co-entrepreneurs, have had a taste of economic life outside of their native neighbourhoods. In the end, they made a conscious decision to come back to this territory that nothing seems to favour. Because where everyone else sees a mountain of unsolvable social challenges, they saw potential. Mohamed summarizes their core belief:
“There is one resource that is both abundant in this territory and underutilized, and that’s talent.”
In 2011, he and and his friends founded Novaedia, a social enterprise created to father economic empowerment projects [vii].
Over croissants and fresh fruits, Mohamed explains that most modern cities are organized like a triangle. People who work and earn an income aspire to live in peace. They form the silent majority. The municipality or central government preserves social peace by making sure that those who do not work are cared for (The amount of care depending hugely on which country it is). Those who do not work (Or have limited or no pension) just struggle.
This isn’t just what happens in poor French suburban areas. It’s a worldwide phenomenon, and it’s not just minorities or immigrants. In the UK for example, people are poorer on average in 2020 than they were in 2008, and around 14 million people live in poverty. It is also not incidental, it is systemic [viii].
When confronted to a poverty challenge, the response of nearly any government is to provide a safety net system, either through government sponsored schemes or any other form of individual or collective aid. The image of a net catching people is adequate. It prevents them falling lower, provided they fit in the categories that the net is designed to catch. But the safety net does not propel them upwards either. It’s a net, it prevents them falling lower, but it is not a bouncing device.
Mohamed confirms that subsidies and safety nets are very necessary, to alleviate the worst effects of poverty but do not lift people out of it. If you need to be poor to be eligible to a specific scheme, you need to remain poor to keep it. This is a well-known catch-22 situation.
The government must also, through intricate sets of rules, ensure for the coherence between the nature and extent of the vulnerability and the support provided. In other terms, governments are always responding to the money inequalities created by our society, by trying to rebalance how the money is shared. That is logical. But nobody seems to get out of it quite what they needed.
To caricature it, workers may feel to some extent that they shoulder the financial weight of non-workers, non-workers feel excluded from society, neither category feels understood or recognized, whilst they both look in growing concern at the 1% at the top, which continues to accumulate wealth at an unprecedented pace [ix].
This situation, which has defined pretty much all social policies in the past 100 years, has created a divide between two political archetypes. Those who support a wide safety net, and those who support a minimal one.
What no government has learned to do though, be they left, centre or right, conservative or progressive, is inspire solidarity. That is not what they are designed for. At least, not yet (At the time of this writing, the COVID-19 sanitary crisis has engulfed the world, and all of a sudden, governments the world over have a chance to learn precisely that...).
Because market societies reward behaviours oriented towards the accumulation of wealth, and in so doing, also prevent different social layers to interact with one another, we all have collectively, to some extent, outsourced solidarity to our governments, to focus on earning a good living for ourselves. Except that they can’t do it all. In governments all over the world, social workers do miracles every day. But governments cannot alone care for the society’s poor, handicapped, elderly or sick better than we would, just like it cannot love our spouse, partner, or kids better than we do.
There is a difference between solidarity when it’s expressed by individual people for the sake of solidarity itself, and when it’s done by the government at a cost: government schemes can let us conveniently forget that solidarity ever was one of our fundamental human duties.
Mohamed does not quite say it like that, but his story makes it plain.
Novaedia means that it is not enough that care for the weakest be organised through a system: true solidarity is when we do some of it ourselves as well, when we supplement food stamps by human connection across the financial divide. With Novaedia, Mohamed and his friends wanted to create a viable economic activity that would provide meaningful job opportinities for those who need it the most, and that required them to wage war on three fronts:
Confronting ambient pessimism
The notion that “There is no future for us.” is sometimes so deeply rooted in some places, that projects like Novaedia attract deep criticism. Not from the world outside. But from the very neighbourhoods that they ambition to help. As he puts it:
“It’s hard to convince people to hope.”
“Finding the people and clients we needed to grow Novaedia was not easy. It’s not that the talent or potential was not there. It is just that information about the opportunity did not go through.” Explains Mohamed. "We tried websites, paper leaflets, poster campaigns, smartphone apps… Nothing went through. How do you communicate your project if nothing ever goes through?
"Only when we started engineering communication through neighbourhoods’ community contacts, so person to person, did we start to gain traction."
“In the “93” there are really only two stereotypes for the youth to imagine the future: the first one is to become a successful (understand: rich) entrepreneur, and the second one to become a successful drug dealer. That’s it.” Both avenues (Successful entrepreneur or drug dealer) eventually represent less than 1% of the population. Mohamed then says:
“Not having a lot of money is a real challenge, but poverty really turns into misery when even imagining a better future for yourself is not possible, outside of an illusory millionaire life, or a life of crime.”
So Novaedia wages this third war with storytelling. It tells a story of urban farming, of sustainable buildings and of circular economy. In just 9 years, Novaedia has grown to employ 30 people and a turnover of € 1.5M, and has spun off a variety of local innovative ventures:
La Ferme des possible (The Farm of possibilities) [x]: With 4 hectares of farmland in Stains, in the heart of the 93’s urban sprawl, it puts farming, sustainable practices and social development back on the map.
La Résilience (The resilience) [xi]: at the heart of La Ferme des Possibles, la Résilience is the headquarter of Novaedia. An innovative sustainable building made of reused wood and compressed-earth-bricks, it was developed in partnership with Bellastock, a firm specialised in experimental architecture.
Photos: Bellastock - La Résilience
Farm produces are re-used in short-circuit in a new brand of local social restaurants called À Bras Ouverts (Open arms), and ESAT Pleyel. ESAT-Pleyel is a catering business, pairing disabled but experienced workers, with young and less-stable workers looking to make a professional debut.
The whole point of the social enterprise is to make work and income a village undertaking, to bring the value chain back into the territory and ensure that it can produce by itself, more of what it consumes. The goal is not autarchy, but a heightened sense of self and opportunity for the participants, so that the community is not only a place where the value produced by others is spent in safety nets, but also where value, unique, sustainable economic value, can be produced and shared with pride by the inhabitants.
Novaedia does values subsidies, at around 15% of its income. Roughly € 225k of public money every year, contribute to ensure continued employment for 30 people, and about € 1.5M of value added to society. And I would venture to say, as far as rate of social returns goes, it is unheard of in government history.
And now we start to see how the future might make some sense.
Everything is linked. Unbounded human consumption created an economy of waste, aggravated income inequalities, and engineered climate change [xii]. As the planet is showing signs of distress, we as humanity come to realize that the free market illusion needs an economic and environmental overhaul to avoid catastrophic consequences.
Everything, from the way we structure economic life, what legal forms our enteprises take, to the way work, ownership and income get distributed, will need to be refocused, whilst we become carbon neutral at the same time. It’s something of a societal double lung and heart transplant.
The idea, the whole idea really, proposed by Novaedia is not more, or less, or even different subsidies. It is that we make solidarity the purpose of the economy and then if needed use subsidies to accelerate it.
I wonder… If human solidarity was the new currency, what would my P&L look like?
[i] Lewis, M, 2019, The Fifth Risk, Penguin Books, 255p.
[ii] The Region Île de France, is a vast territory centred on the city of Paris. It consists of 8 départements (75 – Paris, 91 – Essonne, 92 – Hauts-de-Seine, 93 – Seine-Saint-Denis – The "93", 94 – Val de Marne, 95 – Val d’Oise, and 78 – Yvelines).
[iii] Banlieue used to just mean suburb. But along the years it acquired additional meaning, when referring to cities featuring high proportions of low-income housing projects, mostly inhabited by immigrant populations, and often experienced as poverty traps. [iv] See article by Fahnbulleh, M, 2020, “The Neoliberal Collapse”, Foreign Affairs, January-February 2020. Fahnbulleh convincingly summarizes the links between the free market illusion, unbounded human consumption, income inequalities, and climate change, and shows how poverty is a predictable, not incidental, by-product of free market societies. [v] We used to have a market economy. But it has now evolved into a market society. This phenomenon is well described by Michael Sandel (In Sandel, Michael J., 2012, What money can’t buy: The moral limits of markets, Farrar Strauss and Giroux, 244p). Sandel contends, very convincingly, that as more and more things are translated to economic values and made available for purchase, the free market is crowding out societal values and eroding the worthiness and meaningfulness of our environment. [vi] A citizen initative list is a candidate list constituted as the political arm of a citizen project, and not affiliated to any of the national political parties. The interview took place shortly before the first vote of municipal elections of 2020, which Mohamed and his team eventually won, with a list titled: Ensemble, dans une île vivante, écologique et solidaire (Together, on a lively island of ecology and solidarity). The second round of voting was held on 28/06/2020, and Mohamed’s list obtained 45.93% of the votes.
https://www.lemonde.fr/resultats-elections/l-ile-saint-denis-93039/ [vii] Novaedia is structured as a SCIC (Société coopérative d’intérêt collectif), a cooperative society for collective interest. Commercially, it takes the legal form of a normal limited responsibility company, but it must associate employees, investors and clients (at least) in its governance. Whilst it must be financially viable like any other business, an SCIC is explicitly not designed for the financial interest of its shareholders, but rather for the social benefit of all its participants, clients and the society at large.
[viii] Reference to the same article by Miatta Fahnbulleh.
[ix] According to 2016 US figures from Forbes, 3 men, Warren Buffett, Bill Gates and Jeff Bezos owned in 2016 $46B more than the bottom 50% Americans (Roughly 165 million people !!).
See : https://inequality.org/facts/wealth-inequality/
[x] https://www.laresidencesociale.org/la-ferme-des-possibles/ -
[xi] Building La Résilience: https://www.facebook.com/resilience.stains/ and
[xii] Reference to the same article by Miatta Fahnbulleh.