Although geographically small, the harbor looms large over the village of Portpatrick on Scotland’s rugged west coast. Once a thriving port, the rail line closed, the ferry moved elsewhere, and fisherman quit coming as much as they used to. After years of outside ownership, locals formed a trust to transfer ownership of the harbor back to the community. Then the real trouble began.
For Harper’s, Samanth Subramanian narrates the village’s struggle to save its harbor and identity through a once-obscure ownership model called “community shares.” Portpatrick’s is a story about the pitfalls of capitalism and the benefits of doing what’s best for your town’s quality of life, rather than for a few peoples’ bank accounts.
In the United Kingdom, the law enabling bencoms to issue withdrawable shares is more than a century old, but it was only in the 1990s that it was rediscovered, and only in the 2000s that enterprises began using it in any meaningful number. In England and then Scotland, as state funding dried up in the nerve-racking years after 2008, dozens of communities tried to fend for themselves, issuing shares to buy or create assets they deemed too important to do without. The government found it useful to encourage community share issues; a two-year research program culminated, in 2012, in the launch of the Community Shares Unit. Since 2012, 110 million pounds (some $150 million) have been plowed into 400 or so enterprises: pubs, farms, soccer clubs. In Hastings, in East Sussex, a bencom purchased the local pier. Strontian, up in the Scottish Highlands, plans to build itself a school; not far away, the community built a hydroelectric power plant. And Portpatrick, with its pastel houses under low, capricious skies — Portpatrick bought back its bunny-shaped harbor.
The community shares model is unfamiliar in the United States. For the most part, regulations have been too stringent to permit it, said Amy Cortese, who wrote the 2011 book Locavesting. But the law is changing slowly in such a way that it might, one day, accommodate bencoms. The JOBS Act, which President Obama signed into law in 2012, enabled equity crowdfunding, so that a grocery store might more simply sell shares in itself in an offering online. Beginning with Kansas in 2011, thirty-six states now allow small companies and co-ops to issue shares to local investors. But the benefit of these to the community is presumptive — a reliance on the theory that when a small business flourishes, the local economy feels new wind in its sails. For British bencoms, the impulse to assist the community is written into their genes; it defines the very function of these enterprises, and it organizes the way they spend their profits.
Get the Longreads Weekly Email