CHAPter: 5 -
Strengthen the social and solidary economy

The economical system we endure is anything but solidary apart from a few cases of marginal and alternative behavior.  This system globalizes the financial interests of a favored few to the detriment of hundreds of millions of people who are hence marginalized and live in a state of material poverty.

 

Some people have said NO to this type of neo-liberal economy and have engaged themselves in cooperative alternatives, small businesses, mutual companies and associations.  Foundations have been created which place men (and of course women) at the center of the economic and social challenges. 

 

We must fight the inequities brought on by the dominating system.

 

In this fight for more justice and human respect we must take a handle on the economy that currently rules us.  We are producers of goods and services, we are consumers, savers, readers, voters... together we form a fantastic change force if we unite and act at all levels.

 

Strong support must be given to the initiatives currently underway using social economy to assist the excluded and marginal population.  But more is needed as the proposed alternative must be feasible; we must innovate and come up with powerful and credible solutions to the qualms we have against the current development model.

 

To respect the idea of “common goods for humanity” and their sustainable management (land to be redistributed to the peasants who farm them, clean water for all at an acceptable cost); to offer bank loans in local currency to responsible and dynamic entrepreneurs, to finance small businesses which in turn create durable jobs; to facilitate access to information technology, to intermediate and pertinent technologies, to markets, information, training, to one’s own culture, etc.  These are a few of the action programs that need to be supported and promoted.

 

We’re not short of ideas or initiatives – there are thousands of them.  But they remain marginal and the current economic system continues to thrive without giving a thought to our actions. 

 

Financing the initiatives for a social and solidary economy remains an essential point.  Without money there is no investment and therefore no enterprise!  How then do we finance this alternative economy so that it becomes credible and gains a notorious impact?

 

We are producers, consumers, savers….  We have the power because the answer is as political as it is economic and financial.  So let’s unite and act in networks by creating profitable and durable businesses that will redistribute income, resources and profits fairly and equitably.

 

Our savings must be invested in these new enterprises which defend these values.  There are many ethical and solidary mutual funds;  let’s give them our savings and let’s make sure that the social institutions to which we grant our retirement benefits invest in the same manner.

 

Our consumer attitude must change.  No more unhealthy eating.  Let’s not listen to advertising.  Let’s buy from farmers who sell healthy produce.  Supermarkets will have to get used to our new habits if we impose our choice.  Fair trade is a good alternative example and it enables the producers from the South to be paid the right price for their products.

 

Let’s join our syndicates to defend our rights, the rights of men and women and not only those of the shareholders.

 

All these actions make up solidarity – a value comprising justice, not only charity.  Let’s share our surplus and build more equitable distribution systems.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Governments have an essential role to play.  Many actions of solidary economy and particularly those supporting the “poor” can’t be profitable and self-financed except if the beneficiaries support the cost – and this is impossible and unfair.  Micro credit is a good example.  How can you lend $50 to a woman in Bangladesh in order to help her survive and at the same time think that the cost of this operation (identification, management, evaluation) will be financed by the interest she will be obliged to pay?

 

Governments must therefore finance these enterprises and actions with our tax money.  It’s a question of sharing, of improved distribution and justice.  We must not close our eyes in front of this need -- we must ask our representatives to act properly.

 

Moreover, let’s support the networks promoting taxes on financial speculation, arms production and exportation; let’s fight against corruption, against the non-respect of human rights and for the insertion of the handicapped in our society.  In short, together, let’s build another form of development.

 

Finally, let’s not confuse charity and justice.  Let’s give our generosity to those in need and let’s assist those who want to build sustainable and profitable solutions by lending our money to them as much as possible and let’s volunteer our expertise to those who can use it.

 

 

CHAPter: 5 -
Turn the page of capitalism?  Alternatives are flourishing

The social and solidary economy represents a significant part of our economy.  Based on ethical principles it challenges the rules of capitalism and promotes a vision of solidarity.  Is it a good basis for tomorrow’s society?

« There are no economic alternatives » says the chorus of skeptics.  Alternative means of economic development are seen every day but go unnoticed!  Is practice ahead of theory?  This seems to be the case for the social and solidary economy (SSE) as the economic activities of cooperatives, mutual insurance companies and non-profit associations have grown over the past few years.

SHARED ETHICS
Although not very homogenous, these groups are linked by common principles:  democracy – one person, one vote – in the economic management of their activity, the non lucrative goal of their activity and the distribution of profits on a collective basis.  They also favor the association of persons rather than capital, the cooperation between users and employees and they take into consideration social and ethical criteria as well as new means of exchange and solidarity.  These groups are far from marginal as they represent 7-10% of salaried employment in France, Belgium and Quebec as well as about 5-10% of gross domestic product in France.

SSE is found in nearly all areas of the economy, from the production line via commerce and finance up to the consumer. As an example, a journal edited by an association, an agricultural cooperative producing and distributing vegetables, a cooperative bank, a mutual health insurance or a network of local exchange systems all belong to the social and solidary economy.  Of course there are big differences between the various groups in their degree of application of the ethical principles as well as their political commitment to make ”another society” .  However SSE remains a source of inspiration and an empirical basis for those who want to do business differently or even go further by questioning the rules of the capitalist economy as was done in the 19^th century.

 
THE BEGINNING OF SSE
1830 in Europe – with the inspiration of utopic socialists such as Robert Owen and Charles Fourier as well as Proudhon, the anarchist, some factory workers collectively organize their economic activity.  It’s the beginning of worker associations which will enable them to directly control their production and their consumption starting with common organizations.  Their action has a clear political objective:  to build socialism by economic practice, using shared property, solidarity, cooperation rather than competition, and the abolition of white collar workers.   This vision will however be abandoned progressively following the French revolution of 1848 which enables the middle class to continue its domination of the economy.  Hence, for lack of an alternative to capitalism, the worker associations slowly join the dominating economy and redefine their specificities:  accepting money but not its domination, accepting the market but with a competition balanced by cooperation, etc.

 

 

 

 

 

COMPROMISE
After the second world-war, associative businesses were used by the various countries in the « fordist » growth model recommended by the governments.  These businesses enabled blue collar workers as well as peasants to become consumers by giving them access to credit and cooperatives and they also partially picked up the social costs of the growth by helping the unemployed as well as persons suffering from illness, accident or handicap.   This is how the social economy gradually loses its radical political view to instead associate itself with the success of social democracy in Europe.  Many cooperatives and mutual banks are then pulled into the market’s rules and will lose their vocation, their original democratic and equalitarian structures.

A CRITICAL RENEWAL
However, the rupture of the social-democratic compromise between the market and the government at the end of the sixties, favored the revival of a more committed perspective of social economy.  To practice an alternative economy is to resist the havoc of liberalism – by making available goods and services for the persons excluded from the system – while building a concrete alternative to the dominating model.  The possibility of resisting and building at the same time has enticed more and more activists who want to apply here and now the principles of democracy and equality without having to wait for a grand calling which might never happen.

Since about 15 years, new activity areas have now been taken over by solidary economy, such as fair trade, micro-credit, solidary financing and local exchange systems which have all grown rapidly in Europe.

FROM PORTO ALEGRE TO MUMBAI
More recently a network focusing on « solidary social economy » has been developed within the anti-globalization movement and has had an important participation in the last two world social forums, Porto Alegre in 2003 and Mumbai in 2004.  The network combines various political sensitivities and therefore carries a clear post-capitalistic perspective.   This is the case for a portion of the Brazilian network, of which the economist Marcos Arruda is a member.  According to Marcos, the network organization of a growing number of consumers, businesses and various other sectors of the solidary economy should enable at a point in time a breaking point leading to a post-capitalistic society.  Hence it is important to “globalize” these practices to face the neo-liberal globalization of the economy

A PROJECT FOR SOCIETY?
This strategy can be seen as an update of the associationist project at the time of globalization.  For those supporting this approach, solidary economy represents a real project for society.  For others, however, the timing is not good for this program, as stated by Jacques Archimbaud of REAS (Réseau français d'économie alternative et solidaire): «You can only change society up to its tolerance level.  Our practice is reformist.  But we are not here to endlessly repair the damages of progress.  We re-inject plurality in the economy.   The social economy has been tossed for over a century between revolutionary utopia and pragmatic thought and it follows its path on the practical field.  It managed to prove that the question is not whether or not there are alternatives but rather which are the preferred alternatives.

AN CASE STUDY:  COOPERATIVE HOUSING
Avoid the threat of owners as well as that of individual property?  There is a legal alternative in the case of housing:  cooperative housing.  This enables a group of persons to collectively own the housing used by its members.  The cooperators pay an amount of rent representing actual operating costs.  Over time, housing costs are much lower than market.  In addition to the economical aspect, ethical principles are at the heart of most of these cooperative housing projects, some of which are:  free subscription, democracy, participation and lack of profit.

SUPPORT FROM THE STATE OF GENEVA
In Geneva, housing cooperatives abiding by these principles are very successful since the modification of the general housing law in 2000.  As proposed by the political parties of the “alternative”, this new legal corpus enabled the creation of a Foundation dealing with public law for the promotion of cheap and/or cooperative housing.  One of its missions is to help the cooperatives purchase buildings that can be used by its members.  Hence, with this new law, land and buildings belonging to the state can be made available to cooperatives so that they can create social housing sold as social shares to the cooperators.  Why is this interesting to the public?  The rent levels attained over time by the cooperatives are lower than the market.  This is crucial for the state since the subsidies for low-cost buildings only last 20 years.  On the other hand, after 20 years, cooperatives keep on offering housing at reasonable rent.

 

 

 

 

 

 

 

WHO CAN AFFORD IT?
Is cooperative housing accessible to everyone?  It all depends.  Large and long-term businesses can usually offer apartments without requiring an important financial participation from their members.  For example, the SCHG (Société coopérative d'habitation Genève), founded in 1919, has around 2000 members and requires them to buy CHF 4500 of social shares for a one-bedroom apartment.  The prices are often higher in the case of more recent businesses.  The CODHA (Jeune coopérative de l'habitat associatif) only has a small amount of capital and requires CHF 18,000 for a new one-bedroom apartment.  Of course, the amounts as well as the quality of the housing can vary greatly. 

ECOLOGICAL HOUSING?
Ecology seems to be more and more integrated in the principles brought forward by the cooperatives.   Eric Rossiaud of CODHA thinks that cooperative housing enables ecology principles to flourish.  « Who will invest in solar panels, wood burning boilers and efficient isolation?  Unfortunately not private business whose efforts are to minimize investment with no thought given to the costs borne by the tenants.  Cooperators, however, prefer to invest up front in order to pay less fixed cost in the future! »

THE SOLIDARY ECONOMY IS AWAKENING IN GENEVA

«It’s amazing, most of the people involved in social and solidary economy in Geneva do not know each other.  We must make them meet to create synergy. »  Following this observation, Christophe Dunand, director of the association Réalise, Eric Rossiaud, President of the cooperative of associative housing and Stanislas Zuin, independent economist decided to create the Association to Promote Social and Solidary Economy (APRÈS) in Geneva. Launched a few months ago, APRÈS has set an objective to link the various actors of the social and solidary economy in Geneva and Suisse Romande.  It has already met with success since already 30 associations and businesses have given their support.

 
Amongst them can be found cooperatives such as La Ciguë (housing), Les Jardins de Cocagne (agriculture) and La Librairie du Boulevard, associations such as Equiterre (environment) or the Juristes Progressistes as well as foundations such as Foyer Handicap, Intégration Pour Tous and Pro Senectute.  It is important for APRÈS to vary its support base «Any business or association organized democratically, not seeking overall profit and producing goods or services with a minimum amount of autonomy is considered a part of the social and solidary economy. »

UNITE TO DEVELOP

APRÈS believes that bringing these organizations together would in turn bring many advantages.  It would enable reciprocal economical exchange, for one: « why call on profit-making businesses when another solution may exist with a value added social qualities? » questions Stanislas Zuin.   For Christophe Dunand, there is also the need for a better definition in the eyes of the state so as to obtain better support: “the profit-based economy is well organized with its lobbies and it receives all required support from the state”.  « Also, » imagines M. Dunand, «we could put our resources in common, by creating common retirement funds and insurances rather than contributing to outside funds. »

Based on the information gathered by APRÈS, the social and solidary economy represents a respectable part of the local economy, with 5 to 10% of the active population as participants, representing 10,000 to 20,000 jobs in Geneva.
On November 18 and 19 2004, APRÈS will organize its first « regional meetings of social and solidary economy » with the objective of bringing together a large number of organizations to debate on current themes.   In parallel, the association is preparing a resource center on Internet which will become the real ESS site in Geneva, offering a multitude of advice and information to all those who want to become “a different sort of entrepreneur”.