Category - Social/Solidarity Economy

The other night I attended a presentation by Peter Barnes at Vermont Law School. He was talking about different possible policies Congress might pursue to address global warming. Barnes is a persuasive advocate for a specific form of cap-and-trade on greenhouse gases, wherein the limited permits for emitting greenhouse gases are auctioned off and the revenue that comes in from the auction is then distributed on an equal per-person basis to everyone in the country. More on that in a moment (or see Jonathan Alter’s nail-on-the-head article in Newsweek).

I’d heard about Barnes proposal before–in fact, Nancy Folbre, James Heintz, and I used it as the basis for a bit of the Field Guide to the US Economy. What I hadn’t realized was that there is currently legislation working its way through Congress that would implement a different variation of cap-and-trade on greenhouse gases. The leading version is Joe Lieberman’s S.280 in the Senate and the near-identical bill fostered by John Olver, H.R.620, in the House. (Part of my ignorance stems from the recent birth of my daughter Susannah. I haven’t been keeping up with the news very much.) (But she sure is cute!)

“Wow,” you might be thinking, “Congress might actually pass a bill that deals seriously with global warming. Will miracles never cease?” Well, um, don’t get too excited just yet.

July 27, 2007

Announcing the launch of the U.S. Solidarity Economy Network (SEN-US)

We are excited to announce the launch of the U.S. Solidarity Economy Network. The decision to launch was taken at the end of a series of meetings that were held at the U.S. Social Forum. The time is ripe for this initiative, given the explosive growth of the solidarity economy and representative networks virtually everywhere else in the world. In the U.S., not only is there no such network to support existing solidarity economy practices and policies, but the term and framework is practically unknown.

What, then, is the solidarity economy?

· The Solidarity Economy offers an alternative economic framework to that of neoliberal globalization - one that is grounded in solidarity and cooperation, rather than the pursuit of narrow, individual self-interest.

· It promotes social and economic democracy, equity in all dimensions (e.g. race, class, gender…) and sustainability.

· It is pluralist and organic in its approach, allowing for different forms and strategies in different contexts, and is open to continual change driven from the bottom up whether in civil society or the marketplace.

What does a solidarity economy look like? Here are just a few examples:

· cooperatives – worker, producer, consumer, housing, financial
· local exchange systems, complementary currencies
· fair trade & solidarity finance
· social enterprises
· ‘high road’ locally owned businesses
· reclaim the commons movement
· social investment funds, worker controlled pension funds and credit unions
· land trusts
· co-housing, eco-villages
· consumer supported agriculture
· green technology and ecological production
· open source movement (e.g. Linux, wikipedia, YouTube)
· unpaid care labor & volunteer labor
· participatory budgeting
· collective kitchens in Latin America, tontines – collective health programs in Africa

· community-based services in France, social cooperatives in Italy

Why a solidarity economy network?

There are serious cracks in the dominant neoliberal economic model and there is a historic opening to create and push for a new framework for social and economic development. The solidarity economy builds on the grassroots innovations of people, moved by desperation, practicality, values, or vision, who are building economic alternatives to provide jobs, food, housing, social services, healthier communities and money, as well as advancing economic democracy and more just economic policies. Taken together, they offer stepping stones toward a new way of organizing our economy. Creating a network to foster a common sense of identity and purpose has been powerful in other countries. To take one example, in Canada, the social solidarity economy network has forged a comprehensive national policy framework and has leveraged $132 million in government funding for investment, capacity building, research and training.

What are the aims of the SEN?

We have yet to hammer out a mission statement, but here are some preliminary ideas:

· To develop a structure and vision that can promote a common identity and agenda among the currently isolated elements of the solidarity economy.

· To contribute to new theories of economic development informed by the dynamism and innovative practices within the solidarity economy.

· To raise the visibility, legitimacy and public support for solidarity economy practices,

· To link up with regional and international solidarity economy networks such as NANSE and RIPESS.

· To promote public policies and leverage resources for the support of the solidarity economy.

· To facilitate research on the benefits of the solidarity economy, best practices, opportunities for synergistic cooperation, and the development of training and technical support resources.

· To build the movement for transformative social and economic justice.

Next steps

The SEN Coordinating Committee is in the process of:

1) Mission statement and structure: we are developing a provisional mission statement and structure proposal which will be circulated for wider discussion.

2) Membership: We anticipate putting out an invitation to organizations and individuals to join in approximately a month’s time.

3) Development: We are exploring funding opportunities. The Center for Popular Economics will provide fiscal sponsorship as well as staffing, provisional upon funding in the start-up stage of the network formation.

4) Action plan and timeline: as we build a broad representative coordinating committee and membership we will prioritize our objectives and seek resources to achieve them.

5) Resource development: collect and publish a book of the presentations in the Economic Alternatives & the Social/Solidarity Economy track at the U.S. Social Forum. Develop a SEN-US website.

We hope that you find this initiative as exciting and inspiring as we do. Join us in building the Solidarity Economy Network. Spread the word, and sign on to the SEN listserve to keep up with developments. Send a message to: ssecaucus-subscribe@lists.riseup.net

On behalf of the SEN Coordinating Committee,

Emily Kawano, Center for Popular Economics
Phone: (413) 545-0743 e-mail:
SEN Coordinating Committee
Jessica Gordon-Nembhard, Grassroots Economic Organizing
Melissa Hoover, U.S. Federation of Worker Cooperatives
Emily Kawano, Center for Popular Economics
Julie Matthaei, Guramylay
Ethan Miller, Grassroots Economic Organizing (GEO)
Michael Menser, Amer. Fed. of Teachers, CUNY
Heather Schoonover, Institute for Agriculture and Trade Policy
Dan Swinney, Center for Labor and Community Research

[See part one]
Jonathan Teller-Elsberg, CPE Staff Economist

It’s worth remembering that commons already exist, lots of them, in various places and parts of the world’s economies. Most often, however, they are informal arrangements—holdovers from before the rise of modern market capitalism. In general, commons are not recognized formally by governments as a type of property arrangement deserving protection, the way conventional private property is legally protected.

It is this lack of protection that enables the famous “tragedy of the commons.” Barnes argues that, contrary to the standard perception, commons aren’t undermined by internal tragedies—they are victims of infringement from the outside. Marx described the enclosure of common land into private land as “the primitive accumulation of capital”; today, Barnes is primarily concerned with the ability of corporations to horn in on remaining commons as they seek new resources to exploit for private gain. A recent example is with the digital TV broadcast spectrum, with an estimated value of $70 billion but which the U.S. government gave away for free in 1996 to media conglomerates, even though the airwaves are supposed to be the shared property of all Americans.

The main finding of Peter Lindert’s intriguing 2003 paper, “Why the welfare state looks like a free lunch” (a warm-up for his 2004 book Growing Public: Social Spending and Economic Growth since the Eighteenth Century is that generous social democratic welfare states, with a variety of universalist and means-tested safety net and family support programs, grow just as robustly as stingy laissez-faire states. Here’s the key summary from the abstract:

There is no clear net GDP cost of high tax-based social spending on GDP, despite a tradition of assuming that such costs are large.

The finding should obviously be plastered on bumper stickers, refrigerator magnets, and dorm-room walls and played continuously on a loudspeaker outside the Chamber of Commerce, Club for Growth, Council on Competitiveness, etc. The welfare state doesn’t just look like a free lunch, it is a free lunch, at least from the standpoint of national aggregates.

Class conflict may mean that it’s hard for us to order that free lunch in the U.S. anytime soon, but the barrier between us and the free lunch doesn’t come in the obvious way.

Jonathan Teller-Elsberg, CPE Staff Economist

A few weeks ago, CPE Staff Economist Jerry Friedman wrote an Econ-Atrocity reviewing Bill McKibben’s new book, Deep Economy. Though he says McKibben “has written a clear attack on much of what ails us,” Friedman nonetheless criticizes McKibben for approaching the environmental and social problems of the day from an individualist perspective. For all that McKibben wants to promote and revive “community,” he has the attitude (says Friedman) of a “personal Salvationist . . . [who thinks that] the enemy [is] ourselves: we use too much, waste too much, want too much; and the only salvation for the environment is to change our preferences, use less, recycle more, and choose to live simply.” What McKibben misunderstands or ignores, Friedman argues, is the power of social institutions to drive behavior, regardless of the desires and seemingly free choices of individuals.

I think that Friedman will find solace in Peter Barnes’ recent book, Capitalism 3.0: A Guide to Reclaiming the Commons, since Barnes’ approach is definitively institutional. The problem, according to Barnes, is that the structure of the economy and society leave too much power in the hands of corporate capitalism. Even if all the CEOs and boards of directors and politicians were replaced with kind-hearted souls like McKibben, we would still face pretty much the same issues of environmental decay, economic inequality, and other social ills—the logic of capitalism and the legal structure of private property rights force the leaders of corporations to do what they currently do. He learned this from personal experience as co-owner and manager of several business ventures, most famously Working Assets (a telephone and credit card company that donates one percent of gross revenues to progressive charitable organizations). “I’d tested the system for twenty years, pushing it toward multiple bottom lines [that consider social and environmental impacts in addition to profit concerns] as far as I possibly could. I’d dealt with executives and investors who truly cared about nature, employees, and communities. Yet in the end, I’d come to see that all these well-intentioned people, even as their numbers grew, couldn’t shake the larger system loose from its dominant bottom line of profit.” (Ironically, Bill McKibben is quoted on the front cover of Capitalism 3.0 helping to promote Barnes’ book.)

A recent article in Psychological Science describes experiments aimed at understanding the psychology of accepting, or not, social inequalities. (If the abstract seems a bit abstract, try this slightly more reader-friendly summary from Science.)

The gist: people who accept justifications for inequality experience less emotional stress when confronted by evidence of the inequality. The more a person believes that there are good reasons for inequality, the less emotional stress they’ll have. (Stress in the form of moral outrage, existential guilt, and support for changing things to help out the disadvantaged.) So acceptance looks to be a self-protection mechanism. Also, showing people stories, propaganda, what-have-you, that feeds ideas of justification (for example, “rags-to-riches” stories) increases their acceptance of the justifications, and so decreases their emotional reaction to evidence of inequality.

As the authors abstract, “system-justifying ideology appears to undercut the [urge to bring about] redistribution of social and economic resources by alleviating moral outrage.”

I guess this helps explain why people are likely to accept that “this is the best of all possible worlds.” Giving a rat’s ass that the world ain’t so great is hard to do. It’s stressful. That’s why those of us who think otherwise have got to help each other keep our spirits up. More potlucks!

Two weeks ago, after complaining to my daughter about how much I would dislike it, I bought Bill McKibben’s Deep Economy (New York, Henry Holt: 2007) from my local Amherst book store. Already familiar with his ideas from his various other writings (including The End of Nature; Staying Human in an Engineered Age; and various New Yorker articles), I suspected that his new book would be well written, an effective attack on much that ails us as a society, and would miss the point. It is this last that led me to threaten to throw the book against the wall in frustration. And that frustration led me to write this note. (Actually, it was my wife who wanted me to write this so that I would stop ranting to her.)

What could be wrong with a book that criticizes the Bush Administration, big oil, Cargill, Monsanto, and the Economics profession (among many many other villains)? Especially when the author has such good heroes: including farmers’ markets, urban gardens, organic farmers, Heifer International, and the Indian state of Kerala. Among economists, environmentalists like Herman Daly and Bob Costanza get most of the Kudos but a few, like Amartya Sen, make friendly cameo appearances. Individualism is bad; society is productive; and I agree that would all be better off, and the world a lot better off, if we listened to Bill McKibben.

The problem I have is that McKibben not only reads orthodox economists but believes them.

Over at the Boston Review, Michael Piore and Andrew Schrank’s recent article (“Trading Up: An embryonic model for easing the human costs of free markets”) on labor in Latin America offers a spot of good news. They’ve been studying labor inspections throughout the region, from the Dominican Republic to Mexico to Brazil and Chile, and say they’ve found “an emergent model for reconciling market and social forces.”

By Thomas Masterson, CPE Staff Economist

The Basic Income Guarantee (BIG) is just what it sounds like: a guaranteed basic level of income. Most proposals suggest that it be distributed to every adult citizen without regard to income or wealth. BIG would replace all of the social programs currently in place that attempt to reduce or eliminate poverty, such as welfare, unemployment insurance, and Medicaid, with a monthly payment sufficient to lift an individual out of poverty.

Interestingly, this proposal is drawing support from the right as well as the left (leftists have long supported versions of this proposal). Even Charles Murray (think “The Bell Curve”) likes it: he has written a book about it in which he seems to say that he thought it up, calling it “The Plan.” By eliminating the need to monitor for fraud and abuse of the system, BIG would actually be cheaper than our current system of multiple benefits and eligibility criteria. BIG would also get rid of the disincentive to work built into the welfare system–often working for pay leads to a decrease in benefits, making work a less attractive option. And, by allowing people to decide on their own what to use the money for (though Murray’s plan calls for $3,000 of his $10,000 annual grant to be spent for health insurance), BIG would increase efficiency. Lefties like it because it frees people from dependence on employers and gives them more bargaining power to demand good working conditions and better pay.

By Jonathan Elsberg, CPE Staff Economist

The voters of South Dakota have recently upheld one of the least known but most progressive set of laws in the land. Along with eight other Midwestern states, South Dakota restricts corporations’ ability to own or operate farms. In the case of South Dakota, this restriction was first legislated in 1974 (Title 47, Chapter 9A) and beefed up in 1998 through an amendment to the State Constitution (Article XVII, Sections 21-24), which boldly states that “No corporation or syndicate may acquire, or otherwise obtain an interest, whether legal, beneficial, or otherwise, in any real estate used for farming in this state, or engage in farming.”

Corporate interests attempted to water-down these restrictions with their proposed Amendment A. However, Amendment A was defeated in the June primary elections, meaning that South Dakota’s restrictions on corporate farming will remain intact for the time being.

This is good news for the family farmers of South Dakota, and the rural communities to which they belong. The number of family farms in the state has held steady since 1999, while in the rest of the country family farm have been in the decline. Representatives from the Stand Firm! Coalition (which opposed Amendment A) attribute at least part of this family farm maintenance to the restrictions on corporations. The principle of defending family farming from corporations was recognized by the state’s legislature when it past the 1974 Family Farm Act, which stated that “The Legislature of the State of South Dakota recognizes the importance of the family farm to the economic and moral stability of the state, and the Legislature recognizes that the existence of the family farm is threatened by conglomerates…and is jeopardized by downward vertical integration in farming.”

This idea is not merely theoretical or anecdotal. Researchers Dr. Rick Welsh and Dr. Thomas Lyson recently analyzed Census of Agriculture and Economic Census data to see if corporate farming restrictions have beneficial effects on the states that use them. They found that, in general, states with such laws suffered lower poverty and unemployment and had more farms realizing cash gains in their agriculture-based counties. Additionally, they found that the stronger the restrictions on corporate farming, the better (in general) the outcome for the communities involved.

Unfortunately, South Dakota’s anti-corporate farming laws are not in the free and clear just yet. Recently, U.S. District Judge Charles Kornmann ruled that the existing anti-corporate amendment to the state’s Constitution does not meet the requirements of the United States Constitution’s commerce clause. This ruling is being appealed to the U.S. Circuit Court, but if upheld, it will require South Dakotans to reformulate their laws in a way that protects family farms - as they have repeatedly shown they wish to do - while passing constitutional muster.

It should be noted that Judge Kornmann did not take issue with the right of South Dakota to restrict corporate agriculture. While ruling that that the anti-corporate statutes generally serve “a legitimate [i.e., constitutional] local purpose,” his judgment did find flaw with right-of-way access for utilities and with compliance with the Federal Americans with Disabilities Act. However, South Dakota law states that if any part of a statute is found unconstitutional, the entire statute is nullified. It was into this legal limbo that pro-corporate interests injected Amendment A. If needed, the existing anti-corporate statutes can easily be modified so that they comply with Judge Kornmann’s findings and also continue to protect family farmers and their communities.

Sources and additional information:

Center for Rural Affairs, “Amendment A Fails in South Dakota,” in the July 2002 issue of the CFRA Newsletter.

For additional information on corporate farming issues, see the CFRA’s “Corporate Farming and Market Access” page: www.cfra.org/issues/corporate.htm.

Fritz Herrick, “People victorious over agribusiness in South Dakota,” Madison, Wisconsin Independent Media Center, 6 June 2002 http://madison.indymedia.org:8081/front.php3?article_id=5312.

Argus (South Dakota) Leader editorial, “Amendment A defeat a step backward for S.D.,” 5 July 2002: www.southdakotaelections.com/Story.cfm?Type=Editorials&ID=291 .

Dr. Rick Welsh and Dr. Thomas A. Lyson’s article, “Anti-Corporate Farming Laws, the ‘Goldschmidt Hypothesis’ and Rural Community Welfare,” is available from the website of Nebraska’s “Friends of the Constitution” at www.i300.org/what’s_new.htm#anti_corp.

The full text of Title 47, Chapter 9A of the South Dakota Codified Statues can be read at http://legis.state.sd.us/statutes/Index.cfm?FuseAction=DisplayStatute&FindType=Statute&txtStatute=47-9A

The full text of Article XVII, Sections 21-24 of the South Dakota Constitution can be read at http://legis.state.sd.us/statutes/Index.cfm?FuseAction=DisplayStatute&FindType=Statute&txtStatute=0N-17

The full text of the proposed and rejected Amendment A can be read at www.state.sd.us/sos/2002/2002bqprimary.htm.

If you have access to the Lexis-Nexis online database, you can read Judge Kornmann’s decision. Click “Legal Research” –> “Federal Case Law” –> enter “south dakota farm bureau” into the Keyword box and change the Court drop-list to “District Courts,” then click the “Search” button. Judge Kornmann’s ruling is the first case returned: “S.D. Farm Bureau v. Hazeltine,” filed 17 May 2002.

(c) 2002 Center for Popular Economics

Econ-Atrocities are a periodic publication of the Center for Popular Economics. They are the work of their authors and reflect their author’s opinions and analyses. CPE does not necessarily endorse any particular idea expressed in these articles.