Solidarity Economy I: Building Alternatives for People and Planet

Solidarity Economy I: Building Alternatives for People and Planet Papers and Reports from the 2009 U.S. Forum on the Solidarity Economy

Edited by: Emily Kawano, Thomas Neal Masterson and Jonathan Teller-Elsberg

Center for Popular Economics Amherst, MA USA

Contents Table of Contents

iii

Acknowledgements

vii

Introduction

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I

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Solidarity Economy Overview

1 Crisis and Opportunity: The Emerging Solidarity Economy Movement, by Emily Kawano

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2 Solidarity Economy: Key Concepts and Issues, by Ethan Miller

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3 Solidarity Economics and Twenty-First Century Socialism in the Bolivarian Alliance: An Initial Approach, by Maribel Aponte-Garc´ıa

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II Finance

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¨ ur 4 The Role of Finance in the Latest Capitalist Downturn, by Ozg ¨ Orhangazi and Ian J. Seda-Irizarry

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5 Complementary Currencies as a Method to Promote the Solidarity Economy, by “Miguel” Yasuyuki Hirota

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6 Credit Unions and the Solidarity Economy, by Cliff Rosenthal

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Box 1. Creating Common Good Banks: Democratic Economics for a Sustainable World, by William Spademan

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III Production

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7 Labour Unions and the Solidarity Economy: The Quebec Experience, by Yvon Poirier

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Contents

8 Worker-Run U.S. Factories and Enterprises: The Example of Argentine Cooperatives, by Peter Ranis 115 9 ‘One Worker, One Vote:’ US Steelworkers to Experiment with Factory Ownership, Mondragon Style, by Carl Davidson 125

IV Commons and Wealth

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10 What Does This Moment Require? Dispatches from Work on the Commons, by Alexa Bradley and Julie Ristau 133 11 Reclaiming the Sabbath as a Vision of Solidarity Economics, by Barry G. Shelley 139 12 What Is Productivity For?, by John de Graaf

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13 Community Land Trusts: Developing Permanently Affordable Housing, by John Emmeus Davis and Alice Stokes 157

V Environment

169

14 We Belong with the Earth: An Integrative Vision from Bioregionalism, by Patrick Gibbs 171 15 Taking Ownership of the Climate Crisis, by Jonathan Teller-Elsberg 189 16 Other Worlds, by Beverly Bell, Neil Tangari, Shilpa Jain and rachel Wallis with the Other Worlds Collaborative 201 17 The Concept of Living Well: Vivir Bien

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Box 2. A New Wind Blows in King Coal Country, by Jim Dee

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VI Food

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18 Protecting Local Food and Farms through Models of Shared Equity, by Rebecca Fletcher 227 19 CEDESA, Women, and the Food Sovereignty Movement in Mexico, by Ann Ferguson 241

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Contents

20 From Food Security to Food Sovereignty: Why Vermonters Need Food Sovereignty, by Richard and Angela Berkfield 249

VII Research

259

21 Extending the Bottom Line: What Worker Co-ops In Argentina can Teach us About Sustainability, by Annie McShiras 261 22 Lessons and Opportunities from Canada’s Social Economy Research Program, by Rupert Downing 277 23 Research on the Economic Impact of Cooperatives: Phase I Results, by Lynn Pitman 287 Box 3. Community Economies Collective: Three Members Research in the Solidarity Economy, by Janelle Cornwell, Ted White, Abby Templer and Leo Hwang-Carlos 295

VIIIMovement Building 24 Women, Feminism, and the Solidarity Economy, by Julie Matthaei

299 301

25 Organizing Against the Economic Crisis by Creating a Bank Tenant Association, City Life/Vida Urbana, by Steve Meacham 313 26 Viral Spiral: How the Commoners Built a Digital Republic of Their Own, by David Bollier 325

IX Policy and the State

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27 The Solidarity Economy, State Organization and Political Power, by Nancy Neamtan 341 28 Reimagining Society, by Julio Rafael Chavez

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Acknowledgements We would like to thank all of the participants who made the 2009 Forum on the Solidarity Economy a wonderful event and inspired us to put this book together. We would also like to express our gratitude to all of the authors who gave generously of their time and words; they worked with us patiently and with good cheer throughout the editing process. We want to acknowledge the good feedback provided on particular chap¨ ur Orhangazi, Olivia Geiger, and Maliha Safri. Geert Dhondt ters from Ozg¨ deserves credit for his part in getting this endeavor off the ground. And finally, a very special thanks to the Tom Masterson for doing the hard work of layout - wrestling with LaTeX (a layout software program, nothing kinky here) and the nitty gritty of pixels, orphans, and reflow.

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Introduction There are so many reasons to celebrate the ideas and actions that are represented in this book. As we go to print we are still mired in an economic crisis born of reckless financial and real estate gambling; we face the uncertainty and devastation of climate change; what promises to be the worst oil spill in history continues to gush sludge into the Gulf of Mexico; our prisons are overflowing; we are fighting two wars; the economic divide grows wider and unemployment remains stubbornly high. In the face of this doom and gloom this book is about hope. It’s about solutions, alternatives, re-discovery of old ways, and the creativity of new ways. It’s about asserting that what is important is not blind growth and profit maximization, but living well (vivir bien)–with each other and with the planet (see Chapter 17). This is not a book of utopian dreaming. Rather it is an exploration of what exists, what works and the proposition that the solidarity economy provides a framework for interconnecting these pieces into a coherent system-or more precisely, systems, since we believe that different models will work in different places and in different times.

Building the solidarity economy movement in the U.S. The solidarity economy (SE) movement in the U.S. was born at the first U.S. Social Forum in June 2007 where a series of meetings, initiated by the Center for Popular Economics, about the SE resulted in the decision to launch the U.S. Solidarity Economy Network (SEN). This decision was encouraged and supported by Canadian and Mexican members of the North American Network for the Solidarity Economy (NANSE)1 and the Intercontinental Network for the Promotion of the Social Solidarity Economy (RIPESS). Although the solidarity economy framework is still almost unknown in the 1 In

the spring of 2008, NANSE was reconstituted to become RIPESS-N. America, the continental ”chapter” of RIPESS (Intercontinental Social Solidarity Economy Network).

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Introduction U.S., it is slowly finding its way into the public discourse and practice, as evidenced by a casual search of the term on the internet. The first U.S. Forum on the Solidarity Economy was held in March 2009 at the University of Massachusetts and was co-convened by SEN, the Universidad de los Andes-Venezuela, and RIPESS-N. America. The Forum far exceeded the expectations of the organizers. We had around twice as many people attend than expected. Four hundred participants from around the country as well as abroad-we had participants from Colombia, Canada, Japan, Mexico, Costa Rice, Brazil, Portugal, and a strong contingent from Venezuela-came together and created an experience that was full of energy, warmth, inspiration, learning, connection, culture, and yes, solidarity. We heard from several people who described the event as “pivotal” and “life changing.” The Forum served to raise awareness, not only of the solidarity economy, but of the participants’ connection to one another and the benefits of creating synergistic linkages: sharing resources, technical assistance, and best practices. The Forum brought together a very diverse mix of SE practitioners, labor and social activists, academics, and students involved a wide array of activities, many of which are discussed in this book.

Structure of the book This book contains essays that reflect presentations that were made at the Forum on the Solidarity Economy. In some cases the essays are write ups of the content of the workshops; in other cases, authors have considerably re-worked the material because of new developments since the Forum. In a few instances, we solicited essays to round out a particular area of work, such as the chapter on community land trusts (Chapter 13), or that we thought to be significant enough to include as an emerging path, as is the case of the Living Well piece (Chapter 17). This book is not intended to be a definitive statement of what the Solidarity Economy is or can be. Nor does it pretend to be comprehensive. It is rather a snapshot of a movement in progress. It also builds on a previous publication which collected essays from the SE track at the 2007 U.S. Social Forum, Solidarity Economy: Building Alternatives for People and Planet (available at http://www.lulu.com/product/paperback/ solidarity-economy-building-alternatives-for-people-and-planet/ 2504800). Part One provides an overview of the solidarity economy. The essay by Emily Kawano (Chapter 1, “Crisis and Opportunity: The Emerging Sol-

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idarity Economy Movement”) looks at the opportunities provided by the multiple economic, social and environmental crises to advance the solidarity economy as a fundamentally different paradigm or story. She discusses some specific practices that can lead to long term solutions and concludes with some thoughts about questions still in need of greater exploration and debate. Ethan Miller explores definitions and key concepts of the solidarity economy (Chapter 2, “Solidarity Economy: Key Concepts and Issues”). He argues that we need to move beyond the simplistic dichotomy of market versus state in order to see and embrace the diverse economy. Maribel Aponte-Garc´ıa presents the Bolivarian Alliance for Our America (ALBA), a people-centered alternative model of regional integration that is emerging in Latin America (Chapter 3, “Solidarity Economics and Twenty-First Century Socialism in the Bolivarian Alliance: An Initial Approach”). She analyzes the relationship between the solidarity economics and 21st Century Socialism. ¨ ur Orhangazi and Ian Seda set the stage by explorIn Part Two, Ozg¨ ing the financial crisis, tracing its roots to long term structural features of capitalism including financial deregulation, stagnant wages, rising household debt and growing inequality (Chapter 4, “The Role of Finance in the Latest Capitalist Downturn”). They conclude that capitalism is chronically given to instability and that we must build alternative ways of organizing our economy for a sustainable future. “Miguel” Yasuyuki Hirota discusses the unsustainability of conventional currencies and then provides examples of local and regional complementary currencies that have been successful in economic revitalization for the communities utilizing them (Chapter 5, “Complementary Currencies as a Method to Promote the Solidarity Economy”). Cliff Rosenthal provides a history of credit unions and discusses their roots in social movements and self-help–the belief that people can collectively build institutions for mutual aid and prosperity (Chapter 6, “Credit Unions and the Solidarity Economy”). He then asks the question, are credit unions, or can they be, “a cornerstone of the solidarity economy in the United States, which puts human needs before profit?” He concludes that despite some aspects that may be at odds with the solidarity economy, credit unions do indeed have the potential to be a cornerstone of solidarity-based finance. William Spademan describes efforts to develop a Common Good Bank, a model of banking that is ethical, democratically controlled by its depositors, and designed to channel a portion of its profits into a community fund (Box 1, “Creating Common Good Banks—Democratic Economics for a Sustainable World”). Part Three focuses on workers and production. Yvon Poirier gives an historical account of the role of the labor movement in Canada in building the

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Introduction solidarity economy, including credit unions, a solidarity investment fund, and direct support for the development of the social economy (Chapter 7, “Labour Unions and the Solidarity Economy: The Quebec Experience”). Peter Ranis argues that workers and communities should use the law of eminent domain to legitimize factory takeovers (Chapter 8, “Worker-Run U.S. Factories and Enterprises: The Example of Argentine Cooperatives”). He points out that cases of workplace occupation such as Republic Windows in Chicago as well as others in Great Britain, Ireland, and France, won significant concessions that saved jobs. He goes on to argue that a critical next step is turning these factories into worker-owned cooperatives. Carl Davidson looks at the historic new collaboration between the United Steel Workers (USW) and Mondragon Cooperative Corporation, the gold standard in the world of worker cooperatives, to create worker cooperatives that build on the manufacturing know how of both the Steelworkers and Mondragon (Chapter 9, “’One Worker, One Vote’: U.S. Steelworkers to Experiment with Factory Ownership, Mondragon Style”). Part Four is on wealth that has its value in the sharing, either in the form of the commons or cultural practices that inform and guide economic patterns. Alexa Bradley and Julie Ristau review the experience of the movement to promote commons in the contemporary world and draw lessons that may be useful to those active in other branches of the SE movement (Chapter 10, “What Does This Moment Require? Dispatches from Work on the Commons”). Barry Shelley discusses the history and deeper meaning of Sabbath as a force for radical economic solidarity, more radical even than most promoters of “Sabbath economics” realize (Chapter 11, “Reclaiming the Sabbath as a Vision of Solidarity Economics”). John de Graaf compares various indicators of well being in the U.S. to our European counterparts and finds us lagging in terms of health, poverty, inequality, child abuse, crime, and economic security (Chapter 12, “What Is Productivity For?”). He explains that European countries have outstripped the U.S. in these areas by following a path that supports a social contract instead of our individualistic and competitive one. John Davis and Alice Stokes show how community land trusts (CLTs) and other models of shared equity housing have been able to create permanently affordable housing (Chapter 13, “Community Land Trusts: Developing Permanently Affordable Housing). Furthermore, their recent research finds that homeowners are able to sell their homes and retain more wealth than they possessed when they purchased the house. In Part Five, Patrick Gibbs shares a bioregional perspective, suggesting that this can provide SE activists with a solid grounding-both literally and metaphorically-for contemplating long-term goals and strategies (Chapter 14, “We Belong with the Earth: An Integrative Vision from Bioregional-

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ism”). Jonathan Teller-Elsberg compares different proposals to reduce carbon emissions, analyzing the different ways that they entail altering the property status of the atmosphere and the different contribution each might make to economic solidarity (Chapter 15, “Taking Ownership of the Climate Crisis”). He concludes that the Cap-and-Dividend model is the strongest overall option, arguing that it is preferable to regulation and carbon taxes in terms of effectiveness and superior to other models of cap-and-trade in terms of equity. Beverly Bell and others from the Other Worlds collective look at movements to achieve zero waste, which go beyond technological fixes to solve the problem of waste through holistic change in the extraction, production, distribution, and consumptions cycles (Chapter 16, “Other Worlds”). They also describe the struggle of indigenous peoples to maintain sovereignty, including control over the so-called resources in their historical lands that are now coveted by multinational corporations. In the case of zero waste and indigenous rights, environmentalism is more than a love of nature (though it is that too); it’s an unavoidable survival strategy for communities that historically have had the least recognition by the powers that be. “The Concept of Living Well - Vivir Bien” is a statement from the Permanent Mission of the Plurinational State of Bolivia to the United Nations (Chapter 17). Living well, or vivir bien, is defined as harmonious relationships between people and between humans and Mother Earth, which is central to many indigenous worldviews. Jim Dee provides a story about the Coal River Mountain Watch in West Virginia, which is fighting against the social and environmental damage of mountain top removal (Box 2, “A New Wind Blows in King Coal Country”). But the activists of Coal River Mountain Watch have been able to do more than document harm to their community, they are also working to create jobs in renewable energy like wind power. They view the monoculture of big coal as unsustainable and argue for the need to build a better future through a diversified economic base. Part Six begins with Rebecca Fletcher’s essay on innovative use of the community land trust model to establish and preserve small farms (Chapter 18, “Protecting Local Food and Farms Through Models of Shared Equity”). She looks at several case studies which illustrate the range of options that can be packaged together to create viability. Ann Ferguson traces the development of the grassroots organization CEDESA in Mexico (Chapter 19, “CEDESA, Women, and the Food Sovereignty Movement in Mexico”). She discusses how popular education and principles of mutual aid and solidarity fostered by CEDESA supported the growth of militant social movements for farmers’ rights as well as highlighted the empowerment of rural women particularly in the area of food sovereignty. Richard and Angela Berkfield

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Introduction focus on food in Vermont, where issues of hunger and other injustices are similar to the situation in too many other places (Chapter 20, “From Food Security to Food Sovereignty: Why Vermonters Need Food Sovereignty”). Richard and Angela show how many problems involving the food economy that are often treated separately are actually deeply interrelated, and describe the growing worldwide movement for food sovereignty most clearly embodied in La Via Campesina, the International Peasants’ Movement. Part Seven looks at research on aspects of the solidarity economy. Annie McShiras provides an overview of experiments in Argentina with barter clubs, local currency, and recovered factories (Chapter 21, “Extending the Bottom Line: What Worker Co-ops In Argentina can Teach us About Sustainability”). She presents a case study of La Alameda, a collective workplace comprised of six separate micro-enterprises including a bakery, a photocopy center, a clothing store, a ceramics store, a barbeque, and a woodshop. Rupert Downing describes the Canadian social economy research network, which involves over 300 researchers in both the university and community/practitioner setting (Chapter 22, “Lessons and Opportunities from Canada’s Social Economy Research Program”). Their research has been critical for movement building and for informing the construction of public policy that supports the growth of the social solidarity economy. Lynn Pittman presents new research on the magnitude and sectoral distribution of cooperatives in the U.S. and finds that cooperatives have a significant economic impact in terms of jobs, income, and output (Chapter 23, “Research on the Economic Impact of Cooperatives: Phase I Results”). Janelle Cornwell et al give a sampling of various research projects in western Massachusetts including explorations of local worker cooperatives, community supported agriculture, and how local artists contribute to the economy in diverse, but often unrecognized ways (Box 3, “Community Economies Collective: Three Members Research in the Solidarity Economy”). Part Eight includes essays on movement building. Julie Matthaei discusses the feminist movement and how, while it created profound change in terms of gender equality, it did so within the bounds of the dominant economic system (Chapter 24, “Women, Feminism, and the Solidarity Economy”). She explores ways in which women are now at the forefront of building transformative practices that are parts of the solidarity economy. Steve Meacham looks at the failings of government measures to prevent people from being evicted from their homes (Chapter 25, “Organizing Against the Economic Crisis by Creating a Bank Tenants Association, City Life/Vida Urbana”). He describes the innovative strategy of forming Bank Tenant Associations (BTAs) to represent the interests of tenants after the bank has foreclosed on a property, thereby becoming the landlord. The BTAs use mass organiz-

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ing, education and direct action to force banks to stop evictions and accept rent from occupants. In the longer term the BTA tries to get the bank to sell back the property at current values to the former owner or a non-profit that can develop a housing cooperative. David Bollier describes the inspiring creation of the digital commons, “independent realm[s] of culture that legally cannot be taken private or commercialized by corporations without the consent of the commoners themselves.” (Chapter 26, “Viral Spiral: How the Commoners Built a Digital Republic of Their Own”). In Part Nine we have two essays that look at the role of the state and public policy. Nancy Neamtan argues that in order for the solidarity economy to be able scale up and emerge from the margins, it’s necessary to push for public policies that support its development, just as the private sector does (Chapter 27, “The Solidarity Economy, State Organization and Political Power”). She highlights the importance of social movements in not only advocating for, but also in co-creating these policies. Julio Chavez discusses his experience as the first leftist mayor in the history of the city of Carora, Venezuela in 2004 (Chapter 28, “Reimagining Society”). In an effort to dislodge the entrenched and corrupt elites, the city successfully pursued a multi-faceted strategy of growing popular power and participatory democracy. This book explores just a small fraction of the ways in which people are building the solidarity economy from the local, to the national, to the international levels. These pages attest to the indomitable nature of our better selves, that part of us that resonates to solidarity, to caring for each other and Mother Earth, to cooperation, to participatory democracy, to equity, to mutual aid and to love. We hope that you find these essays enlightening, and that they bring you hope and inspiration. —The editors

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Part I.

Solidarity Economy Overview

1. Crisis and Opportunity: The Emerging Solidarity Economy Movement Emily Kawano The economic meltdown of 2008 stripped the mainstream economic model of its pretenses: that markets are self-correcting, that the economy will thrive through deregulation and that this model can deliver prosperity, a healthy planet and a healthy society.1 Despite optimistic sightings of recovery on the horizon, in the U.S. unemployment is close to 10 percent, zombie banks stagger uncertainly along, foreclosures and bankruptcies continue to rise, and a wave of credit card defaults is poised to come crashing down, threatening to trigger yet another financial crisis.2 The condescendingly nicknamed PIGS (Portugal, Ireland, Greece and Spain), led by Greece, are wallowing in debt and threatened with bankruptcy. There are fears that if there isn’t a bailout to restore confidence, the contagion will spread throughout the world, including to the U.S. This latest crisis is just the most acute symptom of a chronic illness stemming from the failed model of neoliberalism. If neoliberalism were to have a slogan it would be “markets good, state bad.” The result of 30 years of deregulation, privatization, laissez faire, so-called free trade, and public disinvestment has led to stagnant wages, an erosion of benefits, greater underemployment and economic insecurity, and an ever-widening gap between the rich and the poor. These fundamental fault lines of our economy have not gone away and thus we try to rebuild our economy on thoroughly un-solid ground. A further fault line is the mainstream obsession with economic growth, which is quite simply a death march to the beat of climate change and global warming. Clearly these are scary times. Do or die times. 1 See

for example, Paul Krugman, “How did economists get it so wrong?,” New York Times, 9/2/09; “Thought Control in Economics,” Adbusters #85, Sept-Oct. 2009 2 This paper will mainly have a U.S. perspective because there is still so little written about the solidarity economy here.

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1. Crisis and Opportunity

Crisis and Opportunity This is an alarming picture but also one of opportunity. Crisis brings change. Sometimes the silver lining of a serious crisis is that the ruling economic model is swept away, along with its assumptions and policies, and a new model is crowned king. The credibility of the classical school of thought in economics, which held that markets would correct themselves and that the government should do nothing, was demolished by the Great Depression. The Keynesian model took on the crown of ruling economic model and ushered in an era where government intervention was seen as the antidote for all sorts of “market failures,” such as a languishing economy, poverty, unemployment, irresponsible corporate behavior, and so forth. Then, in the late 1970s, the economy seized up with stagflation (simultaneous high levels of unemployment and inflation, something that took the Keynesians by surprise). This economic crisis led to the ouster of Keynesianism and the crowning of a new economic approach—neoliberalism, or, as it was called at the time, Reaganomics, trickle-down, or supply-side economics. Neoliberalism in many ways was a return to the pre-Great Depression classical school. The lessons learned from the Great Depression have been forgotten and the policy responses to it have been to a great extent undone. Neoliberalism unleashed a wild west of speculation, deregulation, and concentration of power and wealth in the hands of a small corporate and financial elite, which led us to this current economic crisis. Now, the very foundation of the neoliberal model has been shaken to its core—hopefully irreparably. The question is what sort of economic model will wear the crown now? There are two broad options: the first is to turn to a new and improved Keynesianism that has incorporated the lessons of the 1970s and the second is to push for a fundamentally different economic system. While a return to Keynesianism would be an improvement over neoliberalism, it still means that we have a society in service to the capitalist economy, whereas what we want is an economy that serves society. We should not accept a system that as a matter of course produces vast inequality of wealth, ownership, power and privilege, and then redistributes just enough to buy off dissent. We should push for a system that creates shared prosperity, ownership, and power in the first place. In other words we don’t want more bread—we want the whole damn bakery. Throughout the world, there is a growing movement to build such an economic system that is called the solidarity economy. In the U.S., as the epicenter of the current crisis and the leading champion of the neoliberal model that lies at its root, it is particularly critical to shift our economic framework and priorities.

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Part I Solidarity Economy Overview

Into the Light: Seeing the Solidarity Economy The solidarity economy (SE) movement in the United States is very young, yet it builds on a strong foundation of real practices, institutions and policies. This foundation, however, is cloaked and practically invisible in the shadow of the mainstream economy. In addition to strengthening these practices, part of the work of SE activists and participants is simply to bring these elements into the light, to demonstrate that there are many alternative ways of producing, distributing, consuming, and living that are elements of the SE. In addition to making these alternatives visible to the general public and policymakers, it is equally important to raise awareness and linkages amongst solidarity economy practitioners. There are numerous examples of mapping the solidarity economy in order to do just this. The most advanced example has been carried out by the Brazilian Forum on the Solidarity Economy which is now in its third round of mapping the more than 22,0000 solidarity economy enterprises throughout the country. The map3 is searchable geographically by goods and services produced and needed. It is linked to another internet platform that facilitates exchanges. Thus solidarity economy enterprises can find each other, source inputs and sell their products, thereby building what are called solidarity economy chains or supply chains. This sort of economic integration is critical to strengthening, diversifying and scaling up the solidarity economy.

Defining the Solidarity Economy in the U.S. As a relatively new framework in the U.S. and as a concept that is committed to pluralism, it is natural that there are different definitions of the solidarity economy. Nonetheless, there is a discernable core set of principles. In the U.S., we based our definition on the principles that were common to practically all of the definitions from around the world: solidarity, sustainability, equity in all dimensions, participatory democracy and pluralism. We understand that there are many different paths that serve to uphold these principles. The solidarity economy approach rejects the need for a vanguard, a blueprint or rigid ideology. Rather it builds organically on existing and emergent practices, informed by principle as well as theory. It is a humble project that does not presume to have all the answers and that claims this humility as a strength, not as a weakness. This pluralistic approach is in resonance with the spirit of building, in the words of the Zapatistas, “a world where many worlds fit.” At the same time, although the 3

Brazilian Forum on the Solidarity Economy website : http://www.fbes.org.br/

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1. Crisis and Opportunity SE is a very big tent, it does not include everything. Through experience, research, analysis, and theory, we will continue to develop an understanding of which practices, policies, and institutions are more in tune with the solidarity economy than others. We return to the discussion of definition after considering new framing and specific examples of the solidarity economy.

The Way Forward: A New Story Homo economicus The bankruptcy of neoliberalism opens up an opportunity to tell a new story. For despite its pretenses, economics is not a science. It is a story. If we want to transform the economy, we need a new story with a new main character. The protagonist of the mainstream neoliberal story is homo economicus or economic man. Homo economicus is a rational, calculating, self interested fellow who seeks the greatest payoff for the least amount of effort or cost. His calculations are made from the perspective of himself as an individual, not on the basis of the larger community, environment, nation, or world. An economy fashioned around such a self centered character is bound to result in exactly the kind of economic meltdown that the world is currently reeling from. Thousands of bankers, investment brokers, Wall Street traders, mortgage lenders, realtors, and developers pushed their activities to the brink of legality and in some cases beyond. To a great extent, they were doing just what they were supposed to be doing—pursuing the greatest payoff for the least amount of effort. Thus it was more profitable to engage in ever more complex and ‘exotic’ financial speculation, fueled by the housing bubble and high risk lending. Eventually, it had to collapse. The subsequent meltdown was not the result of some rogue element, but was a predictable outcome of a system built around the assumptions of homo economicus. Capitalism is systemically prone to crises, and economic models built around the assumptions of homo economicus not only create a blind spot with respect to oncoming crises, but contribute to them as well.4 Homo economicus has never been considered an adequate characterization of human nature by anyone but neo-classical economists. Rather he was plucked out of his more complex self for the purpose of modeling economics. There is a wealth of evidence that people, as often as not, do not behave like homo economicus, but rather like homo solidaricus—humans in solidarity. 4

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“Goodbye, Homo Economicus,” Kaletsky, Anatole, Prospect Magazine, 3/28/09 http: //www.countercurrents.org/kaletsky280309.htm

Part I Solidarity Economy Overview Altuism, reciprocity, solidarity, cooperation, heroism, love, social norms and status—these are all motivators that are just as powerful, if not more so, than material, individual gain. It makes just as much sense to start with the economic actor homo solidaricus as it does to start with homo economicus. In fact these two sides of human nature need to be reunited. We should take our cue not only from the Darwinian notion of survival of the fittest, but just as much so from ecological models of interdependent symbiosis and cooperation. Take for example, the leafcutter ant that grows gardens of fungi for food. They are able to keep this fungus free of a very common and deadly type of disease because of a bacteria that grows on the ant which produces a protective anti-biotic. This three way symbiotic relationship has been working successfully for millions of years, yet rather than patterning our economy on this type of ecological relationship, we have a system that predominantly celebrates the competitive and individualistic side of life.

Metamorphosis Our new story also needs a fitting metaphor for change. One that is particularly apt is metamorphosis. When a caterpillar spins its chrysalis it begins a metamorphosis. Imaginal cells begin to appear. These cells have a different vision of what the caterpillar could be and in fact they are so different from the original cells that they are attacked and killed by the immune system. Still, more and more imaginal cells continue to develop. They begin to find each other and, recognizing each other as part of the same project of metamorphosis, they being to form clusters. Eventually these clusters of imaginal cells begin to work together, taking on different functions, and building a whole new creature. The body of the caterpillar dissolves into a rich nutrient soup to feed the change. As the imaginal cells specialize into a wing, an eye, a leg, they build a new organism which emerges from the chrysalis as the butterfly. In the same way, we can think of the many ‘solidaristic’ economic practices as imaginal cells, existing in a hostile environment. These imaginal cells must first recognize each other as part of the same project—an economic metamorphosis into a just and sustainable economy. By coming together, these cells can begin to coordinate and connect in order to form a coherent economic system with all the ‘organs’ that are necessary to survive, such as finance, production, distribution, investment, consumption, and the governance. The imaginal cells of the solidarity economy are at present fairly isolated, although there are clusters forming at an increasing rate. We have an advan-

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1. Crisis and Opportunity tage over the butterfly in that we already have imaginal cells that are differentiated into different areas of economic activity - production, distribution, consumption, financial, etc. Some of these would be considered alternatives, such as complementary currencies, or cooperatives or community supported agriculture. Others are less obvious pieces of the SE because they are part of the mainstream economy, like public education, social security, and some government policies such as health and safety regulations.

Solidarity Economy Solutions to the Crisis Here are some examples of imaginal cells of the SE in the U.S. They offer pathways to recovery that don’t set us up for yet another round of boom and bust. We focus on some successful strategies in three critical areas: housing, finance and jobs. All of these areas played key roles in brewing the crisis: speculation in housing and finance led to the boom and bust, while degradation of jobs and wages left families deep in debt.

Taking the speculation out of housing Community Land Trusts (CLTs) are non-profit organizations that create permanently affordable homes by taking housing out of the speculative market. Here’s how it works: the CLT owns the land and leases it to the homeowner for a nominal sum. The homeowner pays for the home, not the land. The homes in the Champlain Housing Trust in northwestern Vermont are typically half the price of a comparable open-market unit. Owners can sell their houses at a fair rate of return, but the selling price is capped in order to maintain permanent affordability. Community land trusts have been growing rapidly. In the last seven years the number of CLTs doubled from around 100 to 200 throughout the country. And they are successful in other ways as well. A study conducted in December 2008 showed that foreclosure rates among members of 80 housing trusts across the United States were 6 times lower than the national average.5 In the wake of the disastrous boom and bust of the housing market, this is a model whose time has come. We should demand that the government channel public resources in expanding CLTs throughout the country.

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“Community land trusts lower risk of losing homes to foreclosure,” National Community Land Trust Network, 3/17/09, http://www.cltnetwork.org

Part I Solidarity Economy Overview

Finance for need not greed Community Development Financial Institutions (CDFI) work for economic development in poor communities that are under-served by traditional banks. CDFIs make loans to people and enterprises that wouldn’t qualify for a traditional loan because they would be considered to be too risky. They take these risks in order to nurture community economic development and still outperform traditional financial institutions. For example, among the 200 credit unions in the National Federation of Community Development Credit Unions, which serve predominantly low-income communities, delinquent loans are about 3.1 percent of assets compared to a national delinquency rate on sub-prime loans of 18.7 percent. This impressive track record is due to responsible lending and various kinds of advice and support provided by the credit unions. A credit union is a cooperative financial institution, democratically owned and run by their member/depositors. As democratic institutions that serve the needs of their members and communities, credit unions and in particular, community development credit unions, are a critical piece of the solidarity economy.

Green jobs and economic democracy Creating green jobs is desirable, yes. But we also have an opportunity to create green jobs that are good jobs as well. By good jobs we mean jobs with decent pay and benefits, worker participation and satisfaction, and stability. Research shows that worker ownership improves outcomes on all of these fronts.6 Canadian research has shown that coops have much lower rates of failure after ten years than conventional businesses. Worker cooperatives have a built-in commitment to workplace democracy, worker ownership, and support for the welfare of the local community.7 Labor and community activists are already pushing to ensure that poor people and people of color are able to access green jobs. The ILO (International Labor Organization) recognizes that cooperatives are particularly well suited for creating green jobs in marginalized communities.8 Cooperatives currently provide over 100 million jobs around the world, 20% more than multinational enterprises. Two recent developments in the U.S. signal a movement of cooperatives 6

7 8

“Effects of ESOP Adoption and Employee Ownership: Thirty years of Research and Experience,” Steven F. Freeman, University of Pennsylvania, http://repository. upenn.edu/odworkingpapers/2 “Statement of Co-operative Principles,” International Co-operative Association, http: //www.ica.coop/coop/principles.html See ILO slideshow on Climate Change and the Role of Cooperatives http://www.ilo. org/dyn/media/slideshow.curtainUp?p_lang=en\&p_slideshow_id=18

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1. Crisis and Opportunity into the mainstream. In a remarkable and historic move, the United Steelworkers, the largest industrial union in N. America, announced a collaboration with Mondragon Cooperative International9 to establish manufacturing cooperatives in the U.S. and Canada, 10 Mondragon is the world’s largest and most successful industrial workers cooperative, located in the Basque region of Spain, employing almost 100,000 workers in 260 cooperative enterprises that include manufacturing, a bank, housing, a university, R&D, a social security system, and retail shops. This collaboration is enormously significant in that it signals to the labor union movement as well as the wider public that cooperatives are a way of creating “our own jobs.” The focus on manufacturing offers the hope of rebuilding communities that have been devastated by plant closings. Rising oil and transportation prices, combined with the falling dollar are creating the conditions for a manufacturing renaissance in the U.S.11 Imagine if this renaissance could be infused with democratic worker ownership. The second development is Cleveland’s Evergreen Cooperative Initiative which recently launched a $5.8 million state of the art green laundry, a hydroponic greenhouse the size of a football field and a photovoltaic installation company—all of them worker cooperatives. These three cooperatives are planned as the first in a network of local worker cooperatives and were in part inspired by a visit of a Cleveland delegation to Mondragon. The development of this cooperative network is envisioned as a way of creating jobs and revitalizing depressed neighborhoods of Cleveland. There are but a few of the many examples of solidarity economy practices. The critical next step is for these economic imaginal cells to recognize each other as part of the same transformational project and to work together to achieve metamorphosis. In summary, there is a vast array of practices and policies upon which to build the solidarity economy. The challenge is to foster self identification and engagement of these elements with the SE framework. This will require an appeal to both principles and practicality.

9 10 11

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Mondragon website: http://www.mondragon-corporation.com/language/en-US/ENG. aspx The full text of the Agreement is available here: http://assets.usw.org/Releases/ agree_usw_mondragon.pdf “Can the U.S. Bring Jobs Back from China?” Business Week, 6/19/08 http://www. businessweek.com/magazine/content/08_26/b4090038429655_page_3.htm

Part I Solidarity Economy Overview

Questions and Debates Drawing the line: what are the boundaries of the solidarity economy? The definition of the solidarity economy and the identification of its boundaries is an ongoing process, informed through debate, experience, research, organizing and reflection. A question that consistently arises concerns structure versus intent. Are there structures that are inherently consistent with the solidarity economy, even if practitioners of individual enterprises behave in ways that are inconsistent with its principles? For example, what if a worker cooperative engages in environmentally destructive production? Conversely, are there structures that fall outside of the solidarity economy, despite the good intentions of particular firms? For example, is a socially responsible capitalist corporation outside the bounds of the SE by virtue of its class structure in which workers generate the profits, but the owners reap and control it? In the U.S. these are still open questions and this paper does not presume to offer the definitive answer, but some framing guidelines are offered for consideration: Multi-dimensional: The principles of the solidarity economy are multidimensional, and various practices might be aligned in one dimension, but not another. For example, a cooperative is by definition democratically owned and controlled, but may engage in environmentally damaging production. Perfection is not a requirement. Rather, the solidarity economy as a movement works to help all of its constituent parts develop greater alignment with the multiple dimensions of the SE. Social movements struggling for environmental justice and sustainability as well as those fighting for the rights of women, people of color, workers, poor people, immigrants, non-heterosexuals, indigenous peoples, and people with disabilities that join with the SE help to make us all accountable. This is not simply a matter of finger pointing, but rather of helping each other find better ways of working through best practices, training, and mutual support. At the same time, the SE would exclude a particular enterprise or practice that consciously and deliberately violates SE principles. Spectrum of Alignment: Furthermore there are varying degrees of alignment. For example, a social enterprise, by definition puts social aims at the core of its mission, but may maintain a traditional class structure of owner and worker. To further complicate matters, there are also differing opinions regarding the meaning of solidarity, democracy, equity or sustainability. For example, social solidarity does not mean the trickle down presumption that ‘what’s

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1. Crisis and Opportunity good for General Motors, is good for America’ and must go beyond corporate philanthropy. Wal-mart, for example, topped the 2007 list of corporate giving in the U.S. with donations of $296.2 million, yet no one would argue that Wal-mart should be part of the solidarity economy. There are many other instances where it is not so clear and we must accept that debates about how these principles actually play out on the ground are part of the process of growth and development. Segments of Operation: Many SE practices have distinct segments of operation, and these too can be aligned to varying degrees with SE principles. For example, fair trade producers may be required to form cooperatives, agree to gender equality and sustainable methods of production, yet distributors such as Nestle’s, which has a certified fair trade ‘Partners Blend,’ engages in questionable practices such as aggressively pushing baby formula in poor countries which can lead to serious health risks, and has been linked to paramilitary death squads in Colombia, and child labor in the harvesting of cocoa beans. Intent: In the discussion of the various elements of the solidarity economy, a fair question arises as to whether the practitioners consider themselves part of the solidarity economy. The answer is that most of them don’t. The reasons are many. The most common reason is that the term and framework of the solidarity economy is still almost unheard of in the U.S. This makes education and raising public awareness, both within and outside of the SE, a top priority. Nonetheless, regardless of the awareness of practitioners about the SE, it is still useful to identify structures that are more SE friendly. A more serious challenge is that many SE practitioners don’t particularly resonate to the goal of fundamental economic transformation. Some practitioners are primarily involved for practical reasons, and are not politically motivated. Others see their enterprise as fitting in and supporting capitalism, albeit a kinder and gentler version than neoliberalism. We hope that many of those who are not politicized will be won over by the vision of a more just and sustainable system, and by the argument that a solidarity economy will create a more supportive environment for their enterprise or initiative. At the same time, individual enterprises may fall outside the boundaries of the SE because they oppose some or all of the core principles.

Relationship to social movements The solidarity economy movement is part of a broad spectrum of social movements that are working to transform our economy and society. There is a distinction between solidarity economy practices and practitioners and

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Part I Solidarity Economy Overview the movement. For example, solidarity economy enterprises, such as cooperatives, do not make a movement. The solidarity economy movement includes practitioners, organizers and advocates who work to support, build, and connect these practices. The solidarity economy movement focuses on building alternative practices, institutions and policies, while other social movements have a greater focus on resistance and building power to achieve demands for social and economic justice. These are two ends of a spectrum—groups in between practice a mixture of both—but the important thing is to see the spectrum as one movement that needs to be united in order to achieve justice and transformation. The fight for justice and dignity—for poor people, workers, people of color, women, indigenous peoples, immigrants, the LGBTQ community, and people with disabilities—is a good in and of itself. Amongst progressives, who could deny the justice of struggles for living wages, good jobs, worker rights, decent and affordable housing, good education, a safety net and a clean environment? Who could deny the justice of fighting against ICE12 raids, police brutality, human trafficking, homophobia, corporate domination and global warming? All of these struggles can be transformative—of individuals, of communities, the nation and even the world. For example, the civil rights, feminist, and the environmental movements created change on all of these levels. Yet capitalism has been perfectly able to absorb all of this change and grow even more brutal and powerful. If we are to transform capitalism we need to unite these struggles for equity, democracy, and sustainability with the solidarity economy movement to build concrete alternatives to profit and market driven business, finance, money, trade, budgeting, agriculture, housing, and energy. We need to take seriously the endeavor to build our own economy. In doing so we build not only a viable alternative economic system, and the know-how to run it, but we also build power by developing economic assets—businesses, banks, money, trade systems, jobs, technology and so forth. Resist and build are, or should be, two sides of the same coin and there is much work to do to bring them together.

Role of the state —autonomista vs state engagement There is a debate with the SE movement about the role of the state. At one end of the spectrum are movements that eschew state involvement such as

12 ICE

- Immigration and Customs Enforcement

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1. Crisis and Opportunity the autonomista or horizontalism movements13 and at the other end of the spectrum are examples where the state is in full play and support of the solidarity economy, such as Brazil and Venezuela. In between are countries where the government is engaged to a partial extent, for example in Canada and in many parts of Europe. While some definitions of solidarity economy focus on those activities that are located within neither states nor markets, our definition sees the SE as an alternative economic system and thus includes both the state and the market. Some fellow travelers argue that the SE should reject markets entirely because they inherently create inequitable class relations.14 Some argue that the SE should not engage with the state, either because it is inherently oppressive, or because it is at present too much at odds with the SE. Others argue that we need to use markets in a way that supports the welfare of people and planets and that the state is critical in negotiating local, regional, national and international rules and relationships. Even those who would welcome the withering away of the state as well as the market would have to accept that neither are likely to disappear anytime soon and therefore figuring out how to harness markets and the state for the common good is an important part of building the solidarity economy. The present reality of the economic crisis demands that, at the very least, we need to take defensive action against the harm done by unfettered markets and state policies that undermine the solidarity economy. For example, agricultural regulations and subsidies overwhelmingly favor large-scale corporate agriculture. Open source culture is obstructed by laws that actually make it hard to give ideas away for free. U.S. pension law makes it nearly illegal to use union pension funds for progressive investment. We need to at least create a level playing field that doesn’t disadvantage SE initiatives. Better yet, we should tilt the playing field in favor of the SE on the grounds that it fulfills social, economic and environmental needs. As a framework that is committed to pluralism, the SE movement welcomes lively and constructive debate on these issues. Different paths will make sense in different places, cultures and times.

13

14

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Wallerstein, “New Revolts Against the System”; Marie Kennedy & Chris Tilley, “Making Sense of Latin America’s Third Left,” New Politics, #44, http://www.wpunj.edu/ newpol/issue44/Kennedy-Tilly44.htm; Sixth Declaration of the Lacandon Jungle, Zapatista Army of National Liberation (EZLN) http://www.inmotionmagazine.com/ auto/selva6.html Parecon: Life After Capitalism, Michael Albert, Verso, 2003. see also resources on the ZNet website: http://www.zmag.org/znet/places/Parecon

Part I Solidarity Economy Overview

Conclusion Clearly there is a tremendous wealth of practices, policies and institutions upon which to build the solidarity economy. At present the many elements of the SE that exist in the U.S. are like the imaginal cells in the earliest stages of metamorphosis—isolated from each other and perceived and sometimes attacked by the dominant system as ‘alien.’ We stand at a crossroad in a nutrient rich environment created by the current economic crisis. The challenge is for these many imaginal cells to recognize themselves in each other, and come together in a common process of metamorphosis to a more just and sustainable world.

About the Author Emily Kawano is the Director of the Center for Popular Economics and the U.S. Solidarity Economy Network. She received her Ph.D in economics from the University of Massachusetts, Amherst. While working in N. Ireland, she served on the N.I. Social Economy Network Working Group and worked with two Belfast Community Development Agencies to develop and deliver a social economy training program for community groups seeking to start up social enterprises.

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2. Solidarity Economy: Key Concepts and Issues Ethan Miller1 People across the United States and throughout the world are experiencing the devastating effects of an economy that places the profit of a few above the well being of everyone else. The political and business leaders who benefit from this arrangement consistently proclaim that there are no real alternatives, yet citizens and grassroots organizations around the world are boldly demonstrating otherwise. A compelling array of grassroots economic initiatives already exist, often hidden or marginalized, in the nooks and crannies of the dominant economy: worker, consumer and producer cooperatives; fair trade initiatives; intentional communities; alternative currencies; community-run social centers and resource libraries; community development credit unions; community gardens; open source free software initiatives; community supported agriculture (CSA) programs; community land trusts and more. While incredibly diverse, these initiatives share a broad set of values that stand in bold contrast to those of the dominant economy. Instead of enforcing a culture of cutthroat competition, they build cultures and communities of cooperation. Rather than isolating us from one another, they foster relationships of mutual support and solidarity. In place of centralized structures of control, they move us towards shared responsibility and directly democratic decision-making. Instead of imposing a single global monoculture, they strengthen the diversity of local cultures and environments. Instead of prioritizing profit over all else, they encourage commitment to broader work for social, economic, and environmental justice. These are the already-planted seeds of what many organizers and activists around the world are calling a “solidarity economy.” Our task is not to invent a new economic blueprint from scratch and then convince the world to adopt it, but rather to participate together in ongoing work to strengthen, 1 Gratitude

to Olivia Geiger, Emily Kawano and Michael Johnson for thoughtful comments and suggestions.

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2. Solidarity Economy: Key Concepts and Issues connect and build upon the many economic practices of cooperation and solidarity that already exist. We do not need to wait for a revolution or for “capitalism to hit the fan.” We can begin here and now, in our communities and regions, connected with others around the world, to construct and strengthen institutions and relationships of economic solidarity. Solidarity economy is an open process, an invitation. The concept does not arise from a single political tradition or body of ideas. Its very nature and definition are in continual development, discussed and debated among its advocates. Seeking to “make the road by walking” rather than to push a closed or finalized ideology, solidarity economy is a “movement of movements” continually seeking connections and possibilities while holding on to the transformative commitment of shared values. In such a spirit, this chapter will present neither a complete nor an “objective” view of solidarity economy. Writing as an activist and a scholar in the U.S. context, I seek to contribute towards a concept and practice of solidarity economy that might be useful and appropriate to making change here in the “belly of the beast.” While I draw on some writing–and much inspiration–from the work of those in other parts of the world, I also recognize and honor the responsibility that we have to forge our own ideas about solidarity economy. I hope that this chapter can contribute to that conversation.

A Brief History of the Concept “Solidarity economy” was used as an economic organizing concept as early as 1937, when Felipe Alaiz advocated for the construction of an econom´ıa solid´ aria between worker collectives in urban and rural areas during the Spanish Civil War.2 Contemporary uses of the term appear to have emerged in both France and South America–specifically Colombia and Chile–in the early 1980s. European concepts of ´economie solidaire emerged from a long tradition of “social economy” activism and policy oriented toward addressing social and economic exclusion through “third sector” alternatives to conventional market and state-centered institutions. While the social economy often sought to supplement or compliment the existing social order , solidarity economy advocated a more transformative approach to economic activism. In Colombia, economia solid´ aria emerged out of the country’s cooperative movement and understood as a concept that could place cooperativismo (cooperativism) into a broader, and more political, context of a 2 Alaiz,

Felipe Lorda. 1937. Por una econom´ıa solidaria entre el campo y la ciudad. Barcelona: Oficinas de Propaganda, CNT, FAI.

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Part I Solidarity Economy Overview vision for building a different economy.3 In Chile, the concept was developed more broadly and theoretically by economist Luis Razeto as a cross-cutting “sector” of the economy consisting of diverse enterprises that share a common “economic rationality” of cooperation and solidarity. The task of those seeking economic transformation, said Razeto, should be to connect and strengthen these already-existing alternatives.4 Building off of these conceptualizations, economia solid´ aria developed by the mid 1990s into a growing social movement with a sharedresearch agenda and a powerful network of economic activity throughout Latin America, Europe and Canada. In Brasil, work on solidarity economy was particularly strong and included the development of university research programs, support “incubators” for cooperatives and other solidarity-based enterprises, and the growth of extensive local, regional and national networks linking solidarity economy initiatives and practitioners. Similar efforts developed in France, Spain, Peru, Argentina, Mexico and Quebec, and in the late 1990s many of these networks began to make connections. The International Solidarity Economy Group (Grupo Internacional de Econom´ıa Solidaria, or GES) convened a meeting in Lima, Peru in 1997 that brought together, for the first time, representatives from solidarity economy efforts around the world. It was the birth of a truly international movement and the beginning of what later became the Intercontinental Network for the Promotion of the Social Solidarity Economy (Red Intercontinental de Promoci´ on de la Econom´ıa Social Solid´ aria, or RIPESS). Growth continued on local, national and international levels and by the late 2000s–thanks in large part to RIPESS and to the amplifying role of the World Social Forums–the solidarity economy movement was gathering strength in new regions. The third international conference was held in Dakar, Senegal in 2005. The first Asian Forum on the Solidarity Economy, held in 2007 in Manila, marked the birth of the Asian Alliance for Solidarity Economy. The U.S. Solidarity Economy Network was initiated that same year at the first U.S. Social Forum in Atlanta, Georgia. With a fourth international meeting held by RIPESS in Luxembourg in 2009 and a fifth planned for 2013 in Asia, this much is clear: in the face of a dominant international economy centered on the growth of profits for a small elite, an emerging global network of initiatives around the world is asserting that another economy–an economy for people and planet–is not only possible, but is already being born. “We are building,” writes Paul Singer from Brasil, 3 Arias,

Deisy et. al. 2006. Estado del arte de la econom´ıa solid´ aria en Bogot´ a. Bogot´ a, Colombia: Universidad Colegio Mayor de Cundinamarca. 4 Razeto, Luis. 1984. Econom´ ıa de Solidaridad y Mercado Democr´ atico. Santiago de Chile: Ediciones PET.

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2. Solidarity Economy: Key Concepts and Issues “in the midst of contradictions, in the cracks of capitalism, a new type of society and economy.”5

Solidarity Economy as a Process One of the great strengths and innovations of the solidarity economy movement is its ability to move beyond the factionalism that has so often weakened historical efforts to imagine and build other economies. Indeed, when faced with the question of economic alternatives, many activists have often been tempted to build or to seek a blueprint, a Big Plan, for how “the economy” should operate. While such “blueprints” for alternative economic structures can be very useful as tools for clarifying and motivating our work, they can be problematic as core social change strategies for at least two reasons. First, blueprints often miss the richness of what might emerge from a collective process of imagination and creation; no one person or group is capable of figuring out an economic structure for millions of others to live in. Second, they can lead to a very unfortunate choice of political paths: blueprint in hand, we either convince everyone that we’re right (unlikely) or take over the government and impose our plan on everyone (unethical). Either way, we’ve failed to build a substantially different kind of economy and society, and we’ve failed to live our values. A solidarity economy approach takes a very different path. Beginning from a core belief that people are deeply creative and capable of developing their own solutions to economic problems, and that these solutions will look different in different places and contexts, a solidarity economy approach seeks to make existing and emerging alternatives visible and to link them in mutually-supportive ways. The core idea is simple: alternatives are everywhere and our task is to identify them and connect them in ways that build a coherent and powerful social movement for another economy. In this way, solidarity economy is not so much a model of economic organization as it is a process of economic organizing; it is not a vision, but an active process of collective visioning.

5 Quoted

in Guerra, Pablo. 2004. “Econom´ıa de la solidaridad: consolidaci´ on de un concepto a veinte aos de sus primeras elaboraciones.” Revista OIKOS. Universidad Cat´ olica Cardenal Ra´ ul Silva Henr´ıquez, Santiago de Chile.

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Part I Solidarity Economy Overview

Rethinking Economy and Uncovering Possibilities “The universe is made of stories,” wrote Muriel Rukeyser, “not of atoms.”6 How we view the world and how we act in the world is profoundly influenced by the stories that we tell about reality. These stories help to determine what we see, what is invisible, and what we believe to be possible or impossible. The dominant stories that economists and many others tell about the nature of “economy” deeply shape our collective sense of possibility and imagination regarding economics and economic transformation. A crucial element of a solidarity economy approach is to recognize the ways that conventional economics has described reality so as to make invisible a whole host of practices, initiatives, human relationships and motivations, and thus to limit our abilities to imagine economic alternatives. Acknowledging this, and working to make these other forms of economic life visible and valued, opens up the terrain upon which solidarity economy organizing does its work. The simplest version of the dominant economic story suggests that we live inside of a single economic system (The Economy), called “capitalism” or the “market system” (or any number of other names) that is regulated by the law of supply and demand. The basic building blocks of this economy are the rational, self-interested individuals and groups who seek to satisfy their supposedly endless desires for growth and accumulation (profit-making) in a world of scarce resources. Competition is the name of the game and economics is about understanding this competition and all that it entails.7 A more complex version of the story suggests that economic space left unoccupied by capitalist markets is occupied by “the state,” which acts as both an accomplice to the economys growth and as a safeguard for when the economy falters or fails to deliver. The tension plays out endlessly in public conversation about economic alternatives: how much, or how little, regulation should the state impose on the market? Trapped on a “spectrum” between two poles, we swing back and forth on the political-economic pendulum. This story obscures more than it clarifies. Behind the veil of the market/state vision of economy are a whole host of other kinds of economic activities, behaviors and motivations. These are forms of economy–many of them built on relationships and ethics of care, cooperation and solidarity 6 Rukheyser,

Muriel. 1968. The Speed of Darkness. New York: Random House. story I refer to here is not meant as an attempt to reflect a consensus within the discipline of economics. Indeed, few economists would accept such a simple depiction. Rather, it is meant to describe the general outlines of a story that circulates throughout our wider society, reproduced in popular media and in dominant public discourses.

7 The

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2. Solidarity Economy: Key Concepts and Issues instead of cooperation and individualism–that do not fit easily within the frameworks of conventional economics. Instead of telling a narrow story about economies as varying combinationsof market and state, a solidarity economy approach suggests that we define economics much more broadly as all of the diverse ways that human communities meet their needs and create livelihoods together. To aid us in identifying these diverse economic activities and relationships, it is helpful to visualize economies as interconnected flows made up of different “moments,” or spheres of activity, and to examine what kinds of cooperative and solidarity-based forms of economic organization already exist in each sphere. Where, in the diverse economy, are people engaging in activities and relationships that embody values of solidarity, cooperation, equity, sustainability, democracy and pluralism? What kinds of economic relationships might open up space for recognizing and deepening these values in our communities and in our societies? Asking such questions through a diverse economy lens allows us to see myriad possibilities in each sphere of economic life: • Creation. Where do the basic “raw materials” come from? Here, in the form of what we might call “ecological creation” and “cultural creation,” we find a powerful gift economy. Ecological creation involves earth processes—birth, growth, photosynthesis, respiration, geological and chemical transformation, etc.—that are the original points of production and sustain and generate all life and culture. The moral responsibility to honor and share these collective gifts from the world is a key starting point for a solidarity economy perspective. Likewise, cultural creation offers resources such as language, stories, music, ideas, and skills. Generated and transformed over millions of years by collective creativity, imagination, intuition, observation and experimentation, they are gifts passed down from our ancestors and should be shared and held in common trust. • Production. How are goods and services produced in ways that foster cooperation and solidarity? Here we can identify structures such as worker cooperatives, democratic nonprofits, grassroots producer cooperatives, forms of household production, self-employment and selfprovision (hunting, fishing, gardening, scavenging and “do-it-yourself” projects), and family or community care provision. We might also examine the possibilities for transforming certain “conventional” forms of productive organization such as municipal and state-owned enterprises and values-based “high-road” businesses into more robustly democratic and cooperative institutions.

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Part I Solidarity Economy Overview • Transfer and Exchange. How do goods and services move from production to consumption in ways that enact solidarity values? Forms of solidarity exchange include community currencies, barter networks, fair trade, “solidarity markets,” and the use of sliding scale pricing. Transfer also occurs through one-directional movements such as progressive/redistributive taxation and Robin Hood-style reappropriation (known by those whose excessive resources are being appropriated as “theft”). Gift economies, in which reciprocity is established through giving without expectation of return, are also powerful and widespread means of transferring resources. • Consumption or Use. Through what kinds of cooperative institutions are people and communities organized as consumers? Examples include consumer cooperatives, housing cooperatives, collective selfprovisioning, community supported agriculture initiatives and institutions of participatory, democratic municipal and state citizenship (participatory budgeting, neighborhood councils, etc). How are the demand sides of markets organized socially and institutionally in ways that encourage solidarity? Here we can identify various forms of “ethical consumption” that animate local, ecological and fair trade purchasing practices and institutional “socially-responsible” purchasing policies. • Surplus Allocation. How is surplus, generated in the economic cycle, appropriated and used in ways that foster solidarity values? How does surplus re-enter and re-invigorate the cycle in ways that support other solidarity-based initiatives? Here we have institutions of solidarity savings financing such as credit unions, cooperative loan funds, rotating savings and credit associations, gifting and sharing practices. We also have activities of composting and recycling (also forms of investment) that involve the return of material surplus back into the human productive system and the larger life system. • Governance. What kinds of institutional policies, rules and procedures shape a supportive context in which solidarity-based initiatives can thrive? These might include elements of organizational and business governance (democratic decision-making, grassroots accountability, cooperative and equitable internal economic structures, etc) or policies and procedures implemented by local, state or federal governments (participatory budgeting, cooperatively-structured service provision, financing support, incentives, favorable legal structures, etc).

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2. Solidarity Economy: Key Concepts and Issues

By moving beyond the state/market dichotomy and making these solidarity-based economic practices visible, this diverse economy perspective gives us some of the key strategic tools we need to begin charting out paths for solidarity economy education and organizing. In many regions around the world, solidarity economy organizers have initiated mapping projects to identify and make visible potential or existing actors in solidarity economy movements. The Brasilian government, in collaboration with the Brasilian Solidarity Economy Forum (FBSES), has supported a substantial national mapping project that identifies and maps democratically run enterprises across the nation. An initiative in Italy called Zoes has developed software that facilitates the mapping of diverse social and solidarity economy initiatives including ethical banks, fair trade buying clubs, housing cooperatives and more. In the U.S., a number of local groups have begun to produce “maps” of their local solidarity economy initiatives and the U.S. Solidarity Economy Network is exploring ways to support and connect such efforts.

Naming Our Practices Through Shared Values One important way to connect diverse initiatives and build a movement is through the creation of shared identity, naming these practices as part of an emerging “solidarity economy.” But what is the content of this naming? What does it mean to say that diverse groups are part of a shared project

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Part I Solidarity Economy Overview of building a solidarity economy? For many organizers around the world, the core elements that bind us all together are values. “Despite their differences,” writes Jean-Louis Laville, “these practices share characteristics that allow for parallels: they all attempt to introduce the notion of solidarity into economic activities, thus advocating a solidarity economy.”8 While all economic relationships are social in one form or another, solidarity names a specific mode of relationship: it begins with a recognition of interdependency. In relationships animated by many different dynamics of power, privilege, inclusion, exclusion, cooperation and exploitation, our lives and fates are bound together with myriad others. Solidarity is enacted when we recognize these connections, take active responsibility for our own participation in them, and work to simultaneously transform those relationships that are destructive or exploitative and to cultivate those relationships that embody care and mutual respect for those with whom we are connected. While articulated by numerous solidarity economy networks with different words and nuances, clear commonalities can be seen. Cooperation and mutuality are emphasized above unfettered competition. Individual and collective well being–defined by people and communities rather than distant “experts”–are prioritized over profit and financial accumulation. Economic and social justice (or equity)–struggles to end social and economic oppression in its many forms–are seen as key priorities. The responsibility to work towards ecological health–developing respectful and sustainable relationships with our ecosystems and their other inhabitants–is a core focus. Robust democracy at all levels of society and of organizations, placing people and communities as the active agents of their own lives and development, runs like a thread weaving other values together. And finally, these values are articulated with a strong emphasis on diversity and pluralism–the belief that there can be no “one way”; that people, working together, must forge their own unique paths toward freedom. As the U.S. Solidarity Economy Network describes, this is a pluralism that encourages “different forms in different contexts, open to continual change and driven from the bottom-up.”9 A number of substantial questions may be raised at this point. The values of solidarity economy, like all values, are subject to interpretation; how do we determine if a given initiative is living up to them? Isn’t the “devil in the details” in terms of how well any given group achieves these lofty ethical goals? And isn’t it the case that no one initiative or project, given the complex world that we live in, will ever fully embody these values? 8 Quoted 9 U.S.

in Guerra, 2004. Solidarity Economy Network, http://www.ussen.org

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2. Solidarity Economy: Key Concepts and Issues What to do then? And how do we avoid cooptation? What happens if a group pays lip service to these values but does not, in fact, demonstrate an active commitment to following through? Who decides what “following through” really means? Indeed: how can such a loose framework, so full of big questions, form the basis for a substantial political movement? These are essential questions, and debate around them lies at the heart of the solidarity economy movement. The task is not to decide on final answers to difficult questions but rather to allow the questions and struggles themselves to animate, inspire and connect. The shared values of solidarity economy are not meant to function as a set of fixed, schematic criteria that can be objectively measured and evaluated or applied evenly and universally across multiple contexts, but rather as “coordinates” for shared ethical debate and learning.10 Instead of dictating the details of our actions or enforcing an impossible purity, these value coordinates create a metaphorical gathering space: we are invited into a room called “solidarity” and there, together, in an ongoing process of experimentation, constructive debate, mutual challenge and collective learning, we create provisional, working definitions of shared, enacted values. This approach not only upholds the open, bottom-up approach that solidarity economy seeks to embody, it is also strategically important. It recognizes that while many people, groups and movements agree with the general values articulated by a solidarity economy approach, many fewer (if any) are actually able to claim success at fully achieving them all. A movement that both embraced such broad values and required everyone to live up to them all, all of the time, would be a small movement indeed. The key, instead, is to convene those who–while far from pure–share a committed aspiration toward enacting these values. A commitment to both self-transformation and to the transformation of the world in the service of these shared values is a fundamental binding element of a solidarity economy approach.

Making Connections Developing identities and mutual recognition around shared values is one important starting point for making connections and building economies and movements, but it is only that: a beginning. What remains is the substantial work of building concrete relationships, both social and economic, 10 This

concept of “coordinates” for collective ethical debate and learning was proposed by Massimo De Angelis (“Reflections on Alternatives, Commons and Communities.” The Commoner. n.6, Winter 2003) and further developed by J.K. Gibson-Graham (A Postcapitalist Politics. Minneapolis, MN: University of Minnesota Press, 2006).

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Part I Solidarity Economy Overview between and among solidarity economy initiatives that embody these values and increase the conditions of possibility for these values to flourish more broadly. This is not simply a matter of debating and envisioning, or of facilitating knowledge of each others’ activities and innovations, though such work is crucial. It is, most importantly, the work of building actual economies–developing real and substantial relationships of economic support and exchange throughout networks of solidarity economy actors. In Brasil and elsewhere, this work is called “economic integration,” or the construction of “circuits of solidarity exchange.” A “value chain” becomes here a values chain. To think strategically about these interconnections, we can return to the spheres of economic activity illustrated above. Recognizing these economic moments and identifying solidarity economy practices that are active in each realm can help us to see existing relationships and imagine new linkages. The circle is not meant to be a diagram of a specific economic structure but is, rather, a tool for strategizing possible connections. How can we build stronger linkages between (for example) worker cooperatives and housing cooperatives, which might provide organized markets of “solidarity consumption”? If we seek to make such connections, can we do this in ways that cultivate solidarity forms of exchange? Perhaps a connection emerges between worker cooperatives, community currency and an organized coalition of housing cooperatives and intentional communities. Can this organized “values chain” then mobilize its surplus to help finance other production cooperatives? These are the kinds of questions that a solidarity economy approach encourages, and the kinds of organizing that might emerge. The linkages necessary to build strong dynamics of solidarity economy development cannot, however, be reserved to “economic spheres” alone. Social movements, broadly defined as organized efforts to challenge structures of economic, social and ecological injustice and to build popular power, are essential expressions of solidarity values in society and key potential bases of support for solidarity economy initiatives. These connections, in the United States at least, are not always strong. A core goal of a solidarity economy approach must be to further integrate economic alternatives into social movements and social movements into economic alternatives. The work of defending our lives and communities from colonization and injustice, the work of actively opposing oppression in all forms, the work of healing together from trauma and hurt, and the work of imagining and building alternative ways to live together and meet our needs must all be connected as integral parts of a holistic movement for transformation. Social movements have the potential to act as bases of accountability

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2. Solidarity Economy: Key Concepts and Issues

for solidarity values. Living in a social context that often pressures us to conform to “market values” or to make compromises that do not embody our core values, communities of mutual accountability are crucial resources. We need to be reminded by others who share our values–but who are not facing precisely the same form of temptation to compromise or give in to dominant value systems–that such struggles are both important and shared. We need to be continually engaged in diverse relationships that both challenge and support our work to enact solidarity values. In this way, alternative economic institutions embedded in a social movement context may be more likely to sustain an active commitment to self- and collective transformation. Reciprocally, solidarity economy networks can infuse social movements with concrete examples of their values in action on the economic level. Oppositional work can be deeply strengthened when linked with visions and demonstrations of alternatives. In this way, solidarity economy offers ways for social movements to move beyond critique and challenge towards an increasing commitment to demonstrating that it is possible to build real livelihoods while also building another paradigm of social values.

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Part I Solidarity Economy Overview

Scaling-Up Through Collective Action Connections based on shared values and strong collaborative relationships can build collective capacity. We are stronger together. The integration of solidarity economy initiatives with each other and with broader social movements offers possibilities for collective action and institution building that no single initiative could imagine on its own. This is the construction of “political economies of scale”: groups can link together and scale-up their capacity to engage in transformative activities such as education, knowledge and skill-sharing, the development of solidarity markets, the provision of services, financing, and policy advocacy and governance change. Education, knowledge and skill-sharing. In a culture in which solidarity and cooperation in the realm of economics is not part of a “mainstream” education, the importance of building movement spaces for knowledge and skill sharing cannot be underestimated. A crucial function of networks is to cultivate spaces for such cooperative education: gatherings and conferences, workshops and classes, skill-sharing sessions, and widespread public media outreach. Additionally, networks can develop the capacity to partner with academic institutions and assist in the development of solidarity economy curricula and programs within existing educational structures. These collaborative meeting spaces have the potential to foster new forms of innovation and “solidarity entrepreneurship.” What kinds of new economic innovations might arise from long-term cross-fertilization between initiatives as diverse as worker cooperatives, community currencies, land trusts, community supported agriculture programs and neighborhood mutual-aid networks? And how do we develop collective capacity to support and disseminate (word choice?) these new innovations as they arise? Solidarity markets. The development of dynamic relationships between solidarity economy initiatives and social movements can generate a mutually-strengthening dynamic, each providing concrete bases of economic support for the other. Participants in social movements can constitute committed “solidarity markets”–organized networks of solidarity-based demand–for solidarity economy producers and they can animate the social and organizational networks through which economic linkages described above are forged and sustained. Solidarity economy initiatives, reciprocally, have the potential to offer substantial material support for the social movements of which they are a part as well, both through providing employment, goods or services to movement communities and through sharing portions of their surplus in support of social change work. Financing. Access to financing is one of the most significant logistical challenges to solidarity economy initiatives. Groups structured as non-

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2. Solidarity Economy: Key Concepts and Issues profits may have access to foundations, government grants and individual private philanthropists, but this is often either extremely limited or comes at great costs. Such groups become dependent on unstable external funding sources and find their work shifting from being mission-driven to being funder-driven. Groups structured informally, in “unconventional” ways (such as worker-owned cooperatives or collectives), or even as conventional businesses with unorthodox missions and methods often find sources of funding even harder to secure. This is the case particularly where such enterprises limit, by their activities, potential returns for investors or have structures that make external profit-driven investment impossible. To address these issues, networks of solidarity economy enterprises can pool resources to create cooperative financing options for other projects. In the Emilia Romagna region of Italy, for example, an area with a population similar to that of northeast Ohio and boasting over 15,000 diverse worker, producer, consumer, housing and service cooperatives, every cooperative is required to distribute 3% of its annual profits to cooperative development funds administered by regional networks. These funds provide substantial capital for creating new cooperatively-owned enterprises in the region.11 The Mondragon Cooperative in the Basque region of Spain provides another example. Mondragon’s large network of cooperatives collectively own and support a bank called the Caja Laboral which, in addition to offering diverse banking services to its members also administers a significant fund and technical support division for the creation of new cooperative enterprises.12 These examples offer a glimpse into the kinds of financing that might be possible through cross-sector collaboration. Provision of shared services. The potential of large networks of solidarity economy initiatives to utilize their collective resources in the service of network members is tremendous. In realms such as insurance, financial services, legal services, communications and facilitation, technical support, and research and development, networks can create what economists call “external economies”: aggregations of the financial power of many small enterprises into networks that can leverage economic power at scales of efficiency similar to that of larger companies. Examples of such resource collaboration exist in some realms of the cooperative movement, including in Emilia Romagna and Mondragon which have both developed a number of “second tier” service cooperatives that provide insurance, research and 11 Logue,

John. “Economics, Cooperation, and Employee Ownership: The Emilia Romagna model.” Ohio Employee Ownership Center: http://dept.kent.edu/oeoc/oeoclibrary/emiliaromagnalong.htm 12 Whyte, William Foote and Kathleen King Whyte. Making Mondragon: The Growth and Dynamics of the Worker Cooperative Complex. Ithaca: Cornell University, 1991.

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Part I Solidarity Economy Overview development, marketing and other products to their members. Solidarity economy movements can explore similar initiatives. Policy advocacy and governance change. The role of public policy in shaping the economic and political context in which solidarity economy initiatives struggle, survive or thrive is significant. While engagement with the state involves many dangers (dependency and values compromises, for example)and deserves vigilant caution and careful strategy, it can also be a powerful tool for mobilizing supportive resources and cultivating a “friendly solidarity environment” (as opposed to the “friendly business environment” often used as a euphemism for prioritizing private profit over community well-being). In this vein, solidarity economy networks can and should become players in shaping policy. Such policy might include the creation or improvement of enabling legislation for various types of cooperative and collective enterprise structures, the development of tax policy favoring solidarity-based initiatives, the investment of public funds into solidarity economy development efforts, public support for solidarity economy education and technical assistance, or policy mandating that any privatization of public services be done through the creation of community-run social cooperatives (rather than for-profit private businesses). Also crucial here is the work of reimagining the state itself and working to transform governance structures so that supportive policy becomes easier to implement and sustain. Participatory budgeting, in which government spending priorities are decided in directly democratic processes by citizens, is an excellent example of such an effort. Since the launch of the Brasilian city Porto Alegre’s participatory budgeting program in 1989, hundreds of such programs have emerged throughout Latin America and, increasingly, in other parts of the world.13 These and other such innovations have the potential to open up space in which organized solidarity economy networks and movements can increase public support for solidarity-based development while also changing the very nature of state power.

Some Key Questions and Debates Within Solidarity Economy Movements Solidarity economy is clearly an open and contested world of ideas and practices: in the context of a space of shared values, debate and difference within solidarity economy networks are alive and well. It might, in fact, be 13 Lerner,

Josh. 2006. “Let the People Decide: Transformative Community Development Through Participatory Budgeting In Canada.” Shelterforce. Issue 146, Summer 2006.

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2. Solidarity Economy: Key Concepts and Issues the case that the greatest tension for solidarity economy is how to negotiate the complex lines between, on one hand, keeping a robust scope of debate and difference inside the movement and, on the other, recognizing that some differences may, indeed, lead to real and important divisions in terms of tactics, strategy and vision. Inclusiveness may have limits when it comes to the transformation of dominant economic relations; where are these limits? There are no easy answers, nor will I attempt to suggest any here. I want to conclude this chapter, instead, by raising more questions. These are a few–though by far not all–of the key questions that we might raise about solidarity economy networks and organizing efforts: • Who, really, should be included in “the solidarity economy”? While inclusiveness and openness are priorities, don’t lines need to be drawn somewhere? How do we create such exclusions without creating divisions that weaken a potential movement? • How should solidarity economy efforts relate with initiatives that share similar values but identify with different terms (such as “cooperative economy” or “local living economy,” for example)? Can we have a solidarity economy movement with many names that is still connected and strong? • What is the relationship of solidarity economy movements to “markets”? How do we rethink markets and market dynamics in ways that foster solidarity values? Are certain kinds of markets inherently problematic? How can “solidarity markets” avoid re-creating exclusionary dynamics of currently dominant market structures? • When might engaging the state prove dangerous to a movement seeking to build real, grassroots power and agency? In what ways can the state be transformed and in what ways might it always carry oppressive potential? How do we avoid an either/or binary that is, engage the state while also maintaining autonomy and critical distance?

Conclusion In summary, we can say that solidarity economy is a way of thinking about the economy that opens up spaces of hope and possibility for building a more just, sustainable and democratic economy. It is an emerging language for building a movement to transform economic life. It is a framework for strategizing about how to create this other economy, building on our strengths and connecting our practices from the ground-up.

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Part I Solidarity Economy Overview And finally, solidarity economy is a space in which to imagine, debate and create visions for another economy based on shared values. As a political and economic project, solidarity economy is both humble and ambitious. It is humble in the sense that solidarity economy movements do not claim to have all of the answers, recognizing instead that our strength lies in coming together with creativity and courage to experiment and learn. Its ambition lies in aspiring to build strong linkages across multiple sectors of society and economy, to build coordinated social movements in which opposition to injustice is intimately bound up with the creation of practical and inspiring alternatives, and to ultimately transform the current socioeconomic order. Solidarity economy is far from being a magic bullet proposal for the achievement of such change. For all the promise of its concepts and approaches, it is up to us to bring these potentials into being. Unlike many radical social change theories of the past in which economic transformation was supposedly built into the logic of the structure itself, unfolding out of some “historical necessity,” or from the “contradictions within the system,” the solidarity economy approach comes with no such theories or guarantees. If solidarity economy is to succeed, it will be a product of courage, struggle and collective creation. As Jos´e Lu´ıs Corragio writes, “the viability of social transformation is rarely a fact; it is, rather, something that must be constructed.”

About the Author Ethan Miller is a founding member of the U.S. Solidarity Economy Network (www.ussen.org), a web editor for Grassroots Economic Organizing (www.geo.coop) and a member of the Community Economies Collective (www.communityeconomies.org). He splits his time between being a graduate student at UMass Amherst (Massachusetts) and living, loving and tending the orchard at the JED Collective (www.jedcollective.org), an intentional community and cooperative subsistence farm in Greene, Maine.

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3. Solidarity Economics and Twenty-First Century Socialism in the Bolivarian Alliance: An Initial Approach Maribel Aponte-Garc´ıa, Ph.D.1 We present an initial approach to solidarity economics and twenty-first century socialism in the Bolivarian Alliance for Our America (ALBA, for its acronym in Spanish). The term ALBA was put forth by Hugo Ch´avez during the Americas Summit in Quebec in 2001. ALBA was born as a reaction to the Free Trade Area of for the Americas (FTAA) proposed by the United States government. ALBA is an alternative model of integration and regional endogenous development with social inclusion. This process has generated more than a dozen agreements between 2005 and 2008. The first agreement was signed by Cuba and Venezuela in 2005. Bolivia became an ALBA member in 2006, Nicaragua in 2007, Dominica and Honduras in 2008, Saint Vincent and the Grenadines, Antigua and Barbuda, and Ecuador in 2009. Although these nine countries constitute the ALBA nucleus or core, other countries have 1 This

chapter is a reformulated version of a book chapter written under a grant from the Regional Fellowship Program of the Latin American Social Science Research Council (CLACSO for its acronym in Spanish which stands for Consejo Latinoamericano de Ciencias Sociales) to produce a book and video. The book with video is part of the project The Bolivarian Alliance for Our America: A New Model of Production and Enterprises, Regional Integration and Endogenous Development with Social inclusion awarded a research fellowship in the Critical Thought-Said Contest 2007-2008. It will be published by CLACSO and the Social Science Research Center of the University of Puerto Rico in 2010 and will be available at http://www.biblioteca.clacso.edu.ar). This article was first published in Spanish as Solidarity Economics and XXI Century Socialism in the Bolivarian Alternative: An Initial Approach. Otra Econom´ıa, Volumen III, No. 5, 2nd semester, December 2009, pp. 85-102. (First Latin American journal devoted to solidarity economics, available at http://www.riles.org/otraeconomia).

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3. Solidarity Economics and Twenty-First Century Socialism also signed diverse types of agreements with Venezuela. Regional integration in these cases is articulated around different areas, although energy agreements prevail. ALBA can be considered a part of solidarity economics and twenty-first century socialism for three reasons. First, since Hugo Ch´avez acceded to power in Venezuela in 1999, the socialist turn has gained strength, especially after Ch´ avez overcame a 2002 coup attempt and was victorious in promoting the 2008 Constitutional Amendment, by which he could aspire to reelection in 2010. Second, the need to establish public policies toward solidarity economics has been raised in Venezuela. Third, ALBA is situated in the new political context of the region, in which progressive governments have succeeded in gaining power in an increasing number of countries from Bolivia and Ecuador to Nicaragua and Uruguay. The conceptual relation between solidarity economics and socialism confers new meanings to some of the following debates within the solidarity economics’ camp: 1. Can emerging forms under twenty-first century socialism provide alternatives to the private-public dichotomy and to property rights regime limitations typical of real existing socialism? 2. Can the State be/become an active promoter of the Social Economy? How can State policies consistent with solidarity economics be articulated? 3. Does regional endogenous development with social inclusion make the formation of solidarity economies capable of impacting social needs and giving form to new regional actors and subjects within the regional integration context viable? We will put forth some initial considerations regarding these matters, although definite answers lie beyond the scope and reach of this first attempt. The chapter has four sections. The first briefly defines five theoretical perspectives to approach solidarity economics. The second presents a model of ALBA. The third analyzes some elements of solidarity economics in ALBA. It explores how diverse forms within the ALBA model promote activities that are relevant for solidarity economics. The fourth, by way of a conclusion, summarizes the statements regarding solidarity economics and socialism in ALBA.

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Part I Solidarity Economy Overview

Solidarity Economics2 : Relevant Concepts and Theoretical Perspectives In general terms, solidarity economics is a different (compared to capitalist and state models) way of doing economics (Guerra, 2002, pp. 18-20). The concept of solidarity economics is dealt with from different perspectives: solidarity socioeconomics, third sector, social economy, endogenous development with social inclusion, and social ecology, among others. Within the solidarity economics perspective, Latin America has important exponents: Pablo Guerra (2002), Luis Razeto (1996), and Jos´e Luis Coraggio (2002, 2008a, 2008b), among others. We do not attempt to stick to one particular definition, or model, because our objective is to identify the multiplicity of forms that solidarity economics takes on. Coraggio (2008b, p. 4, my translation) states that solidarity economics takes on multiple organizational forms: family, community, freely-associated, cooperative, associations, mutual help aid networks, commercialization or joint provisioning networks, social currencies, fair trade networks, solidarity finance, recovered private or state enterprises and social movements or collective action that seek to transform the economy by generating rights to land, water, education, housing, healthy habitats, cities, energy, health, social security and protection, and that foster values and meanings built around ecological, feminist, ethnic, youth, and other movements. The concept of solidarity socioeconomics distinguishes four parts in an economic act (production, consumption, distribution and accumulation) and identifies the processes and characteristics of solidarity socioeconomics for each part (Guerra, 2002, pp. 18-20). Solidarity production must make manifest the factor of cooperation, called factor C by Razeto. Consumption must be characterized by the prevalence of the community element over the individual and by a form of consumption that is grounded in a culture different from the predominant mainstream. Solidarity markets and relations of reciprocity that allow for greater social integration must characterize distribution. Finally, accumulation for the social good must be recognized as the fourth part of an economic act. All four components combine to generate a different daily life framed and grounded in solidarity economics. The endogenous development perspective promotes a ‘development from within approach’ and contrasts this vision with that characterized by another type of development, exogenous or from outside. Endogenous development is distinguished from endogenous growth because it includes a so2 The

definition of the five approaches is based on Aponte and Alvarez (2008: 1-3).

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3. Solidarity Economics and Twenty-First Century Socialism cial, historical and cultural vision of the development process. It doesn’t explicitly address solidarity economics as a concept, but it does incorporate theoretical contributions that analyze alternative forms of production and industrial development in different territories, regions3 and historical moments4 , that are consistent with solidarity economics. The endogenous development approach links concepts of multisector regional development, sociocultural history and spatial transformations. The perspective of sustainable livelihoods and environment, as well as that of social inclusion, is sometimes incorporated in endogenous development thinking. The perspective of social inclusion partly emerges from the frustration with development policies promulgated during the eighties and from free trade agreements’ results of the nineties because both processes worsened poverty and social exclusion. The third perspective is that of social ecology. One of its important exponents is Murray Bookchin. Social ecology seeks to restore harmony to the society-nature relationship by creating an ecological society. Concepts of self-management, mutual help, and stateless community revolve around a political theory characterized by direct democracy, decentralization and confederation (Bookchin, 2007, p. 13). The space of ecological movement is the community: neighborhood, town, and municipality (Bookchin, 2007, p. 56). Social ecology seeks to generate changes through municipalities that jointly earn/gain rights to self-management and management through networks of confederated councils, to which towns and cities would send their delegates to participate in democratic decision-making directly. The fourth perspective identifies solidarity economics with the Third Sector. This is the prevailing view in some European countries. The Third Sector is constituted primarily by non-profit organizations. In other countries, as for example in England, the government defines the Third Sector as nongovernmental organizations that are guided by values and that reinvest their surplus for social, environmental and cultural ends. This includes voluntary and community organizations, charity organizations, social enterprises, cooperatives, housing associations, and community and volunteer groups (see http://www.communities.gov.uk/communities/thirdsector/). The fifth perspective defines solidarity economics in terms of the social 3

4

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Examples of these contributions by region are: Europe (Pyke and Sengenberger, 1992; Criscuolo, 2001; Cainelli y Zoboli, 2004), Asia (Ohno, 1988), and Latin America (Carrillo, 1994). In general terms the emergence of this literature is linked to the work of Michael Piore and Charles Sabel (1984) that argued that there was no technological determinist logic in production and carried out research on the history of alternative forms in Europe.

Part I Solidarity Economy Overview economy. This perspective prevails more strongly in Europe and takes on different forms in that continent as well as in Japan. It includes semi-public enterprises, cooperatives, associations, community sector, and enterprises with participatory management.

The ALBA Model ALBA is a model that revolves around two fundamental axes that the wealth of Venezuelan petroleum makes viable. As illustrated in Figure 1, the first axis includes alternative production and enterprise concepts: social production enterprises, cooperatives, and grandnational enterprises (mixed state enterprises with capital originating in ALBA member countries). The constituent elements of endogenous development with social inclusion are implemented through Missions and Nuclei of Endogenous Development. Missions are “massive strategies oriented toward guaranteeing the fundamental rights of the population, with an emphasis on the most excluded sectors.”5 Missions exist in twenty areas. Each one has its own proper name, slogan, goals and objectives and there are some that already show signs of significant achievements. Through these mechanisms, the Venezuelan government promotes a series of social and economic transformations. Some of the Missions (Barrio Adentro (“Inside the Neighborhood”), Misi´on Milagro (“Miracle Mission”), and Misi´ on Robinson are closely linked to some of the bilateral and regional collaboration agreements within ALBA (as explained later). Furthermore, Missions’ activities promote business and social practices linked to solidarity economics. The nuclei of endogenous development are: productive initiatives that emerge from within a territory, economic sector or enterprise, to make the most of their capabilities and potential, with the end of developing economic, social, environmental, territorial and technological projects that allow for the construction of a more humane economy, furthering a new economic life for the country (http://www.pdvsa.com, my translation). There are twenty-three nuclei of endogenous development (NED) in Venezuela. These are classified by territorial axis, name and type of nucleus. Each NED comprises diverse activities that interact as spaces in which to carry out business and social alternative practices. For instance, if we con5

This section is based on author’s analysis based on: Misiones Bolivarianas. Ministerio de Comunicaci´ on e Informaci´ on; Av. Universidad, Esq. El Chorro, Torre Ministerial, pisos 9 y 10. Caracas-Venezuela; mayo, 2007. Impreso en la Rep´ ublica Bolivariana de Venezuela, Dep´ osito Legal: IF87120063002901 y http://www.minci.gob.ve / [email protected].

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3. Solidarity Economics and Twenty-First Century Socialism sider the Fabricio Ojeda NED in Caracas, the spaces and activities where practices are carried out comprise the: Fabricio Ojeda Popular Clinic, Popular Drugstore (“Botica”), textile production cooperative, shoe production cooperative, agricultural sector, Super Mercal, sports’ courts, and commons area. The second axis illustrated in the next page includes concepts of regional integration, cooperation and solidarity trade: 1.Energy Integration, 2.Fair and Solidarity trade, 3.Programs of economic and social cooperation in agriculture and food security, production and multisector industrial development; 4.Finance (ALBA Bank and Bank of the South) and 5.Telecommunications (Telesur). ALBA and the Treaty of the Peoples are the processes through which the strategies of regional integration and solidarity trade are implemented. The wealth and the political economy of petroleum make the functioning of the axes within the model viable. The Venezuelan national oil company, Petroleum of Venezuela, (PDVSA for its acronym in Spanish), is the base upon which ALBA and the financing of Missions and NEDs rests. ALBA is a project of regional endogenous development with social inclusion that has generated significant changes within the country and the region. “The Human Development Index has improved and several Milennium Goals have been met, especially in the areas of public health, education, female population and children” (D´ıaz, 2009, p. 35). In ALBA, trade and investment are approached from a sustainable endogenous development perspective, with social inclusion and effective participation of the State. Social inclusion privileges solidarity in projects of education, health and housing that benefit the poor in Venezuela and the region. Infrastructure is developed from the perspective of an Integral Development of Communications and Transportation. Energy integration, in petroleum as well as in natural gas, is approached from a regional perspective, at favorable prices and terms, and important investments are carried out. Alternative solidarity finance is structured around ALBA Bank and the Bank of the South. Lastly, culture and media alternatives are articulated in regional initiatives such as Telesur and the launching of ambitious communications’ satellite initiatives with the support of China.

Solidarity Economics in ALBA ALBA includes examples of all four categories of solidarity socioeconomics mentioned above (production, consumption, distribution and accumulation). Although our presentation follows the structure suggested by soli-

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Part I Solidarity Economy Overview

Figure 1. ALBA Model-Endogenous Development with Social Inclusion and Regional Integration, Cooperation and Solidarity Trade

darity socioeconomics, we integrate into these categories, concepts related with the other four approaches to solidarity economics: endogenous development, social ecology, third sector, and social economy. For each of these categories, we present at least two examples, one corresponding to axis 1 and/or the base of the model, and another one corresponding to axis 2 of the model.

Production and enterprises Within ALBA, many categories of solidarity production and enterprises are concretized. In this section, we present three: cooperatives, grandnational enterprises and social production enterprises. Cooperatives as a business type are classified as part of solidarity economics under most approaches. The growth of cooperatives in Venezuela after 2004 has been impressive, with tens of thousands of cooperatives be-

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3. Solidarity Economics and Twenty-First Century Socialism ing created. Cooperatives are classified according to the activity for which they were created: production and services, consumer, credit unions, and mixed (produce goods and services for third parties and obtain goods and services for their members).6 During 1997-2005, the quantity and structure of cooperatives by type of activity changed drastically. The number of cooperatives increased from 766 in 1997 to 66,680 in 2005. While in 1997 credit unions predominated (32% of all cooperatives) followed by passenger transportation coops (22% of coops), by 2005 service coops were predominant (53% of all coops) followed by agriculture and livestock coops (30%) (Based on table presented in Colina Rojas, 2006, p. 236). Other authors place the number of registered cooperatives in 2006 at 104,070, and state that 81% of those cooperatives are small and medium enterprises (SMEs) with between 5-10 workers (D´ıaz, 2009, p. 19). The number of cooperatives in Venezuela reached 150,000 by 2009, but since many are inactive, some authors estimate that the real number would be around 30,000 cooperatives (number calculated based on the assumption that there was a 20% survival rate) (D´ıaz, 2009, p. 28). Whether the number is on the order of 30,000 or 150,000, growth is enormous and surprising and its impact on solidarity economics is significant. The second category is that of grandnational enterprises. Grandnational enterprises, a concept introduced in 2008, are regional production initiatives articulated around state enterprises whose ownership is split among two or more ALBA member countries. These constitute an important initiative within ALBA because they promote integration based on joint state enterprises rather than based on private local or international capital. Figure 2 details, for each agreement signed in April 2007 among Cuba, Bolivia, Venezuela and Nicaragua, the specific impact of these in the birth of grandnational enterprises. The impact of grandnational enterprises is important because these constitute one of the most significant regional business forms within ALBA. Grandnational enterprises fall within the definition of the solidarity economy in two ways. First, these enterprises have social objectives. Second, the State promotes alternative public policies focused on promoting solidarity economics via grandnational enterprises. However, its inclusion is problematic if approached from the perspective that solidarity economics represents an alternative to statist and capitalist models. Often, the category of mixed enterprise is located under the classification of organizations that are ‘important for’ but ‘not part of’ the 6 See

Types of Cooperatives, available at http://www.sunacoop.gob.ve/contenido.php? id=207, Found June 10, 2009).

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Part I Solidarity Economy Overview Social Economy (see an example of this in Defourny, Develtere, and Fonteneau, 2001, p. 18 and D´ıaz, 2006, p. 159). Of course, in this case, we would have to ask ourselves if that which is considered “alternative statist” would have some space within the solidarity economics’ conceptualization. In that sense, the “alternative statist” under XXI Century Socialism would have to transcend the limitations that real existing socialism imposed on state enterprises, whereby autonomy in business management was negated and this role was limited to the State. The relevance of these questions can’t be underestimated since the role that these enterprises play is crucial in achieving regional endogenous development with social inclusion. Furthermore, these enterprises constitute an example of public policy directed toward solidarity economics. The third category, that of Social Production enterprises, generates controversies. On the one hand, their promotion by the State creates doubts as to whether it is part of the solidarity economy, for the same reasons described above for grandnational enterprises. On the other hand, they call into question the links between solidarity economics and twenty-first century socialism. In the New National Plan of Venezuela 2007-2013, the socialist model of production is defined as one constituted basically by social production enterprises, and these are proposed to coexist alongside state enterprises and capitalist private enterprises (Rep´ ublica Bolivariana de Venezuela, Presidencia. 2007, pp. 45-46). Social production enterprises (EPS for its acronym in Spanish: Empresas de Producci´ on Social) are, according to Ch´avez, “those entities devoted to the production of goods and services in which work has its own meaning, being non-alienated and authentic, there is no social discrimination at work and in any kind of work, no privileges exist in work associated to a hierarchical position, with equality among its members, based on participatory planning and run under a state or collective property regime, or a combination of both, where the distribution of the surplus responds to the self-sustainability of the enterprise (found at http://www.venezuelanalysis.com and at http://www.minci.gob.ve on March 5, 2007, my translation). By the end of 2007, at least 321 EPS’s had been created in Venezuela, with 59% devoted to production (food and beverages, shoes, industrial equipment, metals, plastics, among other categories), 38% to services (mining, telecommunications, industry, tourism, environment, editing and press) and 3% to distribution (Corporaci´ on Venezolana de Guayana, 2007, pp. 2-6). One of the controversies that has arisen is whether the National Development Plan subsumes the category of cooperatives under that of social production enterprises. Some believe that the National Plan does not

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3. Solidarity Economics and Twenty-First Century Socialism

Figure 2 ALBA Agreements and Grandnational Enterprises

ALBA Agreements by Area ALBA-FAIR TRADETREATY OF THE PEOPLES

ALBA-FOOD ALBA-TELECOMMUNICATIONS ALBA-TOURISM ALBA-INDUSTRIAL

ALBA-MINING

ALBATRANSPORTATION

a

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Grandnational Enterprises (Projection) Grandnational Enterprise of ALBA industrial supplies, for the commercialization/trade of inputs, equipment and machinery for industry. Grandnational Enterprise of ALBA Exports and Imports. Grandnational Enterprise of agriculture and livestock production. Grandnational Enterprise of Telecommunications. Grandnational Chain of ALBA Hotels. Development industrial products for ALBA member countries and Latin America, with the cooperation of allied countries: Belarus, Iran and China. Grandnational Enterprise of cooperation, research and development in the areas of geology and mining. Grandnational Enterprise for the production of aluminum. Grandnational Enterprise for the development of cement industries for ALBA member counties. Grandnational Enterprise for the Management of forests, production and trade of wood industry products. AIR TRANSPORTATION: Promote the creation of Grandnational Enterprise of State Airlines and Grandnational enterprises for maintenance and construction of Aircraft. NAVAL: Grandnational Naval Enterprise of the South, for cargo and passengers’ transportation. LAND: Grandnational Enterprise for the development of the region’s infrastructure.

Source: Author’s analysis based on and Regueiro, Lourdes, 2007, pp. 25-30.

Part I Solidarity Economy Overview take cooperatives into consideration (D´ıaz, 2009, p. 22). This Plan emphasizes other forms of communal socio-productive organization: “enterprises of social-communal or direct property, indirect social property enterprises, social distribution enterprises, self-managed enterprises, solidarity and communal exchange groups, and family production units” (D´ıaz, 2009, p. 24). D´ıaz (2006, p. 157) is of the opinion that it is not clear what type of enterprise or association the State focuses its attention on or privileges by using this recently created concept of EPS. Therefore, according to D´ıaz, “in the registry and definition of EPS all the following types of enterprises could participate: newly constituted enterprises, civil societies, cooperatives, and foreign enterprises with subsidiaries located in Venezuela” (Source: http://www.pdvsa.com/index2.html, accessed June 3, 2009). That is to say an EPS may or may not have profit motives and could anyway aspire to gain preferential treatment from the State. But then he closes by recognizing “. . . This problem of the definition of Social Economy and which organizations the term includes and excludes does not only occur in this country (Venezuela).”

Consumption and Markets: Solidarity Commerce and/or Trade and Missions As described above, solidarity socioeconomics establishes that consumption should be characterized by the prevalence of the community element above that of the individual and by ways of consumption that are supported by a culture different from the predominant one. Furthermore, that solidarity markets and relations of reciprocity should characterize distribution. Solidarity trade within ALBA (axis 2 of the model) and Missions (axis 1 of the model) are examples of these types of relations. These relations exemplify the role played by organizations in impacting development with social inclusion and public policies to promote solidarity economics. ALBA seeks to apply principles of fairness and solidarity in trade. Three of these principles must be highlighted: compensated trade (with product exchanges), non-reciprocity, and differentiated treatment (Girvan, 2008, pp. 5-9). Compensated Trade Agreements (CTA) may embody the most novel solidarity aspect in ALBA trade. Through CTAs, each country sets out what it needs and what it offers. Agreements set exchanges of goods and services according to the needs and capabilities of each country. In the case of Cuba, the island receives petroleum at preferential prices and terms and pays back partly through medical services that Cuban doctors offer in the Barrio Adentro Mission, scholarships to Venezuelan students in Cuba and/or

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3. Solidarity Economics and Twenty-First Century Socialism medical services that Venezuelans receive in Cuba.7 Frequently, Missions are the vehicle through which “compensation in services” related to CTAs can be carried out. In a similar manner, Dominica can pay up to 40% of its petroleum bill in bananas. Exchanged products and services can be produced by solidarity economy enterprises. Non-reciprocity establishes that a country is not forced to reciprocate or grant, to an ALBA member with whom a trade deal has been made, the same terms of trade it has received. In that sense, Bolivia pays Cuba with products, but it is does not have to grant the same terms to Cuba (that Cuba pays Bolivia with products). The principle of differentiated treatment establishes that the social and economic conditions of countries can be considered when articulating measures of solidarity trade. For instance, in the case of Haiti, although this country is not formally an ALBA member, the same favorable terms are offered to it in relation to financing of its petroleum bill as are offered to ALBA members. After his electoral triumph as Venezuela’s president in 1998, Hugo Ch´avez Fr´ıas announced its government’s objective of promoting public policies with an ambitious social and economic scope (Rep´ ublica Bolivariana de Venezuela, Presidencia, 2007). In 1999, although the Bolivarian government controlled the majority at the National Assembly, it still depended on Ministries and state institutions that were slow, sluggish, and bureaucratic organizations. The government chose to carry out its reforms through parallel and more agile structures linked directly to the popular sectors that it sought to impact. Later, Missions were assigned to the different ministries and other branches of government (for example, Mission Ribas is linked to PDVSA). Missions have a certain degree of autonomy in development, in particular with respect to budget allocations for their performance. In the area of health two projects or Missions stand out. The first, Miracle Mission, is devoted to carrying out eye surgery benefiting people throughout Latin America, and the second is devoted to providing medical services in poor communities of Venezuela. These two projects are based on the CubaVenezuela Integral Agreement of Cooperation, signed in 2000. Venezuela committed to provide Cuba with determinate quantities of petroleum in exchange for Cuba providing professional and technical services (doctors and other health workers, teachers, sports’ trainers, technicians, agricultural specialists and other qualified personnel). In the area of food sustainability and security the Mercal Mission stands 7

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Fuente: Cuba, Venezuela, Bolivia Agreement of Application, 29th April, 2006, available at urlhttp://www.alternativabolivariana.org.

Part I Solidarity Economy Overview out. This Mission was born in Venezuela and since then has promoted initiatives at the regional level. It comprises the areas of consumption, marketing and distribution. “It carries out marketing and commercialization of food and other basic necessities at the wholesale and retail levels, maintaining quality, low prices and easy access to guarantee basic provisions to the Venezuelan population, especially poor people. It incorporates small enterprises and cooperatives into its network in order to guarantee food security. The Mercal Mission comprises the following programs: Food Homes, Nutritional Supplements, Mercal Network, Distribution Centers, Type I Modules, Supermercal, Bodegas Mercal (Small Grocery Stores or “Bodegas”), Mobile Grocery Stores and Open Megamarkets” (http://www.misionmercal.gov.ve, my translation). Inside ALBA, some initiatives have been created to take the Mercal concept to Cuba. After 2008, framed within the ALBA Food Program, other initiatives that coordinate agricultural and livestock projects in ALBA member countries have been created.8 The Mercal Mission makes solidarity commerce that favors food security feasible. In that sense, it is a strategy that fosters development with social inclusion. Missions also promote solidarity economics. Benito D´ıaz (2009, p. 17) identifies, among the programs that promote cooperatives, the Mission About Face (“Vuelvan Caras”). Mission Vuelvan Caras, that later adopts the name Che Guevara Mission, was oriented toward training unemployed people so that they would join and become members of production and service cooperatives. We include the Mercal Mission again here because it also impacts cooperatives to the extent that it can distribute food products produced by these firms, including some that might be linked to the Che Guevara Mission. ALBA and endogenous development in Venezuela have improved the daily lives of many in the country and the region. Among the achievements that have contributed to this transformation we can highlight the following: the creation of more than twenty nuclei of endogenous development; growth in cooperatives; the creation of twenty Missions as strategies to implement social inclusion in diverse areas (from the environmental to education); significant achievements in education with Venezuela already having been declared the second most illiteracy-free territory (after Cuba) in Latin America; and significant achievements in health (Mission Miracle having made eye surgery feasible for tens of thousands). These improvements have also been evident in solidarity and/or favorable prices in energy and gasoline, better life and 8

Agencia Bolivariana de Noticias. 2009. “ALBA y Petrocaribe Afianzan Lazos en Pro de la Soberan´ıa Alimentaria.” http://www.alternativabolivariana.org/modules.php? name=News&file=print&sid=3988.

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3. Solidarity Economics and Twenty-First Century Socialism work contextualized in solidarity economics. In education, 70,000 students are educated in the areas of health, more than two million persons have become literate. Cuba offers fellowships in education: in recent years, 2,000 Venezuelans, 5,000 Bolivians, and 175 Dominicans (from Dominica) have studied there. In health, 30,000 Cuban doctors offer free medical services in Venezuela, 600 medical specialists have been mobilized to Bolivia, and close to a million persons have benefited from free (no cost) eye surgery.9 These examples illustrate how consumption and solidarity markets’ initiatives have been formed.

Distribution and Accumulation The renationalization of petroleum in Venezuela is the base of the ALBA model and inspires the new political economy of petroleum. This new political economy exemplifies how a state organization can impact public policies to promote solidarity economics and development with social inclusion. Two examples of this are the new political economy of petroleum itself, implemented through PDVSA (base of the model), and the creation of Social Production Enterprises and energy integration through Petrocaribe (axis 2 of the model). The Venezuelan state articulated, after 1999, a new political economy of petroleum. Its strategy has been to take control of the petroleum industry’s potential to generate income and to distribute part of the benefits among the marginalized sectors of the population, endogenous development projects, and regional integration. This project has turned petroleum income into the new growth engine of national and regional development. The new political economy of petroleum has been created through public policy formulation. First, the State claimed and collected profits obtained by PDVSA’s international operations. Second, after 2004, the Venezuelan State renegotiated the terms and conditions of strategic associations and service contracts under which foreign enterprises that had been associated with PDVSA continue operating as mixed enterprises in Venezuela, thereby increasing the collection of royalties and taxes. A third phenomenon has been the creation of mixed enterprises between PDVSA and state enterprises of diverse countries to develop refining operations in Latin American countries and the exploration and exploitation of the Orinoco Belt in Venezuela. Lastly, through PDVSA, the State has launched a system of direct contributions (accounted for as PDVSA operational expenses) to those 9

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Source: My analysis based on documents available http://www.alternativabolivarian.org; and Girvan (2008) for facts on Dominica.

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Part I Solidarity Economy Overview institutions that promote the social development of the country in a direct manner (without mediation of state agencies). Last year PDVSA launched an initiative to promote social production enterprises to register as contractors of goods and services. In order to qualify as an EPS, enterprises had to comply with two requirements: “distribute their profits equally among its members and participate in community projects through contributions to PDVSA’s Social Fund or through the provision of goods and services” (http://www.pdvsa.com). Petrocaribe is ALBA’s energy integration initiative focused on the Caribbean. The initiative offers favorable terms in trade and distribution. Eighteen countries participate in Petrocaribe.10 Petrocaribe finances part of the petroleum these countries import on a sliding scale based on oil prices. Countries enjoy a two-year grace period to initiate repayment. Part of the payment can be carried out with exchange of products. Countries have up to 90 days to pay 50% of the value of the petroleum bill for oil shipments. The remaining 50% of the bill is divided up in the following manner: 25% of the value of petroleum sales is extended as direct credit to the importing country. The other 25% is destined to the ALBA-Caribbean Fund to carry out economic and social projects with importing countries (http://www.alternativabolivariana.org and Girvan 2008, pp. 7-8). The ALBA-Caribbean Fund has financed many projects with diverse socioeconomic impacts in housing, roads, tourism, health, social economy, education, sports, humanitarian assistance, culture, citizen safety, agriculture and land holding. Projects in the Social Economy include: the reconstruction of a main market in Port of Prince, Haiti, the reactivation of six medium enterprises in Nicaragua, the rehabilitation of granaries (three projects) in Nicaragua; a Sugar Cane Museum and infrastructure for the Fishing Center in Saint Vincent and the Grenadines (PDVSA, PDV Caribe 2008, pp. 32-34). ALBA proposes preventing capital flight through the restructuring of PDVSA and the renationalization of petroleum. As an alternative concept to that of Open Regionalism and Outward Integration focused on foreign enterprises, ALBA proposes accumulation based on complementarity of production articulated around regional investment of mixed state enterprises and physical and social regional infrastructure. ALBA proposes trade agreements and compensatory finance as compo10 Venezuela,

Cuba, Dominican Republic, Antigua and Barbuda, Bahamas, Belize, Dominica, Grenada, Guyana, Jamaica, Suriname, Saint Lucia, Saint Christopher and Nevis, Saint Vincent and the Grenadines, Haiti, Nicaragua, Honduras, and Guatemala.

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3. Solidarity Economics and Twenty-First Century Socialism nents/mechanisms of fair trade. In this manner, the assymetries and social needs of each country can be managed as non-reciprocal international trade agreements that allow for the establishment of differentiated trade according to the development and size of each country. Social inclusion is structured around and privileges the scope of the economics of daily life: food, education, health and housing. ALBA reconceptualizes public policy toward distribution, and this process impacts the formation of solidarity economics. In this process, PDVSA’s role is fundamental. However, distribution and regional endogenous development dependent on PDVSA also creates problems, contradictions and vulnerabilities. Beyond the problem of fluctuations in petroleum prices, is the problem of a growing debt of Petrocaribe members, and its future impact on PDVSA’s business sustainability. Furthermore, the impact of renationalization on foreign investment and PDVSA’s mounting pressure on contractors during 2009.

Conclusion ALBA proposes new common areas between solidarity economics and XXI Century socialism. But what distinguishes ALBA, what makes it unique as an integration process is a combination of four important elements. First, it is the first time that a country has used a natural resource to carry out not only a process of endogenous development, but also a process of regional integration. Second, ALBA defines new parameters for international trade agreements around cooperation, complementarities, and solidarity. Third, ALBA is localized within the new political context of the region where progressive governments have gained access to power in an increasing number of countries from Bolivia and Ecuador to Nicaragua. Fourth, ALBA states new concepts of complementarity in production and enterprises that, because of their scope, are novel and promising for the region. ALBA brings hope but also opens up vulnerabilities. The political economy of petroleum that makes the model feasible also creates vulnerabilities, as fluctuations in international petroleum prices affect income from oil sales. Simultaneously, the strong political conflicts in Venezuela, and in other ALBA member countries of the region, particularly Bolivia, create uncertainties with regard to the long-term continuity of the project. Although Ch´ avez was victorious in amending the Constitution in order to compete for a third term in power after 2012, his continuity as President as well as that of other Presidents (evidenced by the overthrow of Manuel Zelaya in Honduras), is uncertain. As we write these lines, the coup de etat in Honduras (an ALBA mem-

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Part I Solidarity Economy Overview ber country) is being executed. This makes evident the vulnerability of the project. It reflects that the formation of every new economics of distribution necessarily threatens interests in different countries. Democracy, as a form of domination under capitalism, makes the implementation of this new distribution more complex. But the responses of real existing socialism have already been transcended. Therefore, at the crossroads, the challenge is to construct alternative forms against a political opposition that has not migrated as in the case of Cuba, but that instead, conspires to undermine alternative projects. This is one of the great challenges of solidarity economics at present. Against the opposition, democracy emerges as a challenge in XXI century socialism. The other challenge is to allow and promote diversity of business forms, including private, public, semi-public, mixed enterprises with local and international capital. It is through diversity that profound significant changes can be promoted. We believe that emerging forms within ALBA provide alternatives to the private-public dichotomy and to the property rights regime limitations typical of real existing socialism. In the process of reconfiguring a new solidarity economics within twenty-first century socialism, the Venezuelan State has become an active promoter of the Social Economy and has articulated public policies consistent with solidarity economics. Lastly, regional endogenous development with social inclusion has partly made viable the formation of solidarity economics capable of impacting social needs and giving form to new regional actors and subjects within the regional integration context.

About the Author Maribel Aponte-Garc´ıa holds a joint appointment as full professor and researcher at the Graduate School of Business and the Social Science Research Center, both at the University of Puerto Rico, Ro Piedras Campus. Her most recent award is the Latin American Social Science Council (CLACSO) Award on Critical Thought Research (2007-2008) for her work on the Bolivarian Alliance. She is the author of books, articles and multimedia products on Caribbean and Latin American Alternatives, and an advisor to community groups. Her recent publications include, among others, (forthcoming, October). Our America at Dawn. 2010. The Bolivarian Alliance as an Alternative Business, Development and Regional Integration Model, Critical Thought Award Collection. Argentina: Latin American Social Science Research Council (CLACSO) and the Social Science Research Center at UPR; Cuba. A Video Collection on the Emerging as Alternative.

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3. Solidarity Economics and Twenty-First Century Socialism Business and Social Practices for a Dialogic Pedagogy, released in 2006, which constitutes the first video collection on the topic in the world. She lives in Aibonito, Puerto Rico, has a family of five children and is married to Carlos Antonio Alvarez-Swihart.

References Aponte, Maribel y Carlos Alvarez (2008), La econom´ıa solidaria como alternativa de desarrollo socioecon´ omico para Puerto Rico, en Memorias de la Cumbre Social de Puerto Rico, Cumbre Social, San Juan. Bookchin, Murray (2007), Social Ecology and Communalism, AK Press, Oakland, California. Cainelli, Giulio y Roberto Zoboli (2004), The Evolution of Industrial Districts. Changing Governance, Innovation and Internationalisation of Local Capitalism in Italy. Physyca-Verlag Heidelberg, New York. Carrillo, Jorge (1994), Adaptaci´ on de la Producci´ on Flexible y Cualificaci´ on en el Sector Automotriz, en Sociolog´ıa del Trabajo (Ejemplar dedicado a: Un Fordismo que Nunca Existi´ o, Nº 21, 101-128. Colina Rojas, Al´ı (2006), El nuevo cooperativismo venezolano: Una caracterizaci´ on basada en estad´ısticas recientes, CAYAPA Revista Venezolana de Econom´ıa Social / A˜ no 6, Nº 12. 227-248. Disponible en http://redalyc.uaemex.mx/redalyc/src/inicio/ ArtPdfRed.jsp?iCve=62261202, accessed April 3, 2009. Coraggio, Jos´ e Luis (2008ª), La sostenibilidad de los emprendimientos de la econom´ıa social y solidaria, Otra Econom´ıa - Volumen II - Nº 3 - 2º semestre/ 2008 - pp. 41-57, Disponible en http://www.riless.org/otraeconomia, accessed March 7, 2009. Coraggio, Jos´ e Luis (2008b), La Econom´ıa social y solidaria como estrategia de desarrollo en el contexto de la integraci´ on regional latinoamericana Reconstrucci´ on de una parte de la ponencia presentada en el 3er Encuentro Latinoamericano de Econom´ıa Solidaria y Comercio Justo organizado por RIPESS en Montevideo, 22-24 octubre 2008, pp. 1-6. Available at http://www.economiasolidaria.org/node/1771, accessed April 15, 2009. Coraggio, Jos´ e Luis (2002), Presentaci´ on del Libro La Econom´ıa Social en el Norte y en el Sur, Mesa redonda organizada por el Centro de Estudios de Sociolog´ıa del Trabajo que tuvo lugar el 3 de diciembre de 2001 en el sal´ on de usos de la Facultad de Ciencias Econ´ omicas de la Universidad de Buenos Aires. La desgrabaci´ on de las exposiciones por realizada por Ver´ onica Schack. Universidad de Buenos Aires, Instituto de Investigaciones Administrativas, Publicaci´ on del Centro de Estudios de Sociolog´ıa del Trabajo, Nro 38 - Junio-Agosto de 2002, pp. 1-18. Available at http://www.econ.uba.ar/cesot/docs/ documento%2038.pdf, accessed February 20, 2009. Corporaci´ on Venezolana de Guayana (2007), Empresas de Producci´ on Social. Informe T´ ecnico de la 8va. Auditor´ıa al 31 de marzo de 2007. Ministerio del Poder Popular para las Industrias B´ asicas y Miner´ıa, pp.2-6. Available at http://www.cvg.com/espanol/portal_ eps/index.php, accessed March 3, 2009. Criscuolo, Alberto (2001), Reinterpreting the Emilian Model: the Role of Producers Associations in Third Italy. Available at HYPERLINK Available at http://web.mit. edu/11.800/www/repository/criscuolo2001.pdf, accessed July 20, 2005. Defourny, Jacques, Develtere, Patrick, y Fonteneau, B´ en´ edicte, compiladores (2001), La Econom´ıa Social en el Norte y en el Sur, versi´ on en castellano a cargo de Mirta Vuotto. Ediciones Corregidor, Buenos Aires.

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D´ıaz, Benito (2009), Solidarity Economy. Crisis and Opportunity: An Overview from Venezuela, pp. 1-39. Available at http://www.populareconomics.org/ussen/node/107, accessed May 12, 2009. D´ıaz, Benito (2006), Venezuela Pol´ıticas p´ ublicas para la promoci´ on de cooperativas en Venezuela (1999-2006), en CAYAPA. Revista Venezolana de Econom´ıa Social A˜ no 6, Nº 11, 2006, 149-183. Available at http://redalyc.uaemex.mx/src/inicio/ArtPdfRed. jsp?iCve=62261110\&iCveNum=6094, accessed May 10, 2009. Girvan, Norman (2008), ALBA, Petrocaribe and Caricom: Issues in a New Dynamic, pp. 1-16, Available at http://www.normangirvan.info/alba-and-the-caribbean/, accessed May 2, 2009. Guerra, Pablo A. (2002), Socioeconom´ıa de la Solidaridad. Editorial Nordan Comunidad, Montevideo. Ohno, T. (1988), Toyota Production System: Beyond Large Scale Production. Productivity Press, Cambridge. PDVSA, PDV Caribe (2008), Informe de Gesti´ on. Petrocaribe. Energ´ıa Para la Uni´ on. Primer Semestre 2008, pp. 1-40). Available at http://vcumbredepetrocaribe.menpet. gob.ve/interface.sp/database/fichero/publicacion/518/25.PDF, accessed May 5, 2009. Piore, Michael y Sabel, Carles F. (1984), The Second Industrial Divide. Basic Books, Nueva York. Pyke, F. And Sengerberger, W. (1992), Industrial Districts and Local Economic Regeneration. International Institute for Labor Studies, Geneva. Rep´ ublica Bolivariana de Venezuela, Presidencia (2007), Proyecto Nacional Sim´ on Bol´ıvar. Primer Plan Socialista. Desarrollo Econ´ omico y Social de la Naci´ on 2007-2013. Caracas. Available at http://www.unesr.edu.ve/imgindex/img_new_index/proyecto_ de_ley/images/proyecto_nacional.pdf, accessed April 5, 2009. Razeto, Luis (1996), Los Caminos de la Econom´ıa de Solidaridad.: Editorial LumenHumanitas, Buenos Aires. Regueiro Bello, Lourdes Mar´ıa (2007), El Nuevo Entorno Latinoamericano. Algunas Reflexiones para el debate. Presentaci´ on en la Jornada de Educaci´ on Popular. UNRC, Argentina, 5 y 6 de octubre de 2007. Available at http://ar.geocities.com/mjisla76/ Elnuevoentornolatinoamericano-LouerdesRBello.ppt, accessed May 12, 2009.

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Part II.

Finance

4. The Role of Finance in the Latest Capitalist Downturn ¨ ur Orhangazi and Ian J. Seda-Irizarry Ozg¨ The latest downturn of capitalism began as a financial crisis. The first signs of the financial crisis emerged in the US in the summer of 2007 with an increase in mortgage delinquencies followed by an effort by the central banks to inject liquidity1 into the world financial system. March 2008 marked the beginning of the collapse with the major investment bank Bear Stearns facing failure and being acquired by JP Morgan Chase with backing from the Federal Reserve (Fed). This was followed by the takeover of Indymac Bank in July by the Federal Deposit Insurance Corporation (FDIC). Yet it was not until the government took over Fannie Mae and Freddie Mac and forced the sale of Merrill Lynch to Bank of America, Lehman Brothers collapsed and the Fed rescued the insurance giant AIG on September 17 that many realized that we were in the middle of a severe financial crisis. From 2008 to 2009, the total market value of the financial assets and companies wiped out worldwide as a result of the financial crisis was estimated to be over 14 trillion dollars (Roxburgh et al. 2009). Governments all over the world- fearing a systemic collapse- rushed to bailout the failing financial institutions, provide liquidity to the financial markets, and negate the negative effects of the crisis on the economy through massive fiscal spending amounting to trillions of dollars. For example, in the US, by early 2009, the government had made commitments of about $12.2 trillion through various programs (New York Times, 02/04/2009). While the financial system came to a standstill, the world economy went into one of its biggest recessions, with most economies experiencing negative growth rates. While some economists tried to defend capitalism by putting the blame for the crisis on government policies and arguing that state interventions via spending cannot pull the economy out of the present economic downturn (Fama et al. 2009), for some observers the crisis represented the “last nail in 1 Liquidity

here refers to direct loans made by the central banks to the banking system in order to encourage the banks to extend credit to the rest of the economy.

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4. Finance in the Latest Capitalist Downturn the coffin” of the neoliberal ideology that had reigned for three decades and stated that free, unregulated and self-correcting markets, combined with the institution of private property, could allocate resources efficiently and bring about the best possible outcome for society (Stiglitz 2008, Krugman 2009). Still, for others this crisis is a symptom of deeper problems with capitalism as a system that organizes the production of goods and services with the single goal of making more profit (McNally 2009, Resnick and Wolff 2010). What is not disputed is that millions of people are unemployed and those that have not lost their jobs are having to compromise for worse work conditions given the threat of losing their jobs. Many are also losing their homes while companies in every sector are filing for bankruptcy. In order to understand how troubles that emerged in a relatively small part of the US mortgage markets ended up with one of the most severe downturns of the capitalist system ever, a historical look at the structural features of the system since the early 1980s is needed.

Regulated Capitalism and Its Crisis The period from World War II to the late 1970s was one in which the State played a significant role in the economy through regulations and interventions aimed at achieving high rates of growth and low unemployment, while constituting a ’welfare state’ through various social programs. Increases in labor productivity were partly translated into improvements in wages, while weak foreign competition and oligopolistic markets led corporations to engage in ’friendly competition’ and achieve high profit rates. Within this regime of accumulation the financial system was also strictly regulated and made to serve the needs of productive capital with the aim of promoting economic growth. By 1933 the government had already taken steps to control bank activity by passing the Glass-Steagall Act which inserted ’firewalls’ between capital markets and depository institutions by separating banks according to the type of business activity that they did. Commercial banks were restricted to taking deposits and making loans while investment banks traded stocks and bonds. Commercial banks were also prohibited from holding assets that were deemed speculative, such as corporate stock. The Fed had the power to restrict competition among banks and to control interest rates in savings accounts. All of the above interventions and policies, together with the role of the Keynesian2 welfare state and a class compromise (Bowles et al. 1990) that 2 Without

getting into debates as to what it means to be Keynesian, we use this description in the broadly understood perspective that ascribes a role for the intervention by

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Part II Finance guaranteed labor peace, led to the so-called “golden age,” where we see the only period of sustained growth and declining inequality in terms of wealth and income distribution in the history of American capitalism. For example, workers enjoyed increasing material standards of living thanks to the institutional framework that facilitated mass production and mass consumption via higher wages and benefits. The emergence of this “golden age” was supported by the fact that the destruction of Europe and Japan during the war put the US in a very favorable position in world markets given the lack of competition. The US had a fundamental role in reconstructing these devastated countries via the Marshall Plan, which provided funds for the buying of US goods-as the US produced more than half of the world’s industrial output- and also served an ideological function against the rise of socialism all over the world (Hobsbawm 1994). However, this regulated capitalism ran into a multipronged crisis in the 1970s with declining profits, high inflation, and a stagnating economy. A variety of explanations have been offered in order to explain the reasons of this crisis, which ranged from tendency of the rate of profit to fall (Shaikh 1987), to increased foreign competition (Brenner 1998), a slowdown in productivity growth due to diminished worker effort (Bowles, Gordon and Weisskopf 1986), or profit squeeze due to increased wages (Glyn and Sutcliffe 1972). No matter which explanation is taken, the profitability crisis of the 1970s together with the collapse of the post-war Bretton Woods financial system, created new dynamics in the economy which involved a search for ways of increasing profitability and establishing a new financial architecture. The crisis of this regulated capitalism during the 1970s paved the way for neoliberalism, the latest variant of the laissez-faire ideology which celebrates unregulated markets that facilitate the mobility of capital. Since the crisis of the 1970s, a series of attempts have been made by the corporations and the governments to restore profitability. Corporations engaged in cutthroat competition with each other, began relocating their production activities around the globe in order to take advantage of lower labor costs and expand into new markets. Coupled with the new anti-labor stances of the governments and the shift of focus of economic policy from lowering unemployment to lowering inflation—and the emergence of flexible labor markets, subcontracting and outsourcing—a decline in the overall share of labor began. A process of deregulation of trade and finance, privatization of most public services, reduction of taxes on corporations and the wealthy aimed to secure new conditions of profitability for the corporations under a the State in the economy, especially in moments of market imbalances and economic crisis.

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4. Finance in the Latest Capitalist Downturn so-called “free market” economy. While these developments led to the global expansion of the capitalist system and periods of economic expansions, at the same time it has more clearly exposed fundamental contradictions within the modern capitalist system. Five of them are central to a proper understanding of the crisis of late 2000s:

Financial Deregulation With the elimination of most of the financial regulations designed to curb excessive risk-taking by the financial system and with the effect of the unrestrained competition in the financial sector, banks and other financial institutions began engaging in increasingly risky activities in order to acquire profits. This was marked by a shift from traditional financial activities such as mortgage lending towards speculative activities -enabled by financial innovations such as securitization- and resulted in the emergence of asset bubbles both in the US and in the rest of the world. Starting in 1980, the government began to deregulate the financial sector and as a result created an environment in which banks could decide which strategies to pursue to obtain more profits given that taking deposits and lending money were not as profitable as speculative investment. Among these regulatory changes, the infamous Gramm-Leach-Bliley Act of 1999 repealed the Glass-Steagall Act and removed the barriers between investment and commercial banking. In 2000, the Commodity Futures Modernization Act replaced the 1982 Shad-Johnson Act and provided regulatory exemptions to certain financial innovations, among others to credit default insurance and permitted financial institutions to invest large sums in the credit default swaps. The Sarbanes-Oxley Act allowed the banks’ off-balance-sheet activities as long as the risk and rewards of these activities were held by other entities. In 2004, investment banks were allowed to increase their leverage. All these regulatory changes contributed to the latest financial crisis by allowing increased leverage, securitization, and speculation in the financial markets and by creating an environment prone to speculative asset bubbles and fragility. The monetary policy of the Fed only contributed to this by a lowering of the federal funds rate in order to stave off slowdowns of the economy in the early 1990s and then again the early 2000s. The Fed aimed to maintain consumption at high levels through increased credit at low interest rates while allowing the emergence of speculative asset bubbles, in the stock market in the 1990s and in the housing market in the 2000s.

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Stagnant Wages and Household Borrowing The internationalization of production and the concomitant increase in the reserve army of labor both domestically and globally together with flexible labor markets and declining unionization rates led to stagnant wages throughout the new era. Relocation of production to sites with lower labor costs put US workers in direct competition with the global reserve army of labor whose size grew immensely because, among other things, of the increased participation of China in world industrial production. At the same time, the domestic balance of power moved against labor. The declining power of labor organizations and deunionization together with the decline of the social wage through cuts in or eliminations of social programs such as guaranteed retirement pensions, unemployment benefits and so on reduced the power of workers in the workplace and in the political arena. Flexible labor markets involved the widespread use of temporary and contingent workers, leading to decreased job security, lessened bargaining power and declining wages (Rosenberg 2010). In terms of economic policy, we see a shift from the full employment targeting of the “golden age” to inflation targeting and a reduction in social programs which brought down the social wage and decreased the bargaining power of labor. While average productivity in the manufacturing sector between 1978 and 2007 increased 3.26 percent per year, real wages paid to the workers in this sector remained stagnant and even decreased by -0.37 percent per year in the same period.3 Faced with stagnant wages, American households devised new strategies to keep their consumption up, including increased participation in the labor force (more household member entering the workforce), working longer hours or having more than one job, and heavy borrowing (Wolff 2010). Total outstanding household debt as a percentage of disposable personal income was around 70 percent in early 1980s, approached to 100 percent by late 1990s and was more than 130 percent by the time the financial crisis hit in 2007.4 Households also began using their houses as ATM machines in order to sustain their consumption. One measure of this, gross equity extracted from housing, shows that funds acquired by households through their houses constituted close to 10 percent of disposable income in the 2000s (Greenspan and Kennedy 2007, Kotz 2009). 3 Authors’ 4

calculations from the Economic Report of the President, 2010, Table B-47 and B-49. Authors’ calculations from the US Bureau of Economic Analysis, National Income and Product Accounts Table 2.1 and Federal Reserve Flow of Funds Accounts Table D.3.

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Inequality and Finance While the average wages of non-supervisory workers have been stagnant, inequality widened as the wealthier began earning more and more. For example, CEO pay skyrocketed from 42 times the pay of an average worker in 1982 to more than 400 times in the 2000’s. In fact, ”after decades of stability in the post-war period, the top decile share has increased dramatically over the last twenty-five years and has now regained its pre-war level. Indeed, the top decile’s5 share of income is 49.7 percent in 2007, a level higher than any other year since 1917, even surpassing 1928, the peak of the stock market bubble in the ’roaring’ twenties” (Saez 2009: 2). This increase in the concentration of income has been matched by an increase in the concentration of wealth, especially financial assets (Wolff, et al. 2009). Coupled with the financially deregulated environment, institutional investors such as hedge funds or private equity funds would put this increased wealth into more financial speculation and create an ever growing supply of speculative finance. At the same time, increased wealth at the top and the consequent rise of money management forced banks and other financial institutions into intense competition with each other in order to capture this business. Exotic new financial instruments were created in order to provide higher yields and capture niche markets (Crotty 2007). While the rise of profits and financial incomes relative to wages was a major factor leading to a concentration of income and wealth at the top, profits made from managing this increasingly concentrated wealth further contributed to these inequalities. Also, while the regulatory framework allowed increasingly complex financial innovations, institutional investors and the wealthy provided the demand for these complex financial assets. The large amount of wealth accumulated sought professional management through institutional investors as a substantial amount of investable funds were produced relative to existing available investment opportunities.

Chronic Excess Capacity Heightened competition in product markets created chronic excess capacity in many industries, which led to a double problem with the lack of effective demand. While during the “golden age” limited competition placed lower limits on the price and upper limits on capacity, the cutthroat nature of competition in the current era, intensified thanks to deregulation and liberalization of trade flows, led to overinvestment relative to demand, leading 5

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Top decile refers to families with an income of more than $109,600.

Part II Finance to excess capacity. In the face of increasing international competition and price wars, corporations attempted to defend their illiquid capital assets and keep their position through further investment in cost-cutting technology. This led to growing idle capacity, which in turn led to downturns in investment spending as well. Hence the slow growth of aggregate demand and the problem of excess capacity reinforced each other. Increased competitive pressures forced firms to further cut wages and relocate production in an attempt to lower labor costs, further contributing to the slow growth of aggregate demand (Crotty 2005). Non-financial corporations facing profitability problems also began engaging in financial investments. Asset bubbles worsened the chronic excess capacity problem by directing excess investment into booming sectors, as seen in the 1990s tech bubble in which overinvestment created excess capacity in many high-tech industries which led to a collapse of prices, profitability and eventually many firms in the early 2000s (Orhangazi 2008, 2009).

Global Imbalances Finally, in the last decade imbalances in global trade and financial flows have been more pronounced. As the US current account (trade) deficit widened in the 1990s, this was mirrored in the increasing flow of capital into the country. The structural reasons behind this trend included increased relocation of production to lower labor cost countries through outsourcing and subcontracting and the fast growth of export oriented countries, especially in Asia. While relocation of production outside the US was a significant contributor to the decline of high-paying jobs and investment, low-priced imports became an enabling factor in sustaining the stagnant wages of the era. In the process, US consumption, heavily dependent on credit, became an outlet for many export oriented economies in the world. While the size of the trade deficit that the US had for years would be unsustainable for any other country, whose currency would be devalued, automatically reducing imports. But the US dollar’s role as the international reserve currency enabled the continuation of these imbalances by maintaining high demand for US currency. The inflow of international capital into the US involved both private and public savings. The liquidity and perceived soundness of the US financial markets and institutions drew global savings into the American financial markets. Securitization and financial innovation in the US contributed to attracting the excess savings of the world to the US. In addition, the public savings, export-oriented policies of the Asian economies together with their need to hold dollar reserves against financial instability,

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4. Finance in the Latest Capitalist Downturn especially exchange rate instability (a lesson of the Asian financial crisis of the late 1990s), led to a growing amount of surplus flowing to the US economy from these economies. In this setup, while the US dollar played the role of international currency, serving as the basis for the international accounting and payments system, US Treasury bonds played a key role as a store of value.

Concluding Remarks The disturbances that began in the mortgage market led to an unraveling of the contradictions discussed above. Securitization and the deregulated financial environment caused a rapid spread of the financial crisis, while households faced with a decline in their net worth and tightening lending conditions cut their spending and firms began rapidly cutting back on their investments leading to a severe downturn in the world economy. One thing that this downturn reminds us of again is that capitalism periodically runs into crisis. All the risk management innovations made in the recent years, instead of preventing this from happening, exacerbated it. As Minsky had put it, stability is destabilizing in capitalism and there are various sources for this instability. In this sense, any type of policy that aims at reviving and fixing the dynamics of an inherently unstable capitalism will most probably prepare the ground for future crises, especially when the main structures, relations and incentives of the system remain in place. Apart from the current economic crisis that the world is experiencing, other crises related to the environment, energy, and food can all be understood in relation to how capitalism works, irrespective of the shape the system takes and where in the business cycle we are located. This crisis is a strong reminder that we should be looking for alternative ways of organizing the economy if we want to avoid the destructive impact of capitalism on our lives.

About the Authors ¨ ur Orhangazi teaches economics at the Roosevelt University in Ozg¨ Chicago. He is the author of Financialization and the US Economy and a number of articles on financialization and financial crises. He is also a staff economist at the Center fopr Popular Economics. Ian J. Seda-Irizarry is a graduate student and instructor in the Economics Department at the University of Massachusetts at Amherst. His interests include Political Economy, Development and Macroeconomics. He is a member of the Association

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Part II Finance for Economic and Social Analysis and a staff economist at the Center for Popular Economics.

References Bowles, S, Gordon, D and T Weisskopf. 1986. “Power and Profit: The Social Structure of Accumulation and the Profitability of the Post-War US Economy”, Review of Radical Political Economics, 18(1 and 2): pp 132-67. Bowles, S., Gordon, D., Weisskopf, T. 1990. After the Wasteland, M.A. Sharpe Inc., Armonk, NY. Brenner, R. 1998. “The Economics of Global Turbulence: A Special Report on the World Economy, 1950-98”, Special Issue, New Left Review, No 229. Crotty, J. 2005. “The Neoliberal Paradox: The Impact of Destructive Market Competition and Modern Financial Markets on Non-Financial Corporations Performance in the Neoliberal Era”, in Epstein G.A. (ed.), Financialisation and the World Economy. Cheltenham, UK: Edward Elgar. Crotty, J. 2007. “If Financial Market Competition is so Intense, Why are Financial Firm Profits so High? Reflections on the Current ‘Golden Age’ of Finance,” http: //ideas.repec.org/s/uma/periwp.html, Working Papers wp134, Political Economy Research Institute, University of Massachusetts at Amherst. Fama, E. et al. 2010. With all due respect, Mr. President, that is not true. Cato Institute. http://www.cato.org/special/stimulus09/ Glyn, A. and R. Sutcliffe. 1972. Capitalism in Crisis. New York: Pantheon Books. Greenspan, A. and J. Kennedy. 2007. “Sources and uses of equity extracted from homes.” Federal Reserve Board Finance and Economics Discussion Series No. 2007-20. Hobsbawm, E.J. 1995. Age of Extremes : The Short Twentieth Century 1914-1991. New edition. Abacus, October 12. Kotz, D. 2009. “The financial and economic crisis of 2008: A systemic crisis of neoliberal capitalism.” Review of Radical Political Economics, 41(3): 305-317. Krugman, P. 2009. “Life Without Bubbles.” New York Times, January 6th. McNally, D. 2009. “From Financial Crisis to World Slump: Accumulation, Financialisation, and the Global Slowdown,” Historical Materialism. Vol. 17, No. 2. New York Times, ”Adding Up the Government’s Total Bailout Tab,” http://www.nytimes.com/interactive/2009/02/04/business/20090205-bailout-totalsgraphic.html, accessed 05/06/2010. ¨ 2009. “Did financialization increase macroeconomic fragility? An analyOrhangazi, O. sis of the US nonfinancial corporate sector” in Goldstein J. and M. Hillard (eds) Heterodox Macroeconomics. New York: Routledge: 127-139. ¨ 2008. Financialization and the US Economy. Northampton, MA: EdOrhangazi, O. ward Elgar. Resnick, S. and Wolff, R. 2010. ”The Economics Crisis: A Marxian Interpretation”. Rethinking Marxism. 22(2, April): 169-185. Rosenberg, S. 2010. “Labor in the Contemporary Social Structure of Accumulation,” in McDonough, T., M. Reich and D. M. Kotz (eds) Contemporary Capitalism and Its Crises. Cambridge, MA: Cambridge University Press. Roxburgh, et al. 2009. “Global Capital Markets: Entering a new era”. McKinsey Global Institute. Saez, E. 2009. Striking it richer: The evolution of top incomes in the United States (update with 2007 estimates). elsa.berkeley.edu/˜saez

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Shaikh, A. 1987. “The Falling Rate of Profit and the Economic Crisis in the U.S.” in The Imperiled Economy, Book I, Union for Radical Political Economy, Robert Cherry, et al. Stiglitz, J. 2008. The End of Neoliberalism? Wolff, E.N., Ajit Zacharias and Thomas Masterson. 2009. “Long-Term Trends in the Levy Institute Measure of Economic Well-Being (LIMEW), United States, 1959–2004.” Levy Economics Institute Working Paper No. 556. Annandale-on-Hudson: Levy Economics Institute. Wolff, R. 2010. Capitalism Hits the Fan. Northampton, MA: Olive Branch Press.

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5. Complementary Currencies as a Method to Promote the Solidarity Economy “Miguel” Yasuyuki Hirota Outside of the household, nearly all goods and services are exchanged with the aid of some sort of “exchange medium,” the most common being government-sanctioned legal tenders such as dollars. Alternatives to these official monies, such as local exchange trading systems (LETS), local currencies, and timebanks have existed, off and on, for many years, promoting the solidarity economy. The Belgian economist Bernard Lietaer conceptualized these various alternatives under the umbrella term of “complementary currencies.” According to Lietaer, complementary currencies “complement” official currencies because they enable useful socioeconomic flows that would otherwise run dry if the official currencies were the only options available. Currently, complementary currencies exist almost entirely at local or regional levels, where they exist at all. There are no theoretical reasons to doubt that some forms of complementary currency could be expanded to be effective on larger international-even global-scales. I’ll start by explaining how systemic failures in the official monetary system undermine the solidarity economy. After that I will define complementary currencies and describe examples of different initiatives around the world.

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Systemic Failures of Our Current Monetary System and the Significance of Complementary Currencies for Us In 1995, German architect Margrit Kennedy published a remarkable book titled Inflation and Interest-free Money 1 in which she explained the unsustainability of exponential growth, noting that in the natural world only cancer follows this curve. And our (non-solidarity) economy is built around this unsustainable “goal” of exponential growth due to its basic dependence on the compound interest rate underlying official money creation. As a result, the economy is destined to undermine itself, and so much more, as it eats up all the natural resources. In addition to promoting ecological crisis, Kennedy argues that our monetary system is inherently unfair as it necessarily redistributes wealth from the poor to the rich. This occurs because everybody pays interest indirectly for each commodity (such as bicycle) or each service (such as train ticket) they purchase because the producer builds the cost of interest on their loans into the prices they change to customers. The result is that the poorest 80 percent of families to pay more than what they receive while the richest 10 percent of families-who own the vast majority of shares in the banks that initiate the interest-bearing loans, and therefore have claim to the banks’ profits-receive more than what they pay. The system of compound interest also hinders long-term perspectives in economic activities, imposing a bias in favour of short-term projects. Stefan Brunnhuber and Harald Klimenta, other German researchers, give the example of a pine tree that will be worth $100 in 10 years is valued today at approximately $61 (assuming an interest rate of 5 percent: 61 = 100/1.0510 ) because this is how the financial market measures value, while the oak tree that will be worth $1,000 in 100 years is today valued at only $7.60 (again assuming 5 percent interest: 7.6 = 1, 000/1.05100 ). The result is that investors prefer short-term projects to long-term ones. However, we could have a monetary system that promotes a long-term perspective by introducing a currency with demurrage (see below) in which the same pine tree today would be valued at $167 (assuming the demurrage rate were 5 percent: 167 = 100x1.0510 ) while the oak tree would be valued at approximately $170,000 (as 170, 000 = 1, 000x1.05100 ). The inability of our economy to promote anything other than narrow, blindered interests is so clear that even George Soros, one of world’s most 1 The

whole text can be read at: http://userpage.fu-berlin.de/~roehrigw/kennedy/ english/.

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Part II Finance successful financial speculators, admits that International trade and global financial markets are very good at generating wealth, but they cannot take care of other social needs, such as the preservation of peace, alleviation of poverty, protection of the environment, labor conditions, or human rights-what are generally called “public goods.” The concept of “complementary” currency is based on Taoism, a Chinese philosophy. Bernard Lietaer created this term because he observed that, from this viewpoint, our society is too inclined towards Yang (male) values such as central authority, hierarchy, competition, analytical reasoning, and technology, at the cost of Yin (female) values such as mutual trust, equality, cooperation, intuition, empathy, and interpersonal skills-values at the heart of a solidarity economy. Because the monetary system is “the agreement within a community to use something as a means of exchange” —the system that mediates interactions between people —he proposes the use of complementary currencies to balance excessive Yang with an increase in Yin.

Complementary Currency Initiatives The best known complementary currency systems are the local exchange trading systems (LETS), the first of which was put into practice at Commox Valley, British Columbia, Canada by Michael Linton in 1982. Later it was spread into other countries, especially in the United Kingdom, Australia, France (where it is called SEL for syst`emes d’´echanges locaux) and Germany (where it is called Tauschring).

Hanbat LETS (Daejeon, South Korea) Here I would like to describe the Hanbat LETS2 initiative in Daejeon, South Korea. This complementary currency system was introduced in 2000 as an initiative of Agenda 21 in collaboration with different local NGOs with the following goals: 1. To create a communitarian lifestyle in the urban area 2 Hanbat

is the ancient name of Daejeon City from before the Japanese colonisation. Official website: http://www.tjlets.or.kr/ (in Korean). Source: Chun (2006).

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5. Complementary Currencies 2. To create a sustainable economic system by establishing a process of production, circulation, consumption and recycling 3. To create jobs for the unemployed, housewives and the elderly on top of the development and leverage of unused workforce 4. To promote the LETS movement 5. To take part in alternative movements to solve social problems 6. To achieve necessary other projects Other initiatives have been launched through Hanbat LETS, most notably a traditional-medicine cooperative which accepts duru (LETS points) as well as won (the national currency), various classes in subjects such as handicrafts, music, foreign languages, and information technology, and the organization of events such as sports festivals, a farming club, and cooking parties. Members see this system as a space where a traditional and communitarian lifestyle is being reborn, the very lifestyle they used to have before modernisation, one that nurtures human relationships among themselves. The annual turnover in duru and won has been multiplied from 17,490,800 (8,813,300 duru + 8,677,500 won, equivalent to approximately US$14,200) in 2001 to 121,275,676 (65,160,426 duru + 56,115,250 won, equivalent to approximately US$98,480) in 2005, thanks to the manager’s enthusiasm in inviting people to join this new means of exchange/human relationship as well as the fact that the LETS system enables housewives to leverage their talents and/or to establish their new enterprises, given that most women in South Korea have to give up their professional carrier after their marriage and/or having their first baby. It is relevant that in South Korea (not only at Hanbat LETS) the word “Pumasi” is often used, which means “mutual help at the farming,” to illustrate this movement.3 This Asian country began the modernisation process in the 1960s, when young people left their home towns to go to universities and/or to seek jobs in Seoul or other industrial cities. Because modernisation has been so rapid and recent, a good part of the urban population still remembers their traditional communitarian solidarity in the countryside even if they don’t live it anymore. The LETS was introduced when the country was still suffering from the aftermath of its financial crisis in 1997. The aim was to retrieve a communitarian lifestyle and Koreans understood it as a tool to promote this sort of human relationship with abundant Yin 3 For

example, a LETS at Gwacheon, Gyeonggi Province is called as “Gwacheon Pumasi.”

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Part II Finance such as cooperation and mutual trust, very different from the lifestyle of the formal market where Yang values such as hierarchy4 and competition are required. The new human relationship-thanks to the mutual trust to be nurtured in this system and a variety of above-mentioned communitarian activities-are successful examples of the complementarities of this tool in encouraging Yin in Korean society, improving its members’ lives and enhancing solidarity among them.

Chiemgauer (Prien am Chiemsee, Germany) Since 2003, both Kennedy and Lietaer have worked on the implementation of regional currencies in Germany (called regio),5 defined as a form of complementary currency instituted at a regional (subnational) level with the aim of satisfying unmet needs with unused resources. These initiatives differ from LETS in that regio deals with a wider geographic area of between 10,000 and 1,000,000 inhabitants while LETS tend to embrace smaller zones (though Hanbat LETS is an exception and rather closer in scale to regio than other LETS). Organizers of Germany’s Chiemgauer bills, series 2009. Photo by regios hope to replace 30 percent of Matthias Leippe. Courtesy of Christian Gelall conventionally funded economic leri. activities in each region (Kennedy and Lietaer, 2004). Twenty-nine initiatives in Germany, Austria, and Switzerland are operational as of September 2009, and I would like to depict briefly the most successful case, called Chiemgauer,6 which has been active since January 2003 at Prien am Chiemsee, Bavaria. Chiemgauer was founded by female students of a Waldorf school under 4 Keep

in mind, however, that the philosophical base of Korean society is Confucianism in which the hierarchy is well respected. 5 http://www.regionetzwerk.de/ (Only in German) Actually this network extends beyond Germany as some initiatives are located in Austria and Switzerland. 6 http://www.chiemgauer.info/ (Only in German). Source: Kennedy and Lietaer (2004), Hirota (2005).

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5. Complementary Currencies the supervision of Christian Gelleri, a professor of economics. Currently bills of 1, 2, 5, 10, 20, and 50 chiemgauers (equivalent to euros) are issued. In 2005 Chiemgauer was separated from the Waldorf school and has now five regional offices (Gelleri, 2009). Participants in Chiemgauer appoint a non-profit which they want to support financially, and exchange their euro bills into chiemgauer bills at exchange shops and spend them at local shops. Three percent of the euro they pay on exchanging euros for chiemgauer is donated to the appointed nonprofit. Alternatively, consumers can use a Chiemgauer debit card, in which case the equivalent amount of euros are extracted from their bank accounts. Shops that receive chiemgauer can purchase their commodities from other businesses using the chiemgauer or convert them into euro; conversion back to euros incurs a 5 percent commission fee, of which 2 percent goes to cover administrative costs of the Chiemgauer office and the remaining 3 percent go to the non-profit that was chosen by the organization’s participants as previously mentioned. Let us see which advantages each stakeholder has with this system. • Appointed non-profits: for every 100 chiemgauers acquired by consumers, the non-profit receives €3 to support their activities. • Consumers: their use of chiemgauers helps to support the chosen nonprofit organization and also supports the local economy in the area in which they live. • Local shops: accepting and using the alternative means of exchange improves business’ image, and so can entice more customers, by showing that the business supports communitarian activities by way of Chiemgauer. It also provides a way for community-minded business owners to effect their interests in everyday business practice. Another key feature of Chiemgauer is that demurrage has been applied. This concept of demurrage was proposed by Silvio Gesell7 (1862-1930) and means that there is a cost associated with holding the money over time. The purpose of demurrage is to ensure that money be used as a means of exchange and not of hoarding. In the case of chiemgauer, holders of the bills are required to put a stamp on the bills every three months to keep them valid; the cost of the stamp is 2 percent of the face value of the bill (for example, €0.10 for 5 chiemgauers). This functions as an incentive encouraging holders of chiemgauers to spend them more quickly, rather than 7 Read

The Natural Economic Order, Gesell’s masterpiece, appropriate-economics.org/ebooks/neo/neo.htm.

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http://www.

Part II Finance hold on to them for long periods of time, leading to greater stimulation of the regional economy than would happen without demurrage. Indeed, the circulation of chiemgauers is now three times faster than that of euros, and as much as 70 percent of chiemgauers are spent again within the region (Gelleri, 2009). In 2008 Chiemgauer had 2,499 members (of which 607 were businesses), with 399,019 chiemgauers in circulation as of September 2009. The annual turnover of chiemgauers through the economy in 2008 was equivalent to €3,702,397, some 61 percent more than the previous year. As a consequence, donations to non-profits grew to €33,322 in 2008, up 30 percent over the previous year. The combination of demurrage and fees for conversion from and to euros leads users to be more likely to spend chiemgauers at local businesses, reducing opportunities for the money to leak out of the community, thus making local businesses more competitive. The Chiemgauer office itself is a non-profit too, and is managed democratically by its members. These various features-strengthening of the regional economy, support for appointed non-profits, democratic control of the complementary currency organization by participants, discouragement of hoarding-reveal Chiemgauer to be strongly aligned with the principles of the solidarity economy.

WIR Bank (Switzerland) WIR Bank8 was founded in 1934 as a cooperative of small- and mediumsized businesses in Switzerland, in reaction to the crisis of the Great Depression. Since then, it has been issuing and controlling its own complementary currency, called “WIR” (German for “we”), with the aim of stimulating transactions among its business members, and to stop money leakage to multinationals or to foreign corporations. Since 2000 it has accepted individual members too. Members can ask WIR Bank for loans in WIR (equivalent to the Swiss franc, CHF), an electronic complementary currency which can be spent for payments to other members of the bank, in parallel with CHF (for example 40 WIR and 60 CHF instead of 100 CHF). Some 800 million WIR are in circulation and the annual turnover through the system is about 1.670 billion WIR.9 Below are advantages for businesses to join WIR Bank: • Increase of business volume: you can attract more customers by accepting WIR, achieving more turnover in CHF in addition to the gains 8 http://www.wir.ch/

(in German, French and Italian, the three official languages of the

Switzerland). 9 Source: WIR Bank.

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5. Complementary Currencies in WIR. • Lower interest rate: the monetary creation by WIR Bank itself makes it redundant to pay the official rate which commercial banks usually would pay to the central bank, allowing this cooperative to provide cheaper loans to its members. James Stodder (2000) has written that this bank plays a role to cushion economic vicissitudes, shown by the fact that WIR Bank membership tends to grow when unemployment grows, and also that transactions and loans in WIR increase when the rest of the economy (as measured by the Swiss GDP) is faltering. On top of that, WIR Bank member businesses are able to use WIR-denominated exchanges to clear out excess inventory that they cannot clear out when relying on Swiss francs alone. Another crucial point is the fact that WIR Bank is a cooperative owned by its members (businesses and, now, individuals) and therefore is governed by its users under democratic principles, quite opposite to standard commercial banks which enjoy a degree of authoritarian power over businesses which ask for loans. WIR Bank’s goal is not to maximise its profit at the cost of its debtors (= members), but to provide a maximum of benefits to them, enabling a management for the sake of its members. WIR Bank is especially noteworthy given its long lifespan and success in achieving a relatively large scale of operation. It has proven itself a good example of solidarity economics in action, not only by virtue of being a cooperative but especially because of its ability to stimulate mutual trade among its members, especially in times of recession when this is most needed.

Banco Palmas (Brazil) Another remarkable initiative has been working well since 1998 in Fortaleza, Cear, Brazil, strengthening the solidarity economy by providing microcredit in its own complementary currency. Palmeiras, home to some 32,000 people, was a shanty town founded in 1973. The ASMOCONP (Associao dos Moradores do Conjunto Palmeira, Palmeira Neighbourhood Inhabitants’ Association) was founded in 1981 to struggle against the miserable living standard in the shanties, achieving access to drinkable water and electricity service in 1988, to sewage in 1990, and then nurturing its social capital. Despite such developments, poverty remained endemic in the community and ASMOCONP founded Banco Palmas10 in January 1998 to foster economic improvement, since then enabling the creation of more than 1,000 10 http://www.bancopalmas.org.br/

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(in Portuguese).

Part II Finance jobs. This financial institution is managed by volunteers. It has been so successful that 38 similar systems have been established in other parts of Brazil, each reinforcing its local economy. Currently Banco Palmas provides different financial services not in real (pronounced “reeou,” Brazil’s official tender, R$) but in its complementary currency called “palma” (P$). Each palma is backed with one real, and each bill has a barcode, serial number, and other features to prevent counterfeits. Producers and merchants are allowed to convert palmas to reals A one palmas note. Photo courtesy of Infor their external trades. Banco Pal- stituto Palmas. mas maintains a sufficient store of reals on hand to cover these conversions. In addition to offering training courses in order to help entrepreneurs in Palmeiras, Banco Palmas provides the following financial services at lower interest rates than at commercial banks: • Microcredit for production, commerce, and service: loans of up to R$1,000 (about US$450) at an interest rate of 0.5 percent to 3 percent per month • Credit card “Palmacard”: credit line up to R$100 (about US$45), only accepted within the community and no commission fee is charged for this service • Microcredit for women: the bank targets some of its financing to women in precarious situations • Palmacasa: another targeted financial service which helps people improve their homes Some of member businesses provide discounts for purchases in palmas, encouraging community members, including other businesses, to spend and accept this local currency. The Dutch nongovernmental organization STRO,11 which specialises in setting up complementary currency systems in Europe and Latin America, 11 http://www.socialtrade.org/.

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5. Complementary Currencies conducted an interesting experiment with Banco Palmas in 2002. The experiment was a trial to test the feasibility of STRO’s Fomento Project and was funded by.a R$50,000 donation from the Dutch government. The aim was to build a school at Palmeira with financing of construction in a mix of reals and palmas. The school’s construction workers were paid only R$10,000 of their wages in reals, with the rest being paid in palmas. This allowed the other R$40,000 of the original R$50,000 donation to stay at Banco Palmas, enabling the underwriting of additional microcredit services to the community repayable in either reals or palmas, acting as further encouragement for businesses to accept palmas. The current amount of “cloned” reals for microcredit services that has come out of the program is R$48,587, more than the initial planning because of the devaluation of reals in comparison with euro. (The Dutch government donation was determined in euros, so when the real devalued, that same donation in euros converted to a larger donation in terms of reals). In addition, the total amount of microcredits created through the program was R$52,664, more than the original deposit because some businesses repaid their palmas loans partially in reals, allowing Banco Palmas to provide still more loans (Ramada et al, 2003). This mechanism has allowed the original donation to stimulate more economic developments than it would have if distributed only in the official currency, creating two different streams of money through the community, one towards construction workers and another towards local businesses. In traditional development funding the second one would be impossible. Although it is quite difficult to evaluate exactly how many transactions were triggered thanks to this system, it is estimated that at least 80 percent of palmas bills were spent more than once before going back to Banco Palmas, meaning the value of the donated reals to the local economy of Palmeiras was multiplied by being partially converted to palmas.

Conclusion Our current money system, founded on a base of compounding interest, has serious defects which obstruct the creation of sustainable and fair economies. Among these defects are the need for exponential economic growth to pay back the exponentially growing interest burden, income redistribution in favour of the rich, and the discounting of future values which discourages long-term investments. On top of that, from the Taoist viewpoint, it tends to promote Yang elements (physical and financial capital) far from the principles of the solidarity economy, making it necessary to strengthen Yin el-

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Part II Finance ements (social and natural capital). Complementary currencies are an effective way to promote Yin and balance the system, especially when the complementary currencies are designed with the goal of solidarity in mind. There are different complementary currency systems available (and creative activists will surely devise new models in the future) to achieve different socioeconomic goals, and suited to different social and economic circumstances. Hanbat LETS in Daejeon, South Korea has strengthened social bonds among members thanks to the huge variety of its activities, on top of allowing those who are excluded from the formal economy to leverage their talents and so gain access a new income source. Chiemgauer at Prien am Chiemsee, Bavaria is another system which stimulates the regional economy on top of pouring a bit more money into local non-profits, and WIR Bank in the Switzerland stimulates transactions between Swiss small and medium-size businesses so that the purchasing power should stay within the business circle without leaking out of the Switzerland, on top of providing them cheaper loans. And Banco Palmas in Brazil provides microcredits, charging much lower interest rates and allowing the creation of new jobs in the shanty town. Each initiative favours different aspects of solidarity economy: it would be extremely important to realise comparative studies of these and other initiatives to put together all the benefits and to promote the solidarity economy more fully.

About the Author “Miguel” Yasuyuki Hirota ([email protected]) was born in 1976 in Fukuoka, Japan where he still lives. Since 1999 he has been researching and promoting complementary currency systems throughout the world. He maintains the Online Laboratory on Complementary Currencies JAPAN (www.olccjp.net), has published three books in Japanese on the topic, and has given numerous presentations in the United States, Latin America, Europe, Asia and New Zealand.

References Brunnhuber, Stefan, “Wie Wir Wirtschaften Werden,” Redline Wirtschaftsverlag, 2003. Chun, Kyunghee, “The Situation of Korea Community Currency and the Activities of Hanbat LETS,” 2006. http://www.complementarycurrency.org/ccLibrary/Korean% 20CCs%20(English).rtf.

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Gelleri, Christian, “Chiemgauer Regiomoney: Theory and Practice of a Local Currency,” http://www.uea.ac.uk/env/ijccr/pdfs/IJCCRvol13(2009)pp61-75Gelleri. pdf, 2009. Lietaer, Bernard, The Future of Money, London: Century, 2001. Kennedy, Margrit, Inflation and Interest Free Money, Gabriola Island, BC, Canada: New Society, 1995. Available at: http://userpage.fu-berlin.de/~roehrigw/kennedy/ english/. Kennedy, Magrit and Bernard Lietaer, Regionalw¨ ahrungen: Neue Wege zu nachhaltigem Wohlstand, Munich: Riemann, 2006. Ramada, C. et al, “Manual Bˆ onus de Fomento,” Porto Alegre, 2003. http://www. instrodi.org/downloads/arquivos_textos/manual_bonus_de_fomento.pdf. Stodder, James, “Reciprocal Exchange Networks: Implications for Macroeconomic Stability,” 2000. http://www.appropriate-economics.org/materials/reciprocal_ exchange_networks.pdf.

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6. Credit Unions and the Solidarity Economy Cliff Rosenthal Are credit unions part of the solidarity economy? In recent years, mainstream financial companies have brought usurious and predatory practices to a breathtakingly high level. Employing sophisticated mathematical modeling and unrelenting marketing, their products have drained income, directly or indirectly, from millions of uninformed, over-eager, or economically vulnerable working- and middle-class people. In contrast to a financial system that has brought immense pain to tens of millions of people worldwide through profit-driven excess, the credit union movement is a nonprofit, democratically controlled financial system that counts 90 million members and controls $900 billion in collective assets. Is it, or can it be, a cornerstone of the solidarity economy in the United States, which puts human needs before profit? The answer is mixed.

The Roots of Credit Unions In the first decade of the twentieth century, a prominent capitalist, disturbed by the incessant demands on his employees from usurers, began to explore a new financial model – one based on cooperation, peer solidarity, and mutual guarantees. Over the next three decades, he invested one-million dollars of his own money to spread the idea of credit unions across the country. Edward Filene – founder of the department stores that bore his name – is credited as one of the founders of the credit union movement in the U.S How capitalism, and capitalists, have changed! Alphonse Desjardins, the French-Canadian who was one of the founding fathers of credit unionism in North America, described credit unions this way: A credit union is not an ordinary financial concern, seeking to enrich its members at the expense of the general public. Neither

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6. Credit Unions is it a loan company, seeking to make a profit at the expense of the unfortunate. . . The Credit Union is nothing of the kind; it is an expression in the field of economics of a high social ideal. At its roots, the credit union movement in the United States was not quintessentially American. Cooperative finance in the Western world generally traces its roots to the middle decades of the nineteenth century in Germany, where rural and urban poverty spurred Friedrich Wilhelm Raiffeisen, Hermann Schulze-Delitzsch, and others to develop organizations to provide mutual credit. In North America, credit unions began to emerge in the very first years of the twentieth century, through the work of Alphonse and Dorimene Desjardins in Levis, Quebec: They joined with their neighbors, raised $26.40 at a meeting, and in December 1900 founded a caisse populaire.1 The concept migrated south with French-Canadians to Manchester, New Hampshire, where St. Mary’s Bank – the first credit union in the United States – formed in 1908. In 2008, St. Mary’s Bank – the only credit union in the U.S. that has bank in its name – celebrated its hundredth year as a thriving, community-oriented institution, with hundreds of millions of dollars in assets and a deep, broad commitment to serving its local community. The core principles of credit unions were, and are, elegantly simple: people joining together to pool their savings and make loans to each other. “Not for profit, not for charity, but for service” – that motto and mission statement clearly defines credit unions in the financial marketplace. They have no outside, compensated directors; members elect the governing board. They do not, and cannot, give money away, however compelling the need of their members; they loan money at reasonable rates, regulated by federal and state laws, and use the income to build the collective, retained wealth of the institution. They can neither invest internationally, nor in speculative instruments. They are heavily regulated, and with only a few exceptions, federally insured. Today, there are about 7,600 separate credit unions in the U.S., which control nearly $900 billion in total assets, and serve a total membership of some 90 million people. By the numbers, credit unions in the United States are a great success story. They have grown from small, workplace institutions or associations where individuals had a “common bond” to financial institutions which may serve tens of thousands, or even millions of members. (The largest credit union, Navy Federal Credit Union, has several million members and $40 billion in assets.) But most do not have a mission of social 1 MacPherson

Ian. Hands Around the Globe, p.8-9. Horsdal & Schubart Publishers Ltd, and World Council of Credit Unions. Victoria, BC: 1999.

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Part II Finance change. Community development credit unions, or CDCUs, are the exception – a small, progressive sector of the broader credit union movement.

CDCUs and Popular Movements CDCUs were, and are, born of a vision that by capturing and aggregating the savings hidden in low-income communities, it is possible to build strong, self-sustaining, not-for-profit financial institutions. CDCUs are based on a belief in community self-help: while there is much that the public sector must provide for the common good and the sustenance of “the least among us,” the poor must have an ownership stake in our society, a vehicle through which they are not merely recipients, but economic actors who can control their own resources. By empowering individuals and communities, credit unions are vital, vibrant contributors to civil society and democracy. CDCUs emerged through successive waves of social movements, which formed to fight discrimination, poverty, and the economic disenfranchisement of communities. Race long played a role in excluding people from the financial system – especially, but not only, in the segregated South. As early as the 1930s, African-American communities in the South organized themselves to establish credit unions. This strain continued through the 1950s and 1960s, deepened and enriched by the civil rights movement. In the north, AfricanAmerican churches often established credit unions.

The Faith Community Credit Union In June 1952, members of the Second Mt. Sinai Baptist Church in Cleveland, Ohio formed a credit union for their congregation. To become a member, one had to purchase a “share account” with at least $5.00. Many of the members could not afford that, so they brought in $.25 each Sunday after church until they reached that goal. Rita Haynes, who later would rise to the top ranks of the community development credit union movement, began serving as a volunteer secretary of the Board of Directors in 1958. The credit union operated for decades through space lent to it by the church, growing gradually. As local banks were leaving the community, the credit union expanded its vision: it renamed itself Faith Community Credit Union, acquired a donated branch facility, opened its doors to the community, and doubled its membership in a year. A $10-million institution today, led by CEO Rita Haynes, it has been a tireless innovator in pioneering savings

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6. Credit Unions and lending products: it was one of the first credit unions in the United States to introduce Individual Development Accounts (IDAs) to incentivize savings through matched contributions, and its Grace Loans - an alternative to high-priced “payday” loans - have been a huge success financially and in member service, winning national recognition. The “War on Poverty” of the 1960s brought a major national initiative to establish credit unions. It was, unfortunately, flawed by a well-intentioned but unrealistic top-down approach developed and directed by Washington: hundreds of anti-poverty agencies around the country were directed or encouraged to develop credit unions to serve the poor, without substantial technical or management support, but with a goal of becoming self-sustaining within two or three years. Many of these credit unions were short-lived, and their failures were cited by disillusioned supporters or critics as evidence that the poor could not save or be served. The survivors, however, banded together in 1974 to form the National Federation of Community Development Credit Unions (Federation), which has continuously advocated for an invested in these institutions for more than three decades. In the 1970s, a movement grew to combat “redlining” – pervasive discrimination against minority and poor neighborhood communities that were outlined in red on lenders’ maps. Alongside the movement to win the Community Reinvestment Act of 1977, neighborhood groups organized credit unions to reclaim control over their economic lives and make their own lending decisions. In the 1980s, economic discrimination took another, somewhat subtler form. Buffeted by high interest rates and anxious to take advantage of a new technology – Automatic Teller Machines (ATMs) – banks closed hundreds of branches in low-income, often minority, neighborhoods because they were deemed “unprofitable” (or at least, less profitable than branches in more prosperous areas), further contributing to neighborhood deterioration. Again, communities responded by organizing their own credit unions, sometimes taking over the branch buildings that banks had abandoned. The 1990s and first decade of the 21st century saw communities organize to combat yet another form of discrimination: against immigrants. The “gold standard” of this new initiative was the Latino Community Credit Union in Durham, North Carolina. Organized in 2000 because unbanked, cashcarrying immigrants were being robbed, burglarized, and assaulted, this credit union has achieved the most rapid growth of any credit union in the last quarter-century. In less than a decade, it brought in more than 50,000 members, opened ten branches, and grew to nearly $100 million in community-controlled wealth.

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Part II Finance Today, the Federation counts a membership of over 200 community development credit unions with $5 billion in combined assets and a membership of more than one million people. Its member credit unions serve inner cities, rural areas, and Native-American reservations in 45 states and the District of Columbia, from northern Vermont to the southernmost point of Hawaii. Immigrant and Native American, African-American, Latino-American, Asian-American, and other ethnically mixed communities are served by CDCUs. They serve the working poor, people receiving public assistance, and moderate-income people. They provide small personal loans, microenterprise and small business loans, home rehabilitation loans, and first mortgages. Making the economics work is never easy, and each year some reluctantly merge or go out of business. But especially under the Obama Administration, CDCUs have received growing recognition and support for serving people struggling to survive in an unforgiving economic environment.

The Changing Face of Cooperative Finance: Implications for the Solidarity Economy Up to 1970, credit unions were essentially “pure” cooperatives, owned entirely by their members, whose deposits were called “shares” (as they are, for the most part, today). This terminology reflected the risk borne by members for the financial health of their institution: if the credit union became insolvent, they stood to lose their entire stake. In 1970, the credit union world began to change dramatically Legislation was passed extending to credit unions federal deposit insurance, similar to that enjoyed by banks. Deposit insurance inaugurated an era of great growth for the credit union movement. Given their long history and honorable lineage, why should there be a question about the place of credit unions in the solidarity economy? At their best, credit unions do indeed represent another model of finance – non-exploitative, sustainable, and devoted to economic fair play. But enthusiasm for the contemporary credit union movement in the United States should be tempered by several factors. First of all, credit unionism should not be equated with political and social progressivism. One of key principles of the cooperative movement worldwide is that it is non-political and non-partisan. In the U.S., while the key lobbying arms of the credit union movement do indeed cultivate friends on both sides of the political aisle, an unscientific observation of the

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6. Credit Unions leadership of the credit union movement by this writer indicates a right-ofcenter bent. Second, while credit unions are nonprofit, they need to generate a surplus each year in order to remain viable. As government regulated and insured institutions, there are certain targets for return on assets (ROA) – generally, pegged at 1% during good, or ordinary times (unlike 2008-09). Whether from a desire to match the expectations of regulators or the performance of their peers, the pressure has led some credit unions to adopt consumer-finance practices such as hefty overdraft fees that differ only slightly from commercial banks. These fees fall disproportionately on the more economically marginal credit union members. The desirability and ethics of costly fees are hotly debated. There is an inherent tension here: How do you balance the economic benefit of the individual members with the need to safeguard and grow the “collective wealth” of the credit union? Should one segment of the cooperative membership “subsidize” another segment through their fees? The credit union movement is divided today into two almost equal, opposing camps. Expanded financial regulation in 2010 will likely shrink the field of controversy, limiting certain fees. But it won’t resolve the underlying tension, which is likely experienced by many cooperatives of various types, and resolved in varying ways. Third, the integration of the credit union system with the mainstream economy has wreaked havoc on the movement. In 2009, the credit union movement was stunned by the collapse of wholesale or “corporate” credit unions. These multi-billion dollar, cooperatively-owned institutions were created to provide local credit unions with investment vehicles and clearing services, but in late 2008 and early 2009 it became apparent that these corporate credit unions had invested billions of dollars in AAA-rated securities, consisting of the subprime mortgages that precipitated the financial crisis. The largest of these corporate credit unions went bankrupt and were taken over by the government regulator. As a result of their insolvency, their local member credit unions were forced to absorb large amounts of additional federal deposit insurance premiums, as well as to write off billions of dollars that they had invested as their ownership stake in the various failed corporate credit unions. As of the spring of 2010, the future of the “corporate system” was unclear. Almost certainly there will be fewer of these 25 or so institutions. Equally likely, their investment functions will be restricted. But they still may have an important role to play in the credit union movement, especially in the payments system, since one impetus for their formation was to provide credit unions a less costly, more responsive alternative to correspondent banks.

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Conclusion Flawed as it may be, the credit union movement has demonstrated that nonprofit “banking” can be a scalable, sustainable, and popularly attractive alternative to the profit-maximizing financial system. In 2008 – 09, when banks were curtailing their lending to consumers and small businesses despite massive infusions of government aid, credit unions – which received no such aid – increased their lending, their deposit base, and their membership. In 2010, mass-media financial gurus, mainstream publications, and influential bloggers urged consumers to “move your money” and credit cards from large banks to credit unions. Increasing numbers of Americans have done so. In this, the Great Recession, credit unions have an unprecedented opportunity to win over masses of people to their way of finance. Undoubtedly, some people who leave the banks will never return. The challenge for credit unions – and for proponents of the solidarity economy – is to convince them that shared ownership of a credit union is not merely a step toward lowercost, consumer-friendly service, but a statement of commitment to another socioeconomic order.

About the Author Cliff Rosenthal, President and CEO of the National Federation of Community Development Credit Unions, has worked in the cooperative movement for nearly 40 years, and has led the Federation, a network of more than 200 low-income credit unions through the U.S., for nearly 30 years.

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Creating Common Good Banks: Democratic Economics for a Sustainable World Common good banks (CGBs) are designed to be the foundation for a new economic system: • a system that puts people and planet first, for sustainability and economic justice; • a system in which communities gather to discuss and decide by direct democracy what gets funded and therefore what gets done in their community and in the wider world; • a system that can spread rapidly, empowering communities everywhere. The common good bank structure will enable communities everywhere to own their own bank easily. Common Good Banks will partner with other financial institutions, so that any community-spirited bank or credit union can offer Common Good Accounts™, a system of demand deposit accounts with the following features: 1. For the Common Good. Common Good Account deposits will be invested to advance the common good of all. Loans will be made only to socially and environmentally responsible borrowers for socially productive purposes. All operations will be transparent. 2. Community Profits. Investment profits from Common Good Accounts will go into a special Community Fund to support education, families, the environment, arts, and other nonprofit work.

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Creating Common Good Banks 3. Community-Based, Hands-on Democracy. Fifty or more depositors in any geographical community can cooperate, under the terms of a signed covenant, to form a Common Good Bank Community Division – a nearly independent local economic system. In particular, Common Good Account deposits, investments, and profits will be tracked separately for each Community Division. Common Good Account depositors in each Community Division will decide together how their deposits should be invested and how to spend the investment profits. Depositors will discuss and decide what industries to support and what new industries are needed in the community. Those priorities will then be proactively funded, creating job opportunities with microloans for new or expanding small businesses and capital for cooperative projects. 4. Creating Money. Depositors in each community will also decide how much money to create and which local nonprofits will receive that money. This elevates local currency to the same status as national currencies such as dollars, Euros and yen. 5. No-fee Local Credit Card. Common Good Account depositors will use a Common Good™Card for purchases from participating local businesses or even get ”cash back” with no purchase required. Unlike ordinary cards, which cost merchants 2%, any business can accept the Common Good Card with no fees at all, using a card-swipe, cell phone or the internet. 6. Local Rebates. Many local businesses will offer a percentage rebate on sales to other Common Good Account depositors (typically 5 or 10%). Half the rebate will go into the Community Fund (along with the investment profits) and half to the customer. Once the first common good bank has a charter, any community anywhere in the world can easily create its own Community Division as a cooperative depositors group, in partnership with local businesses and nonprofits. Meanwhile, individuals and organizations can help make it happen by signing up online as depositors, partners or investors (see http://commongoodbank.com). William Spademan, Project Director, President of Common Good Finance, http://commongoodbank.com.

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7. Labour Unions and the Solidarity Economy: The Quebec Experience Yvon Poirier Qu´ebec province labour unions have supported the social and solidarity economy. They have created investment funds and credit unions. Most day-care centers (non-profits) are unionized. One union in particular, the Conf´ed´eration des Syndicats Nationaux (CSN), has been in the forefront of this activity. How did this come about? This article tells part of the story.1 This paper is mainly based on the presentation made at the Forum on the Solidarity Economy, but also includes other material, and will take into account developments that have taken place in the last months. Finally, the paper will give some thoughts and considerations about the more global question of labour unions and building the solidarity economy. This paper is inspired by my own personal involvement in unions in Quebec province. From 1968 to my retirement as a college teacher in 1997, I was a union activist, in my local union, at regional level and at the national (Qu´ebec) level. For readers outside Canada, it is important to mention that Qu´ebec is considered a nation, the only French speaking society in North America, and the largest nation of French origin outside of France. My involvement was within the Conf´ed´eration des Syndicats Nationaux (CSN).2

1 This

article is written in good part from personal history. The author has been actively involved in Qu´ ebec society social movements for over 40 years. No specific research has been done to prepare this paper, except for up to date statistics. 2 The official name is in French only. In English, Confederation of National Trade Unions (CNTU) is sometimes used.

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History of Labour Unions in Qu´ ebec Province (a Brief Picture) Unionization in Qu´ebec came from two sources. A first source was American unions which were at the forefront of many unions in Canada. For example, in the 19th Century, the U.S. union, the Knights of Labour were behind many initiatives in Canada and in Qu´ebec province. This is a rare situation since in most countries unions are national organisations, which are affiliated to international organisations. In the early part of the 20th Century, most unions in Canada were either members of, or affiliated with U.S. unions. Even today, many Canadian workers are members of North American unions. For example, the United Steelworkers on America includes Canadian workers and is one of the largest unions in Canada. However, over time, some members have become independent. For example, the Canadian Automobile Workers (CAW) split from the U.S. United Auto Workers in 1984. The second source is mostly of European and Catholic inspiration, and was in part meant to be independent of international (mostly U.S.) unions. In May 1891, Pope L´eon XIII published the encyclical letter Rerum Novarum in which he condemned the fact that the “the majority of the working people live in misery and poverty.” He also condemns “socialist atheism.” This became the inspiration for the organisation of Catholic unions. Since the Catholic Church was very strong in Qu´ebec society (until the 1960s), it was a leading force in the creation of unions. In 1921, the different Catholic unions in the province created the Canadian Confederation of Catholic Unions. In 1960, the organisation became completely lay (non religious) and changed its name to the Confederation des Syndicats Nationaux (CSN).

A Brief Overview of Qu´ ebec Society To fully understand the history of unions and the social solidarity economy in Qu´ebec, a very brief presentation of the socio-economic history of the society itself is necessary. Qu´ebec province has the second largest population in Canada with 8 million people out of a total population of almost 34 million. About 80 percent of Qu´ebec’s population is French speaking compared to less than 5 percent throughout the rest of Canada. There is a long history of struggle to protect French speaking culture and the rights of French speakers in Qu´ebec.

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Part III Production After the British conquered New France (which was the name of the French colony established in Qu´ebec City in 1608), the economy, and in particular the financial sector, became controlled by the English speaking bourgeoisie. Discrimination against the French speaking population resulted in high rates of poverty and under-education. This gave rise to a movement in Qu´ebec society for independence and/or stronger autonomy and two referendums for independence have been held. The last one in 1995, was very close with only 50.1 percent voting to reject independence. This movement has created a very strong sense of national identity which underlies the Qu´ebec nation. This background of resistance and nation building was intertwined with the development of social movements such as unions and the promotion of cooperatives as an economic tool to fight poverty and marginalization. In a sense, there has always been a sense of solidarity in the society that at least partially accounts for the strength of social movements such as unions. Changes in Qu´ebec society have been extremely fast and deep in recent years. In just one decade, from 1960 to 1970, a backward conservative society was replaced by a progressive one, including a modern welfare state, somewhat similar to the Scandinavian model. Changes were so deep and profound that the expression quiet revolution has been coined to describe what happened.

Cooperatives and Non-profits The cooperative sector, the historic social economy, is one of the most developed in OECD countries, especially in the financial sector. Although there were earlier examples, the present day coop movement started with Alphonse Desjardins, with the help of his wife Dorimne, who founded the first credit union in 1897. With the help of the church, this model was extended all over the province and for the first time, gave the French speaking community access to banks. Today, the Desjardins Movement is the largest financial institution in the province of Qu´ebec and one of the largest in the world with over $152 billion in assets and a membership of 5.8 million. Altogether, over 80 percent of the adult population in the province are members. From the 1930s to today, cooperatives have been created in many sectors. In many small towns, there was a credit union, a coop grocery store and an agriculture coop. Today, there are over 3,000 non-financial coops with annual sales of $10 billion. They operate in all sectors including agriculture and fishing, grocery stores, forestry, worker coops, home-care, housing

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7. Labour Unions and the Solidarity Economy and in the funeral sector. Government statistics show that cooperative businesses have a much higher survival rate than a private enterprise: after three years coops have a survival rate of 75 percent compared to 48 percent for private enterprises, after 10 years the survival rates are 40 and 20 percent respectively. A recent change in the law allows solidarity coops, which are multi-stakeholder coops like the social coops in Italy.3 Over the last 30 years, many social enterprises have also been created using the non-profit provisions of company law. Some non-profit associations have started doing business for income purposes, while others use this law instead of the coop law since it has fewer regulations. In many cases, such as daycare centers, the non-profit law was seen as the “normal” way. In other instances, such as housing, non-profits are used as an alternative because there is a lack of funding for cooperative housing. Community land trusts would also fall into this category. Since some non-profits combine business and non-business activities statistics are much harder to establish.

Labour Unions in Qu´ ebec Province Qu´ebec’s rate of unionization is 40 percent - the highest in North America and it has been holding steady for over 30 years. This is all the more impressive when compared to most OECD countries, where the rate has gone down. The rate in the U.S. is around 14 percent. The nature of Qu´ebec society explained above is certainly part of the answer. However, many other factors have played a part, including a generation of leaders with the foresight to integrate the social democratic experience of Scandinavia and Germany where unions were considered “social partners” alongside government and employers. Another reason is that while most labour unions in the world restrict their activity to collective bargaining and the protection of workers’ rights, Qu´ebec unions extend their activities to most social issues such as gender equality, peace, poverty, electoral reform, health and education, equal rights for gays and lesbians, environment, etc. Qu´ebec’s Labour Code is recognized as the most progressive in North America (British Columbia also has amended their own following the Qu´ebec example). Normally, once a majority (50% plus 1) of workers signup to join a union, the Ministry will certify the existence of a union. The anti-scab provisions of the law (for legal strikes) work very well and have “civilised” labour relations. The Labour Code also has provisions where an 3 For

information on social cooperatives in Italy: http://en.wikipedia.org/wiki/ Cooperative#Social_cooperative.

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Part III Production arbitrator can decide on a collective agreement when the parties cannot agree. Even with this Labour Code, some sectors are impossible to unionize. For example, two of the most anti-union multinationals in the world, Wal-Mart and McDonald’s, and most large banks don’t accept unions.

Unions in Qu´ ebec: a who’s who Approximate figures (2008/2009)

F´ ed´ eration des Travailleurs du Qu´ ebec (FTQ) 99% of membership in Qubec province 275,000 members 60% Public sector (mainly health sector) - 40% private sector Conf´ ed´ eration des syndicats nationaux (CSN) The Qu´ebec province Federation of the Canadian Labour Congress (CLC) Some are affiliated to U.S. unions (Steelworkers) 450,000 members 90% Private sector - 10% Public sector Others CSQ: 170,000 (100,000 in education) CSD: about 70,000, mostly private sector Members of CLC not affiliated to FTQ: about 75,000 SFPQ and SPGQ: Government employees 50,000 Nurses: 40,000 Smaller groups - about 50,000

Building the solidarity economy: Part 1 - 1970 to 1995 Between 1970 and 1995 there were many economic upheavals such as the oil crises in the 70s, the relocation of manufacturing to Asia, and long term structural unemployment in Qu´ebec and other OECD countries.4 Unions pushed governments to adopt measures to support employment and even demanded that governments solve the problem altogether by enacting laws to ensure full employment. Even when asking for such measures, unions in Qu´ebec understood that they also needed to undertake initiatives themselves.

4 For

a more detailed picture of evolution in Qubec and North American societies: Poirier & Kawano, Visions related to building the solidarity economy and related alternatives in North America, August 2008.

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7. Labour Unions and the Solidarity Economy Caisse d’´ economie solidaire Desjardins: an innovative credit union In 1971, CSN activists in Qu´ebec city decided to create a new credit union with an innovative mission. A “regular” credit union already existed, which mostly provided savings and loans for individuals. The new credit union decided from the outset on a more collective approach. Instead of having the best interest rates on deposits, collective services were put in place such as group purchasing of home heating oil. Members, either unions or union members also agreed to put some of their savings in interest free accounts. These funds could then be loaned at very low interest rates for building housing coops and making interest free loans to workers on strike. This credit union joined the Desjardins credit union movement in 1979, in part because of the need for computer based services such as direct deposit. Many changes came about over the years and in the 80s and 90s, it merged with other worker credit unions, eventually taking on the name, Desjardins Solidarity Economy Credit Union (Caisse d’´economie solidaire Desjardins). Over the years, other unions such as the teachers and public sector workers unions have become members. Although it is only one of the 550 credit unions within the Desjardins movement, it has kept to its original philosophy of pooling together the savings of workers to improve the quality of life, and work together to build a solidarity economy.5 Today, in 2010, the Caisse is at the heart of the social and solidarity economy in Qu´ebec and is recognized in other parts of the world as being in the forefront of building a people-centered economy. In particular, what is outstanding is its capacity to fulfill its mission, and remain faithful to its original values, while at the same time meeting all of the obligations and rules that are required of all banks. MCE Conseils: giving unions financial expertise In 1987, the CSN initiated MCE Conseils, a non-profit consultant firm that helps unions in various ways. For example, when a company decides to close a factory, the MCE Conseils can help to develop a business plan for the workers to buy out the factory and form a worker coop. Often, in collective bargaining, the employer asks the workers to cut back wages and is often prepared to open all financial statements and information. MCE Conseils are hired to do a financial analysis of the position of the firm from the perspective of the union and workers’ needs. Over the years, this has become

5 International

Newsletter on Sustainable Development #39, June 2007, Yvon Poirier. http://local-development.blogspot.com/.

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Part III Production an important tool, and the MCE Conseils partner with many organisations in Qu´ebec province, as well as in other countries such as Brazil and Mexico.6 Bˆ atirente In 1987, the CSN initiated a financial tool called Bˆatirente (literally, building retirement revenue). This is a collective savings funds to help CSN members save for retirement. Unlike the workers funds (discussed in the next section), there are no specific tax incentives to support these retirement savings. Banks and investment companies offer many different types of funds that workers could put their money in. Since many workers have no pension plans, this is a way of pooling together funds, and have the unions run it instead of having their money be managed by private capitalist funds. Bˆ atirente has set up eleven investment funds to suit the different needs of their members (from less risky to more risky). At the end of 2008, $750 million in savings were managed by Bˆ atirente.7 Workers funds: an innovative approach In Canada, pension plans exist in the public sector and in larger businesses. Professionals (lawyers or doctors), and most SME (small and medium business) have no pension plan at all. To encourage savings for retirement, the governments in Canada have set up Registered Retirement Savings Plans (RRSP) which are similar to Individual Retirement Accounts (IRAs) in the U.S. All investment in these funds is 100% income tax deductable. Income tax is paid only when a person (usually a retiree) takes money out of the fund. People with good pension plans are also encouraged to have more savings for retirement. In 1984, the F´ed´eration des Travailleurs du Qu´ebec (FTQ) asked to the Qu´ebec government to set up a workers pension fund that could invest in the Qu´ebec economy to create and save jobs, and to improve savings for retirement. This was a very interesting initiative since usually pension funds have to prioritize maximizing the growth of the pension fund. Since saving and creating jobs could be a relatively risky investment, a tax credit of 30% (15% provincial and 15% federal) was added to this measure. This fund was created by law in 1984. Called the Qu´ebec Workers Solidarity Fund (Fonds de solidarit´e des travailleurs du Qu´ebec (FSTQ)), this fund has become very popular and now has about $6.5 billion, making it one of the largest investment fund in the province. 6 http://www.mceconseils.com/langues.html. 7 http://www.batirente.qc.ca/en/batirente/profile.

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7. Labour Unions and the Solidarity Economy The mission of the FSTQ8 is defined as follows: • To invest in Qu´ebec businesses and provide them with services to enhance their development and create, maintain and protect jobs in Qu´ebec • To promote the economic training of workers so as to allow them to contribute to Qu´ebec’s economic development • To stimulate the Qu´ebec economy through strategic investments that benefit both employees and businesses • To make workers aware of the need to save for retirement and to contribute to economic growth by purchasing shares in the Fund To achieve its mission, the Fund seeks to grow the savings its shareholders entrust to it and provide them with a fair return. Besides helping workers/taxpayers to save for retirement, the fund became very popular because of the tax incentives. Say for example a teacher or automobile worker earns $50,000 a year and invests $5,000 in the FSTQ. She would not have to pay taxes on this investment. Since she would be paying about 30% income tax, this means she would get back about $1,500 after filing her income tax report plus a further tax credit of 30% is given, boosting her return to $3,000. In other words, an investment of $5,000 will cost the worker only $2,000, or 40 percent of the total investment. Depending on the person’s income, sometimes it will only cost 30 or 35 percent. Any taxpayer can invest in this fund, even an owner of an enterprise, but most of the investment comes from unionized workers, which is reflected in the make-up of the Board. The law also stipulates that the FSTQ has to invest at least 60% in the Qu´ebec economy (the rest is in guaranteed bonds), usually by investing directly in a business, whether though buying stocks, lending, or loan guarantees. The investment policy of the FSTQ ensures that they will not invest in a company that is not unionized. In practice, the FSTQ invests in companies that have unions affiliated to the FTQ. This means the business has to open up the books to the workers. This also has given considerable bargaining power to the unions in the businesses. Until 1997, the FSTQ fund did not invest much in social enterprises (coops or non-profits). In 1995, the government agreed with a proposal by the CSN to create a second workers fund called Fondaction (action fund) to support the development of cooperatives and employment. 8 http://www.fondsftq.com/internetfonds.nsf/VWebTAN/AprAcc.

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Part III Production The law itself (Article 17), specifies: 17. The Fund9 invests mainly : 1. in self managed enterprises, cooperatives or others, that provide the distribution of votes equally among all shareholders or members; 2. in enterprises whose work organization permits the participation of workers in the definition, organization and control of their work; 3. in enterprises with an environmentally friendly approach including commitments, practices or activities that contribute to maintaining or improving environmental quality. The FONDACTION mission is therefore much more oriented to social economy than the FSTQ. The rest is quite similar to the FTQ fund. The Board is mainly made up of CSN members; the tax advantages and the obligation of investing at least 60% in enterprises in Qu´ebec province are similar. As of May 2009, the accumulated savings in the FONDACTION was about $650 mil.

Building the Solidarity Economy: Part 2 - 1996 to Today Unemployment was quite high in the early 90’s. Social movements, in all sectors of society, proposed different approaches. Many associations and non-profit organizations were created to initiate economic activities, including job creation and income generation. An historic event in Qu´ebec was the women’s Bread and Roses march in June 1995. Women’s associations and allies, including unions, marched from the East and West of the province to the capital Qu´ebec city. The march was intended to pressure the government on social and economic issues facing women such as poverty and lower income. For example, since more women than men occupy minimum wage jobs a 50% increase in minimum wage was proposed to help women get out of poverty. Another important demand was for funding of what they called social infrastructure. This march led to the international women’s march at the UN in 2009, which has given birth to the international organization World March of Women. In 1996, the Government of Qu´ebec province convened a Summit of the different “social partners.” Faced with very high rates of unemployment and public debt, the government sought to reduce the budget deficit to zero. The 9 http://www.fondaction.com/.

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7. Labour Unions and the Solidarity Economy Prime Minister Lucien Bouchard, of the Parti Qu´eb´ecois (nationalist and social democrat party) called an Economic and Social Summit where, for the first time in history, social and community organizations were invited as full partners alongside the traditional tripartite partnership of government, business and unions. Different workgroups were set up, including one on the social economy. At the final meeting in October 1996, all social partners adopted the social economy as a priority for job creation and for fighting poverty. The unions agreed to renounce their wage increases because the government, and the private capitalist sector, agreed that social economy would be supported by government policies. Some large corporations even agreed to give a few million dollars for a venture capital fund to support startups in non-profit organizations (NPOs). They thought it was a handout. But today, most of the capital outlay is still there, and proves that social economy enterprises are quite successful. The only discordant notes were from some social movements who said this was too reformist and from some sectors of the union movement who were afraid the government would privatize some services. These fears have been dissipated in good part over the years. Unions, and in particular the weighty public sector unions, played a key role in this difficult situation. Some of the unions such as the FTQ that were closer to the party in power were more ready to accept an agreement with the government to reopen the collective contract of public sector workers. Besides being politically closer to the ruling Parti Qu´ebecois (the social democrat sovereignty party), the pressure on them to resist givebacks was much weaker since only 10% of their membership was in the public sector. For the CSN, the situation was quite different. Almost 60% of the membership was in the public sector, and the leadership of the public sector unions was much more radical. Without something in exchange, there would have been a NO vote in the affiliated unions and this could have provoked a social crisis in Qu´ebec society. The CSN President G´erald Larose played a key role in getting the government and the private sector (including large corporations) to agree to include job creation and poverty reduction in the new policies. In addition to the agreement to support the social economy and the venture capital fund, a three year policy was put in place where employees and employers would each contribute $1 per employee into a fund to support projects fighting poverty. Over the next three years, more that $250 million was generated to support initiatives in different regions of the province. Despite the positive aspects of the policies agreed upon by the government, other unions, and the private sector, the uproar within the public sector unions of the CSN was quite strong. In some public meetings, some

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Part III Production more radical members accused the CSN leadership of selling out and capitulating to right wing policies. A fairly important minority voted against reopening the contracts. This was a very tough period for the CSN. However, in the end no permanent damage was sustained since all the other unions and most of the social movements signed on to the Summit agreements.

The Chantier de l’´ economie sociale du Qu´ ebec and the CSN From the onset, the CSN agreed to join the Chantier de l’´ economie sociale du Qu´ ebec, which was set up after the Summit with government support, to advance the new policies, and work with the government programs to support the new initiatives. Alongside the CSN (and other unions), many social movements and development organisations joined the Chantier. For example the women’s movements, environment organisations, local development organisations, and different concerned organisations such as the association of day-care centers became members. In sum, the Chantier has become a network of social economy networks in Qu´ebec. The only exception is the cooperative sector which in general prefers to work on its own. However, some sectors of the cooperative sector are members of the Chantier (while continuing networking within the cooperative sector). Early after the 1996 Summit, an agreement was struck between the Chantier and the CSN. In particular, the Chantier agreed not to promote or support in any way social enterprises that would directly, or indirectly, result in the loss of jobs in the public sector. In particular, it was agreed that medical services (such as blood pressure tests or giving injections) would not be in the within the mandate of the NPO organisations in the home care sector. The CSN has continued to be involved in the Chantier, and has had a seat on its Board of directors of from the start. The CSN is also indirectly involved in another manner at the national level. In 2007, a Trust fund (Fiducie in French) was set up by the Chantier to invest in social enterprises and fill the gap in patient capital. The Fiducie fund was set up with the following contributions: Federal government - $22.8 mil., Province of Qu´ebec - $10 mil., FSTQ - $12 mil., Fondaction - $8 mil. It is interesting to note that the two workers funds have together invested almost 40% of the total fund.10

10 http://fiducieduchantier.qc.ca/?lang=eng.

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7. Labour Unions and the Solidarity Economy

The CSN and Social Solidarity Economy - a Key Player We have seen that the CSN has been at the heart of many social solidarity economy initiatives. Now, we turn to an exploration of the factors that led to this strategy. We need to go back to the roots, and the organisational structure of the CSN to get part of the answer. Unions engaged in work at the local level existed even before the Confederation was created. In Qu´ebec City, where it had its first headquarters in 1921, local unions already had formed a local council of unions. Historians mention that this existed in the late 19th Century. Thus the CSN was organised around three pillars: the Confederation itself, the Federations and the Central Councils (the City or Regional labour councils). These Central councils are similar to the Labour councils in place within the Canadian Labour Congress (CLC) or in the U.S. with the AFLCIO. In the case of the CSN, this triple affiliation for local unions is an obligation. In the case of the CLC, membership in provincial Federations and local councils is voluntary. So, to attract members, the membership fee to join the provincial federations and the local labour councils is rather low and this translates into imbalance in resources . For example, the Qu´ebec district of the United Steelworkers with 60 000 members, has at least as many staff as the Qu´ebec Federation of Workers (FTQ) with its 450 000 members. In contrast, since membership in the local councils is mandatory in the CSN, membership dues are higher and therefore the CSN has much more capacity to actively engage on a local level on many social issues besides union work. Since in the CSN, there is a much better balance of financial and human resources between the three levels of the organisation, this allows for the CSN itself to have important capacity such as a research service at the national (province) level. The same is true in the local councils. In Qu´ebec city the CSN central council has many times more resources than the FTQ regional Labour Council. In addition to having more of a local focus, leadership and vision have also played an important role. For example, in the 1920s, the CSN council in Qu´ebec city advocated for changes in the law to require that the Mayor be directly elected by all citizens and not by the city councillors. This just shows that even in the 1920’s, the CSN unions engaged in advocacy work far beyond strict collective bargaining or workers’ needs. Unions all over the world have done this, but Qu´ebec unions, and namely the CSN, have

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Part III Production pushed this further, especially in the last 50 years. Qu´ebec society went though dramatic changes in the 1960’s and the CSN was an important actor in this process, promoting a progressive vision of society. The CSN pushed for government policy to put in place community organisations that would educate the public in economic matters such as credit, debt, personal finance such as household budgeting, etc. Even today in 2010, almost 50 years later, these government supported organisations, called ACEF, still exist. At the 1968 CSN Congress, it was decided to adopt a strategy called the “second front,” the first front being collective bargaining and workers rights. In an internal document (2006),11 this is explained in the following manner: . . . this “second front” wants to link the trade union struggles to people’s struggles of the era and proposes to expand trade union action in the areas of consumption and living conditions. Thus union activists got involved in the creation of food coops, community groceries, and cooperative housing. The CSN actively supports the work of citizen committees in the health field, particularly the creation of popular medical clinics. It was also at that time that activists of the CSN joined women’s groups and parents to create day-care centers which provided the basis for future networks of day-care centers. This vision was a direct inspiration for creating the Caisse d’´economie in 1971 as well as the other initiatives mentioned previously. The CSN supports the creation of worker’s coops. For example, unionized ambulance workers now run publicly funded ambulance services as workers coops. In recent years, the CSN has given its formal support to Fair Trade initiatives. From the municipal up through the provincial level CSN representatives are usually involved as members of Boards of organisations such as Community Economic Development (CED) organisations or Local Development Centers. The CSN also is involved in social movements such as the peace movement, international solidarity, gender equality, etc. In 2006 the CSN defined its vision as follows: A vision largely inclusive of social and solidarity economy, a vision that is based on principles of action or intervention such as: • Orienting the economic towards social objectives and meeting social needs 11 La

CSN et l’´ economie sociale.

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7. Labour Unions and the Solidarity Economy • Consequently, challenging the state to fulfill its regulatory and redistributive functions • Democratizing choices in development and investment, and democratizing the management of enterprises • Increasing employment and combating exclusion • Defending the mission of public services • Building solidarity within communities and generating social cohesion This vision is closely aligned with all the social movements that are building solidarity economy as an alternative to neoliberal globalisation. The CSN also extends its work in the international arena. As all other unions, the CSN is involved in the International Trade Union Confederation (ITUC). The CSN along with institutions that it initiated, Fondaction and Bˆatirente, the Caisse d’´economie and MCE Conseils, have gone one step further and created D´evelopement Solidaire International (International solidarity development) to support international cooperation work. For example, in Brazil, there is a formal partnership agreement with the CUT (the Brazil confederation of unions) to develop financial tools such as the CSN has done in Qu´ebec. Many people in the world view the social economy experience of Qu´ebec as one of the more advanced in the world. The same could be said of unions, and in particular the CSN. Very few union movements in the world have gotten so involved in building “another economy”. The experience of Qu´ebec is not a model that can be duplicated; however, there are strategies that could inspire similar initiatives in other countries. In particular, the idea that unionized workers should pool together their savings and bank accounts to have an impact on society is certainly an idea that has attracted a great deal of interest from unions in other countries.

Looking Towards the Future - Many Challenges This paper has highlighted many positive initiatives, yet the challenges facing unions and solidarity economy are still huge. Relations between unions and the cooperative movement are not always easy. For example, only a minority of workers in large coops is unionized. Most credit unions are not unionized. Some cooperatives are doing all they can to prevent unions. Formally, the CSN and the Coop movement collaborate and are often on the same wave length when pushing for government policies. However, at the local level, things are not as easy.

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Part III Production Unions themselves face important challenges. Right wing neoliberal think tanks all over the world are attacking unions. The liberalisation of trade forces countries and workers to engage in a “race to the bottom” to stay competitive. Very often, the very survival of jobs is at stake. One question needs to be raised here. Unions and coops were the first line of defence and solution that workers and citizens organised in the struggle against the harsh capitalism of the 19th century. Unions and coops often worked hand in hand. Over time, especially in the second half of the 20th century, the two have taken separate paths and have lost the ideals of the founders. In general, this is probably the case in most countries. Unions by themselves will not be able to tame neoliberal globalisation. The cooperatives will not be able by themselves to develop a more humane economy. Let us hope that the recent agreement between the United Steelworkers of America (the largest union in North America) and Mondragon Cooperative Corporation (the largest workers cooperative in the world) to develop workers coops in North America is a harbinger of things to come. It is interesting to note that one potential source of capital that they have identified is the FSTQ. Not only do unions and cooperatives need to work together, they also need to work with other social movements to resist oppression and create a society that puts the economy in its rightful place, in the service of the people and planet.

About the Author Yvon Poirier is the Chair of the International Committee of the Canadian Community Economic Development Network (CCEDNET). As a college teacher before he retired in 1997, he was a union activist in the CSN at all levels, from the local to the national. Since retirement, he is involved in networking, including internationally. In particular, he is involved since 2004 in Intercontinental Network for the Promotion of the Social Solidarity Economy (RIPESS). He also participated in the World Social Forum in 2005 and in 2009. He is also co-publisher, since 2003, of an International Newsletter on Sustainable Local Development.

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8. Worker-Run U.S. Factories and Enterprises: The Example of Argentine Cooperatives Peter Ranis1 The US crisis of unemployment and underemployment (20% by March 2010) is more severe than at any time, including the Great Depression, because of the structural nature of our unemployment caused by a global-oriented capitalist sector, the spread of technology throughout the world and the increasing competition from skilled, low-wage workers abroad. I do not think the American trade union movement alone can provide for the necessary ideological offensive to protect jobs in the US. On April 7, 2010, Richard Trumka, newly elected AFL-CIO president, spoke at Harvard’s Kennedy School advocating fair trade, currency reform, worker training, infrastructure investment and regional development policies providing for a “healthy manufacturing sector.” It is doubtful that these measures, some already advocated under Presidents Clinton and Bush, can champion a resurgence of employment growth in America. Rather, what is required is a fundamental reorientation of the responsibility of public policy-makers in defending the American working class. My view is that we need a serious change in the direction of the state. I don’t believe that community and progressive organizations are enough, though they can highlight the challenge through concerted activism testifying to the power of the solidarity economy. What is needed is a coalition that includes progressive community, legal and political activists and the cooperation of public agencies, city councils and state legislatures, the official instruments of law and justice. Despite the obvious shortcomings of the Obama stimulus package for Main Street America, this administration’s outlook provides the best opening in many years, certainly since the Johnson years, for concerted government intervention into the economy. There is a far better understanding today of the need for a 1 Revised

from Presentation at the U.S. Forum on the Solidarity Economy, University of Massachusetts Amherst, March 2009

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8. Worker-Run U.S. Factories and Enterprises new regulatory state and a growing acceptance for a Keynesian approach to deficit spending to stimulate economic recovery (Skidelsky 2009). In this context, I believe worker-managed cooperatives represent a more fundamental alternative to even the most positive islands of union activism that we have seen in the U.S. and Western Europe in the last two years. These worker actions can only be seen as a prelude to the formation of a working class cooperative consciousness as a leading edge of a solidarity economy offensive.

The Argentine Example In Argentina, workers have asserted their right to take over factories on the basis of national and provincial constitutional law that allows for the takeover of private enterprises with reasonable compensation in the interest of the “common good” and “public use.” Approximately 200 Argentine factories and other enterprises have been, or are in the process of being, recuperated and reorganized as worker cooperatives. These actions occur when there is clear evidence that economic recession is fraudulently used by owners to decapitalize and disinvest in their firms. Some owners have reaped millions of dollars in government credits for non-production related financial speculation while breaking labor contracts with workers and depriving them of their earned wages. Still others simply walked away from the factory or enterprise by declaring bankruptcy, and then many, unburdened by financial duress, began new enterprises with unorganized, cheaper labor. Expropriation gives the cooperative workers protection from the creditors’ demands upon the previous owners who incurred any possible debts. Without expropriation creditors can demand the auctioning off of the buildings and their contents and throwing the workers into the streets. Workers banding together can almost always make a go of the recuperated enterprise. Often up to 80 percent of the cost of paying for the profits and salaries of the owners and managers are ended. Moreover, cooperatives are spared paying sizeable taxes on enterprise profits. Additionally, workers can decide collectively to reduce wages in the first months of recovery. Argentine recuperated enterprises turned into cooperatives have drawn global attention to a major shortcomings in the political economy of neoliberalism. They have managed to etch out areas of economic survival that attest to the alternative means of worker initiative, collective engagement and reconfiguring the workplace. As the workers proceed in the occupation and recuperation of their workplaces, they will be touching on fundamen-

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Part III Production tal questions concerning the direction of the neoliberal economy. By their capacity to form alliances with progressive legal, community, political and labor forces available to them, they symbolize an alternative path to economic development that is predicated on worker solidarity and democracy in the workplace. The collective ownership of the workplace acts as a catalyst for worker sacrifice, ingenuity and creativity. In this the Argentine cooperative movement represents an intelligent, resourceful, pragmatic alternative to continued unemployment and poverty in Argentina (Ranis 2010).

The Case for Eminent Domain in the U.S. In the U.S. we have the same mechanism that exists in Argentina to achieve worker-owned and managed enterprises and factories. It is the use of eminent domain, which can potentially be used to foster worker-run cooperatives. Eminent domain is constitutionally sanctioned and has been legally applied for community, infrastructure and development purposes. The time is ripe for a broad-based coalition of community interests, social movements, labor unions, city councils and state legislatures to promote the use of eminent domain to expropriate with compensation enterprises in danger of being abandoned or moved off-shore or out of state by their owners. Plant closings have severe negative repercussions and societal impacts on workers and communities which legitimizes the right to regulate them by way of eminent domain on behalf of the public interest (Singer 2006). Workers in cooperatives in both the U.S. and throughout the world have shown that they can run enterprises without owners and managers if given the necessary financial and legal tools. The collective social rights of workers who have built up the value of the firm through years of hard work and applying their know-how and skill have to be legally asserted. The companies cannot be free of societal obligations. By outsourcing jobs they have broken a contract for which there must be reparations and consequences. Labor has few options and the use of eminent domain could spark a public debate about the obligations of corporations and confront the passive acceptance of the steady decline of jobs with livable wages. In what I consider a landmark decision with great relevance for the struggling American working class, the U.S. Supreme Court in Kelo v. New London (2005) ruled in favor of New London by eminent domain to take over private property for reasons of “public purpose.” The court ruled on behalf of New London’s economic development plan based on the “takings clause” of the U.S. Constitution’s Fifth Amendment which states, “. . . nor shall

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8. Worker-Run U.S. Factories and Enterprises private property be taken for public use, without just compensation.” Justice John Paul Stevens wrote for the majority that expropriation of private holdings as part of urban development is justified for the public purpose of increasing jobs and tax revenues. What Kelo offers is the defense of jobs as a key component of public sector responsibilities to its communities. In a previous case, Berman v. Parker ((1954), a unanimous court observed: “The concept of the public welfare is broad and inclusive.” It becomes clear in Berman that public use has been expanded to include “public interest” and “public welfare” by way of displacing “blight” in a poverty-stricken neighborhood in Washington, D.C. (Ranis 2007). Most eminent domain initiatives are not used to condemn mom and pop groceries or small homes for the sake of replacing them with larger private operated businesses but rather for large urban, community mixed public and private complexes that provide increased employment, an enhanced tax base, urban development and community edification. As one legal observer indicated, “When desperately poor urban communities are revitalized the vast majority of people in those neighborhoods benefit—the area is more beautiful and livable, jobs are more plentiful and inner city problems are curtailed. In Kelo, the city of New London was suffering from deep economic and social disadvantage, steep economic decline, high unemployment and fewer residents today than in 1920” (Goston, 2006, 11). Unhappily, hard on the heels of the use of this eminent domain initiative, the US economic recession curtailed this particular attempt at urban renewal. Nevertheless there are countless examples throughout the U.S. of the uses of eminent domain as the available approach to combat unemployment and poverty. As in the U.S. Constitution, most state constitutions permit the use of eminent domain for “state public purposes” or “recognized public purpose.” The Kelo decision should focus community groups to activate public development agencies, municipal councils and state legislatures and/or the U.S. Congress to promote a constitutionally affirmed right to take over factories and enterprises that are threatening to disinvest, fire workers and relocate in search of cheaper wages and deeper tax concessions, leaving in their wake depressed American communities with ever deepening unemployment. As William Julius Wilson has argued, “The consequences of high neighborhood joblessness are more devastating than those of neighborhood poverty. Many of today’s problems in the inner-city ghetto neighborhoods—crime, family dissolution, welfare, low levels of social organization—are fundamentally a consequence of the disappearance of work” (Wilson 1996, xii). Once expropriated the factories and enterprises would then be turned over, with an initial public subsidy, to the workers themselves, who have, by and large, the technical skills and know-how to run these industries. In

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Part III Production Argentina, for example, workers have shown they can maintain and improve enterprises and industries, be they metal plants, tire factories, meat-packing plants, textile factories, auto parts installations, electronic component suppliers, ceramic factories, lumber mills, supermarkets, hospitals or hotels as successful and viable establishments. In the U.S. eminent domain has been used for many decades for building highways, airports, hospitals, municipal offices, schools, libraries, public parks, sport complexes in the name of urban development and public benefit. It is especially appropriate to apply this same rationale to protect against the loss of industrial and service jobs on behalf of labor and the American working class. It can be logically defended as preserving community needs and survival. The time is ripe for solidarity economy initiatives to pursue the strategy of eminent domain as public policy to protect the livelihoods and promote the general welfare of millions of at risk workers and their communities. It behooves the AFL-CIO/Change to Win to reach out and represent non-traditional categories of workers such as these potential eminent domain workers. To view workers as simply card-carrying, dues-paying union members is, at the very least, suicidal. Eminent domain workers will bring new activism, energy and engagement in public policy often absent with passive union membership. The current crisis of American labor requires new forms of union associations that go beyond collective bargaining. By using eminent domain to protect a community against a runaway factory or enterprise, no new land seizure is required, no displacement of homes or lateral businesses occurs. What is at stake here is the expropriation of the firm with city or state compensation for the market value of the enterprise at the time of its proposed liquidation and a temporary public subsidy to guarantee the enterprise’s productivity in the initial months of transition. This financial assistance will in most cases be less than the tax concessions, subsidies and other benefits granted to the former owners of the enterprise.

Beyond Factory Occupations In December 2008 the United Electrical (UE) workers’ occupied the Chicago Republic Windows and Doors factory in protest against the company throwing its workers into the street without the two month notice required by the 1988 WARN labor law. In Great Britain workers occupied three Visteon plants which supply parts for Ford Motor Company. In Ireland the Waterford Crystal plant was worker-occupied after it was bought out by a US equity firm KPS. And in France, workers took bosses and managers hostages

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8. Worker-Run U.S. Factories and Enterprises for a day or overnight in the French Caterpillar plant, a Gucci manufacturer, a 3M plant, a SONY plant, and a Michelin plant. All these protests resulted in either reducing the numbers of workers scheduled to be laid off, saved all jobs for a certain time period, gained enhanced severance pay or workers received promises of a new entity that would restore their jobs. The commonality in all these worker actions was the occupation of the factory or offices before attempting to negotiate with the owners and managers. That gave the workers the legal and ethical bargaining power to confront capital on its own playing field, namely by contending that they are breaking a contract and a commitment to a community. And because of the dramatic nature of the workers’ militancy, in all these cases of worker occupations of plants and mangers’ offices, US, British and French public officialdom got involved in the support of the workers: Illinois state legislators, Chicago ward councilors, Senator Richard Durbin, Vice-President Joe Biden and President Barack Obama supported the sit-down action; in Ireland, Gerry Adams and various Northern Ireland governmental ministers gave their support to the Visteon workers; and French President Nicolas Sarkozy made commitments that there would be no immediate layoffs. This influenced and solidified legal opinion, public support, and gave the workers the additional moral authority to push their demands. These are the key first steps, but it is critical to take the second step and form a worker-managed factory or enterprise cooperative and call for city or state legal action using eminent domain. Leaving the factory first, for example, in the case of the courageous and defiant Stella D’Oro bakery workers on strike in the Bronx, New York is not the best alternative. The workers had shown themselves to be a coherent and solid group of workers, striking for 11 months to keep their jobs without a single worker crossing the picket line, engaging an important community, political and labor support group and using its union Local 50 of the Bakery Confectionary, Tobacco Workers and Grain Millers (BCTGM) to attain a positive National Labor Relations Board (NLRB) ruling that mandated back pay and benefits. Almost immediately after the NLRB ruling in July 2009, Brynwood Partners, the equity firm that then owned Stella D’Oro, announced plans to close the factory and eventually sold it to Lance, Inc. which moved the company to Ohio in the Fall of 2009. As important as the Stella D’Oro solidarity outreach had been it was not enough to save the jobs of the 136 workers. Without a dramatic plant occupation, community groups and labor unions alone are not enough to carry the day. Concerted worker activism is the required first step followed by the use of eminent domain proceedings instituted by the municipalities involved. Forming worker-managed cooperatives must become the final aim.

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Part III Production The UE Chicago workers took that first principled and reasonable step of peacefully occupying and maintaining the Republic plant to be ready for production. This stood as a powerful message and opportunity for the American working class. In February 2009 a bankruptcy court judged ruled that a California building materials company (Serious Materials) could purchase the plant’s assets and employ the 260 workers involved in the occupation of the factory. However, this alternative was fraught with the uncertainty of market calculations by the private buyer. As of spring 2010, Serious Materials had rehired only 30 workers. It would have been appropriate if a progressive coalition in Chicago had called for the intervention from the city council to implement eminent domain proceedings, providing temporary subsidies or public funding at low interest rates to the occupying workers. Alternatively, the Obama administration could conceivably create a public worker development bank that would allocate a portion of the $787 billion stimulus package to focus on exactly such cases as the Republic plant in Chicago. As it turned out only one-third of the stimulus package went to infrastructure investments, the other two-thirds were funneled to states and localities and for tax cuts. Additionally, states could pass legislation that allows for public investment funding for just such purposes of maintaining workers in at risk plants by creating and supporting worker cooperatives. After all, when a runaway company leaves, the state loses tax paying workers and has to pay unemployment compensation and Medicaid payments. Why shouldn’t recovery measures be directed at workers who make products or provide services rather than subsidizing failing investment banks and insurance companies? Given the high levels of unemployment and underemployment–almost one in five workers–collective bargaining has ceased to be a valuable tool in a jobless recovery in an increasingly informal and outsourcing economy. The formation of worker cooperatives via eminent domain provides a platform where worker productivity and wages move together, where shareholder dependency doesn’t exist, where equity firms have no role, where external investment decisions cannot occur. Within the cooperative structure, the disjunction between full-time, part-time, and temporary workers is abolished. There is a basic modicum of worker security and worker alienation is substantially reduced. Without owners and privileged managers and their super-sized salaries, workers share the enhanced profits equitably. When belt tightening is required, everyone shares in the sacrifices, hours may be cut, salaries reduced until profits are reestablished but the decisions are made by democratically in worker assemblies and the work force remains in place. As seen in other country contexts, the workers within the enterprise develop strong feelings of mutuality and camaraderie. And as Logue and

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8. Worker-Run U.S. Factories and Enterprises Yates explain, “Worker-owned enterprises anchor capital and jobs locally despite increasingly rapid capital flows in the global economy. . . Unlike the conventional capitalist firm which is believed to maximize the single value of profits, employee-owned firms clearly must optimize the balance between various goals. Many of these goals are economic, but some, such as voice for members, a focus on local economic development and community, decent work for employees, and training and education for members, are both highly valued and broadly distributed” (Logue and Yates 2005, 2-3, 53).

Conclusion Eminent domain is just another mechanism of legislative public policy, no different from the powers to tax and spend, to zone, to regulate places of work environmentally and for the health and safety of its employees and surrounding communities. It can be used positively and creatively. How can communities continue to stand idly by while crucial employers, who have fed off the public trough and loyal workers for decades, get up and leave with near impunity when this legal procedure is available? Eminent domain represents the viable mechanism that will place worker autonomy and worker rights at the center of the political debate in the defense against the decline of decent jobs in America.

About the Author Peter Ranis is Professor Emeritus in Political Science at the Graduate Center, CUNY.

References Goston, L.O. 2006. Property Rights and the Common Good. Hastings Center Report 36(5): 10-11. Logue, J., and J. Yates. 2005. Productivity in Cooperatives and Worker-Owned Enterprises. Geneva: International Labour Organization. Ranis, P. 2007. Eminent Domain: Unused Tool for American Labor? Working USA: The Journal of Labor and Society 10(2): 193-208. Ranis, P. 2010. Argentine Worker Cooperatives in Civil Society: A Challenge to Capital-Labor Relations. Working USA: The Journal of Labor and Society 13(1): 77105. Singer, J.W. 2006, The Ownership Society and Takings of Property: Castles, Investments and Just Obligations. Harvard Environmental Law Review 30: 309-39. Skidelsky, R. 2009. Keynes: The Return of the Master. New York: Public Affairs Books.

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Wilson, W.J. 1996. When Work Disappears: The World of the New Urban poor. New York: Alfred A. Knopf.

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9. ‘One Worker, One Vote:’ US Steelworkers to Experiment with Factory Ownership, Mondragon Style Carl Davidson In 2009, the United Steel Workers Union (USW), North America’s largest industrial trade union, announced a new collaborative with the world’s largest worker-owned cooperative, Mondragon International, based in the Basque region of Spain. News of the announcement spread rapidly throughout the communities of global justice activists, trade union militants, economic democracy and socialist organizers, green entrepreneurs and cooperative practitioners of all sorts. More than a few raised an eyebrow, but the overwhelming response was, “Terrific! How can we help?” The vision behind the agreement is job creation, but with a new twist. Since government efforts were being stifled by the greed of financial speculators and private capital was more interested in cheap labor abroad, unions will take matters into their own hands, find willing partners, and create jobs themselves, but in sustainable businesses owned by the workers. “We see today’s agreement as a historic first step towards making union co-ops a viable business model that can create good jobs, empower workers, and support communities in the United States and Canada,” said USW International President Leo W. Gerard. “Too often we have seen Wall Street hollow out companies by draining their cash and assets and hollowing out communities by shedding jobs and shuttering plants. We need a new business model that invests in workers and invests in communities.” “This is a wonderful idea,” said Rick Kimbrough, a retired steelworker from Aliquippa, Pa, and a 37-year-veteran of Jones and Laughlin Steel. “Ever since they shut down our mill, I’ve always thought, ‘why shouldn’t we own them?’ If we did, they wouldn’t be running away.” J&L’s Aliquippa

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9. ‘One Worker, One Vote’ Works was once one of the largest steel mills in the world, but is now shutdown and largely dismantled. Much of the production moved to Brazil. The USW partnership with Mondragon was a bold stroke. While hardly a household word in the U.S and little known in the mass media, the Mondragon Cooperative Corporation (MCC) has been the mother lode of fresh ideas on economic democracy and social entrepreneurship worldwide for 50 years. Started in 1956 with five workers in a small shop making kerosene stoves, MCC today has over 100,000 worker-owners in some 260 enterprises in 40 countries. Annual sales are pegged at more than 16 billion Euros with a wide range of products—high tech machine tools, motor buses, household appliances and a chain of supermarkets. MCC also maintains its own banks, health clinics, welfare system, schools and the 4000 student Mondragon University—all worker-owned coops. Over the past decade, there have been a handful of efforts to apply the model and methods of MCC to projects in the United States. Almost all are on a small scale—several bakeries in the Bay Area, some bookstores, and most recently, an industrial laundry and solar panel enterprise in Cleveland. In Chicago, Austin Polytechnical Academy, a new public high school in a low-income neighborhood, was inspired, in part, by Mondragon, and a group of its students recently took part in a study tour of MCC in the Basque region. But the USW initiative, and the potential clout behind it, puts the Mondragon vision on wider terrain. An integrated chain of worker-owned enterprises that might promote a green restructuring of the U.S. economy, for instance, would not only be a powerful force in its own right. It would also have a ripple effect, likely to spur other government and private efforts to both supplement and compete with it. The USW, however, is proceeding cautiously. “We’ve made a commitment here,” said Rob Witherell during a recent interview at his Organizing Department’s offices in the USW Pittsburgh headquarters. “But for that reason, we want to make sure we get it right, even if it means starting slowly and on a modest scale.” What this means at the moment, Witherell explained, is that the USW is looking for viable small businesses in appropriate sectors where the current owners are interested in cashing out. The union is also searching for financial institutions with a focus on productive investment, such as cooperative banks and credit unions. “It can get complicated,” Witherell continued. “Not only do you have to fund the buyout, but you also have to figure out how to lend workers the money to buy-in, so they can repay it at a reasonable rate over a period of time, and still make a decent living.”

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Part III Production The core Mondragon model was developed in the 1950s by a Roman Catholic priest, Father Jose Maria Arizmendi. It starts with a school, a credit union and a shop—all owned by workers who each had an equal share and vote. The three-in-one combination allows the cooperative to rely on its own resources for finance and training. The worker-owners cannot be fired. In regular assemblies, they hire and fire their managers, as well as set the general policies and direction of the firm. The workers themselves decide on the income spread between the lowest paid worker and the highest paid manager, which currently averages about 4.5 to one (compared with more than 400 to one in the U.S.). As the worker-owners accumulate resources, they can encourage the formation of new coops, indirectly through their bank and directly through their firms, and bring them into the overall structures of MCC governance. This is how they grew from one small shop to 260 enterprises in the past 50 years. Finally, if a worker-owner retires, he or she can “cash out,” but the share cannot be sold. It is only available for purchase by a new worker-owner at that firm. This last crucial point was developed by Arizmendi during the course of deep study of Catholic social theory as well as the works of Karl Marx and the English cooperativist Robert Owen. A worker-owner’s ability to sell his or her share to anyone was a flaw in Owen’s approach, Arizmendi decided, since it enabled outsiders to buy the more successful coops, turning their workers back into wage-labor, while starving the other less successful coops of resources. With Arizmendi’s new approach, only four out of the several hundred MCC coop ventures have failed during the half century since Mondragon began. The difference between worker-owned coops Mondragon-style and the Employee Stock Ownership Programs (ESOPs) more prevalent in the U.S. has to do with legal structure and control. In an ESOP, a portion of the companies stock, ranging from a large minority bloc to 100 percent, is owned by workers but held in a trust. Its value fluctuates with the stock market and workers can get dividends as they are paid, buy more stock, or “cash out” when they retire. If they do “cash out,” they pay taxes on the closing amount, unless they roll it over into an IRA. By and large, ESOPs are financial instruments and do not automatically lead to worker control over the workplace or a role in shaping the firm’s capital strategies. Managers are hired by the firm’s board of directors, which is partially controlled by the trust. “We have lots of experience with ESOPs,” said Gerard, “but we have found that it doesn’t take long for the Wall Street types to push workers aside and take back control. We see Mondragon’s cooperative model with ’one worker, one vote’ ownership as a means to re-empower workers and

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9. ‘One Worker, One Vote’ make business accountable to Main Street instead of Wall Street.” The USW, however, will insist on at least one modification of the Mondragon model: the worker-owners will be organized into trade unions, and will sign collective bargaining agreements with the management team. This sets up a unique situation whereby unionized workers strike an agreement with themselves as a workers’ assembly and with the management team they hire. This is not as big a problem as it may sound. “‘This is not heaven and we are not angels’ is a common phrase heard by visitors to Mondragon,” said Michael Peck, MCC’s North American delegate. Within the structure of each MCC enterprise is a ’social committee’ of the workers, which looks to their broader social concerns. But, it has also come to play the role of settling day-to-day disputes with the management team, thus serving as a de facto union. Class struggle surely continues, even in a modified form in a worker cooperative. There are also other features unique to MCC that may or may not apply to its replication in the U.S. Father Arizmendi developed his plan as a community-based survival mechanism following the devastation of the Spanish Civil War and World War Two. He was imprisoned under Franco. The Basque region, a center of anti-Franco resistance, was not only in economic ruin, but was also punished by the Franco government by being denied resources. MCC evolved through self-reliance. Under Spanish law, MCC worker-owners are not technically wage-labor since they get their income from a share of the profits, so they are excluded from much of the country’s social welfare safety net pertaining to workers. MCC responded by organizing and funding it’s own ’second degree’ cooperatives—health care clinics, retirement plans, schools and other social services, all cooperatively owned with their own worker assemblies. Much of this integrated second-degree structure may not be required in the U.S. Here, it may make more sense for worker-owned enterprises to form local or regional collaboratives and stakeholder arrangements with county government, credit unions, community colleges and technical high schools, and other nonprofit agencies. What’s in the partnership for Mondragon? Josu Ugarte, President of Mondragron Internacional declared: What we are announcing today represents a historic first— combining the world’s largest industrial worker cooperative with one of the world’s most progressive and forward-thinking manufacturing unions to work together so that our combined know-how and complimentary visions can transform manufacturing prac-

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Part III Production tices in North America. We feel inspired to take this step based on our common set of values with the Steelworkers who have proved time and again that the future belongs to those who connect vision and values to people and put all three first. Along with its core values and unique ownership structure, MCC is still a business producing goods and providing services in markets, anchored in Spain but reaching across the globe. It seeks to sustain itself and grow, although it is not driven by the same ’expand or die’ compulsion of traditional corporate or privately owned firms. Adding more worker-owners simply gives each worker a smaller slice of a bigger pie. There’s no removed batch of nonproducing stockholders raking in superprofits, or trading their stock speculatively as it rises or falls. MCC firms still compete with traditional rivals for customers in the marketplace, and thus are always seeking a competitive edge. MCC enterprises, for example, are mainly known for high quality products. But when this is combined with a fact of self-management, that they have far fewer supervisory layers on the payroll, the higher quality products hit the marketplaces with a lower price. This puts MCC on the leading edge of Spain’s economy. MCC also looks for other advantages, such as horizontal integration and securing competitive sources of supply. This is why it has cautiously been expanding abroad, buying up supply firms or other complimentary businesses, and seeking to reshape them into the MCC cooperative structure. Often, however, they run into difficulties, where another country’s laws treat cooperatives with disadvantages. That is not the case in the U.S., where even though industrial coops are not common, there are few undue restrictions on their formation. “As we look for firms to purchase,” said Witherell, “MCC is not just interested in buying up companies and having the workers as employees. It’s the MCC rep that’s always pushing on how readily we can convert to worker ownership.” The Mondragon initiative is not the first innovative project of the Steelworkers seeking wider allies. With the encouragement of International President Leo Gerard, following on the anti-WTO street battles in Seattle in the 1990s, the USW helped found the Blue-Green Alliance together with the Sierra Club and other environmentalists. It has worked closely with Van Jones and ’Green for All’ on their jobs initiatives and the union plays a major role in the ongoing annual ‘Good Jobs, Green Jobs’ conferences. Most recently, the USW was a major participant in the week-long series of events making the oppositional case at the G20 events in Pittsburgh. For Gerard and the USW, these alliances are matters of utmost practicality and survival. Gerard points out that 40,000 manufacturing facilities in

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9. ‘One Worker, One Vote’ the U.S. have closed since the onset of the 2007 economic crisis, throwing 2 million people out of work. His answer is structural reform in the economy along the lines of a ’green industrial revolution’ and to fund it with a tax of speculative capital’s financial transfers, known as the ‘Tobin Tax.’ “Americans going green—manufacturing windmills and solar cells—would benefit both the economy and environment,” said Gerard in a Campaign for America’s Future article. “As the Wall Street debacle that pushed this country into the Great Recession last year showed, the United States cannot depend on trading in obscure financial products to support its economy. To survive, America must be able to manufacture products of intrinsic value that can be traded here and internationally.” He often notes that there are 200 tons of steel and 8000 moving parts in every large wind turbine—a concept that is never lost on the unemployed and under-employed manufacturing workers that hear it. The same point is not lost on small and medium-sized businesses looking for orders from new endeavors. This is where green entrepreneurs can form alliances with worker-owned cooperatives, trade unions, living wage job advocates and the global justice movement. The key question is whether the political will and organizational skill can be brought together to make it all happen in a way that most enhances the strength and livelihood of the working class. Here is where the ball returns to the court of left organizers and solidarity economy activists. Lending a helping hand to the new initiative entails a good deal of investigation into the state of local businesses and conditions, plus building alliances, generating publicity, and contributing educational work among all those concerned. It’s not crowded, and there’s a lot to be done.

About the Author Carl Davidson is currently a national board member of the US Solidarity Economy Network, web editor of SolidarityEconomy.net and a National CoChair of the Committees of Correspondence for Democracy and Socialism. In the 1960s, he was a national leader of SDS and the antiwar movement. He now resides in Beaver County, Western PA, and is also a member of Steelworkers Associates, the community arm of the United Steel Workers union.

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Part IV.

Commons and Wealth

10. What Does This Moment Require? Dispatches from Work on the Commons Alexa Bradley and Julie Ristau If you are reading this book, you almost certainly share our recognition of the widespread brokenness that surrounds us. Our economic system and its myth of infinite growth is failing the majority of people and killing our planet; our social fabric is torn with escalating inequity and violence on the rise; we have lost a sense of coherence and shared meaning. We cannot solve any one of these problems without also addressing the others. This dire predicament could easily lead to despair. And yet, remarkably, we can see an array of efforts to reconstitute community and better harmonize our lives with the health of our planet, all of which is evidence of a broad yearning for hope, connection and restoration. We can draw hope from this multitude of kindred endeavors emerging around the country—and globe—that explore new or renewed modes of human interdependence and collaboration as a basis for survival and sanity. They reflect a recognition that the usual solutions and solution making are inadequate and that we need a fundamental shift in our way of living. This suggests a “movement moment”—the rising of a new tide of social change that could gather momentum and bring great possibilities with it. This newly emerging movement, if it comes to maturity, could galvanize the intensity, courage, and imagination of a broad range of people, linking specific local efforts and pioneering leaders with others around the globe moved by a shared vision. While there are promising signs of shifting social and political dynamics, it’s clear that we are in the early stages of a movement, just learning to walk, and much is unknown. People and organizations are mapping visions, seeking shared understandings, developing the ideas and strategies that could foster and facilitate a broader social movement. Necessarily it is a messy, uncoordinated, bottom-up process, for only that can give rise to new politics and practices that not only hold the line, but create a positive,

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10. What Does This Moment Require? affirmative agenda. And yet it is premature to predict that all of this activity will coalesce sufficiently and with enough power to create change at scale. While change—even significant change—is possible, that possibility does not by itself automatically translate into the kind of transformation we would like to see. There is no simple answer to this dilemma. We need a mode of social change work that has enough depth to offer real and inspiring alternatives to the current path we are on, and enough breadth to link many like-minded efforts in common cause. Resisting or mitigating the impacts of extreme marketization—privatization, ecological decimation, radical inequities, etc—is important but insufficient. There needs to be a simultaneous imagining and construction of alternative approaches that move us toward a life sustaining future.

Breaking the Spell: The Commons Rising Around the globe, people are rediscovering the commons as a way of naming what we are for, a vision that extends beyond any one issue, to describe the kinds of relationships between people, resources, and power that foster community resilience, ecological stewardship and democratized decision making. The commons are all the forms of wealth we share—social, natural, cultural—and the way we take care of them, use them, enhance them and pass them on. A commons arises whenever a given community decides that it wishes to manage a resource in a collective manner, with a special regard for equitable access, use, and sustainability. It is a social form that has long lived in the shadows of our market culture and is now on the rise. The commons is a term with centuries of use and usefulness. The language and, to some extent, history of the commons originates in Europe but has been adopted and enriched in many places in the world that wanted a way of naming their desired relationship to resources, one another, and power. In our contemporary political moment, the commons framework is gaining a new currency as a way of articulating a set of transformational questions, ideas, and practices that are rooted in a different worldview and value system. The worldview that drives the old systems is still in place—an extreme market orientation that commodifies all resources to enable their appropriation, and a parallel dehumanization of people valued only as consumers or labor inputs. It is hard to think outside this dominant framework. It shapes much of our contemporary experience and so strongly has it naturalized one particular way of seeing and thinking that it can eclipse any other.

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Part IV Commons and Wealth In order to break through this dominant market paradigm and reveal that another way is possible, we need both ideas and actual experiences of a different way of living. The commons framework lifts up a potent counter narrative and also has the practical dimension of helping people create tangible ways to live towards a more commons-based society. These are critical dimensions that could help us make a leap forward at this moment in our nascent movement times. The emerging efforts such as those in cooperative economics, open source digital sharing, participatory governance, and food justice are performing a critical role in developing alternatives, however partial or small scale, that give us a chance to practice different ways of interacting and organizing resources. They help us reconstitute our capacity for shared ownership, collaboration and stewardship. If we additionally see these efforts as part of a larger body of work to reclaim and protect commons we begin to connect them to one another strategically and to a broader goal of social transformation. Drawing from our work with the commons, we offer the following ideas and observations that we believe can help us meet this movement moment creatively and constructively.

12 Commons Dispatches for These Times 1. The commons and the creation of a commons-based society is a radical and necessary proposition for our times. 2. Commons exist. We can learn from them. Formally and informally, people have created systems of shared resource use and decision making for centuries. Commons come in many forms from communal fishing arrangements to libraries, from use of waterways to the creation of open source software, cooperatives, musical sampling and green space. While some of these forms are new, most have their roots in traditions and survival strategies from other times. 3. The commons is a way of naming a set of relationships and understandings. The term right relationship comes to mind. The existence of a commons is only possible within the context of collaborative, reciprocal and equitable relationships. These relationships hold a commons intact and insure its just use and continued health. The commons also calls forth a set of relationships that extend in ways that the market suppresses: to include those of future generations, those with other living beings and with the very resources on which we depend.

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10. What Does This Moment Require? 4. Commons are central to the life and vitality of community, offering a system of meaning and value that is not transactional or market based. The resources of a commons concerned have a usefulness, some of which is economic, but that is not the same as their market value. Resources in a commons are part of the totality of a community—its economic survival, its history, its ecological health, its beauty, its identity, its resilience, the relationships among its people, its life blood. 5. The commons expresses an understanding that communities have a fundamental and equitable claim to our common inheritance of natural and created abundance, and a critical role in the stewardship of those resources. A commons is what we share and how we share it. 6. The commons, then, begins with a claim. This claim is a collective one made by a community or communities on natural or social resources that are shared and belong to them all. It is a claim for equitable benefit whose history stretches back in time. Peasants in Europe asserted their hunting and gathering rights as prior to the legal authority of kings and landowners, and had those recognized in the Magna Carta. This is a radical and libratory history. 7. The commons carry responsibility. The community entrusted with those resources must insure their equitable and just use as well as their stewardship for the future. Equity and stewardship are intertwined at the center of a commons with the community members acting as the protectors, co-creators, stewards and beneficiaries. 8. The commons—as both an idea and practical arrangement—reminds us of our own authority in regard to the resources necessary for our community’s well being. The commons reminds us the vital difference between petitioning for access and benefit, and knowing that we are already the rightful claimants on that abundance. We cannot be satisfied with resources and spaces that the powers that be designate for our “access” or “input,” we must assert our direct relationship with and stake in the resources necessary for our survival and well being. 9. There is a link between the material erosion of the commons and the erosion of the idea of the commons. As the ability to think in terms of the commons, to even have the idea of such a thing, diminishes, the actual commons of our society are left vulnerable to everything from appropriation and destruction to neglect. Likewise as we have lost much of our commons, we have unconsciously relinquished a sense of the commons. The same is true for the regeneration of the commons:

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Part IV Commons and Wealth we need to animate both commons thinking and the reclaiming or creation of actual commons. 10. We have all lived the commons in some manner, often in unnamed, differently named and culturally specific ways. The specific term “the commons” comes from European history and the specific struggles by common people to have their right to use and care for resources necessary for survival recognized. Other cultures have kindred traditions of communal ownership, interdependence and resource sharing and stewardship. Across these traditions and in our own memories there is great wisdom and practical experience to draw on as we forge modern day commons. 11. The idea and language of the commons has been misused. At times powerful interests, corporations and colonizers have used the language of the commons (as well as common good, common heritage, public interest and so on) to justify the appropriation of resources and dislocation of communities particularly of indigenous people. Vigilance for and resistance to this kind of co-optation and abuse is critical. Deep attention must be paid to whose commons a resource belongs within and how that is determined. We must actively work to link commons work to the struggles for equity, racial justice and human dignity. All of us seeking a just and life sustaining future, lose when powerful and libratory ideas like the commons are co-opted, abused, marginalized, forgotten or suppressed in our collective imagination. 12. A commons revival needs to be fostered, supported, organized and resourced. Animating a commons begins with asking a different set of questions that engage a broader set of experiences and help a community break out of constrained thinking. The goal is to enable a community to participate in and manage the communities in which they live, which in turn requires being able to see and claim resources in new or renewed ways. Because so much works against this possibility, we must pursue intentional strategies to animate and bolster commons work.

Kindred Spirits and Convergence We are witnessing a growing body of activity today that shares a sensibility and orientation with commons based work. This emergence is simultaneous, kindred, and potentially synergistic with commons work but in many cases

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10. What Does This Moment Require? names itself differently. We affirm the need for rich, creative, and relevant ways of describing the multiplicity of undertakings on the rise. We see this multiplicity of names as providing a needed space so that as many kindred impulses can find voice, so that we don’t miss learning from the experiences and wisdom held in other forms—ultimately so we can move to a point of authentic convergence. And we think it is important that we begin to see the links and shared purpose among these efforts: a lake into which the many rivers feed. We posit that the commons offers this movement moment a multi-dimensional, cross-sectoral way of describing the worldview and shared goals connecting us. As a unifying frame, it has the advantage of offering a belief system, a rich historical tradition, and examples of actual community arrangements and practices for caring for resources. Now and then, a new concept comes along that captures the historical moment and guides social movements in a promising new direction. Rachel Carson captured such a moment with her 1962 book, Silent Spring, launching the modern environmental movement which is still growing and evolving in amazing ways. We can think of similar catalytic ideas in key moments of every social movement. Such a moment has come again with the reemergence of an ancient concept—that of the Commons.

About the Authors Alexa Bradley has worked as an organizer, facilitator and popular educator for more than 25 years, with a particular focus on linking progressive organizations to broader social movement strategies. She is currently an organizational consultant and a Fellow at On The Commons, supporting community solutions rooted in the principles of collective stewardship and use of our common resources. Julie Ristau is Co-Director of On The Commons, an organization working to raise the visibility of the commons and promote innovative commons-based solutions to contemporary problems. She is also co-chair of Homegrown Minneapolis, an inner city local food initiative. Ristau has been publisher of Utne Reader magazine, director of the League of Rural Voters, a public school teacher and a community organizer.

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11. Reclaiming the Sabbath as a Vision of Solidarity Economics Barry G. Shelley Solidarity economics is a fundamental theme that runs through both the Hebrew Bible, shared in part by the Jewish, Islamic, and Christian traditions, as well as the Christian New Testament. In fact, I would contend that it is one of the central threads that holds the fabric of the Biblical story together. That often comes as a surprise to both followers and non-followers of these faiths. In this chapter I want to introduce to some and remind others of this thread and, in so doing, suggest that the Biblical story may still have some relevant insights for us in regards to the local, national, and global economic concerns we face. Let me begin with some general comments about the Bible. Among other things, the Bible is a story, a story of a People trying to connect with and live in covenant with the divine, with that transcendent realm some of us call God. In the initial covenant or contract, as the story goes in the Hebrew Bible, God provides through Moses a set of wise guidelines for an alternative way of living together as a community and promises that if the people follow these guidelines, they all—everyone—will experience whole, healthy, abundant life. Special rituals evolve that help to remind the people of these guidelines and to incorporate them into this new way of life. The people struggle to live by the guidelines and practice the rituals that help to uphold them. Along the way many forget, ignore, or defy the covenant guidelines; but there are always others, like the prophets, who denounce the problems—the evil—that results and re-proclaim the covenant vision for good living. In the New Testament Jesus calls the people to a new covenant that evolves from the old. Jesus’ followers, such as the Apostles, the early church in Acts, and Paul, continue the mandate to build alternative communities of the covenant. It’s very important to read Biblical passages as parts of a whole, as parts of this Big Story and not as disconnected pieces.1 1 For

a creative and substantive summary of this Big Story see Manna and Mercy: A Brief History of God’s Unfolding Promise to Mend the Entire Universe by Dan

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11. Reclaiming the Sabbath It is also crucial to understand that Big Story as one recorded by various human beings in particular historical and cultural contexts that span over one thousand years. This is important both for those who embrace the story as a matter of religious faith and for those who don’t. While the Hebrew community during these times was founded on an alternative social vision that ran counter to the principles of other contemporary cultures, it too was a society fraught with rampant violence, patriarchy, racism, and classism. Even Biblical activists advocating for a more just and peaceful society do not fully transcend their humanity and their cultural context. Just as we do today, we must not assume that such voices from the past—as wellintentioned and committed as they might be—carry the perfect or whole “Truth” for their own times, much less our own. I’m still convinced, however, that the Big Story does hold much wisdom for us today. So let’s look more closely at these covenant guidelines for abundant life. The faith and economics link most often made in relation to global debt and some other global economic issues is grounded in the discussion of jubilee in Leviticus 25. There it is proclaimed that every 50th year all debts shall be cancelled and all land should return to its original owners. In order to more fully understand jubilee, however, we need to explore the earlier and more stringent sabbath laws—or guidelines—found in Exodus and Deuteronomy. Sabbath rest has become a popular theme in recent years, as more and more church members feel overworked and stressed out. The sabbath tradition definitely offers insights as we face schedule crunches and the imbalances of work, family time and leisure in our lives. However, here I primarily want to explore other, often ignored, facets of sabbath that offer wisdom and hope on matters that are broader than those of our own personal rest and spiritual health, concerns like the debt crisis, increasingly unequal distributions of wealth and economic power, and economic imperialism. Yet, as we’ll see, sabbath rest very much links us to debt and other such seemingly distinct issues.

The Sabbath Tradition in the Hebrew Bible To better understand this idea of sabbath we need to go back to the Torah or the Pentateuch, the first five books of the Bible. First, let’s recall this part of the Big Story: The Hebrews are oppressed as slaves in Egypt. God hears their cries for mercy and help, and liberates them from their Egyptian masters. Then God guides them through the wilderness for 40 years and uses Erlander (Mercer Island, WA: The Order of Saints Martin and Teresa, 1992).

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Part IV Commons and Wealth that stripped down basic existence to de-program the Hebrews from their Egyptian-taught mindset about how to live, and to teach them a new way of living together in community. The ten commandments, given to Moses in the wilderness, are fundamental guidelines for how to live in an alternative society. This part of the story is found in Exodus 20. Let’s look at one of those commandments—the commandment to “remember the sabbath and keep it holy.” 20:8

Remember the sabbath day, and keep it holy. 9 For six days you shall labour and do all your work. 10 But the seventh day is a sabbath to the LORD your God; you shall not do any work—you, your son or your daughter, your male or female slave, your livestock, or the alien resident in your towns. 11 For in six days the LORD made heaven and earth, the sea, and all that is in them, but rested the seventh day; therefore the LORD blessed the sabbath day and consecrated it. (New Revised Standard Version, NRSV) There are two key points I want to make about this passage. First, we are to rest because God rested. “By God’s own precedent, rest is woven into the fabric of the universe.”2 Secondly, notice the effort in verse 10 to specifically identify those who should not work: 10

. . . you shall not do any work—you, your son or your daughter, your male or female slave, your livestock, or the alien resident in your towns. Who are these creatures? They are the most vulnerable in the household. So, this is not just about the value of rest. It is a protection against exploitation of the most vulnerable in the house. Everyone gets a rest—even the animals—and no patriarch should threaten dismissal for not working on the sabbath.3 (Let me note that I wish the passage also specified wives. The sabbath commandment was in need of further enlightenment about the dominance of patriarchy of the time.) When we dig deeper in Exodus and Deuteronomy we find the call to practice a sabbath year every seven years—a time when farmers should let their land lie fallow, debts should be cancelled, and slaves should be freed. In this case slavery refers mostly to a kind of indentured servanthood triggered when one land owner is unable to repay a loan to another landowner. In such a case the creditor takes control of the debtors assets, including land, 2 Richard 3 Ibid.

Lowery, Sabbath and Jubilee (St Louis, MO: Chalice Press, 2000) p. 82. pp. 106-107.

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11. Reclaiming the Sabbath and the debtor, having no other means of livelihood, becomes a dependent servant of the new landowner. Not only were these debt slaves to be freed, they were to be given back the confiscated land plus a little additional capital to ensure a subsistence basis sufficient for remaining free. We also find prohibitions against charging interest. How did these sabbath laws arise? What are their purposes? Let’s continue the story, this time with a bit of historical and biblical scholarship thrown in: After the Hebrew slaves escape from Egypt and experience their rite of passage in the wilderness, they settle in the land of Canaan, the majority living as peasant farmers. They organize themselves into families and clans practicing their agriculture on commonly held land, and manage their community affairs in a relatively egalitarian manner. Then, despite the vehement warnings of peasants and prophets such as Samuel, a monarchy is established about 250 years after the exodus from Egypt. Increasing oppression from the king’s court, in part through a tributary tax system and the arbitrary confiscation of peasant land, leads to the split between the tribes into two kingdoms after less than 100 years of monarchy. Then, after another 100 or so years, during the 8th century B.C.E., a monumental shift in the social structure begins—a shift that probably provoked the sabbath laws. That shift was the introduction of individual private property and an accompanying system of money and interest-based credit. The risk of poor harvests and other obstacles to survival was shared less and less by the community at large. Under the earlier kings’ tax burdens, rural communities still had maintained a sense of solidarity. Now, however, small farmers were increasingly on their own. Those who had a bad year could be forced to borrow from neighbors for seed and other supplies for the next year’s planting. If they were unable to repay the loan, they often lost their land and themselves to the creditor. That is, the entire family might become the debt slaves of the creditor. Through perfectly “legal” creditordebtor contracts, property distribution became more and more unequal, and the previous solidarity among the peasant farmers was significantly undermined. Much evidence suggests that the sabbath laws actually were first developed and instituted in the wake of these new property and credit systems, not during the time of Moses some 500 years earlier as the Exodus story suggests. As the Hebrew people became aware of how these new economic structures were eroding the physical, social, and spiritual health of the community, they probably established the sabbath laws in an effort to both prevent and correct the destructive tendencies they saw in their society. So then why do they appear in the Torah as coming from the time of Moses? Sabbath laws were considered so important, so fundamental to preserving

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Part IV Commons and Wealth the crumbling identity of the Hebrew people that the Biblical writers at the time then incorporated them into the older, identity-defining story of Israel—the exodus and wilderness experience.4 The rationales for the laws might have been something like the following: First, let’s establish preventative guidelines, like “no charging of interest on debts,” that prohibit exploitation. At the same time, let’s recognize that to some degree, even with these preventative measures, things inevitably are going to get out of whack. However, we refuse to accept the destructive concentration of wealth and the resulting loss of solidarity as a permanent or “natural” condition. Instead, additional corrective sabbath practices rectify injustices that occur despite the preventative guidelines, and these are implemented on a regular basis to reestablish “right” economic relations. “Disparities of wealth and power are not ‘natural’ but the result of human sin, and must be mitigated within the community of faith through the regular practice of redistribution.”5 In summary, sabbath practices are built-in restraints against abuse and exploitation of other human beings and of nature. They are safeguards against anyone accumulating too much and against society become too unequal. They are founded on the following principles: • Property rights are not divinely ordained and permanent. Property regimes should serve social purposes, not foremost an individual purpose. Property regimes should serve humanity (understood as a collective) and life, not the other way around. • Concretely, the vulnerability of your neighbors must not be exploited for one’s personal accumulation. Predatory lending is wrong. • Holding power over others permanently by exploiting creditor-debtor relationships is wrong. • Finally, individuals have no sacred right to perpetuate the status quo economic relationships. On the contrary, the community has a responsibility to dismantle the status quo in the interest of the communal whole. The connection between the sabbath vision and the current global debt crisis across the Global South is clear. Many of the loans made to poor nations originally were, or later became, predatory. Furthermore, they have 4 Ulrich

Duchrow and Franz J. Hinkelammert, Property for People, Not for Profit: Alternatives to the Global Tyranny of Capital (London: Zed Books, 2004) pp. 13-22. 5 Ched Myers, The Biblical Vision of Sabbath Economics (Washington, DC: The Church of the Saviour, 2001) p. 5.

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11. Reclaiming the Sabbath been used—particularly by the U.S., the World Bank, and the International Monetary Fund (IMF)—to pressure nations to accept economic policies and certain treaties against their will. Despite the fact that these debts literally lead to destruction and death, not life, despite the fact that they long ago ceased to serve a broader social purpose, despite the fact that the lenders have already profited many times over from these loans, and despite the fact that these debts exacerbate extreme inequality, calls for cancellation are met with sterile arguments about not wanting to undermine the current economic order with “bad” precedents. We tend to accept “the economy” as some natural order with which we cannot tamper. Our world and our economy is very different from that of the Middle East 2700 years ago. Yet, the wisdom of the sabbath laws still seems quite applicable. Those guidelines would suggest that to not cancel the debt is wrong!

The Link to Weekly Sabbath Rest How does sabbath rest directly link us to these national and international concerns, as suggested at the beginning of this chapter? To discover this link, it’s enlightening to take into account scholarship that suggests that the practice of a seventh-year debt release pre-dates that of the seventh-day rest, and that the sabbath day was instituted as an on-going symbol of the purpose and vision of the seventh-year practice. In his book, Sabbath and Jubilee, Rick Lowery suggests that “a periodic release from debt and its burdensome consequences eventually was celebrated as a weekly cessation of work. . . . [The seventh-day sabbath] is a ‘little sabbath year,’ a ‘little jubilee.’ It is an enduring sign in Israel of the social solidarity and economic justice implied in seventh-year debt release.”6 So even the sabbath day—not just the sabbath year—is about social solidarity and economic justice. Amos, one of the earliest Biblical prophets, wrote in the 8th century B.C.E. soon after the sabbath laws probably began. In the book of Amos chapter 8, verses 4-7 he warns the rich about abusing the spirit of the sabbath: Hear this, you who trample the poor and exterminate the lowly of the land, saying, “How long till the new moon passes, so we can sell grain, and the sabbath, so we can market wheat, shrinking the bushel, expanding the buck, and cheating with 6 Lowery,

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Part IV Commons and Wealth unbalanced scales, buying the helpless with silver and the poor for a pair of shoes, while we sell the sweepings of the wheat.” Yahweh swears by the arrogance of Jacob, “I will certainly never forget any of your deeds.”7 As Rick Lowery interprets this passage, Amos 8 turns on a fundamental misunderstanding of sabbath. The privileged wealthy scrupulously observe the sabbath ban on commerce just as they obsessively keep the requirements of temple purity. But they completely misunderstand the significance of sabbath relief. By trampling on the poor [they] violate sabbath, even while religiously taking a daylong pause. Sabbath is a day of rest, but more fundamentally, it is a call to economic justice.8 The task of Amos and other Biblical prophets—Isaiah, Jeremiah, Ezekiel, Hosea, Micah, and the rest—was to denounce the injustices and call the Hebrew people back to holding up their end of the Covenant with God, to call them back to the vision of an alternative way of life set forth in God’s guidelines initially given to Moses in the wilderness. The sabbath economics theme runs right through the prophets. Isaiah and Micah offer additional examples. In Isaiah 5:8, the prophet angrily denounces, “Ah you who join house to house, who add field to field, until there is no room but you, and you are left to live alone in the midst of the land!” Micah also rails against the increasing unequal distribution of land in chapter 2. He declares, 1

Alas for those who devise wickedness and evil deeds on their beds! When the morning dawns, they perform it, because it is their power.” And what are these evil deeds? He continues, “They covet fields, and seize them; houses, and take them away; they oppress householder and house, people and their inheritance. . . . 9 The women of my people you drive out from their pleasant houses; from their young children you take away my glory for ever. In other cases, the prophets specifically refer to the abuse of the commandment to keep the sabbath day holy. This came home to me a few 7 Ibid. 8 Ibid.

pp. 109-110. pp. 115.

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11. Reclaiming the Sabbath months ago as I prepared a sermon for which one of the lectionary texts was Jeremiah 18:1-11. In this passage a potter, first being unsuccessful in his efforts, reworks what at first was a “spoiled” vessel into another vessel that is deemed to be “good.” We can imagine Jeremiah walking down the street in Jerusalem where most potters worked and having a moment of spiritual insight that he goes onto pronounce as follows: God desires to do with Israel what the potter does with the spoiled pot: Reshape the flawed nation into a one that is good. Reflections on this passage often conjure up the image of God molding us as individuals. That can be an inspiring interpretation and deserves attention. But if we limit our reflection to only that we miss the societal dimension of Jeremiah’s plea: It’s the nation—the society—that needs to turn from its evil and be remolded. And the key question is, “What is this ‘evil?’” Just the usual run of “classic” sins: sexual promiscuity, murder, abuse? Actually, with only a little digging around, I found that Jeremiah seems to be especially concerned about the people of Israel not obeying the commandment to keep the sabbath holy. It’s right there in the previous passage: Three times in chapter 17, verses 21–27, Jeremiah quotes God as warning the people to “bring in no burden by the gates of this city on the sabbath day, but keep the sabbath day holy and do not work on it.” In the verse, God even goes so far as to suggest that the consequences of continuing to abuse the sabbath would be the destruction of Jerusalem. So, let’s get this straight: God is ready to punish the entire nation of Israel because many have been working on Sunday? It sounds a bit melodramatic. However, the scale of God’s reaction makes sense if we truly understand what sabbath is all about. Clearly it must mean more than just a day of rest. It is a sense of abundance—of enough—which undergirds the entire sabbath vision. If we see the world and our lives in terms of scarcity—a fundamental assumption of mainstream economic theory today—then our security depends on competing and accumulating, storing things away so that we’ll always have enough for ourselves. It’s hard to rest in such a world, or to cancel debts or to redistribute when we’ve come to have more than others. Such practices would defeat the whole purpose of competing and accumulating in the first place. But if we see the world and our lives in terms of abundance, if we truly believe that with social solidarity and appropriate restraint there is enough for everyone, then when we have enough, enough really is enough. Our security is placed in God’s grace and abundance experienced through community. We are liberated from competing and accumulating. There is time for rest. This was God’s wilderness lesson in the manna story, when God provided

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Part IV Commons and Wealth food every day in the desert. The people had only to collect it off the ground. There was always enough for everyone, but anything hoarded rotted. Only on the sixth day did the extra food collected stay preserved overnight. On the seventh day—the sabbath—everyone rested and there still was enough to eat . . . enough for everyone.9 So, now maybe we’re getting some idea why one of the ten most important guidelines God gives the people of Israel about how to live together as a community is the commandment to keep the sabbath day holy. The violation of the sabbath is not about breaking some rule dictated by an egotistical God. It is actually symptomatic of alienation from God and from everything God had tried to teach the Hebrew people about how to live. It’s symptomatic of a deep distrust in our covenant with God: That if we will live by these wise guidelines, we will be blessed with abundant life. So, sabbath is about rest, but not rest only in a personal way. It is one foundational piece of a much bigger picture. Sabbath rest is an act of resistance to the dominant order, an act of support for abundance through solidarity and restraint rather than through competition and accumulation.

The Sabbath Tradition in the New Testament Now, what about Jesus? Didn’t he ridicule the sabbath laws? So it seems when we read accounts such as that found in the book of Mark, chapter 2, verses 23 through chapter 3, verse 6:. 2:23

One sabbath he was going through the cornfields; and as they made their way his disciples began to pluck heads of grain. 24 The Pharisees said to him, ‘Look, why are they doing what is not lawful on the sabbath?’ 25 And he said to them, ‘Have you never read what David did when he and his companions were hungry and in need of food? 26 He entered the house of God, when Abiathar was high priest, and ate the bread of the Presence, which it is not lawful for any but the priests to eat, and he gave some to his companions.’ 27 Then he said to them, ‘The sabbath was made for humankind, and not humankind for the sabbath; 28 so the [the Human One]10 is lord even of the sabbath.’ 3:1

Again [Jesus] entered the synagogue, and a man was there

9 Exodus

16. order to maintain inclusive language, the increasingly accepted term “the Human One” has been substituted here for the commonly used title “the Son of Man.”

10 In

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11. Reclaiming the Sabbath who had a withered hand. 2 They watched him to see whether he would cure him on the sabbath, so that they might accuse him. 3 And he said to the man who had the withered hand, ‘Come forward.’ 4 Then he said to them, ‘Is it lawful to do good or to do harm on the sabbath, to save life or to kill?’ But they were silent. 5 He looked around at them with anger; he was grieved at their hardness of heart and said to the man, ‘Stretch out your hand.’ He stretched it out, and his hand was restored. 6 The Pharisees went out and immediately conspired with the Herodians against him, how to destroy him. (NRSV) First, Jesus and his disciples are walking through a grain field and the disciples, being hungry, begin picking grain to eat. “That’s a violation of the sabbath,” say the Pharisees. And what is Jesus’ response? “The sabbath was made for humankind, and not humankind for the sabbath.” That’s outrageous as far as the Pharisees are concerned. Then Jesus goes into the synagogue and heals a man with a withered hand, also assumed to be a violation of the sabbath law. The Pharisees leave and begin to plot against Jesus. So it does appear that Jesus is thumbing his nose at the Pharisees and has little respect for the sabbath laws. However, if we look at these stories in the context of the Gospel as a whole, we find that at the core of Jesus’ ministry was precisely the restoration of the true meaning of sabbath. It’s reminiscent of Amos. By this time, many in Israel had turned sabbath into an even more rigid set of ritualistic legalisms—part of what was called the purity code. While the original intent of the purity code may have been otherwise, it did in many cases serve to maintain social stratification between distinguished castes instead of protecting the poor and serving justice. Not surprisingly, many of the Pharisees and others that vehemently and piously protected this code held elite positions on the social scale. In Luke, when Jesus first announces his ministry he refers back to the prophet Isaiah in proclaiming. . . 4:18

The Spirit of [God] is upon me, because [God] has anointed me to bring good news to the poor. [God] has sent me to proclaim release to the captives and recovery of sight to the blind, to let the oppressed go free, 19 to proclaim the year of the [God’s] favour. (NRSV) What’s the year of God’s favour? It’s a reference to the jubilee, or the sabbath year of sabbath years. And what’s good news to the poor? Probably

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Part IV Commons and Wealth in this context, it’s debt cancellation and land reform. What could be better news to the poor? And when his disciples ask Jesus to teach them to pray he gives them what we call the Lord’s Prayer (Matthew 6:9-13): “Give us our daily bread” is most likely a direct reference to the Exodus manna story. And “Forgive us our debts, as we also have forgiven our debtors”? That connection is pretty obvious! Too often that significance is lost when “debts” is mistranslated as “sins” or “trespasses.” Jesus is not ridiculing the sabbath. On the contrary, the restoration of the true sabbath tradition is at the core of his ministry. What does he actually do on the sabbath? He feeds and heals—precisely what the sabbath is all about. His acts on the sabbath are acts of reclaiming sabbath for those for whom it was meant to serve and protect. And who is sabbath meant to serve and protect? Most directly, the poor and disenfranchised. I affirm efforts by many in the Jewish and Christian traditions to reincorporate sabbath practices of rest into daily and weekly rhythms. However, I raise a caution: I don’t believe a sabbath focus that is limited to our personal rest will get us very far. Sabbath practices are not just about doing or not doing certain things during our faith traditions’ designated sabbath days. They are about living out the vision of sabbath economics every day. Sabbath practices that are consistent with the Biblical story will, from the outset, include a sense of “we’re all in this together.” They will call practitioners into worldwide solidarity and urge them to proclaim enough is enough! Beyond what we’ve explored here, the thread of sabbath economics continues to weave its way through other books of the New Testament, including Acts, the Epistles, and Revelation. Solidarity economics is central to the Biblical story, and much of that story holds relevant insights for us today. Let me conclude by quoting Richard Lowery, one of the most respected scholars on sabbath and jubilee: In its biblical contexts, sabbath protests conditions of scarcity, overwork, and economic inequality that prevailed under Israel’s kings and foreign emperors. By celebrating a divinely ordained cosmic order built on natural abundance, self-restraint, and social solidarity, sabbath critiques the oppressive consequences of a royal-imperial system built on tribute, forced state labor and debt slavery. In the modern context of globalization, sabbath can serve a similar critical function. As individual alienation increases and a sense of social solidarity declines, as the boundaries of time and place that once defined the world of work dis-

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11. Reclaiming the Sabbath appear into cyberspace, sabbath speaks a word of proportion, limits, social solidarity, and the need for rest, quiet reflection, and nonconsumptive recreation. In the emerging world, sabbath consciousness may be the key to human survival, prosperity, and sanity.11

About the Author Barry Shelley teaches in the Program for Sustainable International Development at Brandeis University. His work focuses on poverty and inequality, rural development, land reform, and the environment in the Global South. Combing his extensive experience in social change programs in El Salvador and the U.S. with his formal training in political economy, theology and ethics, and public policy, Barry frequently facilitates economic literacy workshops for activists and faith-based communities.

11 Lowery,

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12. What Is Productivity For? John de Graaf 1 The Labor Day 2007 headline in the Seattle Times caught my eye immediately: WE WORK HARD-U.S. AT THE TOP IN PRODUCTIVITY. The article explained that the most recent International Labor Organization report confirmed what most of us take for granted-U.S. workers produce more per capita wealth than workers in any other country, some $63,885 a year. Due to early adoption of computer technologies, Americans are also highly productive per hour-ranking second only to Norway. But, the article explained, a big part of our annual lead comes because in the US, “more people were working longer hours to make ends meet.” Despite a dramatic increase in productivity since 2001, “the share of national income going to corporate profits has dwarfed the amount going to workers paychecks,” according to the Associated Press. So there you have it. We’re number one in productivity. We do have the Grossest Domestic Product. But it’s a different story when you compare other indices of our quality of life with those in Europe, for example. Europeans, as I will show, would do well to be wary when leaders like France’s Nicolas Sarkozy suggest they should be more like the United States, so as to compete for the gold ring of GDP dominance. That way lies a decline in health, well-being and sustainability. And while there are no Utopias out there, other parts of the world will find better examples of livable societies on the other side of that Atlantic from New York. For most of the past 35 years, the United States has pursued an ideologically-driven economic strategy markedly different from that of nearly all western European nations. From 1932 until 1972, the United States used government policies to increase economic opportunities for the poor, the middle-class, women, and minorities. Wages kept pace with increases in productivity. But since then, and especially since Ronald Reagan declared that “government cannot be the solution because government is the problem,” we’ve 1A

portion of this chapter appeared previously in Common Ground magazine.

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12. What Is Productivity For? followed a different path, toward what has sometimes been described as market fundamentalism. Increasingly, in the name of “personal responsibility,” our policies require more and more Americans to provide privately for all their own economic security. For most of us, the “ownership society,” emphasizing privatization, deregulation and massive tax cuts for the wealthy, is really a “you’re on your ownership” society. We’ve cut taxes dramatically for wealthier Americans, privatized and de-regulated large sections of the economy. By contrast, most northern and western European countries have followed a different path they call “the social contract.” To work well, they argue, markets need strong rules, an activist government, and powerful protections for the rights of workers and consumers. For the most part, the Europeans have continued to strengthen their social safety nets, offering increasingly generous unemployment compensation, old age pensions, paid family leave, long vacations, and other benefits such as universal health care. Two different approaches. It seems fair to ask which one has worked better. And that question leads to another, more fundamental one: What’s the economy for, anyway? How much stock can we take in the Dow Jones? Is the Gross Domestic Product the measure (the grosser the better), and stuff the stuff, of happiness? Is the good life the goods life? If so, then our way seems a winner. US per capita GDP (the value of all goods and services sold on the market each year) is still 30% higher than the average in Western Europe, just as it was a generation ago. We’ve got bigger homes (and more storage lockers for what doesn’t fit into them), bigger cars, and more high-definition televisions. But what if we measure success by the happiness, health, fairness, and security economies provide for their people? Here’s just a short list of where we fall behind: • Poverty: Our poverty rate is two to three times European levels. Ditto for child poverty. • Gap between the rich and poor : Ours is by far the widest and growing wider. Our middle-class, as a percentage of the population, is smaller than anywhere in Europe. Since the introduction of “trickle down” economics by Reagan, America’s wealth has gushed up to the already wealthy. • Health: The US now ranks 42nd in the world in longevity, down from 11th in 1980. All but one European country does better. We also rank 42nd in infant mortality, worse than any European country. We’ve got

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Part IV Commons and Wealth twice as many obese people as European countries do. And the World Health Organization rates our health care system a dismal 37th in the world, despite the fact that we spend more on health care than any other country. • Mental health: US rates of anxiety and depression are among the highest in the world and double those in Europe. • Child abuse: More than double European rates. • Crime and punishment: We lead the industrial world in violent crime despite an incarceration rate 7-10 times higher than in other countries. • Environment: We’re worst in air pollution, carbon dioxide emissions, and overall environmental sustainability, and next-to-worst in municipal waste per capita. • Savings and security: The US ranks next to last in personal savings in comparison with EU countries. Ditto for rates of income replacement for unemployment or pensions. That’s not the end of the dismal numbers, but I want to focus on one area where I think we can make an immediate difference. As other essays in this book make clear, connecting more with the natural world and healing our planet, wounded by over-development and sick with greenhouse gasses and industrial wastes, is not only essential for our survival as a species but also for our sanity and connections with one another. Experiencing the wonder and joy of creation in wild and sparkling places enables us to see, with John Muir, that “whenever you try to pick out anything by itself, you find it hitched to everything else in the universe.” But what if you never get out there? What if you never have time to get out there? Richard Louv (Last Child in the Woods) and others have written eloquently about how American children are suffering from “nature deficitdisorder.” Compared with a generation ago, children today spend only half as much unstructured time outdoors. I worry that children who have not been exposed to the natural world will be less interested in protecting it. Many environmentalists became active because their parents introduced them to nature while on vacation. I know I care about the earth because my father took me backpacking in the Sierra when I was very young. When I made a film about David Brower, longtime leader of the Sierra Club, and perhaps the most effective environmentalist of the 20th Century, he told me the same was true for him. At age six, his parents took him

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12. What Is Productivity For? camping and the magic of the wilderness stayed with him forever. Back then, it took them three days to get to Yosemite from Berkeley on gravel roads. But fewer and fewer parents can find the time to take their children on vacations like that. Among industrial countries, only the US has no paid vacation law. Europeans get at least four weeks by law after the first year on the job; most get six weeks or more. By contrast, a quarter of American workers get none at all; the average is less than 14 days and we take only ten of those, afraid of the work that piles up when we’re gone. For many workers, vacation time is used only for long weekends, to run errands at home. How do you find time to experience nature in a situation like that, or time to do anything to protect it? This is an outrage, and it’s time to call it so. There are clear arguments for a paid vacation law: • Vacations are shown to improve health-those who take them have only about half as much risk of a heart attack. • Vacations are family-friendly. For many of us, the memories of family vacations are the strongest memories we have of childhood, a time when we bonded most closely with our parents. Having just taken a one-week camping trip with my son, I can attest to the value of this. • Vacations help prevent worker burnout. They improve productivity and, especially, creativity, central to success in the information economy. This is not about slacking; this is about health and family and planet. But the effort to reclaim vacations does challenge our values. It asks the question, what do we do with progress? Must we use all of our productivity gains to produce more and more stuff, more and more unequally distributed? Or do we value time in our lives-to learn, to think, to eat slowly, to build friendships and strengthen families, to love, to volunteer, to laugh and sing and paint and play, to exercise, to appreciate the wonders of the earth at their own pace, to read to a child or raft on a river? To fight global warming and defend the earth for generations unborn? The issue of time is one that environmentalists must take seriously. A 2007 study by the Center for Economic and Policy Research found that if Americans could only reduce their working hours to European levels they would almost automatically cut their energy use and carbon footprints by 20 percent or more. What is progress for? What is productivity for? What’s the economy for, anyway?

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Part IV Commons and Wealth When will we raise these questions to a crescendo that cannot be ignored? I know from speaking around the country that people are waiting to hear these things, wanting to hear them. A few months ago, a desk clerk at a hotel in Florida told me her employer had cancelled her two-week vacation for seven years in a row, paying her extra to work instead, but not offering her the choice. “It’s not that I don’t need the money,” she said. “I’m a single mom and I’m a clerk in a hotel after all. But I need the time more. I’m desperate for some time off, but I’d have to quit this job to get it and I can’t afford to do that.” The American “conservative revolution,” with its focus on income growth and consumption, has had more than a generation to prove itself, and as I have shown, it has failed to make life better while threatening the support systems all life depends on. The working definition of insanity is to keep doing the things we’ve been doing hoping for a different result. It’s time for a change. America needs a break. Let’s give the most “productive” workers on the planet some time to enjoy the fruits of their labor. And let’s give our children a chance to get back in the woods!

About the Author John De Graaf is the Executive Director of Take Back Your Time (http: //www.timeday.org), an organization fighting overwork and time poverty in America. He is the producer of the PBS special Affluenza and the new film Whats the Economy for, Anyway? (http://www.eartheconomics.org). He is the co-author of Affluenza: The All-Consuming Epidemic and the editor of Take Back Your Time. His new book is Whats The Economy For, Anyway?, to be published by Bloomsbury in 2011. He lives in Seattle, Washington and can be reached at [email protected].

References Books De Graaf, J., David Wann, Thomas Naylor. 2001. Affluenza: The All-Consuming Epidemic. San Francisco: Berrett-Koehler Publishers. Louv, R. 2005. Last Child in the Woods: Saving Our Children From Nature-Deficit Disorder. Chapel Hill, North Carolina: Algonquin Books. McKibben, Bill. 2007. Deep Economy: The Wealth of Communities and the Durable Future. New York: Times Books/Henry Holt & Co. Wann, David. 2007. Simple Prosperity: Finding Real Wealth in a Sustainable Lifestyle. New York: St. Martin’s Press.

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12. What Is Productivity For? Websites • Take Back Your Time: http://www.timeday.org. • What’s the Economy for, Anyway? : http://www.citizeneconomy.org. • The Story of Stuff : http://www.storyofstuff.org.

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13. Community Land Trusts: Developing Permanently Affordable Housing John Emmeus Davis and Alice Stokes1 Readers will quickly perceive the strong values of solidarity evident in the following case study of a community land trust. Without sacrificing the well-being of individual homeowners involved, the shared well-being of all in the community was enhanced through the establishment of restrictions on the housing market for those houses included in the trust. The Champlain Housing Trust proves the viability and advisability of what might be called a “free-nonmarket” economic system, in the sense that participants are free to exchange their holdings (in this case, real estate) but on terms other than that dictated by the standard “what the market will bear.” —The editors Quietly thriving amid the more familiar forms of affordable housing promoted by governmental agencies and by for-profit investors in the United States, a robust “third sector” of private, nonmarket housing has grown to maturity during the past thirty years. Contained within this sector are many types and tenures of housing, including nonprofit rentals, mutual housing associations, limited equity (and zero equity) cooperatives, community land trusts, and resale-restricted houses and condominiums with affordability covenants lasting many years.2 1

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This chapter combines excerpts from two publications: the first two portions of the chapter from the Champlain Housing Trust’s report Lands in Trust, Homes that Last: A Performance Evaluation of the Champlain Housing Trust (2009, http://www.champlainhousingtrust.org/assets/files/Lands-In-Trust_ Homes-That-Last.pdf) and the final section from a piece put out by Burlington Associates in Community Development LLC, “Key Features of the ‘Classic’ Community Land Trust” (2005, http://www.burlingtonassociates.com/resources/archives/ clt_101/000058.html). It should be noted that, while the CLT can stand alone as a unique form of housing tenure, it is often combined with other models of “third sector housing.” For instance, limited equity cooperatives, limited equity condominiums, and even nonprofit rental projects are often sited on land that is leased from a CLT. For a detailed description

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13. Community Land Trusts In most of these models of third sector housing, the occupants are homeowners. They hold many of the same rights that any other homeowner would expect to possess when gaining title to residential property, an ownership stake that is secured by possession of a deed, a ground lease, and/or corporate shares that are transferable and inheritable. They are homeowners, too, because of the security they enjoy, the control they exercise, the responsibilities they assume, and the risks they bear in occupying and operating their housing. Unlike their counterparts in market-rate housing, however, some of these rights, responsibilities, risks, and rewards are shared with a nonprofit organization that remains in the picture long after these homes are sold. Hence the name that is often given to those models of third sector housing that are clustered at the homeownership end of the tenure continuum: shared equity housing.3 Part of what is shared is the financial gain from owning a home. The owners of shared equity housing typically recoup at resale whatever personal investment they have made in buying, maintaining, and improving a home, augmented by a modest return. They are not allowed to walk away, however, with all of the value embedded in their property, since much of it—perhaps most of it—is a product of the community’s investment: equity created at the time of initial purchase if a public grant, charitable donation, or mandated concession from a private developer was used to reduce the home’s price; and equity created during the course of the homeowner’s tenure if public investments in infrastructure, private improvements in surrounding properties, or changes in the regional economy have increased the home’s appraised value. Such socially created value is retained in the home, keeping it affordable for the next homebuyer of modest means, one resale after another; one generation after another. Equity is more than investment and appreciation, however. It is more than money. It is the “owner’s interest”—the total package of rights, responsibilities, risks, and rewards that accompany the ownership of residential property. In market-rate housing, this package belongs exclusively to the homeowner. In shared equity housing, it does not. An organizational steward, whether a nonprofit organization, a cooperative housing corporation, or a public agency, retains an interest in the property, continuing to exercise

3

and comparison of these various models of “third sector housing,” see “Beyond the Market and the State: The Diverse Domain of Social Housing,” in J.E. Davis (ed.), The Affordable City: Toward a Third Sector Housing Policy, Philadelphia, PA: Temple University Press, 1994. See: John Emmeus Davis, Shared Equity Homeownership: The Changing Landscape of Resale-Restricted, Owner-Occupied Housing, Montclair, NJ: National Housing Institute, 2006.

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Part IV Commons and Wealth a degree of control over how it is used, financed, maintained, improved, and conveyed. An organizational steward stands behind the property, helping the occupants to shoulder the responsibilities and to manage the risks of homeownership. Shared equity homes are wrapped in a durable garment of stewardship, where a homeowner is never forced to go it alone. These homes are designed to last, in good economic times—and in bad.4 This commitment to the continuing stewardship of affordable homeownership opportunities that public dollars and private donations have helped to create, while a characteristic of all shared equity housing, is the heart and soul of the community land trust (CLT). Stewardship is what a CLT does best: preserving affordability when real estate markets are hot; protecting residential assets and preventing foreclosures when markets are cold. News from the field has affirmed that CLTs have been doing a superior job of stewardship. Local CLTs have reported for years that the owner-occupied housing within their portfolios continues to resell for prices that remain affordable for households at the same level of income as those who initially purchased them. They have asserted that, unlike other homeownership assistance programs where public subsidies are removed by the homeowner or recaptured by a public agency whenever homes resell, CLTs continue to serve the same targeted group of low or moderate-income homebuyers without the need for additional subsidies, regardless of the number of times a home is resold. CLTs have also touted their success in “backstopping” security of tenure for their lower-income homeowners, claiming a foreclosure rate many times lower than the national norm.5 Beyond a mountain of anecdotal evidence, however, there have been few systematic, data-based evaluations of the model’s effectiveness, mainly because most of the nation’s CLTs are still too new and too small to have had a significant number of resales. Without many cases to draw from, over a span of many years, it has been difficult to gauge whether the model performs as promised. 4 5

See: John Emmeus Davis, “Homes That Last: the Case for Counter-Cyclical Stewardship,” Shelterforce, Winter 2008: 18-25. The National CLT Network (NCLTN) has conducted two surveys of its members focused specifically on mortgage foreclosures. One of these surveys was completed in December 2008; the other in March 2009. Both discovered a foreclosure rate among the CLTs’ portfolios of resale-restricted, owner-occupied housing that was a fraction of the national rate among market-rate homes. In the latter survey, NCLTN discovered the foreclosure rate among the resale-restricted, owner-occupied homes of CLTs to be 0.5 percent. The default rate among CLT homeowners (mortgage payments more than 90 days in arrears) was reported to be 1.4 percent. At the same point in time, the NATIONAL foreclosure rate among market-rate homes stood at 3.3 percent; the national delinquency rate stood at 7.0 percent. See: http://www.cltnetwork.org.

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13. Community Land Trusts The community land trust in Burlington, Vermont is an exception to this pattern of too new and too small. Incorporated in 1984, the Champlain Housing Trust (CHT)—then known as the Burlington Community Land Trust—spent its first decade assembling a respectable portfolio of over 100 resale-restricted, owner-occupied houses and condominiums. That portfolio then doubled in size and doubled again, reaching a total of 410 shared equity homes by 2008. Within that portfolio, over an organizational lifespan of twenty-five years, there were 205 resales. All of these houses and condominiums were sold and resold subject to durable contractual controls that were designed to maintain affordability and to preserve owner-occupancy for many years. They were meant to last. These 410 resale-restricted homes and 205 resales provided a rare opportunity to test whether the Champlain Housing Trust actually secures the community benefits and the individual benefits that are claimed for it. On the community side, does CHT’s model of resale-restricted, owner-occupied housing deliver on its promise of lasting affordability? Does it protect and leverage the community’s investment in affordable housing, retaining the public subsidies that bring homeownership within the financial reach of lower-income households? Does it protect homeownership gains over time, safeguarding security of tenure and neighborhood stability? On the household side of the benefits equation, does CHT’s model of resale-restricted, owner-occupied housing help lower-income people to improve their lives? Has CHT been successful in expanding access to homeownership for persons who could not otherwise afford a home? Do these homeowners receive a fair return on their investment when they resell? Do they build wealth? Do they buy another house or condominium after reselling their CHT home—or do they slip back into being the renters they were before CHT helped to boost them into homeownership? These are the questions our study was intended to answer. They are the yardstick against which we have measured the performance of CHT’s portfolio of shared equity housing and, by extension, CHT’s programmatic success in doing what it claims it can do. Because these claims are common to nearly all community land trusts, the evaluation of CHT has a wider relevance. Despite the many variations that exist among the nation’s 230 CLTs and the many differences that exist from one housing market to another, especially in a time when some remain strong and some have collapsed, we believe CHT’s experience with shared equity homeownership to be fairly representative of the experience of many other CLTs (and, for that matter, of many nonprofit housing development organizations that are not CLTs). To the extent this is true, a performance evaluation of CHT’s sizable portfolio of resale-restricted, owner-occupied housing may be seen as a crucial

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Part IV Commons and Wealth test of the model itself, with implications that extend beyond a single CLT in Burlington, Vermont.

The Champlain Housing Trust Experience Between 1984 and 2008, the Champlain Housing Trust developed 424 modestly-priced single-family houses and condominiums. All of these homes were sold to homebuyers subject to durable contractual controls over their occupancy, use, and resale; controls designed to maintain the homes’ availability and affordability for low-income households for many years. The first resale of a CHT home occurred in 1988. By the end of June 2008, CHT had overseen the resale of 205 houses and condominiums. This pool of resales provided a rare opportunity to evaluate the performance of an unconventional model of tenure that promises to secure the benefits of homeownership for persons of modest means, while also achieving larger social goals like the preservation of affordability, the stewardship of public resources, and the stabilization of residential neighborhoods. While such claims are common to all community land trusts (CLTs), most of the nation’s CLTs are too new and too small to have had many resales. There has been little way to gauge how effective they have been, therefore, in doing what they promise to do. The Champlain Housing Trust, by contrast, has been around since 1984. It has built a sizable portfolio of resale-restricted, owner-occupied housing and has had a significant number of resales. In 2003, the Burlington Community Land Trust used data derived from these resales to undertake a systematic assessment of how well its innovative approach to homeownership had performed over the previous nineteen years. Six years later, on the organization’s twenty-fifth anniversary, the Champlain Housing Trust has refined and updated this ground-breaking evaluation, incorporating data from more recent resales. The present evaluation, like the earlier one, examines how effective CHT has been in reliably delivering—and equitably balancing—two sets of benefits, some accruing primarily to the homeowners served by CHT (individual benefits) and some accruing primarily to society as a whole (community benefits). The study’s principal findings are as follows: Expanding homeownership Access to homeownership for persons excluded from the market was expanded. All of the households served by CHT earned less than 100 percent of Area Median Income (AMI). Most earned considerably less. The average household served by CHT on the initial sale of a house or condominium earned 69.4 percent of AMI. The average house-

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13. Community Land Trusts hold served by CHT on the resale of these same homes earned 68.6 percent of AMI. Creating individual wealth When reselling their homes, most CHT homeowners walked away with more wealth than they had possessed when first buying the home. Although less than they might have realized from the resale of an unrestricted, market-rate home in an appreciating market (assuming they been able to buy such a home), CHT’s homeowners still earned a very respectable return on their investment. The average CHT homeowner, reselling after five-and-a-half years, recouped her original down payment of $2,300 and received a net gain in equity of nearly $12,000. Homeowners who made capital improvements in their homes received even more. Enabling residential mobility Households who left CHT did so for similar reasons and with similar success as homeowners buying and selling on the open market. One hundred eighteen of CHT’s homeowners bought unrestricted, market-rate homes after reselling their CHT home; ten bought another resale-restricted CHT home; forty-two became tenants, sometimes renting from CHT; and five died. The subsequent housing situations of another thirty households could not be determined, primarily because they had left the state. Among CHT homeowners whose subsequent housing situations were known, 67.4 percent of them bought market-rate homes within six months of leaving CHT; another 5.7 percent traded their first resalerestricted home for another, choosing to remain within CHT. Preserving affordability Affordability not only continued between successive generations of low-income homebuyers, but improved—even when the favorable effect of falling mortgage interest rates was removed. The average CHT home was affordable to a household earning 56.6 percent of AMI on initial sale. On resale, it was affordable to a household earning 53.4 percent of AMI—a 5.65 percent gain in affordability. Retaining community wealth Public subsidies invested in CHT’s houses and condominiums remained in the homes at resale, underwriting their affordability for subsequent generations of lower-income homebuyers. An initial public investment of $2,172,207 in those homes that resold one or more times allowed CHT to bring homeownership within the reach of 357 lower-income households. Had these subsidies not been retained in the homes, allowing their owners to pocket both the public’s investment and all capital gains when reselling, the size of the public’s investment needed to serve the same number of households at the same level of income as CHT had served would have been five times greater. Enhancing residential stability Lands and homes placed under the stewardship of CHT were seldom removed from its portfolio. Occupancy,

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Part IV Commons and Wealth use, and resale controls remained in place for 96.7 percent of the 424 units of owner-occupied housing developed by CHT between 1984 and 2008. Only 14 homes were released to the market. Foreclosures remained a rare event, even as the mortgage meltdown in the rest of the United States approached the point of crisis. Over its twenty-five year history, CHT has had only nine foreclosures. No lands or homes have ever been lost from CHT’s portfolio because of foreclosure. The Champlain Housing Trust, for most of its existence, has operated in a housing market with rising prices, a growing demand for modestly-priced housing, and a chronic shortage of houses and condominiums within the financial reach of persons earning less than 80 percent of AMI. Only recently has the local homeownership market experienced a decline in prices, but with little effect on the “affordability gap” that has long existed between the average cost of housing and the average income of the households hoping to buy that housing. CHT, on the other hand, has had considerable success in closing that gap, not only on the initial sale of a house or condominium but also on its eventual resale. The performance of CHT’s portfolio of resale-restricted, owner-occupied housing provides encouraging evidence that it is possible to promote the legitimate interests of first-time homebuyers, without sacrificing the legitimate interests of the larger community. In Burlington, Vermont for twenty-five years, the Champlain Housing Trust has been doing what it promised to do.

Key Features of the “Classic” Community Land Trust The community land trust is an equitable and sustainable model of affordable housing and community development that has slowly spread throughout the United States during the past 40 years. Since 1992, the defining features of this model have been enshrined in federal law. There is considerable variation among the 240 organizations that call themselves a community land trust, but ten key features are to be found in most of them.

Nonprofit, Tax-exempt Corporation A community land trust is an independent, not-for-profit corporation that is legally chartered in the state in which it is located. Most CLTs are started from scratch, but some are grafted onto existing nonprofit corporations. Most CLTs target their activities and resources toward charitable activities like providing housing for low-income people and redeveloping blighted

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13. Community Land Trusts neighborhoods, making them eligible to receive 501(c)(3) designation from the IRS.

Dual Ownership A nonprofit corporation (the CLT) acquires multiple parcels of land throughout a targeted geographic area with the intention of retaining ownership of these parcels forever. Any building already located on the land or later constructed on the land is sold off to an individual homeowner, a cooperative housing corporation, a nonprofit developer of rental housing, or some other nonprofit, governmental, or for-profit entity.

Leased Land Although CLTs intend never to resell their land, they provide for the exclusive use of their land by the owners of any buildings located thereon. Parcels of land are conveyed to individual homeowners (or to the owners of other types of residential or commercial structures) through long-term ground leases. This two-party contract between the landowner (the CLT) and a building’s owner protects the latter’s interests in security, privacy, legacy, and equity, while enforcing the CLT’s interests in preserving the appropriate use, the structural integrity, and the continuing affordability of any buildings located upon its land.

Perpetual Affordability The CLT retains an option to repurchase any residential (or commercial) structures located upon its land, should their owners ever choose to sell. The resale price is set by a formula contained in the ground lease that is designed to give present homeowners a fair return on their investment, while giving future homebuyers fair access to housing at an affordable price. By design and by intent, the CLT is committed to preserving the affordability of housing (and other structures) – one owner after another, one generation after another, in perpetuity.

Perpetual Responsibility The CLT does not disappear once a building is sold. Since the CLT owns the underlying land and also holds a preemptive option to re-purchase any buildings located on its land, the CLT has an abiding interest in what happens to these structures and to the people who occupy them. The ground

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Part IV Commons and Wealth lease requires owner-occupancy and responsible use of the premises. Should buildings become a hazard, the ground lease gives the CLT the right to step in and force repairs. Should property owners default on their mortgages, the CLT has the right to step in and cure the default, forestalling foreclosure. The CLT remains a party to the deal, safeguarding the quality and condition of the buildings and the residential security of homeowners and other occupants.

Place-based Membership The CLT operates within the physical boundaries of a targeted locality. It is guided by – and accountable to – the people who call this place their home. Any adult who resides on the CLT’s land and any adult who resides within the area deemed by the CLT to be its “community” can become a voting member of the CLT. This place-based community may encompass a single neighborhood, multiple neighborhoods, or, in some cases, an entire town, city, or county.

Resident Control Two-thirds of a CLT’s board of directors are nominated and elected by its members, all of whom reside within the CLT’s service area. There are two categories of members: people who live on the CLT’s land (or who lease land for other uses) and people who reside within the CLT’s service area but do not lease land from the CLT.

Tripartite Governance The board of directors of the ”classic” CLT is composed of three parts, each containing an equal number of seats. One third of the board represents the interests of people who lease land from the CLT (“leaseholder representatives”). One third represents the interests of residents who do not lease CLT land (“general representatives”). One third is made up of public officials, local funders, nonprofit providers of housing or social services, and other people presumed to speak for the public interest (“public representatives”). Control of the CLT’s board is diffused and balanced to ensure that all interests are heard but no interest is predominant.

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Expansionist Acquisition CLTs are not focused on a single project located on a single parcel of land. They are committed to an active acquisition and development program, aimed at expanding the CLT’s holdings of land and increasing the supply of affordable housing (and other types of buildings) under the CLT’s stewardship. A CLT’s holdings are seldom concentrated in one corner of a community. They tend, instead, to be scattered throughout the CLT’s service area, indistinguishable from other owner-occupied housing in the same neighborhood.

Flexible Development There is enormous variability in the types of projects that CLTs pursue and in the CLT’s role in developing them. Many CLTs do development with their own staff. Others delegate development to nonprofit or for-profit partners, confining their own efforts to stewardship: assembling land and preserving the affordability, quality, and security of any structures located upon it. Some CLTs focus on a single type and tenure of housing, like detached owner-occupied houses. Other CLTs take full advantage of the model’s unique flexibility: they develop housing of many types and tenures or they focus more broadly on comprehensive community development, undertaking a diverse array of community projects. CLTs around the United States have constructed (or acquired, rehabilitated, and resold) single-family homes, duplexes, condos, co-ops, SROs, multi-unit apartment buildings, and mobile home parks. CLTs have created facilities for neighborhood businesses, nonprofit organizations, and social service agencies. CLTs have provided sites for community gardens, community-supported agriculture, and vest-pocket parks. Land is the common ingredient, linking them all. The CLT is the social thread, connecting them all.

About the Authors John Emmeus Davis is a partner and cofounder of Burlington Associates in Community Development LLC, a national consulting cooperative founded in 1993. He previously served for ten years as Housing Director for the City of Burlington and as Coordinator for the Old North End Enterprise Community. He has taught urban studies, housing policy, and neighborhood planning at the University of Vermont, New Hampshire College, and MIT. Alice Stokes worked at the Champlain Housing Trust for five years. She

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Part IV Commons and Wealth became interested in the community land trust model when she bought a home through CHT in 2003. She served as the first staff for the National Community Land Trust Network from 2005-2008. Alice and her family currently live in one of the resale-restricted homes included in this study. She holds a B.A. from the University of Vermont.

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Part V.

Environment

14. We Belong with the Earth: An Integrative Vision from Bioregionalism Patrick Gibbs1 Thanks to all that feeds us. I feel honored to share these ideas with you here, and I hope that they feed you in your effort towards more whole, healthy life. This chapter builds on a session I gave about bioregionalism at the 2009 Forum on the Solidarity Economy in Amherst, Massachusetts, United States. Bioregionalism starts with the idea that we each live in a place that is alive—bio means life and a region is a place. Seeing and accepting that we each live in a life-place shifts our consciousness, which in turn shifts our cultures, politics, economics, and daily habits—a shift towards working inplace to 1) restore ecosystems, 2) develop human life support systems in harmony with the rest of life, and 3) develop support for individuals.2 This chapter attempts to explain bioregionalism through “A Story of Movement” and then offers examples of bioregionalism in action. If you want to do something bioregional right now, then put this book down and go make a map of your home place: include on it where your drinking water comes from and other flows and details that you choose, then show the map to a friend and ask what they can add to the map.

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This chapter is covered by a Creative Commons Attribution 3.0 Unported license (http://creativecommons.org/licenses/by/3.0/). You are free to copy, distribute, and transmit this work and to adapt it into new work, so long as you credit the original source. As my thinking develops, new versions of this chapter will be posted at http://www.mutualgift.net, where supporting material is also available. 2 Peter Berg, “Growing a Life-Place Politics,” pp. 137-144 in Home!: A Bioregional Reader, edited by Van Andruss, Christopher Plant, Judith Plant, and Eleanor Wright (Gabriola Island, BC: New Catalyst Books, 2007).

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Mapping Bioregionalism (Through a Story of Movement) I will tell you a story of movement, a story set in the ridges and hollows around my house. There is one pattern in this story—the watershed pattern—and there are three movements in this story: water, humans, and the bioregional movement. My house is at the top of a ridge, and when I walk down into the valley I come to a dry wash. A few hundred feet to the west this valley merges with another and there is a stream that runs during all but the driest times of year. This stream goes south for a few hundred feet and curves to the west, and as more valleys feed into it the stream grows. The stream is 10 feet wide and 5 inches deep at a spot 20-minutes walk from my house. This stream is Swan Creek—my house is in the Swan Creek watershed, which means that the rain that falls on my house flows into Swan Creek. Swan Creek in turn flows into the Duck River (near Centerville, Tennessee) which flows into the Tennessee River (near Waverly, Tennessee, where the Buffalo River meets too) which flows into the Ohio River (near Paducah, Kentucky) which flows into the Mississippi River (near Cairo, Illinois) which flows into the Gulf of Mexico (near New Orleans, Louisiana) which connects with the Caribbean Sea and the Atlantic Ocean (so my house is in all those watersheds too). There are no breakages in this flow, no dry spots—when I dip my feet in Swan Creek to cool myself on a hot day, I touch an unbroken flow of water that connects me all the way down to the Atlantic Ocean, and from there all the way back up every other watershed on Earth, all the way up to the creeks that run on every continent, including the water closest to you right now. (Human-made dams do get in the way.) There is a continuous body of water connecting me and the dolphins of the Amazon River and the people bathing in the Ganges River and the trees on the banks of the small streams in the mountains that feed the Nile River. (We are also connected by air and earth.) This water flows through each of us as well, as Thomas Berry reminds us: There is only one river on the planet Earth and it has multiple tributaries, many of which flow through the veins of sentient creatures. When the Sun shines on the Gulf of Mexico and the Atlantic Ocean, water evaporates, rises, and gathers into clouds, some of which the wind blows to the Swan Creek watershed, and when a cold front meets this warm moist air above my home, the clouds condense into rain and fall onto this ridge

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Part V Environment (and if I’m paying attention then I’ve already brought my laundry inside).3 That is one of the movements in this story: water. Another movement is visible here in the ridges and hollows around my house: people. People here have made our roads along the ridge tops and built our houses next to the roads. People walking, bicycling, and driving cars move along these roads, and we have rhythms of movement: in the evenings we flow towards our houses to sleep, and in the mornings we flow out of the houses towards gathering places to be together in different groups to work, learn, and enjoy each other’s company. Our movements change with the weather and with the seasons. That is the second movement in this story: people. In October 2009 there was pulse of humans here, in this land. About 150 people came here for nine days for Continental Bioregional Congress 10. This gathering of humans (and their tents and cars and food and fire) was a particularly visible moment in the bioregional movement, which integrates the first two movements of this story—water and people—by suggesting to people that they live-in-place so that they come to be inhabitants in their watershed, practicing self-governance in their bioregion and shaping their culture in accordance with the shape of the land-community, rather than living as colonizers or invaders who commit ecocide/suicide/genocide by extracting a living from the living land. Bioregionalism sees that people can flow with the land as gracefully as the water does, and Continental Bioregional Congress 10 was a gathering to share how we humans are moving back into graceful relation with our life-places. Let us look closer at the third movement in this story: the bioregional movement.

The Bioregional Movement Humans tend to align themselves in movements in order to improve the health of their community, and getting healthier requires changing the way we do things. One step in changing the way we do things is to change the way we view things. With a new view of community health we can explain why we want to do things differently and get an idea of what we might do. So, how does the bioregional movement view reality, community, and health? Reality is ecological. 3

Globally, about four times more rain comes from the transpiration of plants than from ocean evaporation (source: The Upward Spiral, a film by Paul Krafel). This happens when plants absorb water through their roots and breathe it out through tiny pores, stomata, in their leaves, similar to the way humans breathe out water vapor in our breath and sweat it out through our skin.

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14. We Belong with the Earth Another way of expressing this view comes from Aldo Leopold in A Sand County Almanac,4 in what he calls “the land ethic”: The land ethic simply enlarges the boundaries of the community to include soils, waters, plants, and animals, or collectively: the land. Aldo also offers a bioregional view of what some call ethics and I call health: A thing is right [healing] when it tends to preserve the integrity, stability, and beauty of the biotic community. It is wrong [diseasing] when it tends otherwise. Briefly restated: reality is ecological, our family includes everything in our place of residence, and health is about balance among family members such that we all become more ourselves. With these basic statements of a bioregional view of reality, community, and health, this story comes to the question, “What can we do to benefit our community health?” A clear response from bioregionalism is, “Gather ourselves in bioregional congresses to coordinate human effort towards bioregion restoration.” Bioregional congresses are also a way of getting to know our human neighbors and paying attention to our non-human neighbors. How can we start thinking about a bioregional congress? To begin, figure out what watersheds we’re in. Remember the pattern of this story, the watershed pattern. The bioregional movement arises like a watershed. Just as many streams flow together to make a wide river, there are a diversity of people with their own cultures who flow together from their home bioregions to make the bioregional movement. When we speak of rivers, we speak of the way many streams come together into one body, and we keep in mind that each stream offers its unique expression higher in the watershed—similarly, in a movement each person has their own voice, and what we hear from the movement is a confluence of those voices (confluence means the place where things flow together). We can come together in this way, remembering our origins as unique small creeks, remembering that the story of the movement is a confluence the stories of many people and many communities, and it is their diversity of experience that makes possible this movement as a river. A closer look shows us more about the watershed-shape of the movement. Each stream flows according to the character of the land it flows in. Swan 4

Aldo Leopold, A Sand County Almanac (New York: Oxford University Press, 1949); quotes found online at http://en.wikipedia.org/wiki/Aldo_Leopold#A_ Sand_County_Almanac.

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Part V Environment Creek by my house flows in a way that makes sense with this shape of land, and a stream in Illinois shapes itself to the shape of the land there, and the two streams eventually meet in the Mississippi River. So it is with bioregional practice: we gather for cultural activities, governance, and commerce in our smaller watersheds first and shape our local actions to the land there, and then we gather with our neighbors of the next larger scale and consider the land on that scale and consider how our culture, governance, and commerce can flow together in ways that make sense with the land. This is the way many human cultures lived healthily for many thousands of years, and some of those cultures still breathe today, flowing with the land they are part of. As we-who-became-colonizers realize that living as colonizers does not work for life, the path of living-in-place-as-inhabitants is open to us as it always has been. In this story of movement, why do we consider the land’s movements as we choose how to arrange our human movements? Just as a stream changes more rapidly than the rocks it flows over, human activities occur at a quicker pace than changes in the land. And just as the rocks are slowly changed by the stream, so the accumulation of human activity changes the landcommunity over time. Later I will explain a tool to think about aspects of a bioregion that change at different paces, the “scale of relative permanence.” I said earlier that the bioregional movement wants community health. Considering that the human community in many places is rather unhealthy (starvation, obesity, war, systemic oppression, loss of cultural diversity) and that many of us humans are making the community of the land similarly unhealthy (soil erosion, monoculture replacing biodiversity, climate chaos), some people approach this situation with a desire for big, fast change. We know from the watershed pattern that small, slow change is practical, and it’s safer than big, fast change. To look at a river for a moment: if the river banks are eroding and the water is too cloudy for fish, we say that something with this river is out of balance (we do not say that this is a bad river). In order to find out what is out of balance, we look around the community, and we look upstream, and we pay attention to small, slow things that build up into big unbalancing things (we do not try to understand the river in isolation). As we start to understand the small, slow roots of the erosion and the cloudy water, we start to see that by paying attention to our community and applying our creativity we can make the river healthier. Paying attention and acting creatively with our community in this way requires staying in one place long enough to know the place, and it can take generations for a family of humans to get this familiar with a small creek and its watershed. This is why bioregionalism advocates living-in-place— stay where you are, don’t move! Consider living with the same river until

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14. We Belong with the Earth you die, and imagine your family living with that river for the next 500 years (500 years ago was the year 1510, and 500 years from now will be the year 2510—let that soak in for a few days). A river gets healthier when its community knows itself better (the humans paying attention to the streams, and the coyotes paying attention to the humans, and so on), not when it’s dammed and forced to flow into another valley (where there’s already a river!). If you do move, remember that wherever you are for however long, you’re part of that life-place, and it’s worth participating consciously. People who are part of their life-place are powerful in particular ways. They learn how to work with that place to meet their needs. Groups of people-in-place can organize themselves (to build soil, plant fruit trees, create healthier economies, renew rivers, and heal from generational systems of oppression) in ways that are impossible when no one sticks around for more than five years. Take a deep breath... feel the your head balanced on your spine... look around... consider what you would do if you knew you and your community’s great grandchildren would be living here for the next 100 years. Right here, 100 years—how do you want this place to be? We can see from colonist genocide of indigenous peoples across the Earth that this power of place is not invincible. I come from a long lineage of colonists, and I am inspired to see how my parents and grandparents have given sincere effort to becoming part of their places, and I see that there is plenty of healing left for me and generations to come. I am 23 years of age, and I’m starting to get a sense that one of the most radical things I can do for local and planetary health is say “I’m staying here, you can count on me being here in 60 years, and doing my best to foster a deep passion for this place in my community’s children.” As I think about that, I feel resistance in myself—that resistance tells me there’s still work to do—and I feel a strong urge to plant nut trees and to clean up this watershed. I think I can trust those urges, go ahead and figure out a sensible way to establish a grove of nut trees (this is viable in nearly any human settlement, including big cities), and if I do decide to move, well, at least this place got a little more balanced.

Planning for Long-term Health My friend Dave Shaw said, approximately, “If it’s a long-term plan, then it’s supposed to happen after I die—at least 200 years from now.” My long-term plan for my bioregion includes people living-in-place, and one of the huge challenges to living-in-place is that our current economic arrangement makes it hard for us to dedicate large blocks of time to regenerating the land in our places. Fortunately, we can take it in steps, and there are enough other

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Part V Environment people addressing this same challenge (and have been for a while now): How do we finance community orchards? How do we keep eating while building soil in severely polluted lands? Step by step, people are creating real ways to do the work that needs to be done without going bankrupt. (I’ve listed some under the heading Places and Projects below.) One way to look at this is to compare inhabitants and invaders (land participants versus land exploiters). When people move around so much that we don’t know where we are, we tend to act as invaders instead of inhabitants.5 Learning to live as inhabitants requires that we rehabilitate another human practice: self-governance. (Rehabilitate means bring back to health.) Many humans, both individually and communally, have been convinced to let go of our ability to make sensible decisions—we have been told in factoryschools, prisons, and once-every-four-years elections that we don’t need to know how to govern our own activities because someone else will do it for us, and that we’re too ignorant and would just get in the way if we tried to participate in community governance. Fortunately, that’s both a lie and it’s true: we do need to become competent self-governing humans-inbioregions, and as self-governing bodies we do get in the way of the current suicide/ecocide/genocide. Let’s consider bioregionalism as our effort to self-govern for long-term health. One useful tool in this effort is a scale of relative permanence, an idea that comes to me from P. A. Yeomans, who explains it this way in a book about agricultural land planning:6 If something is to be planned and built it needs a basis or a foundation. If it has a foundation, then [the foundation] should be permanent, more permanent than the “thing” [...] that goes on the foundation. What “thing” are we planning with bioregionalism? We’re planning how to make decisions and meet our needs and practice our creativity together with the full community of life in our bioregion—let’s say we’re looking at our politics and economy as the “things” we are planning. Well, what’s a foundation that is more permanent than human politics and economy? The places we live: bioregions, and more broadly the planet Earth, and more broadly the encompassing solar system, and beyond that there’s the rest of 5

6

Peter Berg and Raymond Dasmann, “Reinhabiting California,” pp. 35-38 in Home!: A Bioregional Reader, edited by Van Andruss, Christopher Plant, Judith Plant, and Eleanor Wright (Gabriola Island, BC: New Catalyst Books, 2007). P. A. Yeomans, “The Keyline Scale of Permanence,” chapter 4 in The Challenge of Landscape: The Development and Practice of Keyline (Sydney: Keyline Publishing, 1958), available online at http://www.soilandhealth.org/01aglibrary/ 010126yeomansII/010126ch4.html.

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14. We Belong with the Earth existence. Okay, we’re planning our politics and economy on the foundation of our life-places—let’s see Yeomans’ next words: Decisions on any aspect of planning have a relative importance which relates to the permanence of the effect of that decision. A man decides to buy a tie; this decision is not as important as the decision to buy a suit of clothes. It is unlikely that he buys the suit of clothes to match the tie, but logical to buy the tie to match the suit. The permanence of the effects of each decision indicates the relative importance of the decision in planning. Every decision made on any aspect of land planning must be based on or fit in with all others that are more permanent, or more permanent in their effect than it is. He wrote of using the scale of relative permanence when making a plan. In our bioregional plan for human politics and economy, what is our scale of relative permanence? From the slowest changing to the quickest changing: 1. Land: this life-place, the community of life where I am right now. What am I standing on? I can sense this directly, and I can see patterns here over time. 2. Human consciousness: my worldview, my perspective of the land, including my view of my relation with the rest of life in this place. Ethics and principles. 3. Human action: my action changes from moment to moment, hundreds of times each day. This scale of relative permanence shows that the land is more permanent than human understanding of it. If I anchor my ethics in the land, and I anchor my actions in my ethics, then life starts to make sense. If I don’t anchor my ethics in the land, then what can I anchor them in? I see nothing more real. This way, when I ask “What shall I do?” I turn to “What is my understanding of what’s going on?” This brings me to my ethics and my view of reality. When I come to a moment of asking “What’s my view of reality?” I turn to “Where am I?” What is happening in this place, what is alive here? There are many other people in the bioregional movement, and I’m relatively new to it, so please take that scale of relative permanence and re-shape it as makes sense to you. Remembering a focus in this story of movements: the bioregional movement. With bioregionalism we plan from community to individual, from

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Part V Environment pattern to detail—we want health, integrity, and beauty for the whole community of the land, so we start our plan by thinking about the whole community. Then we act from the individual to the community because we recognize that in that scale of relative permanence our action is what changes the most often. Remember the pattern of this story, the watershed pattern. In a watershed, the bigger communities are the larger bodies of water (the oceans and the big rivers and lakes and aquifers) and the smaller communities are the smaller waters (creeks, streams, ponds), all the way down to the individual people (and trees and birds and so on) as the drops of water. So when we plan from community to individual, we start by thinking about the rivers and the oceans, the bottom of the watershed. And when we act as individuals in community, we go to the top of the watershed. Our actions are high in the watershed : By my house high on the ridge there are hundreds of little streams of water when it rains. As these flow down the slope and into the valley they form a stream.

As the valley continues, streams join together and a larger stream forms.

The stream joins others and we find that they have become a river.

These are our hundreds of actions each day. When seen together, our many actions embody our worldview and show our patterns that distinguish us. The patterns of individual humans flow together, and the patterns of humans flow together with the patterns of trees, rain, birds, and the rest of the community in this place. The community of this particular neighborhood relates with other neighborhoods, and we see a city, a county, a region.

This makes sense: I can change the flow of water at the top of the watershed with my two hands. If I go to the Mississippi River, it will hardly notice my hands, and the people trying to change it there build huge levees. Let’s work on the human scale, at the top of the watershed, where we can start work directly with our individual powers (such as our hands, conversations, and attitudes)—this is more sensible and practical and safe than the huge hyper-industrial methods. Remember that the bioregional movement wants healthy communities. We can learn from the watershed how to go about changing the watershed. Let’s see what happens when I mix the scale of relative permanence with

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14. We Belong with the Earth the watershed pattern.

Closing the Story of Movement The bioregional movement seeks to integrate the movements of water and of people by redirecting human consciousness to our life-places. This movement offers the idea that when we want to shape our society in harmony with the rest of life, we can begin by listening to the land. It is a choice: Will we live as deaf parasite-invaders that will die when we suck the last life out of those that nourish us, or live as inhabitantlisteners who base our action on the stories of our many living neighbors? As millions of people choose to listen, solidarity blossoms, and we all get healthier together. Things to remember for bioregional consciousness: • I am human, I am part of life, and I belong here on Earth. • I am part of life, and I want to be healthy and happy and live well, so I will work with the full community of life in this place for our mutual health and happiness. • I plan to live on Earth for a while longer, and I plan on my community living here for at least 500 years.

Bioregionalism in Action How do we start re-inhabitation from our current situation? It’s not practical to say “Okay, everyone go out into the woods and prairies and live as part of them.” Most people would die—due to lack of skill and polluted, depleted life systems—and the hyper-industrial apparatus that keeps our electricity flowing and our gasoline available would break and release more nasty toxins into the waters. Further, bioregionalism recognizes that cities can be done in a healthy way, so we don’t need to abandon them, we need to bring them into balance with the community-of-the-land. I mentioned three things that would kill us if we suddenly abandoned our current invader-based way of life: lack of skills to live as inhabitants; the life support systems of inhabitant-based life-ways are polluted and depleted (this was done on purpose by the invaders, and accidentally); and the infrastructure of the invasion tends to decay toxically, even catastrophically. So, what to do? Re-skill ourselves, personally and communally, to live as inhabitants with the land; regenerate the life support systems to support a thriving community of life; and dismantle the invasion-infrastructure

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Part V Environment as gracefully as possible, re-using the pieces when possible, and otherwise decomposing them and recycling them. Some examples of each: For skills, learn to identify plants, animals, and landscape features where we live; learn how to find destructive patterns in our minds and heal from them (co-counseling is a helpful tool here); learn to communicate clearly, honestly, and compassionately (start with Nonviolent Communication); learn to think in integrative, non-linear ways (start with mind mapping and permaculture); and learn to stop thinking, to be present, experiencing the moment. For regeneration, build rich, living soil. Again: revive the soil—this is very, very important and integrates a lot of other work; use plants and fungi to suck toxins out of the land and metabolize the toxins into food and other useful products and to take carbon out of the atmosphere and put it back in the soil (where much of it came from7 , and where it is a fertilizer rather than a catalyst of climate chaos)8 ; stabilize eroding landscapes by starting at the top of the watershed. And finally, reuse, recycle, and decompose the invasion infrastructure: in many cases what’s waste in one place can be food in another place (for fungi and other decomposers). Deep-water oil rigs, nuclear reactors and nuclear waste, and military weapons all have to be decomposed somehow. These three aspects are interdependent—not isolated silos—since they’re all part of re-inhabiting our life-places. Therefore we must address them together: What can we do that re-skills, regenerates, repurposes, and recycles? There is no one answer, since there is no one human or one place to reinhabit. Here are some stories of people working together for re-inhabitation, in three sections: 1) bioregional congresses, 2) places and projects, and 3) activities.

Congresses The bioregional movement has at least two clear embodiments: The movement focused on bioregional congresses and vision councils (consejo de visiones in Spanish) is mostly active in the United States, Mexico, and Canada. Separately, there is a movement in South America for regional economic integration driven by national governments—this movement does not call itself “bioregional,” but there is enough similarity in purpose and practice that Diego Martino offers ideas for the two movements to learn from each other.9 My explanations here focus on the movement in North 7 8 9

Christine Jones, PhD, http://www.amazingcarbon.com Carbon Farming Tennessee, http://carbonfarming.wordpress.com Diego Martino, “Bioregionalismo: Introduccin a los conceptos y alternativas para Amrica Latina,” 27 December 2005. Available at http://www.bioregionalismo.com/

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14. We Belong with the Earth America. A bioregional congress is a coordinative body for the humans in a bioregion. There are congresses that gather as an event, and there are ongoing congresses. The longest-running bioregional congress is the Ozark Area Community Congress, started in 1977 by David Haenke and other organizers in the Ozark watershed of Missouri and Arkansas. There are guides to organizing a bioregional congress available at http://www.biocongress.org. A diagram explaining the basic purpose of a bioregional congress is on page ??. There have been 10 continental bioregional congresses in North America since 1984, and proceedings from many of them are available on the biocongress website. One way to find out about congresses in your area is to join the [email protected] email list and ask if anyone is in your bioregion.10

Places and Projects There are more bioregional projects active than I can list here. I offer a few notable examples; others are listed at http://www.mutualgift.net and http://www.biocongress.org. • Nuestras Raices is a multi-initiative community project in Holyoke, Massachusetts, United States, that includes Tierra de Oportunidades Farm, where Nuestras Raices staff work with first-generation immigrant farmers to develop ecologically and financially sound land-based businesses that are culturally relevant to the farmers and their community. http://www.nuestras-raices.org. • The permaculture movement is closely tied with the bioregional movement and offers many practical, immediate ways to increase a community’s ability to satisfy its own basic needs. Permaculture is sometimes seen as focused on agriculture, though it is much broader: it is a holistic design system that is being applied to social dynamics, finance, governance, and beyond. No one website represents permaculture. You can search for local permaculture groups or institutes, or check out Permaculture Activist magazine (http://www.permacultureactivist. 10

analisis/MartinoBioregionalismoConcepto.html. Planning for the next continental biocongress is underway as I write this chapter in June, 2010, and there is an open invitation to participate in the upcoming Mexican congress, the 10th Consejo de Visiones: El Llamado del guila, to be held November 1421, 2010, in Temictla, near Chalmita, Estado de Mxico, Mxico, in the Cuahunahuac bioregion. The event website is http://www.consejodevisiones.org.

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14. We Belong with the Earth net) which lists groups and courses, primarily in the United States but also beyond. • Community Environmental Legal Defense Fund in Pennsylvania, United States, is supporting people to change local laws towards recognizing and protecting the rights of nature. http://www.celdf.org. • Woodbine Ecology Center outside of Sedalia, Colorado, USA, promotes indigenous values and sustainable communities by offering courses in permaculture, compassionate communication, and much more. They are helping develop the framework of indigenous permaculture, which includes a powerful explanation of five principles to build a healthier world. They are organizing an Indigenous Permaculture Convergence in August, 2010. http://www.woodbinecenter.org. An emerging vision that could link together congresses and projects across many bioregions is the idea of ecosystem investing on a community scale. Ecosystem investing means to invest like an ecosystem (in a diverse, interconnected set of projects) and to invest in ecosystems.11 One way to apply this is to start a network of bioregions that invest in each other with US dollars, local currencies, labor, materials, and anything else that makes sense. The investments in each bioregion would be coordinated by the local bioregional congress in support of local efforts to restore the land to lifesustaining abundance. In our current time of climate chaos, it seems wise to invest in each other to create a multi-local web of communities so that if one region experiences a drought, their mutual investments pad them from crashing completely. For more about this idea, look online for financial permaculture, EcoTrust, the Transition Network, sociocracy, and the Global Ecovillage Network.

Activities There are many activities that foster connection with a bioregion that are practical for one person and can be used in groups as well. Another source of activities is the Bioregionalism Curriculum currently in development by the Continental Bioregional Council. This project began at the CBC 9 in 2005 at Earthaven and drafts of the curriculum are available now. See http: //www.biocongress.org for more information. Another wonderful resource for more activities is the book Coyote’s Guide to Connecting with Nature by Jon Young, Ellen Haas, and Evan McGown. 11

Ethan Roland and Gregory Landua, “Financial Permaculture & Ecosystem Investing,” a presentation at the Green Ventures Conference, Fairleigh Dickinson University, 2009.

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Part V Environment Listening Groups of people change human society by getting together and telling their group story, other folks listening to the new story, and the listeners acting differently because they now know what’s real for another part of their community. My neighbors all around me are telling stories that, if I can listen to them, will change me and the way I live.12 There are many ways to listen to the stream by my house: Go every day for a year and sit in the same spot and watch for an hour; swim in the stream; measure the chemistry of the stream (pH, heavy metal content, dissolved oxygen, and so on); ask elders for stories about the stream from 60 years ago; taste the water; sit by the stream during challenging moments, listen to the stream, and consider how I might deal with my situation by imitating the stream. After I listen to a story from the stream, I know a new perspective about what the world is, a new experience of the unity of life. Since we are part of the same organism, part of the same oneness of life, the stories of the stream teach me about myself—I am in everything, and everything is in me. This attitude isn’t always easy to reach, and it’s worth practicing it for a few minutes each day. This attitude makes peace much easier. Peace as active flowing of life, including disagreement and conflict, versus war, the active repression of life, including the repression of diversity and peaceful conflict. How can I hit another human, how can I dump motor oil on the earth, when I am one with all? I cannot. This “one with all” stuff may sound fluffy and pointless and too spiritual to some people. While it makes sense in many spiritual views, it also makes sense in a very empirical-scientific view. Right now my body includes molecules that were soil and air only 30 days ago, and stream water only 30 minutes ago. Right now I am warm in the winter because I act respectfully with my human neighbors and we cooperate to gather wood for our fires. My unity with all my living context calls loud and clear. We are part of the land, the land is community. Asking Get curious! Ask how things came to be: how was the rice I eat grown, who planted it, where is that breed of rice from? If curiosity isn’t easy for you, then find someone with lively curiosity and follow them outside—young ones are especially helpful here. If everyone around me is too focused on “being cool” in that very flat way of not 12

Listening to and telling my own story is also transformative.

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14. We Belong with the Earth getting curious about anything, then I go outside with someone, point at anything (car, bird, fire escape, tree) and enthusiastically ask “Why is that there?” and listen for their response—most people will at least grunt, and many will respond with curiosity. The internet is an amazing tool for a curious person, though it is limited. It doesn’t give access to the direct experience of feeling the ground beneath your feet, or to everything that’s at your local public library. Want to know what was going on 200 years ago in the spot where you sleep? Ask your librarian—it’s free! I get lots of useful information from the internet, and when I have specific, local questions I get help by visiting my librarian. Mapping Making a map can be a transformative activity, meaning that I see myself and the world differently after I make the map. You can make maps. Start with yourself and your house. Now add the nearest tree, and next add water to the map: water that comes through pipes, water that falls from the sky, water in rivers and lakes and oceans. Be creative about what you map. Don’t clutter the map with everything you see, just include things that matter to you. Bioregionalism and solidarity economy understand that one of the most radical actions people can take is to define their own reality, and mapping is a great way to do this. It will raise questions that you cannot answer by yourself, so it nudges people to ask questions of their neighbors—aunts, uncles, librarians, trees, the sky. Find ways that the things on your map connect with each other and influence each other. Paying Attention A friend showed me a tiny book called When Singing Just Sing by Narayan Liebenson Grady. It says that meditation is the act of doing one thing at a time, of paying attention to the one thing I’m doing and really sinking into it. This is a very useful practice for getting to know my bioregion. One way to pay attention every day is to pay attention to myself (I am part of the bioregion). At least once each day when I eat I focus on eating. I don’t talk to anyone, I don’t think about what I’ll do when I finish eating, I don’t dwell on what happened two hours ago. I pay attention to my food and my body. I express my feelings about the deliciousness of my food by humming many “mmmmm”s while I eat. I notice that saying “mm-mmmm” while eating slows me down, gives me more fulfillment from the food I eat, helps me breathe deeper and chew my food more thoroughly—and that means that my body (and all those microscopic critters that do most of

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Part V Environment my digestion) get more from the food, and I think it’s worth it. In a time when people talk about “using resources efficiently and effectively,” we can get more nourishment from our food by slowing down, chewing well, and enjoying each flavor and texture. This is one example of how it pays to pay attention.

Our Unique, Creative Selves When I ask the living earth “What guidance do you offer me for living as a healthy human?” I hear the earth reply—in the examples of plants and animals—that my role is to give what only I can give, to create what only I can create, as me, this specific human in this specific place with this specific history. Making our own maps is one of many ways to reclaim our power to create our own tools and define our own view of the world—we need to stop just consuming, start creating! Many conversations about consumption focus on food and clothing and gasoline—we can also stop consuming stereotypes about gender and race, stop consuming stories about humans being separate from nature; stop consuming maps that only have paved highways marked on them. Listen, create, share, listen, create, share, listen, over and over and over again. Choose who to listen to—you can only listen to one thing at a time, and some messages are more useful for living than others. Bill McKibben wondered who to listen to when he asked the question “In this so-called information-age, is there more information outside or on TV?” He wrote a book about his experiment of spending 24 hours watching cable TV and 24 hours wandering and playing outside in a forest.13 His conclusion: there’s more information outside, and it’s more richly woven into context so it is more meaningful than the makeup-coated TV anchors reciting lists about what happened inside a window-less room on Wall Street this morning. So, who do we want to listen to in our communities?

About the Author Patrick Gibbs, born 23 years ago, currently resides with The Farm community in mid-south Tennessee, United States, on the southwest edge of the Highland Rim, near Swan Creek, which flows into the Duck River. He draws deep happiness from relationships among humans, birds, streams, trees, and 13

The Age of Missing Information (New York: Random House, 1992).

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14. We Belong with the Earth soil that help each become more itself, and finds that co-counseling is a potent tool in this area for humans. His website is http://www.mutualgift.net.

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15. Taking Ownership of the Climate Crisis Jonathan Teller-Elsberg The climate crisis is triggering debates among environmentalists on strategic as well as philosophical grounds, especially as proposals to deal with the situation become bills and bills become laws. Most laws intended to reduce emissions of climate-change-inducing greenhouse gases rely on “cap-andtrade” systems, and these systems, which come in many flavors and under various names, strike many activists and observers as fundamentally flawed, especially as they seem to create private property out of what has been common property. In this chapter I’ll address the question of property as well as the related question of the relationship between different policies and a solidarity economy. First, let’s review the different policy option categories that are on the table, carbon taxes, regulations, and cap-and-trade. Historically, the government has relied largely on regulations to control pollution of different kinds. Beginning in the 1990s there was a shift among policy makers in favor of “market based” systems like cap-and-trade, though many regulations remained and the tool was not abandoned wholesale. Most economists, on the other hand, have traditionally advocated for taxes on pollution, arguing that this is the simplest form of intervention in the market to correct for “negative externalities”—costs incurred by market activities that don’t show up in the market prices. (In theory, if the costs did show up in the market prices, the market would adjust accordingly and the problem would be self-correcting.) Taxes on carbon might well persuade people to use fossil fuels less, but it’s extremely difficult to know just how high to set the tax to achieve the desired target; furthermore, the adaptability of people and businesses to shifting prices means that a tax of, say, $50 per ton of carbon will have a different effect on use of fossil fuels one year as compared to another. Just because the price is higher due to the addition of a tax doesn’t necessarily mean that people and businesses won’t just go ahead and pay the extra, and keep on burning up all that coal, oil, and gas. That means that if we are

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15. Taking Ownership of the Climate Crisis serious about our target for reducing carbon emissions, the level of the tax will have to be constantly readjusted in less-than-predictable ways. This is not merely an annoying complexity, it is also an opening for political attack by those who would just as soon seek short-term profits over the long-term health of the planet.1 A regime of pure regulation tends to run into one of two problems. Regulations that directly target emissions, for example by mandating use of carbon-capture-and-sequestration equipment at coal-fired electricity power plants, are too narrow. One regulation deals with power plants, another would be needed for metal smelters, another for cement manufacturers, another for airlines, another for auto manufacturers, and so on. . . every different type of use of fossil fuels would need its own regulations. The result is an enormously complicated set of government dictates that are inflexible and have a dangerous tendency to trigger anti-government fervor. Other regulations might work indirectly, by targeting energy efficiency, as with standards for automobile fuel efficiency. These regulations have a frustrating tendency to achieve only their literal objective, increased efficiency in the use of fossil fuels, but not the underlying objective, a reduction in total consumption of fossil fuels. William Jevons, a British economist working in the 1800s, famously pointed out that increases in the efficiency of coal-burning machinery had the seemingly ironic result of increasing the demand for and use of coal. When efficiency improved, the effective cost of using coal fell, so it became attractive to use ever more of it. To avoid this Jevons Paradox in a case of pollution control, you need additional measures on top of efficiency regulations, such as taxes or cap-and-trade, to ensure that fossil fuel prices rise faster than efficiency improves. The standard response to this is: If you have to institute carbon taxes or cap-and-trade to make the regulations work, why bother with the regulations at all? Simply set your taxes high enough or your cap low enough, and the increased price 1 Peter

Barnes, the leading advocate for the Cap-and-Dividend version of cap-and-trade in the United States, has emphasized the political dimension of the crisis. In his view, a climate policy must be equally attendant to the vagaries of politics as it is to the science of runaway global warming. Even the strongest transition to a climatefriendly economy will take decades, and the policies that help push that transition have to stay in place for the duration so that they actually get the job done. A policy that is instituted now but that is politically vulnerable has a higher chance of being overturned five or ten years down the road before it has been able to successfully move the economy away from fossil fuels. Barnes argues that the dividend aspect of Capand-Dividend is the political cement that solidifies a popular base of support for the policy over the long haul. See his book Climate Solutions (White River Junction, VT: Chelsea Green Publishing, 2008), available at http://cantwell.senate.gov/issues/ Climate%20Solutions%20-%20Barnes.pdf. (Full disclosure: I worked in the editorial department at Chelsea Green at the time Climate Solutions was published.)

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Part V Environment for use of fossil fuels will induce people to migrate to more efficient technology on their own, without need for regulatory dictate on the details of that technology. In principle, the result should be the same and is achieved with less complexity. In practice, markets are far from “efficient,” as economists use the term, and there is an enormous amount of foot dragging even in face of large price changes. Another problem with regulations of either sort is that they don’t generate a source of revenue that can be used to help people deal with inevitably rising energy costs. (See footnote one above and discussion of Cap-andDividend below under “Distributing and Trading Permits.”) That said, some regulations—such as mandated improvements in vehicle fuel efficiency—may well make sense on top of carbon taxes or cap-and-trade to kickstart the shift away from fossil fuels. As mentioned at the beginning of the chapter, the majority of legislative proposals for addressing the climate issue emphasize a cap-and-trade system. (Some combine cap-and-trade with regulations.) Let’s start with the basics on how the system works. Under cap-and-trade, the government, or some other government-authorized body, determines a maximum amount of greenhouse gases that can be emitted in a year—it’s the buildup of these gases in the atmosphere that is inducing change to the climate. 2 That’s the cap. Each year, right from the start or after a few years’ time for the economy to begin adjusting, the cap is reduced until use of fossil fuels is significantly cut or even eliminated entirely a few decades down the road. The targets in legislative proposals currently before the United States Congress 2

In the best proposals, it is not emissions themselves that are measured and permitted under the cap, but the introduction into the economy of greenhouse gas producing fossil fuels. In other words, instead of a utility needing to have a permit to qualify the carbon dioxide that comes out of its coal-burning facility, the coal mining company would have to have a permit to qualify its digging up and first sale of the coal. This “upstream” accounting is superior because it is much easier to track the relatively small number of inflows of fossil fuels into the economy (roughly 2,000 in the U.S.) than to track the hundreds of millions of stacks, chimneys, and tailpipes out of which the burned fuels enter the atmosphere. It also allows for containment of the size and complexity of the aftermarket in permits, something I’ll discuss further below. As yet, all legislative proposals focus primarily on emissions from the burning of fossil fuels, largely ignoring emissions that result from land use, such as agriculture. It’s doubtful the climate can be fully stabilized if agricultural and other land-use practices are not reformed as thoroughly as those of energy production, industry, and transportation, so these proposals are, at best, only one step in a larger process if we are to actually avoid utter disaster. In his fascinating 2009 lecture sponsored by the Irish NGO Feasta, “Keeping Cattle: cause or cure for climate crisis?,” biologist and rancher Allan Savory argues that climate change was already being induced by human agricultural activity before the beginning of the industrial age. See the lecture at http://www.feasta.org/events/general/2009_lecture.htm.

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15. Taking Ownership of the Climate Crisis are to cut emissions 83 percent by 2050 as compared to the “baseline” level in 2005. The governing authority issues permits that add up to that cap. For example permits might be for one ton of carbon dioxide each, and if the cap for the year is one billion tons, then one billion permits are issued. Now, that potentially could be the end of the story: “cap-and-distribute” you might call it. Those to whom the permits are distributed can use them to cover their greenhouse gas emissions. If they don’t emit as many greenhouse gases as they have permits to cover, these excess permits simply expire. However all the existing legislation and proposals add another layer to the system, that of “trade,” and this layer is supported by the vast majority of economists.3 Actually, what happens is not trading in the common sense of the word, but buying and selling. If I have emission permits that I don’t want to use, I can sell them to you. The total number of permits in the system is unchanged, but who holds and uses the permits can adjust over the course of the year through an aftermarket exchange following the initial distribution. Economists, of the mainstream sort at least, like the trading aspect of the system because it is supposed to make the system more flexible and efficient. Assuming the cap is truly fixed,4 why would it matter if ExxonMobil shifts some of its permits to Massey Energy? If ExxonMobil realizes it has more permits than it can use profitably, and if Massey is willing to pay ExxonMobil for more permits, the climate problem isn’t any worse off as a result of this “trade.” Instead of ExxonMobil’s petroleum carbon going into the atmosphere, Massey’s coal carbon goes into the atmosphere. Maybe ExxonMobil will use the money it gains from Massey to conduct research into renewable energy alternatives!5 So if you accept that a cap-and-trade system is a legitimate option, you’ve still got some contentious issues to deal with such as: How high is the cap? How are the permits going to be distributed by the government? Who is allowed to hold a permit, either initially or through the aftermarket? Will the genius financiers who brought us the housing-based derivatives meltdown get to create new boondoggles based on the aftermarket for carbon emissions permits? 3

As noted, the majority of economists, especially mainstream economists, seem mostly to prefer a carbon tax over cap-and-trade schemes. But given a system that uses a cap, they strongly prefer that it allow for tradable permits. 4 Unfortunately, we can’t assume a hard cap with great confidence. Many legislative proposals include “offset” options that boil down to being loopholes allowing for the creation of additional permits over and above the supposed cap. 5 A guy can dream.

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Part V Environment But there are some who don’t accept the legitimacy of a cap-and-trade system to begin with. That rejection is based on a challenge to the very notion that a “permit to pollute” is acceptable in the first place. Such permits appear to grant government-sanctioned property rights to the use of the atmosphere as a dumping ground for waste; holders of such permits can be seen to have a slice of ownership in the very air that seamlessly connects us all. Isn’t this in essence privatizing what has until now been a common property of humanity (and other beings)? Can a solidarity economy coexist with cap-and-trade? I argue that cap-and-trade can be compatible with a solidarity economy, but that its compatibility depends on the details of the system. If the details are right, cap-and-trade is potentially not just compatible with, but a strong and positive contribution to, a solidarity economy. (That’s not to say that it’s perfect in all respects.) Let’s run through the issues raised by aspects of cap-and-trade proposals.

Setting the Cap It must be emphasized that one of the singular advantages to cap-and-trade systems over others for limiting greenhouse gas emissions is the existence of the cap. It represents a maximum amount of emissions in a given period of time. The climate crisis is such that we don’t merely need to shift the economy off of fossil fuels, we need to know that we’re achieving that goal in a sufficiently short amount of time. As described toward the beginning of this chapter, both taxes and regulations have the worrisome drawbacks of potentially failing to achieve the main goal: actually reducing total emissions of greenhouse gases. The cap in cap-and-trade solves that problem, but only if it is set low enough (and enforced). One of the worst failures of the European Union’s Emission Trading Scheme (EU ETS)—a limited cap-and-trade system begun in 2005 that applies only to large industrial polluters—is that the cap was initially set higher than the total emissions of all those it covered! Coal burning utilities could continue burning as much as they ever had, or even more, without worrying about running into the cap. As a result, the cost of a permit fell to a piddling €0.10 per tonne (US$0.13 per U.S. ton at the exchange rate of the time).6 If part of the solidarity economy is solidarity with future generations, then the cap must be set low enough to matter, and must fall fast enough to make a difference for the climate. 61

tonne = 1,000 kg = 2,205 lbs. 1 U.S. ton = 2,000 lbs = 907 kg.

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Distributing and Trading Permits Once the cap is determined, a governing authority has to distribute them somehow to some set of recipients. Permits might be issued for free, sold off at a set price, auctioned off, or some combination of these methods. Permits might be issued on an equal basis to the people directly at no charge, as in the Cap-and-Share proposal (http://www.capandshare.org) which has its base of activist support in Europe, or auctioned only to the upstream producers of fossil fuels into the economy, as in the Cap-and-Dividend proposal (http://www.capanddividend.org) which has a stronger following in the US. Under the EU ETS, some permits are allocated directly to industrial facilities that are part of the system while others are auctioned off. Cap-and-Share has the egalitarian quality of providing all members of society an equal share in the total pool of emissions. The upstream producers of fossil fuels need to acquire these permits to cover the carbon they introduce into the economy. Individuals would sell their permits—or not—presumably at whatever the going rate is at the time of sale. While egalitarian in some respects, Cap-and-Share has drawbacks. People with lower income will have little choice but to sell off their permits as soon as they receive them, likely producing a glut of sales and low prices. Meanwhile, those with higher income would be able to wait for better prices, while financial investors with deep pockets will be in a position to buy up cheap permits and hoard them, later to cash them in for easy profits. What seems at first to be an egalitarian distribution would likely have highly unequal results. Furthermore, the expansiveness of the markets for permits under Capand-Share introduces additional risks. Anyone and everyone is eligible to buy and sell permits. Financial firms not only can invest directly in permits, they can create derivatives based on the permits; as seen with the housing bust, derivative markets can hugely exaggerate the impact of shocks to the economy, turning small problems into large problems and large problems into monumental problems. If prices for carbon permits don’t go in the direction the financiers expect, the risk is another financial collapse and global recession. If prices do go the way they expect, that only means the select few will be growing ever more astronomically rich while the vast majority continue their daily struggles. Cap-and-Dividend is more egalitarian and progressive in its results: all permits are auctioned to upstream carbon producers, and the revenues from the auction are distributed on an equal-per-person basis to the people. Just as a flat tax hits the relatively poor much harder than it hits the relatively rich, a “flat rebate” like the dividends from a carbon auction is a bigger

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Part V Environment boost to the poor than it is to the rich. Analysis by James Boyce and Matthew Riddle has found that under a politically plausible version of Capand-Dividend, the lower-income 60 percent or more of families in the United States would come out ahead after accounting for both rising energy costs and the income from the rebate. The negative financial impact on higherincome families would be slight.7 But the fact that permits are only sold to upstream carbon producers—and only tradable within that group—means that the rest of us have no participation in the system except as recipients of shares of the auction revenue. We can’t acquire permits and retire them, either as a strategy for pulling down what might be a too-high cap or for any other reason. The “right to pollute” that is represented by the permit is available only to those upstream players. (I’ll address the ethics of this “right to pollute” below.) But as I argued above in regard to the risks of large markets in permits with Cap-and-Share, there’s a greater good to be protected by keeping the aftermarket simple and small. Readers of this book probably agree that markets—even the most open and inclusive markets—are not always the best economic tools for promoting social solidarity. Then there are the versions of cap-and-trade that more or less ignore egalitarian and solidarity concerns. When permits are simply given to industrial polluters or fossil fuel companies at no charge, they represent windfall profits and the transfer of an enormous amount of wealth from the population at large to the corporate coffers. If the government auctions off the permits (or some of the permits) and holds on to the revenues, the results are up in the air: Will that money be spent in ways that support the people broadly? To finance tax cuts for the rich? Whatever happens, the odds are mighty slim that the money will be spent in a way that is in line with the solidarity economy.

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James Boyce and Matthew Riddle, “Cap and Dividend: How to Curb Global Warming while Protecting the Incomes of American Families,” Political Economy Research Institute working paper 150, November 2007, http://www.peri.umass.edu/ 236/hash/a53e6e14d9/publication/281/. Also see their follow-up analyses, “Keeping the Government Whole: The Impact of a Cap-and-Dividend Policy for Curbing Global Warming on Government Revenue and Expenditure,” November 2008, http:// www.peri.umass.edu/236/hash/2d535cd8b5/publication/328/; “Cap and Dividend: A State-by-State Analysis,” August 2009, http://www.peri.umass.edu/236/hash/ 928ccab881/publication/352/; and “CLEAR Economics: State-Level Impacts of the Carbon Limits and Energy for America’s Renewal Act on Family Incomes and Jobs,” March 2010, http://www.peri.umass.edu/236/hash/863fdbde6e/publication/403/.

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And Yet. . . a Right to Pollute? Thus far I’ve tried to show how different forms of cap-and-trade do or do not comport with a solidarity economy. For purposes of long-term, intergenerational solidarity, a system that caps is a safer bet than the alternatives of taxes or regulations.8 For purposes of solidarity in the current and following generations that will live through the transition away from fossil fuels, it is imperative that the revenues generated by either a tax or cap-and-trade scheme be distributed to the people in something like an egalitarian way—a truly egalitarian distribution as with Cap-and-Dividend is strongest in this regard.9 And yet. . . what of the argument that a cap-and-trade system, of whatever stripe, is simply ethically flawed as it represents the privatization of the atmosphere, and the issuing of a government sanctioned “right to pollute”? A key concept for the very notion of a solidarity economy is the recognition that some things shouldn’t be made into property, at least not private property. Indeed, much of the work of those building the solidarity economy is to reclaim aspects of private property and bring them into the fold of the commons! (For example, see David Bollier’s chapter, “Viral Spiral,” in this book.) One answer to this is that a cap-and-trade system might be made a part of 8

9

In case it’s not clear: all three alternatives lead to higher prices for energy. A tax imposes the price directly while cap-and-trade or regulations do so indirectly by imposing higher costs on the producers of energy. Whether those producers pass the full increase in costs on to customers is unclear—depending on market conditions, the producers might have to absorb some portion of those higher costs, resulting in lower profits. Some supporters of a carbon tax similarly advocate that the revenues be distributed in an egalitarian fashion. If a tax policy were to be adopted, this would be the best use of the revenues in my opinion, or at least the majority of the revenues. (Many proposals recommend that somewhere between 10 and 20 percent of revenues from a carbon tax or permit auction be set aside to help communities dependent on fossil fuel industry to transition to new economic bases, or other similar targeted uses.) Regulations, on the other hand, do not result in any form of capturable revenues, and so offer no easily available financial cushion to the mass of people who will be faced with rising energy costs. Separately, it’s worth mentioning that solidarity with current and near-term generations means we can’t just halt use of fossil fuels instantly. Besides the well-known problems of our dependence on long-distance transport for so much of our sustenance, some 40 percent of the protein in the average human alive today derives from synthetic nitrogenous fertilizer, which is derived industrially through the use of natural gas. We are almost literally composed in large part of fossil molecules. See Stan Cox, “Hunger for Natural Gas,” AlterNet, 2005, at http://www.alternet.org/story/26703/. A revised version of Cox’s article is chapter 6 in his 2008 book Sick Planet: Corporate Food and Medicine (London: Pluto Press).

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Part V Environment the commons. Peter Barnes, who formulated the Cap-and-Dividend concept (though not initially using that name), ideally advocated that the authority to determine the cap, conduct the permit auction, and distribute the revenues should lie with an independent trust that he called the Sky Trust.10 The trustees would be legally bound to determine the cap at the level that best protects the atmosphere into perpetuity; in other words, they would be legally bound to equally represent the interests of all persons, present and future, in a healthy, stable climate—just as the board of directors of a co-op is legally bound to represent the interests of the co-op’s members in the co-op’s mission. Under this formulation, the atmosphere is treated as common property of all humans through time, rather than private property or public (government) property. The Sky Trust uses tradable permits (or not; trading is not an essential element of the communal nature of this arrangement) representing a limited right to utilize the shared, communal atmosphere, but the underlying ownership of the atmosphere remains in common. As it is, it’s extremely unlikely that governments will establish independent Sky Trusts. Instead, we are seeing legislation in which the ownership of the atmosphere is with the government as it determines the cap, issues the permits, and allocates any revenues generated in the process. The critic’s response is likely to be: “under either the Sky Trust or government control, ownership of the atmosphere might in name be common or public, but the de facto property right is with the polluting corporations that get the permits. And granting new rights to corporations is not at all what we’re after.” Consider, though, that these aren’t new rights for the corporations. Under the status quo, with the government having thus far failed to implement a climate policy, corporations have the right to mine for fossil fuels, sell them, and burn them—they have the right to pollute our shared atmosphere. You have that right too, and exercise it every time you drive a car or use a lighter to take a bong hit. If a carbon tax is established, none of those rights would be changed at all, only the cost of exercising the rights will be increased. If regulations are adopted, it’s a muddier picture: even assuming direct regulations that block emissions of carbon dioxide from industrial power plants, drivers will still have the right to burn gas in their cars and send the fumes out into the air. One of the confusing aspects of this philosophical debate is that the atmosphere currently is not in the commons, as is often assumed. The commons 10

See Barnes’s books Who Owns the Sky? (Washington DC: Island Press, 2001), Capitalism 3.0 (San Francisco: Berrett-Koehler Publishers, 2006), and the previously mentioned Climate Solutions.

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15. Taking Ownership of the Climate Crisis are property regimes—property held and managed by a community of one sort or another. But nobody owns the atmosphere, not even communally. We all have access to the atmosphere, we use it, but that doesn’t make it property. For the time being (and ignoring the few cap-and-trade programs already in effect), the atmosphere is non-property. Establishing management of the atmosphere, including restrictions on its use as a dumping ground for waste gases, means converting it from a state of non-property to a state of property. That property might be common, or public, or private. Regardless, the atmosphere will have to become property of one kind or another if we are to do anything to control greenhouse gas emissions. From the perspective of the supporter of a solidarity economy, the trouble is that there doesn’t seem to be any one climate policy that is definitively more “solidaritous” than the others. Regulations represent the conversion of the atmosphere from non-property to public property. For those who view public property as a second-best after commons and who view cap-and-trade as too near to private property, regulations will look good on that count. However regulations offer no easy way to achieve other solidarity objectives, such as the egalitarian redistribution of carbon revenues. Similarly with carbon taxes, the atmosphere falls into public property, but even moreso than with strict regulations, the “right to pollute” is left untouched. On the other hand, carbon taxes do offer the possibility of promoting solidarity through some form of revenue redistribution, either directly to the people or indirectly through government programs that support aspects of the solidarity economy. With cap-and-trade, it remains unclear if the property regime being applied to the atmosphere is public via the government’s authority over the system or private via the rights embedded in the permits issued by the government. Common property, as with the Sky Trust, is possible but highly unlikely to pass as legislation. As with the carbon tax, cap-and-trade offers the possibility for generation of revenues that can, in turn, be used to promote aspects of the solidarity economy. Given its other potential advantages, a decently designed cap-and-trade scheme may be the best compromise available for the policy aspect—which is not the only aspect—of addressing the climate crisis, able to promote solidarity now and with future generations.

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About the Author Jonathan Teller-Elsberg is a staff economist with the Center for Popular Economics and coauthor of Field Guide to the U.S. Economy: A Compact and Irreverent Guide to Economic Life in America (New York: The New Press, 2005). When not gardening or minding his two daughters, he works as a freelance editor and permaculture designer.

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16. Other Worlds Two excerpts from Other Worlds’ Who Says You Can’t Change the World?: Just Economies and Societies on an Unjust Planet. http://www.otherworldsarepossible.org/other-worlds/ who-says-you-cant-change-world.

1. Waste Not, Want Not: Environmental Protection and Zero Waste Beverly Bell, Neil Tangari, and Shilpa Jain with the Other Worlds Collaborative A thing is right when it tends to preserve the integrity, stability and beauty of the biotic community. It is wrong when it does otherwise. —Aldo Leopold Only when the last tree has died And the last river been poisoned And the last fish been caught Will we realize that we cannot eat money. —Cree saying A growing attention to avoiding consumption, discarding, and pollution both honors the earth and protects the life upon it. Household- and community-led composting projects. . . local governments mandating that all new housing be energy-efficient. . . national agreements to reduce carbon emissions. . . these and many other initiatives are part of the quickly spreading movement. And not a moment too soon. The current model of hyper-consumptive industrialization is exhausting the earth’s natural resources while flooding it with waste products, including greenhouse gases. The natural systems that sustain human life—fresh water, food, fuel, materials for building and clothing—are increasingly stressed and, in places, collapsing. Marginalized people suffer most from both the loss of resources and the pollution. With catastrophic climate change now threatening, reducing our consumption and

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16. Other Worlds our pollution—especially in wealthy societies—has become a matter of the survival of humanity and its home. One easy place to start is with the trash we produce every day, through a new movement called zero waste. Instead of seeking to ‘manage’ waste, this important philosophy and campaign aims to eliminate it. Zero waste considers the entire life cycle of the material objects in our lives, everything from chairs to cars to computers. These goods are merely one point in a long chain of activities—natural resource extraction, processing, production, transportation, consumption, and disposal—which is simultaneously exhausting the planet’s resources and creating increased pollution. Zero waste re-examines this system with an ethical, economic, and environmental eye. It recognizes that the ‘upstream’ problems of deforestation, mining and global warming are directly linked to the ‘downstream’ problems of waste, pollution, and toxics. Zero waste starts with the humble elements of waste reduction, re-use, recycling and composting. But it goes further by requiring companies to change the way they design and manufacture goods so that they are free of toxins. Ultimately, zero waste aims to create a society that lives sustainably on a finite resource base. In the process, it strengthens local economies with jobs, reduces energy demands and thus climate change, and saves local governments money that is spent cleaning up industries’ mess. Instead of looking towards technology for quick-fixes, zero waste focuses on how we eat, move and live in the world. It asks us to consider our real needs and then to seek to meet them without creating toxic substances at the beginning or end of the process. One obvious example is forsaking packaged food products and instead purchasing fresh food directly from local farmers, but we can name hundreds more. Almost all solutions to ‘waste’ problems can be found by looking within one’s community, harvesting its skills and talents, and learning how to live with “enough.” Fortunately, this does not mean a reduction in quality of life; in fact, often it is just the opposite. Environmentalist Annie Leonard described to us one of the movement’s strengths: “It’s not a technical, materials-based approach but a community-building, social relations approach.” Zero waste’s low-cost, simple solutions tend to strengthen our relationships within the community, support the local economy, and be good to Mother Nature. They rely on neighbors pooling what they have instead of buying their own. They focus on meeting the physical needs of food, shelter, and clothing through local skills and the local ecology. Sharing and joint problem-solving, not money and material goods, become the currency of exchange. From Canberra to Buenos Aires to San Francisco, cities have passed zero waste resolutions and are moving forward with concrete plans for imple-

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Part V Environment mentation. The Global Anti-Incinerator Alliance (GAIA) is providing unity and strength to the work of its 600-plus organizational and institutional members in 82 countries. One of GAIA’s members, Zerowaste Kovalam, provides a shining example of how the looming dangers of environmental destruction can be defied. When garbage filled hillsides and clogged waterways and the state government moved to install an incinerator in Kovalam, a town in southern India, the population began to organize. Residents exerted enough pressure to force the government to shelve the incinerator plans and then, in 2000, formed Zerowaste Kovalam. The project’s success has been based on community mobilization, led by women and involving most everyone, even primary schoolchildren. Based on the values of community control, public interest over corporate interest, and democracy, Kovalam provides a model of creating sustainable systems and closing each waste loop. The community has moved from recycling to inventing livelihoods in such resourceful ways as replacing plastics by making and selling more than 100 products from coconuts. Cloth discarded from tailors is converted to marketable items, bringing income for low-income families. Construction of a small biogas plant, fed by local compost, lightens both cost and environmental impact, while the slurry creates healthy fertilizer. Poison-free farming has reversed the toxicity of the soil while generating organic food and fair trade. Given the advanced state of planetary damage, the human community will have to do much more, and soon, especially to dramatically reduce consumption in the global North and find large-scale alternatives to oil. We have spent many months trying to find successful examples of the latter and, while we are encouraged by some moves, they are still few. The reasons are two-fold. First is political and economic control by major oil companies. While their power could be significantly reigned in in the U.S. by such government measures as regulating prices and separating the interests of oil and state, politicians have not chosen to do so. Second, those solutions that do exist tend to be very tech-focused, and are not affordable or accessible on any wide scale yet. Government funding that could be developing solar and geo-thermal options, for instance, has thus far backed oil interests. If we—the whole of society—have even a little sense, we will soon begin applying our hearts and minds towards solutions. Whether motivated by unwillingness to pay for gasoline that sometimes tops four-dollars- plus, fear over climate destruction, or horror that the U.S. is waging war in Iraq to get the oil under its ground, this is a movement whose time must quickly come.

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2. The Fat of the Land: Indigenous Territory and Resource Rights Beverly Bell and the Other Worlds Collaborative with contributions from Shipla Jain and Rachel Wallis

Indigenous people, not nuclear power, are a solution to climate change. —Derek Wall, environmentalist With the world’s supply of natural resources increasingly depleted or polluted, the carefully protected repository on indigenous lands is now a target of big business. Globalization has increased the risks for indigenous peoples living on lands that contain such strategic resources as water, oil, gas, forests, minerals, and biodiversity. All this—not to mention knowledge, plants, animals and human genetic information—are subject to privatization by government and sale on the stock market. Results include increased environmental deterioration, loss of autonomy and rights, and poverty. With good reason do many indigenous people call globalization “the second coming of Columbus.” In response, indigenous people are organizing and asserting themselves. Countless indigenous nations, organizations, and movements are looking for, and sometimes finding, ways to defend their sovereignty, first of all, and to defend their right to their lands and resources. Protecting something that’s already yours may not sound at first like an alternative, but it constitutes one against the dominate trends of theft of so much that belongs to the collective and destruction of so much that is Native. Strategies to reclaim indigenous territory and resource rights, and a few victories those strategies have wrought in Latin America, include: • Forcing national legal and constitutional changes which can be deployed to stop resource extraction. In Nicaragua in the 1980s, the Miskito Indians succeeded in changing the constitution to allow broad exercise of their right to self-government, including free election of indigenous authorities, communal forms of land ownership, and communal use of water and forests on these lands. In addition, the government cannot authorize concessions or contracts for the exploitation of natural resources in the autonomous regions of the Atlantic Coast without the approval of indigenous councils. In Columbia, indigenous peoples forced into the 1991 constitution social guarantees and rights for indigenous peoples, which—among other things—guaranteed them

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Part V Environment legal recognition of their territory. Here, as in most places, however, the constitutional protections have been repeatedly violated by the government, though they remain an important foundation for claiming land and resource rights. • Using international law, as when the Awas Tingnis of Nicaragua got the Inter-American Court of Human Rights and the Organization of American States to declare the government in violation for not recognizing their right to their own ancestral lands. The court also ordered the government to pay damages. • Using political mobilization and pressure to resist corporate piracy of their resources. The U’wa people of Columbia [. . . ] threatened to commit mass suicide if their lands were drilled for oil. Occidental Petroleum was forced to quit U’wa lands and return its oil concession to the government-owned Ecopetrol. In another case, the Mapuche people of Chile have occupied plantations and other lands which they claim belongs to them. Stating that they are defending their legitimate rights to [. . . ] their property, the Mapuche have led more than 1,000 actions in their campaign to recover their usurped lands. • Employing a popular referendum, known in Spanish as consulta. Perhaps the most successful use of a consulta was in the community of Tambogrande, Peru. In 1989 the Fujimori government granted a concession for an open pit gold mine that would have displaced more than 16,000 residents and polluted the water in an already arid region. Community members held a referendum in 2002 in which more than 90 percent of the town’s residents voted against the mine. Boosted by this pressure, in 2003 the Peruvian government found that the mining company had failed to meet the criteria for proceeding with the mine. More than 30 consultas across Guatemala have rejected mining projects and dams. Although they haven’t yet resulted in closing any mines, they are a powerful tool in coalescing popular consensus and in exposing the lie that the international financial institutions consult local populations about development projects. Given the profits some stand to make off of natural resources, indigenous peoples’ battles to preserve the earth under their stewardship are guaranteed to be long and hard and to extract a heavy toll. Regardless, with everything hanging in the balance, the movement is growing in numbers and strength. To quote what Gustavo Castro Soto of Otro Mundos in Mexico once told us, “From here comes the greatest hope that another world is possible.”

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About the Authors Beverly Bell is founder and coordinator of Other Worlds and also an Associate Fellow at the Institute for Policy Studies. Shilpa Jain is Education and Outreach Coordinator with Other Worlds, and coordinates the Global Youth Leadership Collaborative and the Leveraging Privilege for Social Change Jam with YES! Neil Tangri works on the waste and climate change campaign with the Global Alliance for Incinerator Alternatives/Global Anti-Incinerator Network (GAIA), of which he was a founding member. Rachel Wallis is Media and Education Coordinator for Other Worlds and an artist and activist living in Chicago. Other Worlds is a multi-national, multi-media education and organizing collaborative to inspire hope and knowledge that another world is possible, and to help build it. Other Worlds compiles and brings to light political, economic, and social alternatives that are flourishing throughout the world, and inspires and helps the public open up new pathways to adapt and replicate them.

Sources and resources For “Waste Not, Want Not” • Democracy Now, October 7, 2008, interview with Antonia Juhasz. http://www.democracynow.org/shows/2008/10/7. • Jeff Conant and Pam Fadem, A Community Guide to Environmental Health (Hesperian Foundation, 2008). • “The Story of Stuff.” http://www.storyofstuff.com. • Global Alliance for Incinerator Alternatives. http://www.no-burn. org. • Sustainable Energy and Economy Network. http://www.ips-dc. org/SEEN. • Oil Change International. http://priceofoil.org. • Movement Generation. http://www.movementgeneration.org.

For “The Fat of the Land” • Jerry Mander and Victoria Tauli-Corpuz, Eds., Paradigm Wars: Indigenous Peoples’ Resistance to Globalization (Sierra Club Books, 2006).

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Part V Environment • Juan Houghton and Beverly Bell, Indigenous Movements in Latin America. http://www.otherworldsarepossible.org. • Cultural Survival Magazine. http://www.culturalsurvival.org. • Indigenous Environmental Network. http://www.ienearth.org. • Amazon Watch. http://www.amazonwatch.org. • Native Movement. http://www.nativemovement.org.

In General • Global Alliance for Incinerator Alternatives/Global Anti-Incinerator Alliance (GAIA) is a worldwide alliance of more than 600 grassroots groups, non-governmental organizations, and individuals in over 82 countries whose ultimate vision is a just, toxic-free world without incineration. GAIA works both against incinerators and for safe, sustainable, and just alternatives. In the U.S., GAIA is a project of the Ecology Center (http://www.ecologycenter.org). http://www. no-burn.org. • Indigenous Environmental Network is a network of indigenous peoples empowering indigenous nations and communities towards sustainable livelihoods, demanding environmental justice, and maintaining the sacred fire of their traditions. http://www.ienearth.org. • Green for All works to shift the national economy to clean energy, thus improving the health and well-being of low-income people and creating entrepreneurial, wealth-building opportunities for those who need new avenues of economic advance. http://www.greenforall.org. • Pesticide Action Network North America (PANNA) works to replace the use of hazardous pesticides with ecologically sound and socially just alternatives. http://www.panna.org.

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17. The Concept of Living Well: Vivir Bien This is an official statement from the Permanent Mission of the Plurinational State of Bolivia to the United Nations.1 We felt that this is worth including as it represents a worldview that is growing in influence and momentum. It is especially critical in the context of the crisis of climate change. - from the editors

We should live in a simple way for others to be able to live as well. –Mahatma Gandhi He who is richer is not who has more, but who needs less. –Zapotec saying, Oaxaca, Mexico We suffer the severe effects of climate change, of the energy, food and financial crises. This is not the product of human beings in general, but of the existing inhuman capitalist system, with its unlimited industrial development. It is brought about by minority groups who control world power, concentrating wealth and power on themselves alone. Concentrating capital in only a few hands is no solution for humanity, neither for life itself, because as a consequence many lives are lost in floods, by intervention or by wars, so many lives through hunger, poverty and usually curable diseases. It brings selfishness, individualism, even regionalism, thirst for profit, the search for pleasure and luxury thinking only about profiting, never having regard to brotherhood among the human beings who live on planet Earth. This not only affects people, but also nature and the planet. And when the peoples organize themselves, or rise against oppression, those minority groups call for violence, weapons, and even military intervention from other countries.

1 Website:

http://www.boliviaun.org/cms/?page_id=621

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Living Well, Not Better Faced with so much disproportion and wealth concentration in the world, so many wars and famine, Bolivia proposes Living Well, not as a way to live better at the expense of others, but an idea of Living Well based on the experience of our peoples. In the words of the President of the Republic of Bolivia, Evo Morales Ayma, Living Well means living within a community, a brotherhood, and particularly completing each other, without exploiters or exploited, without people being excluded or people who exclude, without people being segregated or people who segregate. Lying, stealing, destroying nature possibly will allow us to live better, but that is not Living Well. On the contrary, Living Well rather means complementing one another and not competing against each other, sharing, not taking advantage of ones neighbor, living in harmony among people and with nature. It is the basis of the defense of nature, of life itself and of all humanity, its the basis to save humanity from the dangers of an individualistic and highly aggressive, racist and warmongering minority. Living Well is not the same as living better, living better than others, because in order to live better than others, it is necessary to exploit, to embark upon serious competition, concentrating wealth in few hands. Trying to live better is selfish, and shows apathy, individualism. Some want to live better, whilst others, the majority, continue living poorly. Not taking an interest in other peoples lives, means caring only for the individuals own life, at most in the life of their family. As a different vision of life, Living Well is contrary to luxury, opulence and waste, it is contrary to consumerism. In some countries of the North, in big metropolitan cities, people buy clothes they throw away after wearing them only once. That lack of care for others results in oligarchies, nobility, aristocracy, elites who always seek to live better at other peoples expense.

Nobody Says: I Will Only Take Care of Myself Within the framework of Living Well, what matters the most is not the individual. What matters the most is the community, where all the families live together. We form part of the community as the leaf forms part of the plant. Nobody says: I will just take care of myself; I dont care about my community. It is as absurd as if the leaf said to the plant: I do not care about the community; I will only take care of myself. It is just as preposterous as if the leaf would tell the plant: I do not care about you, I will only take care of myself.

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Part V Environment We are all valuable, we all have a space, duties, and responsibilities. We all need everybody else. Based on complementing each other, the common wealth, organized mutual support, the community and the community life develop their ability without destroying man and nature.

Work Is Happiness Not working and exploiting our neighbors will possibly allow us to live better, but that is not Living Well. When one is living well, work is happiness. Work is learning to grow up, melting into the fascinating reproduction of life. It is an organic action such as breathing or walking. Within the Living Well framework, work is general, for everyone and everything, from a child to a grandfather. Its for men, women and even nature itself. Among us, nobody lives to benefit from the work of others. Private accumulation is unknown and unnecessary. Community accumulation always fills the warehouse. In our communities we do not seek, we do not want anyone to live better, as development programs tell us. Development is related to living better, and all the development programs implemented among different States and governments, starting from the church, have encouraged us to live better. Development depends on an ever-increasing use of energy, primarily oil. We have been led to believe that development is the salvation of mankind and that it will help us to live better, but without oil there is no development. And for us, with or without oil, sustainable and unsustainable development means anti-development, which is the cause of major disparities in nature and between people.

Development Can Be a Disaster Consequently, Living Well is contrary to capitalist development and goes beyond socialism. For capitalism, what matters the most is money, making a profit. For socialism, what matters the most is the man, because socialism tries to meet the increasingly growing needs of man, both material and spiritual. Within the Living Well framework, what matters the most is neither man nor money; what matters the most is life. But capitalism does not care about life, and the two development models, the capitalist and the socialist, need rapid economic growth, causing a dissipation of energy and an insatiable use of fossil fuels to boost growth. Therefore, development has proved to be a failure, as evidenced by the

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17. Vivir Bien crisis of nature and the severe effects of climate change. It is now the leading cause of global crisis and the destroyer of planet Earth, because of the exaggerated industrialization of some countries, addicted consumerism and irresponsible exploitation of human and natural resources. The industrialization and consumerism of Western “civilization” threatens Mother Nature and the subsistence of the planet, to such a degree that it must not be spread to the whole of humanity, because natural resources are not enough for all of us nor renewable at the same pace in which they are being exhausted.

Living Well in the Global Crisis The most important crises are: • The exponential increase of human-induced climate change affecting all regions of Earth; • The water crisis, where urbanization, industrialization and increased use of energy is lowering the level of groundwater resources; • The crisis in food production by the impact of climate change and the increasing production of biofuels; • The imminent end of the era of cheap energy (we are reaching the peak of oil production). In the lapse of 100 years we are finishing fossil energy created over millions of years, and this is bringing about dramatic changes in all the theories about the operation of society; • The significant depletion of other key resources both for industrial production and for human welfare, including fresh water, genetic resources, forests, sea and wildlife, fertile soils, coral reefs, and most of the local, regional and global elements we have in common. Unless they are reversed, this combination of dangerous tendencies may soon bring global environmental and social crises up to an unprecedented scale, and they may also cause the collapse of the most basic economic and operative structures of our society.

On the Verge of Catastrophic Change Climate chaos and global warming threaten the loss of much of the worlds most productive lands, physical upheavals in many places caused by storms

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Part V Environment and rising waters, desertification of many agricultural lands, and economic and social tragedy that will last for long in the future, with very severe problems for the most impoverished nations and peoples. Without having found alternative sources of energy that can replace inexpensive oil and gas supplies in the amounts to which we have become accustomed to (and alarming new evidence regarding the limits of accessible coal), Peak Oil threatens the long term survival of industrial nations and industrialism itself, at its present scale. Long distance transportation, industrial food systems, complex urban and suburban systems, and many commodities basic to our present way of life–cars, plastics, chemicals, pesticides, refrigeration, etc–are all rooted in the basic assumption of an everincreasing inexpensive energy supply. Other scarce resources – fresh water, forests, agricultural land, biodiversity of many kinds, are dramatically decreasing in number due to the overuse of industrialized nations that every year surpass 30 percent of the resources that the Earth can regenerate, rendering the survival of humans and other species far more difficult than at any other time throughout the history of mankind. We also face the possible loss of 50% of the worlds plant and animal species over the next decades. So the planets ecological, social and economic systems are on the verge of catastrophic change, and very few societies are prepared for this. Efforts by governments to respond to the impending emergency are thus far grossly inadequate. Efforts by corporations and industries to reform their behaviors remain largely enclosed by structural limits that require continued growth and profit above all other standards of performance.

Living Life Well to Counteract Against the Global Crisis In this Global Crisis, all the problems have the same structural base, and can be faced using the same structural changes. The solution for each one is the solution for all. All the new models must begin by accepting there are fundamental limits to the capacity of the Earth to sustain us. Within those limits, societies must work to set new standards of universal economic sufficiency and a Living Well conception that does not depend on the excessive use of the planets resources. The construction of a Living Well vision to counteract Global Crisis in this era of climate chaos and diminished resources in our finite planet, means ending consumerism, waste and luxury, consuming only what is necessary,

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17. Vivir Bien achieving a global economic “power down” to levels of production, consumption and energy use that stay well within the environmental capacities of the Earth. It also means stopping energy dissipation, i.e. bringing about a rapid withdrawal from all carbon-based energy systems, and rejecting large-scale so called “alternative” energy systems designed to prolong the industrial growth system. These include nuclear energy, “clean” coal, industrial scale biofuels, and the combustion of hazardous materials and municipal waste, among others. Equally important is a dramatic increase in the practices of energy conservation and efficiency, i.e., powering down, decreasing the personal consumption in countries where it has been excessive, and reorienting the rules of economic activity trade, investments, norms. It is also important to modify all of societys main activities that are related to those norms (transport, manufacture, agriculture, energy, building design, etc). Our current dependence on export-oriented production, enormous amounts of long distance transportation, ever-expanding use of resources and global markets, cannot possibly be sustained in a finite planet.

Local Production for Local Consumption In order to adapt ourselves to the true reality of a post carbon era, we will have to satisfy our fundamental needs such as food, housing, energy, production, and means of support, from local systems and resources. This means encouraging regional and local self-sufficiency, sustainability and control; economic localization and community sovereignty, local production for local consumption, local ownership using local labor and materials. Thus Living Well means redesigning urban and non-urban living environments, the restitution of the local, regional and national communal goods, and a quick transition towards renewable energy at a small scale, that must be oriented to the locality and also owned by the local community, without hampering the natural balance, and including wind, solar, small scale hydro and wave, local biofuels. Living Well also means promoting an orderly reconstruction of the countryside and the revitalization of communities by way of an agrarian reform, education and application of eco-agricultural microfarming methods, based on our cultural and communal practices, the wealth of our communities, fertile land, clean water and air. All of these approaches are in preparation for the inevitable de-industrialization of agriculture, as cheap energy supply declines.

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Part V Environment Furthermore, Living Well means reallocating the trillions of millions destined for war in order to heal Mother Earth who is injured by the environment issue.

Less Will Be More Our Living Well proposal emphasizes on harmony between humans and with nature, and the preservation of “natural capital” as primary concerns. It is well known that the protection and preservation of balance in the natural world, including all its living beings, is a primary goal and need of our proposal, and that mother nature has inherent rights to exist on the Earth in an undiminished healthy condition. Living Well also means unplugging the TV and internet and connecting with the community. It means having four more hours a day to spend with family, friends and in our community, i.e., the four hours that the average person spends watching TV filled with messages about stuff we should buy. Spending time in fraternal community activities strengthens the community and makes it a source of social and logistical support, a source of greater security and happiness. For societies that now accept the images of “the good life” widely promoted in the media, this “good life” is based on hyper consumption of commodities, the new strategies to use less resources, to accumulate less, and to be ruled by modest standards of living also become arguments for greater personal fulfillment. Driving less and walking more is good for the climate, the planet, and our health. Buying less means less pollution, less waste, less time working to invest in shopping. Less stress, more time for the family, friends, nature, creativity, recreation and leisure which are activities on which people spend little time nowadays. Among presently over-consuming societies, less really will be more. Basic compliance with Living Well conditions include sufficient food, shelter, clothing; good health and the values of strong community engagement; family security; meaningful lives; and the clear presence and easy access to a thriving natural world.

We Are Part of Mother Nature In this context, Living Well means living a sovereign and communal life in harmony with nature, where we can work together for our families and for society, sharing, singing, dancing, producing for the community. It means

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17. Vivir Bien living a modest life that reduces our consumption addiction and maintains a balanced production. Rather than eroding the Earth, depredating nature and within 30 or 50 years ending with gas, oil, iron, tin, lithium and all other non-renewable natural resources required for a living better, Living Well guarantees life for our children, for the sons and daughters of our children and for those that will come after them, saving the planet using our rock, our quinoa, potatoes and cassava, our beans, broad beans and corn, our mahogany, coconut and coca. In the construction of Living Well, our economic and spiritual wealth is tied directly to a high regard for Mother Earth and a respectful use of the wealth that she gives us. The only alternative for the world in this Global Crisis, the only solution to the crisis of nature, is that human beings acknowledge that we are part of Mother Nature, that we need to restore the complementary relationships, the mutual respect and harmony with her.

Boosting Community Energy with Creativity and Collective Action For this new experience of facing global crisis, for this new experience of Living Well to be successful, it will be necessary to boost local and international actions. We should follow the example of the millions of people on this Earth who are not waiting for official recognition of the global crisis, we should follow the example of the uncountable numbers of people and communities across the planet who, with creativity, enthusiasm and joint action are already actively trying to create or update a great variety of alternative practices at local, community and regional levels, in both rural and urban contexts. Out of our own initiatives in our communities and also with help from governments that boost Living Well, with a broad unity of forces and social movements, we have to wake up community energy, boost community energy in our communities, which is the main capacity weve got to transform society and build a Living Well vision. We have to follow the example of these people and communities, starting to rebuild our communities and nations OURSELVES, with our own hands, our own hearts and our own brains, starting to take responsibility for the building of a Living Well Life for all within the limits of nature. We cannot rely only on governments and international movements to solve our problems.

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Powering Down Out of our own initiatives in our communities and also with help from our governments, let us begin to regain our ancestors harmonious living, strengthen our own way of life, the identity and spirituality in our communities. Let us begin to organize our productive and community life in the countryside and in our neighborhoods, making education work, as well as communication and health, let us build our schools and roads, resolve between all of us our internal relations and the issues of land and territory, water, forests, and so on. Let us build a Living Well vision and the sovereignty of our communities within the balance between man and nature, where we can rebuild our bonds, respecting everyones right to consultation when making our own decisions, where we can freely determine our own aims, our forms of organization, the joint planning of our communities, the designation of our authorities, all based on the knowledge we have of ourselves and with full awareness of the responsibility that this entails. To start powering down, we can reduce significantly our energy use: driving less, flying less, turning off the lights, buying local seasonal food (food takes energy to grow, package, store and transport), wearing a jumper instead of turning on the radiator, use a clothesline instead of a dryer, going on holiday closer to home, buying second hand things or borrowing them before buying new ones, recycling. We can also nurture a Zero Waste culture at home, within our school, workplace, church, community. This means developing new habits, such as using both sides of the paper, carrying with us our own mugs and shopping bags, making compost out of food leftovers, avoiding bottled water and other over packaged products, repairing and mending rather than replacing. . .

Our Own Health, Learning and Communication Out of our own initiatives in our communities and also with help from governments that boost a Living Well vision, let us start to run our own health system taking after the ways that have always kept us healthy, where the health of the community is as important as that of our own body and where abundant healthy food free of chemicals is our medicine. Faced with the growth of increasingly manipulated consumption, let us rebuild the healthy domestic food production. Let us prevent diseases instead of looking for drugs to cure them, and let us use our own natural medicine which will not cure a disease by creating another.

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17. Vivir Bien Let us start to run our own education, or rather our own communication, learning in the way that we have always taught our children in our communities as part of the community practices and responsibilities, i.e. through community learning, through which we create communal energy and learn through daily work, within the social school that would be the community, where we learn that we cannot live outside of communal life. Rather than education, let us re-establish our own communication; strengthen the real communication between father and son, between students and teachers.

Let Us Protect Our Own Seeds Let us defend the women, traditional defenders of the seeds and food safety, custodians of natural variety and of local and quality food for our families, whose life revolves around fertility, child care, countryside, seeds, the care of water, trees and other resources, and whose farming practices in the communities are part of communal life in harmony with nature. We do not solve world hunger with Terminator seeds from agricultural business, but bringing back and protecting our rich ancestral seeds, storing them and fighting against their usurpation by large transnational corporations that defend themselves through intellectual property, patents and the use of transgenic seeds having as an excuse productivity increase. Let us protect the life of indigenous country communities, which allows the cycle of seed and inputs to be closed within the very same communities, freeing us from the need to import them. Lets practice a small-scale production, which will protect natural resources for the present and future generations, and give us all healthy and varied food. Let us build a Living Well vision, retaking our own appropriate technologies, which are not expensive and can be managed through community administration, monitoring and control, using our own funds from our own savings banks or credit unions. We can do our own self-training, which can mature if we bring together researchers and professionals who have a vision of sympathy, support and respect for reorganization processes of the communities and the peoples.

To Strengthen All Our Procedures. . . Living Well means giving back fertility to the planet, now in the hands of sterile corporations, reforesting the world, living a modest life close to soil in communities or small family farms, which are those that have preserved

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Part V Environment the trees and the harmonic variety of species, that have more water at their disposal and survive better. Waking up the ethical and moral values of our peoples and cultures, we can make this new millennium, a millennium of life and not of war, a millennium for Living Well, for balance and complementarity. Together we can build a culture of patience, the culture of dialogue and fundamentally the Culture of Life, a way of life that is not dependent on excessive consumption of non-renewable energy that emit greenhouse gases but is based on the harmonious relationship between man and nature. In order to strengthen all the procedures that may lead us to Living Well, we encourage a broad discussion and debate regarding this proposal, so we can find a common approach that will lead to a fundamental change in the way societies operate, and how we live, as communities, families and individuals. Article distributed in English by the Bolivia delegation at the UN April 2010.

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A New Wind Blows in King Coal Country The Deepwater Horizon oil spill disaster in the Gulf of Mexico hasn’t just handed foes of offshore oil drilling some powerful new ammunition, it has also steeled the resolve of activists battling against another ecologically devastating fuel extraction process – mountaintop-removal mining in the Appalachian Mountains. “I’m counting on the fact that this disaster will wake Americans up, the ones that haven’t already been woken up,” said Julia Bonds, the executive director of Coal River Mountain Watch in West Virginia. “I see a movement growing among youth and on college campuses. Students are demanding a shift away from fossil fuels,” she added “I think our kids realize the fact that we, as adults, told them to clean up their rooms, but look at the mess we’re leaving them.” Mountaintop removal mining aims to access coal veins quicker and cheaper by skipping the building and maintenance of mine shafts. And, since the actual mining is done via huge excavation machines, fewer workers are needed, thereby dramatically lowering labor costs. Dubbed ‘strip-mining on steroids,’ the process begins with trees being clear cut from peaks. Then, upwards of 800-feet of elevation is blasted off with a concoction of diesel fuel and ammonium nitrate akin to that used by Timothy McVeigh - each explosion 10 times more powerful than McVeigh’s 1995 Oklahoma City bomb. Central Appalachia endures hundreds such blasts daily. So far, over 450 mountaintops have been erased.

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Next, bulldozers clear away tons of tree, rock and soil debris (which the industry euphemistically terms “overburden”) by plowing it into nearby valleys. Since 1985, thousands of Appalachian valleys have become clogged with such rubble, increasing the severity of run-off and flood damage in areas below. Mountaintop removal mining has spiked since 2002, when federal regulations were relaxed. According the federal Environmental Protection Agency, more than 700 miles of streams have been completely buried. Thousands more miles have been seriously damaged. “It has greatly affected life in the valleys and communities where people live,” said Julia Bonds. “As a matter of fact, there are certain areas where there are certain fish that have two eyes on one side of their head, from the toxic discharges. . . ” Coal is a huge component of America’s energy landscape. Last year, power plants burned more than a billion tons of coal en route to producing more than half of the nation’s electricity. Companies such as Massey Energy – the same outfit that brought us April’s Upper Big Branch Mine catastrophe that killed 29 miners in West Virginia - say that mountain-top removal isn’t so destructive because mined areas are later reseeded with grass, trees and other vegetation. Critics claim that companies routinely break their promises, leaving behind severely scarred, lunar-like landscapes. Coal industry defenders argue that mountaintop mining provides much needed work in one of America’s most economically blighted regions. But the CRMW’s Julia Bonds dismisses the notion. “We’ve been mining coal for over 140 years here in West Virginia. We’re the poorest state in the nation and the most unhealthy state in the nation – both physically and mentally,” she said, “So, if there is prosperity from coal mining, I can’t find it anywhere.” “The real problem here is the lack of diversification, a reliance on one industry, such as a banana republic would rely on one crop,” Bonds insisted “And that’s what we consider ourselves – a banana republic. When you have a mono economy, it takes choices away from communities and people, as a culture.”

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Part V Environment Coal River Mountain Watch advocates developing wind power as an alternative to coal. It estimates that its proposed Coal River Mountain Wind Project would power between 85,000 to 100,000 homes by placing turbines on peaks that Massey wants to obliterate. The group claims a wind farm would create 28 percent more jobs than mountaintop removal mining. And, since wind is a renewable resource, unlike mining, a wind power project is a more sustainable source of tax revenue as well. It all sounds like a win-win situation for the environment and local residents. But Julia Bonds said the Coal River Mountain Wind Project faces an uphill battle at present. “Most people in West Virginia that are progressive regard this as a great solution - to save a mountain and to put a wind turbine up and have future taxes (on profits) forever, and have energy forever, and clean energy jobs forever,” she said “But most of the state has received this very badly because the coal industry look at this as a threat.” “You have to understand that West Virginia is not part of the United States of America. It’s King Coal’s country,” added Bonds “The coal industry thinks that West Virginia is it’s own little country where they can do anything they want.” She maintains that huge proportions of the state’s politicians and media outlets “are either owned or influenced by the coal industry,” and, as a result, most ordinary folk are conditioned to buy into King Coal’s perspective. “The problem here is a lot like battered wife syndrome, the Stockholm syndrome, in which the person identifies with their abuser,” she said. Although Massey was granted the right to begin limited blasting last fall, CRMW hopes that their legal challenges to its mining permits will bog down future operations while they try to gain support for the wind project.

But, given the breadth of King Coal’s power and influence, how can CRMW hope to succeed? “You fight it one day at a time, honey,” Bonds said “You eat that elephant one bite at a time.”

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A New Wind Blows in King Coal Country “We have to be hopeful,” she added “Because coal is a finite resource. You can only mine it and burn it one time. And, according to (U.S. Geological Survey) reports of coal reserves here in the area, we’re looking at approximately 20 years worth of coal left here in the valley.” “So we have to have another source of energy, and we have to have it soon – hopefully, while we still have some mountains left to put wind turbines on.” Jim Dee is a freelance journalist based in western Massachusetts whose articles have appeared in the Boston Herald, Foreign Policy in Focus, Z Magazine, Irish Times, and the Belfast Telegraph.

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Part VI.

Food

18. Protecting Local Food and Farms through Models of Shared Equity Rebecca Fletcher More and more people are demanding healthy, locally grown food even while small, local farms are increasingly under threat. This chapter explores the use of creative tools to protect local food and farms through shared equity models where the costs and benefits are shared by the farmers, local consumers, and the community. There is a widespread movement to buy and eat local food. New farmers markets are springing up, and older ones are increasing in size. Parents and teachers are promoting the idea of more locally-grown produce in school cafeterias, and colleges and universities are working to get local and regional food into their dining halls. Coops, health food stores, supermarkets, and even some restaurants have begun to label fruits, vegetables, meat, cheese, and other foods with where they were grown. More and more soup kitchens and food banks are using local food to meet emergency needs. And along with the Obama family, a rising number of community gardeners and urban farmers are even growing food in the middle of cities. The locally-grown food movement has spurred an increase in Community Supported Agriculture (CSA) farms. CSA programs give community members an opportunity to become “shareholders” in a local diversified farm. Before the growing season begins, community members purchase a share in the farm’s harvest. This payment up front provides available capital at the time of the year when the farmer has the most expenses. As the farm begins to produce food, shareholder/members receive a share each week, usually for about 25 weeks, from a farmer they trust. People are choosing locally-grown food to reduce the fossil fuel used in growing, packaging, and transporting food. They’re choosing it for health reasons, to support their neighbors, to protect their community’s agricultural character and economy, and in support of developing a more self-reliant regional food system.

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18. Protecting Local Food and Farms For access to local food, we all depend upon the health of local working farms, mostly small diversified farming operations. As the slogan goes: “No Farms, No Food.” This chapter explores why farm affordability is an issue that affects all of us, and what tools our communities can use to protect our sources of local food.

What Are Farmers Up Against? Farmers are caught between two very strong forces: The first is our societal demand that food be cheap. This limits the income of farmers. The second is our use of land as a medium for investment, and our expectation that land will continually increase in value. This drives the cost of land up. Let’s take a minute to look at the value of a piece of farmland through three lenses. The land’s agricultural value as a diversified farm will be higher if there is a well-maintained farmhouse, and if there are solid barns, fencing, greenhouses, a milking parlor, or other outbuildings that will provide equipment storage, shelter for animals, apprentice housing, spaces to start seeds, and other support for the farm’s purpose of producing food. The land will have more value as a farm if it is flat, well-drained, and if there is a water source, and in some cases an irrigation system in place. The land’s agricultural value will also be higher if the soil’s fertility has been carefully built up. Value will be increased by perennials such as an orchard, vineyard, or highbush blueberry patch. Wind turbines and solar panels that defray the farm’s energy consumption would increase the farm’s value as well. The land’s agricultural value will be diminished if there is a loss of biodiversity in the soil, soil erosion, or if the soil has endured the use of pesticides and herbicides. The land’s agricultural value will also be limited by how much debt a family earning their income farming the land could incur. That is, how big of a mortgage a farm family could afford to service earning their living farming. The land’s development value for a new residential neighborhood, superstore, or parking lot will be higher if it is flat, open, and well-drained. It will be more valuable if it has road frontage, and access to existing roads, sewerage, and community amenities. The more rapidly the surrounding community or region is developing, the more valuable the land becomes to developers. These conditions can promote purchase by investors who speculate that the land’s location will be desirable to developers in the future, thus driving up the price. (White, Kirby, ed. Farms for Farmers, 1) The land’s estate value is enhanced if it has an attractive, historic, rural farmhouse that has been well-maintained with a scenic view, and by

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Part VI Food many of the above-mentioned features. Even when the farmhouse is in poor condition, the house can be repaired or replaced, making farms appealing as a second home, a retirement home, or a primary residence for a person whose job doesn’t necessitate being near a big city. (White, Kirby, ed. Farms for Farmers, 1) Increasingly, conservation land trusts have been working to prevent agricultural land from being developed. Using something called a “conservation easement” a land trust can purchase all rights to develop the land now and in the future for residential, commercial, or industrial purposes. When farmland with a conservation easement goes on the market, developers do not compete with farmers to purchase the protected property because the land cannot be subdivided for new construction. Yet even when looking to buy land without development potential, farmers face increasing competition. Farmers are outbid over and over by those purchasing farms for a home in the country. Farmers are outbid because people of means bring greater purchasing and earning power to the table than farmers. Unable to afford land that is being sold at its development value or its estate value, many farmers are left renting land from wealthier individuals. This is problematic for farmers for several reasons: 1. Where farmers rent, all of the infrastructure that supports the operation of the farm business (the farmhouse, barns, greenhouses, irrigation, fencing, etc.) as well as the land’s very soil, belongs not to the farmer but to the property owner. Often the farmer is faced with the choice of living without needed improvements to this infrastructure, or making costly investments in the infrastructure and soil without any assurance that they will ever be able to recoup these investments. The farmer has no opportunity to build equity in the property through their investments. 2. Farmers who rent with a short-term lease (one to five years) or no lease, have no guarantee that the owner from whom they rent will not choose to sell the land, or terminate their tenancy so that the owner or a family member can assume residence. Hence, the farmer has no security of tenure on the land. I want to share the stories of two farming couples: • Don and Bridget lived in the Boston area where Don worked at the Food Project, a youth development program that focuses on agriculture. In Bridget’s words,

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18. Protecting Local Food and Farms Although we enjoyed living in the Boston area, we felt frustrated by the challenges of finding an affordable farm where we could live and raise our family. Don loved his work at The Food Project and appreciated immensely the land on which he farmed, but he knew that no secure land tenure was possible for him in this position. For one, his status as farmer on that piece of land depended on his continued employment at the Food Project. Secondly, the Food Project’s tenure on the land was contingent on a lease from the town of Lincoln, and this lease was subject to a renewal process every 5 years. Don was also experiencing the challenges of being a commuter farmer, as he needed to be available both early in the morning and at times late in the evening to check on the farm. We wanted to incorporate our family into life on the farm and have animals. Living on this land, however, wasn’t possible because it didn’t fit into the town’s conservation goals. . . For a year we looked at land in Maine, a state that is dear to us for many reasons. Although we could find land that was affordable, the challenge was that it was often located far away from markets. We imagined how much of our time, energy, and resources would be spent trucking produce great distances, which was especially unappealing as we envisioned where our young children would fit into this picture. (Spann, Bridget. Address.) Here Bridget identifies three main challenges she and Don faced in their early years of farming: 1) They lacked secure access to the land where Don farmed. 2) There was no affordable on-site housing for them. 3) In their search for new land, they found that farms located near viable markets were out of their price range. • Sam & Elizabeth purchased an old dairy farm in Williamstown, MA, and slowly but surely brought it to life, building up the fertility of the soil year by year, eventually establishing a vibrant diversified farm with livestock, fruits, vegetables, and an apiary. They named it Caretaker Farm, and eventually they began using the community supported agriculture (CSA) model to market what they were growing, in time selling shares of the farm’s harvest directly to 230 families each year.

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Part VI Food After 35 years of farming at Caretaker, Sam and Elizabeth were close to retirement. They began to look at selling the farm, knowing that they needed to recoup enough of what they had invested in the farm to have an adequate retirement. However, they soon realized that selling the farm at market value would mean selling to non-farmers. They faced a dilemma: how could the farm be made affordable for young farmers and still provide sufficient retirement income for the Smiths? Further, how could the farm as a whole be made permanently affordable, enabling future generations of farmers to live and work there, and provide the surrounding community with good food?

Protecting Our Local Food Sources—What We Can Do During the rest of this chapter, we’ll explore two approaches to farm ownership that can protect affordability for farmers, and see where these approaches fit into the broader shared equity movement. Our communities can use these approaches to permanently protect our local farms and the food they produce. Caretaker Farm Let’s get back to Caretaker Farm. Sam and Elizabeth wanted to protect their farm, but not just from development. They wanted to accomplish three goals: 1. To guarantee a secure source of locally-grown food for the community. 2. To guarantee that part of the community’s land base will always remain a working farm that uses sustainable farming practices. 3. To create affordable, secure access to the farm’s land, housing, and other infrastructure for farmers now and in the future. Still searching for land, Don and Bridget eventually met Sam and Elizabeth, who became interested in transferring the farm to them, if only they could find a way to make the farm affordable. To do this, they created a new ownership structure for the farm. First, the Commonwealth of Massachusetts, with an interest in preserving farmland, purchased an easement that prohibits development of 32 of Caretaker Farm’s 35 acres and requires at least some minimal agricultural use of this land. This was very helpful for generating income for the project and working towards their goals. Massachusetts paid $252,000 for the easement, the value they calculated the development rights to be worth.

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18. Protecting Local Food and Farms Of course development was not the only thing threatening the future of the farm. The easement still left the farm unaffordable to farmers, and placed no protections on the farmhouse and barn. Sam and Elizabeth turned to their 230 CSA member families to help raise the money to place the next layer of protections on the farm. The 230 member families, with an interest in protecting the farm as a secure source of local food, spearheaded a fundraising campaign within their community and beyond, and raised $250,000 to make the project possible. The farmers partnered with their local conservation land trust, Williamstown Rural Lands Foundation. The Williamstown Rural Lands Foundation, with an interest in preserving Caretaker Farm as a working farm for the Williamstown community, agreed to purchase all of the farm’s land, including the land under the farmhouse. They raised $50,000 for this purchase. Don and Bridget purchased the farmhouse, barns and other improvements, at their agricultural value of $177,000. Don and Bridget do not own any of the land, even the land under their house; they have a lifetime, inheritable ground lease. Their lease requires that they occupy the house and actively farm the land. It stipulates that when they wish to stop farming, they will sell the house and barns to farmers. In the future, when they want to sell their interest, the price will be determined by the appraised as-restricted agricultural value. New Ownership Structure For Caretaker Farm • Land is owned by: Williamstown Rural Lands Foundation • The farmhouse & other infrastructure is owned by: Don & Bridget, farmers • Conservation easement is held by: MA Department of Agriculture • Option to purchase is held by: Williamstown Rural Lands Foundation • There is a 99-Year Ground Lease to the farm’s land: – Lessor: Williamstown Rural Lands Foundation – Lessee: Don & Bridget, Farmers

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Part VI Food Through their work protecting Caretaker Farm as a working farm, the community secured a permanent source of local food. Active-farming requirements in the lease ensure that this land will produce food now and in the future. Resale restrictions in the lease require the current farmer to sell to another working farmer when it is time to transfer the farm. The land trust holds a purchase option, enabling them to buy the house and barns for their agricultural value if the current owners stop working the land. This allows the active farming requirements to be enforced. Sam and Elizabeth did not receive as much money as they would have received if they had sold the farm for its full market value. But they received enough money to enable them to retire, which was several times more than Don and Bridget would have been able to pay for the farm. Don and Bridget own the farm business, and the farm infrastructure, including the farmhouse where they will live and work until they are ready to retire and pass the farm on to other farmers. Live Power Community Farm In the 1970s, in Covelo, CA, Stephen and Gloria established a biodynamic CSA farm on 40 acres. Instead of fuel, the farm uses horse-power to pull all farm equipment. As they slowly improved the soil and repaired the farmhouse, Live Power Community Farm became a vibrant place, soon growing vegetables, herbs, flowers, fruits, and feed for the horses. Stephen and Gloria also keep dairy cows and chickens, butcher and process beef cattle, and bake bread on site. The farm feeds 160 CSA member families, many of whom live in San Francisco. In the early 1990s, the owner of the farm’s 40 acres needed to put the land on the market. Stephen and Gloria wanted to buy the farm, but the price was far more than they could afford on their farm income. With the owner of the farm ready to sell, they were desperate to find a solution that would let them keep all that they had put into this place. The farm’s CSA member families were just as eager to find a solution that would protect the farm’s future. Working with the farmers and a nonprofit called Equity Trust, the CSA members raised $81,000, so Stephen and Gloria would only need a mortgage for $69,000. The total, $150,000, was enough to purchase the property. In return for their fundraising work, the CSA members were assured that the farm would continue to produce food because Equity Trust assumed a specialized agricultural conservation easement and purchase option on the farm. The easement prevents non-agricultural development on the property, and non-agricultural uses. It requires Stephen and Gloria to live on the property and earn their living by farming the land organically or biodynamically.

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18. Protecting Local Food and Farms New Ownership Structure for Live Power Community Farm • Land is owned by: Stephen & Gloria, farmers. • Farmhouse & other infrastructure are owned by: Stephen & Gloria, farmers. • Specialized Agricultural Conservation Easement on all land & infrastructure is owned by: Equity Trust. • Option to Purchase is held by: Equity Trust. In the case of Live Power Community Farm, the easement goes far beyond traditional conservation easements that simply prevent development. Their easement and option to purchase place all of the protections that are found in Caretaker Farm’s lease document and option to purchase. The easement requires the farm’s owners to earn 50% or more of their income from farming the land, ensuring that this land will produce food now and in the future. The non-profit holds a purchase option, enabling them to buy the farm at its agricultural value if the current owners fail to carry out their farming obligations. This gives the non-profit the ability to enforce the active farming requirements. These measures guarantee the community a source of local food. Equity Trust, which helped to facilitate the protection of both Caretaker Farm and Live Power Community Farm, has developed a model lease with purchase option, and a model easement with purchase option, both of which can be downloaded for free at http://www.equitytrust.org/. These two approaches to farm ownership can be used by any type of farm, though the specific language will need to be modified to fit each particular farm’s circumstances.

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Part VI Food Characteristics of Both: • Permanent Affordability: Legal documents restrict the maximum resale price to the next generation of farmers and include an option to purchase at the agricultural value. • Active Use: Model requires owner-occupancy and active use, and establishes use and care standards. • Retention of Subsidy: Any subsidy put in to initially create affordability is protected through future property transfers. • Resale Restrictions: Within the legal documents are resale restrictions that designate the class of potential buyers to whom the property may be sold in the future such as ”farmers.” This further protects the property’s use. • Security, Equity & Legacy: Model provides land tenure security for homeowner, while allowing them the chance to build equity through their own investments. The homeowner is allowed to pass on their rights under the model to their children should their children wish to farm. There are two approaches used to implement this model: 1. Ownership Split Between the Individual and a Nonprofit • Underlying land is owned by a nonprofit entity. (Nonprofit can be a community land trust, a conservation land trust, or other nonprofit.) • Houses and/or other improvements are owned by individuals or cooperatives. • Homeowners have a 99-year, inheritable ground lease to the land. • All restrictions are spelled out in the lease, which balances the interests of individual homeowners with needs of the community. • Nonprofit holds option to purchase the infrastructure at the appraised as-restricted agricultural value. 2. Specialized Easement with Purchase Option • Improvements and land are privately owned. • Owner partners with a nonprofit that will hold a specialized easement. • Restrictions are spelled out in the easement. The easement balances the interests of individual homeowners with needs of the community. • Nonprofit holds option to purchase the farm at the appraised as-restricted agricultural value.

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18. Protecting Local Food and Farms While in both of the above stories, farmers initiated the projects, protecting the affordability and use of a farm and its farmstead can also be initiated by a community group, or by a municipality, and the farm being protected may or may not be actively farmed before the protection project is completed. These approaches to farm ownership do not in and of themselves generate money for the farm’s protection, yet they offer a vehicle to permanently protect and recycle subsidy that is raised for the project. Both approaches define what the community will get in return, making it easier to fundraise for the project. Funds for the two projects described above came from state programs, from town CPA dollars, from food coops and business owners within the community, from private foundations, and from neighbors, family, friends, and supporters of the farm.

The Shared Equity Movement These two approaches to farm ownership are part of a broader Shared Equity Movement, the primary focus of which has been affordable homeownership, displacement prevention, and neighborhood revitalization. This movement includes: • Limited-Equity Cooperatives A limited-equity cooperative is a corporation that owns real estate consisting of residential units. A shareholder in the cooperative has the right to occupy one housing unit, subject to an occupancy agreement. Except in the case of noequity cooperatives, shares can be sold for a profit, but not a windfall. (Davis, John E. Shared Equity Homeownership, 23) • Deed-Restricted Housing Property is transferred from one owner to another by a deed. A deed restriction is a legal document that places limitations on real estate. Long-term affordability and occupancy deed restrictions (30 years or more) can be placed on homes that otherwise have a conventional ownership structure. For example, a deed restriction may be used to restrict the price for which a home can be resold, in order to protect the home’s affordability for low or moderate income families. When the home is sold, the seller will recoop part of the home’s increase in value, while part of the increase will remain with the home to reduce its sale price for the next homebuyer. While an easement must be held by an entity other than the homeowner, and a lease is also entered into by two parties, deed restrictions do not in and of themselves require two parties. Therefore

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Part VI Food they may or may not be actively monitored. A deed restriction may run with the land forever, but is most commonly written for a finite period of time, although that period of time may reset upon sale of the home. The deed restriction may or may not contain an option to purchase, giving a nonprofit organization or other entity the right to purchase the property for an affordable price. Deed restrictions are strongest at protecting affordability and use where they are long-term, where they are being monitored by a nonprofit, where they provide a non-profit organization with an option to purchase the property at an affordable price, and where their protections reset upon the home’s sale. (Davis, John E. Shared Equity Homeownership, 13) • Community Land Trusts (CLTs) A community land trust is a nonprofit corporation that holds land. Homeowners can own houses on CLT land, just not the land underlying their house. A long-term lease to the land defines the relationship. Homes can be sold for a profit, but not a windfall. The resale price is determined by the CLT’s resale formula. Community centers, farms, and affordable retail or office space can also be located on community land trust land. The two shared equity approaches to farm protection outlined in this chapter both draw on the community land trust housing model, employing occupancy and use standards, and resale restrictions to protect future affordability and define future beneficiaries. The approach used in the Caretaker Farm project, where the underlying land is held by a non-profit organization, closely resembles the community land trust model. While traditional conservation focused on maintaining forests or open space as wild forever, farm protection involves stewardship of land that is occupied and being actively worked. The community land trust model offers strategies for protecting the affordability and use of occupied land and housing, and was invaluable in the development of these two shared equity approaches to farm protection. Shared-equity housing can offer long-term solutions in markets where there is disinvestment because by increasing owner-occupancy even where residents are very low-income, shared-equity housing reduces turnover, provides a means for residents to build wealth, encourages investments of sweat equity, builds a sense of community, and eventually prevents further erosion of home values. Shared-equity housing, which is also very effective at protecting affordability, is crucial to preventing displacement in markets where housing prices are rising faster than incomes, resulting in a growing affordability gap. As a community, or as a society, we may invest subsidies to increase homeownership opportunities, and these subsidies are best stewarded through

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18. Protecting Local Food and Farms shared-equity housing. Subsidies that we invest might come in the form of a loan or grant from city, county, or state government directly to the homebuyer, or in the form of a tax deduction like the home mortgage interest deduction. In other cases the subsidy may be implicit such as a local inclusionary housing program that requires developers of market-rate housing to sell a small percentage of units at an affordable rate. In some cases, the subsidy is volunteer labor that helps to bring down the cost of building an affordable unit, such as when community land trust members or Habitat for Humanity volunteers offer their labor towards building a new home. If as a society we decide to invest subsidy dollars to create and protect affordable housing, how can we get the most out of these subsidies? In shared equity ownership, the initial subsidy invested doesn’t get lost when the home is sold. Instead it remains invested in the unit even through subsequent sales, growing with the value of the real estate over time. Resale restrictions allow homeowners to sell their homes for a profit, but not a windfall. Shared equity ownership thereby allocates value to the homeowner where the homeowner has created that value. Where the value has been created by the community, the ownership structure leaves the value with the home to grow the subsidy and benefit the next homeowner. To learn more about shared equity housing, please visit the websites of the National Community Land Trust Network at http://www.cltnetwork.org/ and of Burlington Associates in Community Development at http://www.burlingtonassociates.com/

In Conclusion Developing a solidarity economy in the present and future will involve increasing the access our communities have to locally-grown foods, and increasing individuals’ and families’ participation in local and regional food systems. For the on-going health of diversified small farms that provide us with locally-grown food, it is critical that we protect the affordability and agricultural use of farms. Farmers are unable to afford land that is being sold at its development value or its estate value. They get outbid both by those seeking land for new construction, and by those seeking a secluded country home. To protect farms from both of these threats, we need to guarantee the affordability of the farmhouse along with the land, require active farming, and use a purchase option to ensure that the restrictions can be enforced. Federal, state, and local dollars must be spent subsidizing farm infrastructure as well as protecting farmland from development. Growing a solidarity economy will involve implementing shared equity approaches to ownership, to protect the resources upon which our commu-

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Part VI Food nities depend, such as land and housing, from being used for speculation. Both for agricultural and residential housing, shared equity approaches to ownership can help us stretch our subsidy dollars the furthest, recycling them for use for generations to come. Farm affordability is an issue that affects all of us who eat! These measures will help communities to protect their farms for farmers and make possible the ecological, economic, social, and health benefits that diversified farms and local food systems provide. Farms should be places where generations of farmers and apprentices can live and work, “where people experience a shared responsibility for and simple joy in the care of the land, as well as a foundation for a locally based food system.” (Smith, Sam and Elizabeth.) Access to land to produce local food is a key underpinning of such a vision.

About the Author Rebecca Fletcher works with Equity Trust a small, national organization that provides education, technical assistance, and financing to farmers, land trusts, and community groups working to save farms and to create affordable housing. Equity Trusts programs support ownership structures that balance the needs of individuals with the needs of the community, the earth, and future generations. http://www.equitytrust.org

References Davis, John E. Shared Equity Homeownership. Montclair: National Housing Institute. 2006. Smith, Sam and Elizabeth. “Caretaker Farm – History.” Caretaker Farm. 2006. http: //www.caretakerfarm.org/history.html Spann, Bridget. Address. Gaining Ground Workshop. Portland Friends Meeting House, Portland ME. 31 Jan. 2009. White, Kirby, ed. Preserving Farms for Farmers: A Manual for Those Working to Keep Farms Affordable. Turners Falls: Equity Trust, Inc. 2009.

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19. CEDESA, Women, and the Food Sovereignty Movement in Mexico Ann Ferguson1 In January, 2009 I participated in a three day women’s conference on Women, Food and Food Sovereignty at a nonprofit regional development center in the state of Guanajuato, Mexico called CEDESA (Centro de Desarrollo Agropecuario). Also attending were several other academics besides myself from the United States, the two present directors of CEDESA, and local residents of Mexico working as activists in the food sovereignty movement, including some from Oaxaca. Although I had heard of the idea of food sovereignty a few years before in a conference on globalization at the Center for Global Justice in San Miguel de Allende, Mexico, this was the first time I understood how this might be seen as a women’s issue. Through this conference I came to appreciate the leadership of grassroots women in the struggle for food rights and local democratic control over food production in opposition to corporate agri-business and free trade economic arrangements that harm the poor. I also learned that the local grassroots struggle against poverty has deep roots, deeper than the struggle against current neo-liberal policies. Indeed, CEDESA has been around since the late 1960s, and helping to build a social base to promote sustainable development out of practices of the theology of liberation, land reform struggles, and the New Left movement. While CEDESA started organizing as a regional anti-poverty movement for small farmers, they have since joined the corporate anti-globalization movement and broadened their solidarity networks accordingly. 1A

previous version of this paper was published with the title “CEDESA and the Food Sovereignty Movement in Mexico: The Organizing Power of Women” in Against the Current, #146 (May/June 2010), pp. 19-22. I wish to thank Holly Yasui who translated the CEDESA pamphlet I used as a reference in this piece, and also helped editthis article. Altagracia (Chilo) Villareal was also helpful as a resource on CEDESA and the Mexican food sovereignty movement. For more information on CEDESA, contact Holly or CEDESA at [email protected].

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19. CEDESA, Women, and Food Sovereignty Like many people in the world anti-corporate globalization movement, the organizers and their allies have been inspired by the meetings of the World Social Forum, which started in 2001 in Porto Alegre, Brazil, and continued yearly there until 2006. Since then, the WSF has been held in different locations and sometimes multiple locations (polycentric WSF) either annually or every other year. The WSF has inspired regional and thematic social forums since the beginning. One of these regional social forums was the first US Social Forum in Atlanta in 2007, and the second US Social Forum in Detroit will occur in June 2010. From these global and regional social forums a view is emerging of a radical third way to organize against capitalist globalization. It is called the Solidarity Economy, which is a set of economic and political networks that include worker- and consumer-owned cooperatives, rural farmers’ unions, fair trade networks, local social money and bartering networks, and the global food sovereignty movement advocating locally grown food and ecologically-sustainable development. The new global communication networks, particularly the internet and the dedicated work of reporters for independent (Indy) media, have allowed diverse populations to connect to and learn from anti-corporate globalization movements in other countries, such as the Zapatistas in Mexico, the Landless Farmer Movement (Movimiento Sin Tierra) in Brazil, and the Unemployed Workers’ movement in Argentina. The world anti-corporate globalization movement has its roots in such networks, and forms a growing global resistance to the world capitalist system of commodity production for private profit that has had disastrous environmental and social effects ever since its origin and spread by European imperialism and colonization of non-European populations three or four centuries ago. Local economic exchanges and production designed primarily for use rather than profit have existed for a long time in rural areas in countries in the global South. Even in the US where agri-business has diminished the numbers of independent small farmers, there continue to be pockets of local small farmer in-kind exchanges of food, fertilizer and seed where no money is involved. And in spite of the power of US corporate agri-business, the number of local cooperatives, both worker- and consumer-owned, are growing, as are CSA (Community Supported Agriculture) farms, that is, small locallyowned farms that have consumer-members who pay an annual fee and then share a portion of the harvest. Environmental and organic foods movements are urging people to buy locally to avoid the environmental costs of transportation and uncertain safety and nutritional value of food distributed by multinational corporations. Thus the stage is set for the growth of a US food sovereignty movement. We can learn from our neighbors to the South

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Part VI Food in Mexico not only how important the demand for food sovereignty is for promoting grass-roots democracy and basic human rights around food for our own population, but also how important promoting fair trade solidarity in what food imports we buy as consumers is for our neighbors, and particularly for rural women. In Mexico as in other countries with a large population of rural poor, a food sovereignty movement is growing which claims the right of peoples to define their own food, agriculture, livestock and fisheries systems, in contrast to having food largely subject to international capitalist market forces (cf. www.viacampesina.org) The global Via Campesina movement, which has many member organizations in Latin America, advocates seven basic principles. These include: access to safe, nutritious and culturally appropriate food; agrarian reform which gives landless, farming and indigenous people ownership and control of the land they work; the sustainable care and use of natural resources, especially land, water, and seeds and livestock breeds; the prioritization of production for domestic consumption and food self-sufficiency; challenging the globalization of hunger caused by the growing control of multinational corporations over agricultural policies of multilateral organizations such as the WTO, World Bank and the IMF; ending the ongoing displacement, forced urbanization, repression and increasing incidence of racism against smallholder farmers which causes violence and disrupts social peace; and finally the demand that smallholder farmers, and particularly rural women, have democratic input into formulating agricultural policies at all levels (cf. Via Campesina, www.Wikipedia.org). It should be noted that the Via Campesina movement challenges the development ideas both of capitalist and tradition Marxist-Leninist or Maoist theory. Both types of modernist development model assume that peasants (small farmers) cannot be organized as a revolutionary class and will at any rate disappear with the development of capitalist multinational agribusiness or state socialist state farming systems. The global food sovereignty movement advocates a third way for development that demands the defense of decentralized and localized food production with democratic input into the conditions and contents of this production by small farmers, whether owners or workers. Much analysis has already been made of the Zapatista challenge to neoliberalism by the indigenous movement in Chiapas, Mexico. Less well known, however, are related indigenous ecological and food sovereignty movements based in Oaxaca, which are developing appropriate technology for small scale ecological production, local food production cooperatives with such crops as cacao, as well as the urban garden movement, the clean water and aquifer movement and popular education efforts on these issues spurred by

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19. CEDESA, Women, and Food Sovereignty the Universidad de la Tierra in Oaxaca, founded by Gustavo Esteva, a left intellectual known for his support of the Zapatistas. In the rest of this paper I would like to concentrate on northern Mexico and the growth there of the CEDESA center and its philosophy and practice. CEDESA was legally chartered as a nonprofit organization in 1965. It was founded by a liberation theology priest, Father Guillermo D´avalos (Padre Memo) who started working with campesinos of northern Guanajuato in 1959. He created a boarding school in the early 60s in the town of Dolores Hidalgo to educate young campesinos in short courses with diverse subjects such as group discussion techniques, grass-root organizing, campesino and women’s issues, and development of micro-businesses such as production of fruit, poultry and livestock, beekeeping, food preservation, sewing, etc. In 1965, Padre Memo purchased some land south of town for an experimental farm and campesino education center. Construction was started with loans from the local savings cooperative he founded, funds from the Social Secretariat of the Catholic Church, and funds donated by the Misereor Foundation of Germany. Twenty-five percent of the funds to complete construction came from sales of food products produced by CEDESA The fundamental purpose of the Center was to organize and teach campesinos the skills necessary to combat rural poverty. The CEDESA project continued after 1970 under a team of young activists mentored by Padre Memo. He was expelled from northern Guanajuato after the Mexican government’s brutal repression of progressive movements following the 1968 massacre of students in Mexico City. Two young women, Luz Maria (Lucha) Rivera P´erez and Tere Mart´ınez Delgado, had been leaders of the Young Christian Farmers (JAC) movement founded in Michoacan in the 1960s. At CEDESA, they promoted literacy and organized schools and solidarity groups for agricultural and livestock production, using the philosophy of mutual aid and solidarity to create savings and loan, consumer and production cooperatives. They were later joined in 1972 in the leadership of CEDESA by Tere’s sister, Graciela (Chela) Mart´ınez Delgado. Although Lucha has since died, Tere and Chela continue today as directors of CEDESA. A pamphlet put out by CEDESA (Rivera P´erez et al 2008) describes its history into three phases: 1. The construction of the social base and emergence of a grassroots campesino movement from 1970-1979; 2. Mobilization and regional organizing against the neo-liberal policies of President Miguel de la Madrid and successors in the 1980s, including the struggle for land and water;

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Part VI Food 3. From the 1990s to the present, the integration of CEDESA’s alternative economic project, including the campaign for drinking water, the defense of the land, and the promotion of the self-sustaining family economy. In what follows, I will sketch some details of events and projects in these periods, emphasizing how the popular education and principles of mutual aid and solidarity fostered by CEDESA supported the growth of militant social movements for farmers’ rights as well as highlighted the empowerment of rural women.

The First Phase: Building a Social Base from 1970-79 CEDESA in 1971 was asked to participate in a regional literacy program which gained them credibility, and from 1972 to 1978 they organized production projects including beekeeping groups as a way to create local food resources, and successfully initiated a revolving loan fund out of their earnings. Based on their strategies of mutual assistance and production emphasizing consumption over sales, they helped to create a beekeepers’ union (ASANG).

The Role of Women In 1976 CEDESA responded to a demand by women in the rural community of La California to help them create a collectively run mill for grinding corn. The women were radicalized in the process as they were given the bureaucratic run-around when they were denied a permit to get electricity installed in the mill and realized the government did not respond to the needs of the poor. Nonetheless they were successful in purchasing a gas-powered mill which convinced them of the organizing power of women united. Many of these same women from La California and surrounding communities then became key organizers in the water and land battles in the next decade. In 1978, Lucha Rivera and Chela Mart´ınez found themselves in a conference on appropriate technologies with only 6 other women out of a group of 50, and decided that more participation by women in sustainable development leadership was necessary. So in 1979 they organized the First Latin American meeting of women at CEDESA where the La California women presented their story of the mill cooperative, and received support from the international group.

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19. CEDESA, Women, and Food Sovereignty Women continued to be key in the second phase of mobilization and regional organizing around food nutrition, health and water issues. Partly because of the gender division of household labor in which women are seen as responsible for food preparation and family health care, it was primarily women who came to be trained in workshops at CEDESA dealing with curative natural medicine and preventative health measures. These measures include improving the campesinos’ diet with fresh vegetables, herbs, fruits and cereals and the use of soy products and local foods such as nopal cactus. Women trained as health promoters in these workshops then became key organizers in the drinking water campaign and in the Union of Campesino Communities of Northern Guanajuato (UCCANG), a regional organization that CEDESA helped to found.

The second phase: Land and Water Rights Struggles in the 1980s to 1992 In the 1980s, campesino occupations of land were initiated by farmers with petitions for land ownership pending from the 1930s and 40s. These farmers had been encouraged by Mexican President Echeverria’s creation of the Secretariat for Agrarian Reform which promised to carry out land reform. But Echeverria had the army oust and jail such farmers on disputed land and created programs for large commercial farmers to receive credits for producing crops for market. These actions only expanded agribusiness and deforestation, lowered the standard of living for campesinos and increased social unrest. Struggles to get permits for wells and to have the government drill them for farming communities were spearheaded by the general assemblies in rural communities, in which campesinos discussed and initiated actions for their common good. At one point during this struggle, 300 representatives from 20 communities demonstrated in front of the Governor’s Palace to get a meeting with him. After several more years of struggle, the network UCCANG, formally constituted in 1986, succeeded in gaining drinking water for 50 communities by obtaining 29 wells. Land disputes between large landowners and ejidos, that is, land owned in common by members of a community, usually resulted in legal decisions in favor of the large landowners. With the help of CEDESA, these decisions were contested by the campesinos, who used land occupations to defend their rights in spite of repression such as evictions by soldiers and jailings. However, pressure by UCCANG (supported by CEDESA) was finally successful

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Part VI Food in getting legal land tenancy and water rights in various rural communities, including the contested community of La Colorada, which was founded and defended by activists of La California.

Phase Three: The Integration of an Alternative Economy 1992 to the Present In the third phase of CEDESA’s organizing, the regional food sovereignty movement in the state of Guanajuato has had to deal with more of the institutionalized effects of neo-liberal policies in Mexico. These include the amendment of the Mexican Constitution’s Article 27 which, subsequent to the Mexican Revolution at the beginning of the century and the land reform of the 1930s, had guaranteed the right to communal ejido lands. Rescinding Article 27 allowed the privatization and sale of these lands, which has increased agri-business takeovers of ejido land, given the economic disadvantages that small farmers have faced. This privatization process has been exacerbated by the passage of NAFTA that favors importation of subsidized cheap products from the US and puts Mexican products, particularly corn, at a disadvantage. The resultant increased poverty in the countryside has forced the emigration of many rural men to seek low-paid farmwork jobs in the US. Thus Mexican immigrants, mostly men, are working for US agribusiness, leaving women and children to fend for themselves at home in Mexico.. In the 1990s, CEDESA has redoubled its efforts to help campesinos to create self-sustaining family economies. This has included promoting backyard gardens and production using recycled water, and organic fertilizer and pest control. They have also revived ongoing beekeeping projects by aiding farmers to buy land for the apiaries and giving technical training. UCCANG and CEDESA created a Conservation Commission for recycling and soil and water conservation, and have introduced new eco-technologies in the communities, including rainwater-harvesting cistern systems, dry toilets and efficient wood stoves and ovens. They are investigating the problem of contamination of the aquifer with fluoride and arsenic, due to agribusiness practices, as well as distillation systems to purify the water. CEDESA has also helped to found the Mexican Network of Community Commerce (REMECC) which has initiated a system of alternative community markets. The practice of barter used in these markets have in many cases yielded more in consumption goods to women-headed households than the remittance dollars sent by their migrant husbands in the US (Rivera P´erez et al

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19. CEDESA, Women, and Food Sovereignty 2008, p. 16).

Conclusion A look at the history of CEDESA gives us a case study of an organization involved in a successful campaign of more than 40 years to create a sustainable alternative economy to capitalist development, one that stresses democratic participation in decisions involving local development and an ecologically conscientious use of natural resources, including land and water. It is just one of many local organizing projects which sustains current anti-corporate globalization struggles and the growing networks of the global solidarity economy. CEDESA is a model example of an alternative project that explicitly values mutual assistance, collective work and the common good over corporate profits. It also has highlighted the importance of incorporating women as activists around issues of food and water rights as they impact on family health and sustainability. Their work helping women to develop as activists shows that empowering women can empower the whole community, not in the liberal individualist sense promoted by the World Bank, of teaching women to be better entrepreneurs (cf. Ferguson 2009), but by engaging them as leaders in their communities’ struggles for the rights to food, health and livelihoods that they democratically control.

About the Author Ann Ferguson is Professor Emerita of Philosophy and Women’s Studies UMass Amherst and feminist activist.

References Ferguson, Ann, 2009. “Empowerment, Development and Women’s Liberation”, Anna G. Jon´ asd´ ottir and Kathleen B. Jones, eds. Political Interests of Gender: Redoing theory and politics with a feminist face. Manchester UK: Manchester University Press. Rivera P´ erez, Luz Mar´ıa, Teresa Mart´ınez Delgado and Graciela Mart´ınez Delgado, 2008. CEDESA: The social struggle against poverty in northern Guanajuato. Trans. Holly Yasui. Guanajuato, Mexico: CEDESA (Centro de Desarrollo Agropecuario A.C.). The Via Campesina Movement, cf. www.viacampesina.org and Via Campesina in www.Wikepedia.org.

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20. From Food Security to Food Sovereignty: Why Vermonters Need Food Sovereignty Richard and Angela Berkfield The local food movement is strong in Vermont with a recent surge of farmers’ markets, CSAs, food hubs and centers, localvores and more, but the question remains: Is that enough to build the environmentally sustainable and socially just food system that many of us envision? We hope our focus on the situation in Vermont will be instructive and inspiring to readers in other states and beyond the U.S. entirely. More than 10 percent of our fellow Vermonters go hungry due to lack of resources while family farms are struggling to survive. Most small farmers must have off-farm income to avoid bankruptcy, a need that’s increasingly difficult to meet as rural economies have been hit hard in this current economic depression. Fortunately, Vermonters are resilient and work to create their own solutions. Some examples include the work of Rural Vermont developing the local food system by protecting farmers, as well as NOFA–VT’s (Northeast Organic Farming Association–Vermont) efforts to promote food security by increasing access to local food for all Vermonters through the federal food stamp program. While these are all valuable alternatives, there still remains a powerful threat to these efforts: the increasing power of transnational corporations (TNCs) and international capital. The influence they yield over the food system endangers producers, consumers, and the environment as they promote genetically modified organisms (GMOs) and aggressive “green revolution technologies.” Such a powerful and determined enemy warrants a large social movement to stop it. The growing social movements throughout the world, and particularly in Latin America, have successfully laid the groundwork for a similar movement here in the United States. Food sovereignty is a guiding principle that has the potential to bring people together across different political views and socio-economic classes. Local, democratic control of food is the basis of the movement. Without a strong movement here in the U.S., the heart of

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20. From Food Security to Food Sovereignty the destructive global food system, little can be done for food sovereignty. Despite valiant efforts to build local food systems, or to solve the hunger crisis, the possibilities for our accomplishments are severely limited without a strong and well-organized movement against what La Via Campesina1 (The International Peasants’ Movement) sees as the common enemy: TNCs and international capital.

The Food Sovereignty Movement Although food sovereignty is a new term the concept is old. Sovereignty, defined as “governance free from external sources of control,” is not a new idea. Patriotic New Englanders (among others) may remember democratic and local control over resources as a major reason for the Revolutionary War, and more recently the Second Vermont Republic movement has similar aims as it agitates for secession from the U.S. and the establishment of an independent Vermont Republic.2 A look at the current global food system clearly illustrates a lack of sovereignty. “Food for Thought and Action: A Food Sovereignty Curriculum,” developed by Grassroots International, lists some of the ways in which local control of food system is threatened: • concentration of agribusiness • corporate influence of food policy • free trade agreements trumping national and local laws • communities whose own, local legislation is trumped by Federal law and regulation • consumers not knowing what’s in their food Record agribusiness profits amidst a global food crisis make this point painfully obvious, and make it clear that drastic change is needed. For some Vermonters this is new information, yet for others around the world, the need for food sovereignty has been abundantly clear for decades if not centuries, beginning in the colonial era. In 1996, La Via Campesina, representing peasants, small- and mediumsized producers, rural women, indigenous people, rural youth and landless agricultural workers, developed this definition to illustrate the change needed: 1 2

For more on La Via Campesina, visit http://viacampesina.org/en/. For more on the SVR, visit http://vermontrepublic.org/.

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Part VI Food Food sovereignty is the right of peoples to define their own food and agriculture; to protect and regulate domestic agricultural production and trade in order to achieve sustainable development objectives; to determine the extent to which they want to be self reliant; to restrict the dumping of products in their markets; and to provide local fisheries-based communities the priority in managing the use of and the rights to aquatic resources. Food sovereignty does not negate trade, but rather, it promotes the formulation of trade policies and practices that serve the rights of peoples to safe, healthy and ecologically sustainable production. (Statement on Peoples’ Food Sovereignty, 1996, by Via Campesina, et al.) La Via Campesina is an autonomous, pluralist and multicultural movement, independent of any political, economic, or other type of affiliation, with members from 69 countries in Asia, Africa, Europe, and the Americas. The First Conference of La Via Campesina was held in May 1993 and the fourth in 2004 in Sao Paolo, Brazil. The principal objective of La Via Campesina is to develop solidarity and unity among small farmer organizations in order to promote gender parity and social justice in fair economic relations; the preservation of land, water, seeds and other natural resources; food sovereignty; and sustainable agricultural production based on small and medium-sized producers. The Secretariat for North America is the National Family Farm Coalition (NFFC).3 The NFFC works to unite and strengthen the voices and actions of its diverse grassroots members to demand viable livelihoods for family farmers, safe and healthy food for everyone, and economically and environmentally sound rural communities. They envision empowered communities everywhere working together democratically to advance a food and agriculture system that ensures health, justice, and dignity for all. Rural Vermont is a member of the NFFC.

Six Principles of Food Sovereignty In 2007, more than 600 delegates from five continents met at the World Forum for Food Sovereignty in Mali to develop the Principles of Food Sovereignty, a policy framework that calls for: Food for People, Valuing Food Providers, Localizing Food Systems, Making Decisions Locally, Building Knowledge and Skills, and Working with Nature. While this is the broad 3

For more on the NFFC, visit http://www.nffc.net.

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20. From Food Security to Food Sovereignty framework, La Via Campesina member organizations develop their own specific policy platforms that relate to their specific contexts, meaning that the NFFC in the U.S. has a different platform from that of the Landless Workers Movement in Brazil, or that of Campesino a Campesino, which is active throughout Central America. Some examples of policies advocated by La Via Campesina include: fair prices to farmers; enforcement of anti-trust laws; tying environmental programs to levels of production; strong community food programs; increased public funding for sustainable and organic agriculture research, technical assistance and credit; and mandatory country-of-origin labeling. In general Vermonters are not strangers to these principles, yet we need to challenge ourselves to look deeply to see where more work needs to be developed. For example, many of us are concerned about Fair Trade practices for some of the goods we consume from abroad such as coffee, tea and chocolate, yet seldom do we apply these same principles to the apples, veggies or dairy products we purchase from local farms. Where is the Domestic Fair Trade movement? A strong Food Sovereignty Movement in Vermont will help us address some of the issues raised by the larger global movement led by La Via Campesina.

Applying the Six Pillars to Vermont By exploring each of the six pillars, we can develop our analysis of how to build the Food Sovereignty movement here in Vermont. 1. Food for People Food sovereignty stresses the right to sufficient, healthy and culturally appropriate food for all individuals, peoples and communities, including those who are hungry or living under occupation, in conflict zones and marginalized. Food sovereignty rejects the proposition that food is just another commodity for international agribusiness.4 Vermonters should look squarely at this principle and do something about the fact that more than 10 percent of our state’s population is hungry. Though many of us may believe that healthy food is a human right, it is not always easy to put that belief into practice. A deeper discussion of human rights in general and for food in particular will allow us to join with La Via Campesina in the rejection of food as a 4 This

quote and the others that begin each of the six pillars sections are from the “Synthesis Report” of Ny´ el´ eni 2007 - Forum for Food Sovereignty. http://www.nyeleni. org/spip.php?article334.

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Part VI Food commodity and towards a world where food is a human right that is fulfilled! One example of how the movement can do this is to challenge the standard anti-hunger approach, which keeps folks alive by providing emergency food, and essentially preventing a rebellion against a system that oppresses them. The charity model, led by the rich, funnels private and public money into a corporate-led industrial food system that perpetuates systematic oppression, materialized as poverty and hunger. We need to transform this into a people-led approach that views food as a human right and takes action to make that a reality. While addressing food as a human right, we must not overlook where this food comes from and by whom it is produced. 2. Valuing Food Providers Food sovereignty values and supports the contributions, and respects the rights, of women and men, peasants and small scale family farmers, pastoralists, artisanal fishers, forest dwellers, indigenous peoples and agricultural and fisheries workers, including migrants, who cultivate, grow, harvest and process food; and rejects those policies, actions and programs that undervalue them, threaten their livelihoods and eliminate them. A more international approach can be taken by Vermonters in support of food sovereignty, not just for our own sakes, but also for others around the world, especially the most marginalized. We must not only think of our farmers, but also the many food providers around the world, especially those that are involved in the products we consume. For example, the deforestation of rainforest in soy production not only harms the local farmers and communities, but it also adds to the climate problems that effect people all over the world. At the same time we need to address key issues here in Vermont. We must be anti-racist and anti-sexist, and look closely at immigration policy and the connection between migration and trade policy, as well as livable wages and corporate food subsidies. We must support a domestic fair trade movement that supports local farmers, as well as farm workers. Consolidation of our domestic farms has resulted in fewer farmers and more farm workers, most of whom are immigrants and many without proper documentation. These undocumented workers are targets not only of unfair labor practices that, in some cases, have amounted to modern day slavery, but also of legal raids and racist attacks. Equally tragic are the living conditions which

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20. From Food Security to Food Sovereignty drive these farm workers away from their homes, and the disruption to their families they have had to leave behind in throughout Mexico and Central America. We need to consider whether our apple pickers, dairy workers, and other farm workers are earning fair wages, and if not we need to work to achieve this, while also considering the impact of our consumption and policy on their families back home. If economic conditions were better throughout the world, we wouldn’t have desperate, easily exploited farm workers. Valuing food providers in Vermont also means increasing government support for local farmers. The state of Vermont needs to step in to save farms from destructive USDA policies by supporting the rebuilding of local food systems. The state must look at the results of the current Farm to Plate Initiative5 and follow the recommendations brought forth to build jobs through the farm and food sector in Vermont. For example, policies must facilitate farmers selling meat and dairy to their neighbors. 3. Localizing Food Systems Food sovereignty brings food providers and consumers together in common cause; puts providers and consumers at the center of decision making on food issues; protects food providers from the dumping of food and food aid in local markets; protects consumers from poor quality and unhealthy food, inappropriate food aid and food tainted with genetically modified organisms; and resists governance structures, agreements and practices that depend on and promote unsustainable and inequitable international trade and give power to remote and unaccountable corporations. Vermonters have been hard at work to relocalize food systems throughout the state. In focusing on the local system, we can easily overlook how the global system still penetrates into every area of the world. Less than five percent of food consumed in Vermont comes from Vermont, so we need to look at where this food comes from, and at what expense to the localities out of which it is coming. A food sovereignty approach looks at how localities around the world need a local food system, and proposes ways in which we can support the work of others. By seeing the big picture, and our common enemy, we all have a better chance to wrestle local food systems from the global system. Clearly, “free trade” in the global food system must be stopped, and 5

See http://www.vsjf.org/project-details/5/farm-to-plate-initiative.

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Part VI Food we must all realize how we can participate in promoting fair practices, as described by food sovereignty principles. A starting point is to break down the commodity-focused USDA that promotes industrial agriculture and the culture of cheap food. We need to have more influence on the annual Farm Bill to funnel money away from big business, especially the biotech industry, and towards traditional local food systems at regional levels. In addition, the challenge is to bring prices to farmers up, while also supporting livable wages so that everybody can afford local and healthy food. One way to localize the food system for everybody is to use food as a source for celebration and as a tool for community building, empowerment, and revolutionary change. Cooking together from scratch and with local food within the family, neighborhood, and community breaks down the reliance we currently have on corporations to prepare our meals for us. Farm dinners and potlucks, as well as celebrations at farmers’ markets and in neighborhoods can redefine the value of cooking, food, and community. At the heart of localizing the food system is community involvement and decision making. 4. Making Decisions Locally Food sovereignty seeks control over and access to territory, land, grazing, water, seeds, livestock and fish populations for local food providers. These resources ought to be used and shared in socially and environmentally sustainable ways which conserve diversity. Food sovereignty recognizes that local territories often cross geopolitical borders and advances the right of local communities to inhabit and use their territories; it promotes positive interaction between food providers in different regions and territories and from different sectors to resolve internal conflicts or conflicts with local and national authorities; and rejects the privatization of natural resources through laws, commercial contracts and intellectual property rights regimes. The rich tradition of Town Hall meetings throughout Vermont can be built upon with a specific focus of food sovereignty. Food Policy Councils are the best way to ensure local control over food, yet there are still barriers to the success of this approach. The preemptive policies that prevent local control need to be removed. These include national laws as well as international free trade agreements. For example, Vermonters want to grow hemp, and our state legislature has voted to allow it; that should be sufficient to make it legal.

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20. From Food Security to Food Sovereignty Again, while working locally, we need to recognize how we are tied to other localities struggling for the same control over their food. All of our voices and work from many localities are needed to change the centralized and global food system fueled by government subsidies, international capital, environmental and social exploitation. Local control over decisions allows local people to practice the agricultural traditions that are the most environmentally sustainable and socially just. 5. Building Knowledge and Skills Food sovereignty builds on the skills and local knowledge of food providers and their local organizations that conserve, develop and manage localized food production and harvesting systems, developing appropriate research systems to support this and passing on this wisdom to future generations. Food sovereignty rejects technologies that undermine, threaten or contaminate these, e.g. genetic engineering. There remain pre-industrial food producers in Vermont. Their knowledge is disappearing, but a recent resurgence in interest is helping to preserve and renew traditional methods and understanding. A food sovereignty movement would work to maintain and disseminate this invaluable knowledge. For example, workshops are needed to teach about traditional hand tools that were designed for efficient work. In addition, the resurgence of diversified farms complete with animals preserves this knowledge and builds on necessary skills. Schools like Sterling College and Green Mountain College are actively working to build the knowledge and skills of young farmers. A major challenge is to create the opportunity for young farmers to access land and further develop their skills as future farmers through incubator farms and other innovative land access programs. We need to support young farmers in a transition towards or back to more agroecological practices that work with nature instead of against it. 6. Working with Nature Food sovereignty uses the contributions of nature in diverse, low external input agroecological production and harvesting methods that maximize the contribution of ecosystems and improve resilience and adaptation, especially in the face of climate change. Food sovereignty seeks to heal the planet so that the planet may heal us; and, rejects

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Part VI Food methods that harm beneficial ecosystem functions, that depend on energy intensive monocultures and livestock factories, destructive fishing practices and other industrialized production methods, which damage the environment and contribute to global warming. While much of the organic sustainable agriculture movement recognizes the value of working with nature, many farms and gardeners still rely on off-site fertility sources. The increasing use of cover crops, compost, and more integrated farms with animals shows how many Vermonters are reducing the need for external inputs. This also focuses on the regeneration of nature using agroecological practices. One issue to push among landowners from out of state is that Vermont is a working landscape for food and should be agroecologically sound. Therefore, agroecological farming practices need to be prioritized over the wishes of landowners who want a “pristine environment” here in Vermont, but overlook the environmental destruction that their eating habits produce elsewhere. A small meat processing plant serving local farmers, or a municipal compost program, should not be discouraged because out of state landowners think it messes up their vacation home aesthetics.

Next Steps for Food Sovereignty in Vermont One of the first steps to take is to find out if Vermont farmers and consumers see the same common enemies to food sovereignty as are identified by La Via Campesina. If not, we need to work to encourage this understanding by using the food sovereignty lens. By using the six principles outlined above, we can find examples of the challenges ahead and work together to find solutions.

About the Authors Richard and Angela Berkfield are community organizers in Southern Vermont. They live with their son Birch on a small farm cooperatively with two other families.

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Part VII.

Research

21. Extending the Bottom Line: What Worker Co-ops In Argentina can Teach us About Sustainability Annie McShiras Five years ago, Sara1 arrived at La Alameda, a neighborhood community center and workers’ cooperative, looking for a warm meal after spending a week living on the streets in the poor barrio of Villa Avellaneda, Buenos Aires, Argentina. The previous week she had made the bold decision to escape her workplace and home—a textile sweatshop hidden in an apartment in the neighborhood. There, she had sewn tee-shirts for three months straight, and earned the equivalent of $7 USD for her entire time there, from 7 am to 2 am, with a 10 minute break for lunch. When she arrived at La Alameda to eat a meal, she soon became acquainted with the community, and after a few months she started molding and painting ceramic mugs and bowls with seven other women within one of the five micro-enterprises that make up the cooperative. Profits are divided up evenly between all the members of the ceramics enterprise at their weekly meeting, during which time the eight women discuss the budget and vote in consensus over important decisions. Today Sara lives in a small apartment near the cooperative with her husband and son, but comments that “everyone at La Alameda is also my family.”2 La Alameda is but one example of the many initiatives for cooperative, dignified, and democratic workplaces in Argentina and worldwide. Its study warrants attention because of its timeliness in the context of the 2008 US economic crisis—and the fact that in 2001, Argentina experienced a crisis similar in scale. Out of that crisis came an upsurge in new economic activity, including a growth of cooperatives. Yet, the cooperative project is one of a 1 Name 2

changed for confidentiality Sara. Personal Interview. 15 June 2007.

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21. Extending the Bottom Line very few of those new economic projects in Argentina that has endured to today—others have dissipated since the country regained financial stability. So what has made those cooperatives successful? What can we learn from Argentina here in the US? The answer to these questions is the focus of this essay.

New Economies in the US In the US, in the wake of one of the worst financial crises in recent US history, people are getting creative. People—you, me, everyday people—are building alternative economies from the bottom-up. What are these alternative economies? They are cooperatives, family-run businesses, timebanks, and neighborhood barter networks. They are savings clubs, credit unions, complementary currencies and Community Supported Agriculture (CSA) projects. They are diverse; from grannies crocheting sweaters in a smalltown coop; to cooperatively owned and run grassroots organizations; to REI, the nation’s largest consumer cooperative, with 2.8 million members.3 They are here and now. They are transforming our economy. American cooperative businesses are gaining momentum in their own right. More and more, upstart entrepreneurs are creating jobs in cooperatives. Nearly 30,000 US cooperatives are in business today; owning over $3 trillion in assets, generating $654 billion in revenue, and $75 billion in wages and benefits paid. They have created over 2 million jobs.4 These 30,000 cooperatives include approximately 500 worker co-ops, 1500 producer co-ops, 725 purchasing co-ops, and 27,000 consumer co-ops.5 It seems that an incredible opportunity has been created out of this financial downturn. While many of these alternatives have been around for awhile, this important moment of real economic transformation has not. People are hungry for a change in the economy. The moment is ripe. Will momentum be this strong for alternatives once the economy has stabilized? Ultimately, how sustainable is this new economy? History has taught us to look to the past for answers. Eight years ago and over 5,000 miles away, in Argentina, people were getting creative in the face of economic downturn.

3 4 5

University of Wisconsin Center for Cooperatives. “Research on the Economic Impact of Cooperatives”. March 2009. http://www.ncba.coop/pdf/ReportFULL.pdf University of Wisconsin Center for Cooperatives. “Research on the Economic Impact of Cooperatives”. March 2009. http://www.ncba.coop/pdf/ReportFULL.pdf ibid.

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Drawing the parallel: Argentina in December 2001 In December of 2001, Buenos Aires looked and felt much like New York in September of 2008. Uncertainty, anxiety, and dread hung heavy in the air that month. On December 1st , 2001, as the country was nearing total financial collapse, Economy Minister Domingo Cavallo announced state intervention over private bank accounts, limiting cash withdrawals to 250 pesos/dollars6 a week.7 This announcement prompted the beginnings of “cacerolazos”, or public protests marked by banging pots and pans in the street. The straw was finally broken on December 19 and 20, 2001, when the Argentine peso devalued nearly 80% overnight8 , representing the most devastating financial crisis in Argentine history. Banks closed, businesses closed, and by the new year the city of Buenos Aires hit an all-time unemployment high of 22%.9 2001-2002 is also the period of time in Argentina in which a significant number of cooperatives, neighborhood assemblies, and bartering clubs took form; including even a local currency called the “nodo” to stand in for the crumbling peso. At its height, there were 6,000 barter clubs in the country, and about six million Argentinians used barter as part of their survival strategies, with an annual circulation of the “nodo” credits estimated at over US $1 billion.10 The recovered factories movement took off during this time as well—a movement spurred by debt default and abandonment of hundreds of industrial factories at the peak of the economic crash. Factory workers’ sheer determination and volition to gain back their employment resulted in the re-taking of 200 factories and the securing of 10,000 jobs between 20012009.11 Astoundingly, 71% of Argentine recovered factories distribute income in an egalitarian manner, when traditional distribution could result 6 7 8 9

10 11

From 1991 to 2001 the peso had equal value as the dollar after President Menem’s “Law of Convertibility”, which pegged every US dollar to the Argentine peso. Levy, Marcela L´ opez. We are Millions: Neo-liberalism and New Forms of Political Action in Argentina. Latin American Bureau, London: 2004, 11. Levy, 13. Instituto Internacional de Estad´ıstica y Censos (INDEC), Argentina. “Evoluci´ on de la tasa de desocupaci´ on por aglomerado. 2001 en adelante.” 21 April 2008. http: //www.indec.mecon.ar/ Levy, 102. Klein, Naomi and Avi Lewis. “Forward”. Sin Patr´ on: Stories from Argentina’s Worker-Run Factories. Haymarket Books, Chicago: 2007, 8; Trigona, Marie. “Update on occupied factories in Argentina: Factory in the Hands of Workers”. 14 Aug. 2009. http://geo.coop/node/380.

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21. Extending the Bottom Line in higher profit.12 Most of us don’t equate job creation with egalitarianism. Why would the owners of a recovered factory choose to distribute income in an egalitarian manner? The answer lies somewhere in the steady development of cooperative businesses past the peak of the financial crisis, with 11,117 cooperatives now in production in Argentina.13 Something about the cooperative model sustained these Argentine co-ops past their post-crisis popularity.

Bringing Humanity into the Workforce: The Importance of Social Incentives The inherent quality of the cooperative model itself speaks volumes to its longevity. It is sustainable because it is not limited to the single bottom line of short-term growth—rather, the model prioritizes the multiple bottom lines of collective management and decision-making; member and community welfare; education, and equality. In essence, a cooperative is the only truly democratic business model. Melissa Hoover, Executive Director of the US Federation of Worker Cooperatives, defines the co-op simply: “At the most basic level, worker cooperatives boil down to two things: the workers own it, and the workers control it.”14 This means that firstly, all workers have a stake in ownership of the enterprise. This ownership can take a variety of forms, but often it means that profits are distributed evenly between all who work there, depending on the hours worked. Secondly, the workers control the co-op. All workers are equal members and have an equal say in the management of the business. The cooperative is self-managed, and decisions are often made in consensus. The cooperative could not exist if not for the will of its loyal memberworkers. But why would a person choose this work when s/he could follow the conventional route? 12

13

14

Zibechi, Ra´ ul. “Worker-Run Factories: From Survival to Economic Solidarity.” Dispatches from Latin America: On the Frontlines Against Neoliberalism, South End Press, Cambridge, USA: 2006. Pp 340-349. Fontenla, Eduardo H. “Cooperativas que Recuperan Empresas y F´ abricas en Crisis”. Equipo Federal del Trabajo. Ed. 34 (2007).10 Nov 2007. http: //www.newsmatic.epol.com.ar/index.php?pub_id=99\&sid=1101\&aid=28621\ &eid=34\&NombreSeccion=Cooperativismo\&Accion=VerArticulo Hoover, Melissa. “Another Workplace is Possible: Co-ops and Workplace Democracy”. Solidarity Economy: Building Alternatives for People and Planet. ChangeMaker Publications, Chicago: 2008.

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Part VII Research The reason is not quantifiable in terms of money, but rather encompasses innumerable and un-quantifiable social benefits. These benefits include personal empowerment, a sense of shared purpose, control, community, friendship, happiness, and passion, among many other motivations. For the people dedicating their lives to building cooperatives and transforming the economy, the social benefits of collective work greatly outweigh any material benefits they could find working any other job. Believe it or not, material gain is simply not the most compelling reason these people are working. Many suggest that it is empowerment through control that is the overriding incentive for cooperative members: The main reason people come to work in an alternative organization is because it offers them substantial control over their work. Collective control means members can structure both the product of their work and the work process itself. Hence, the work is purposeful to them.15 These social incentives drive members of a small co-op in Argentina—La Alameda—to choose cooperative work.

The Co-op Model Examined: A Buenos Aires Case Study Two and a half years ago, I visited the worker-cooperative La Alameda, tucked in the poor barrio of Villa Avellaneda, Buenos Aires, Argentina. La Alameda is a collective workplace comprised of six separate microenterprises, each producing in a cooperative manner. These enterprises include a bakery, a photocopy center, a clothing store, a ceramics store, a barbeque, and a wood-shop. They were founded in order to offer their workers, many of whom are Bolivian immigrants, an alternative work environment—specifically an alternative to sweatshop labor, which had long plagued this neighborhood but became a particularly vicious and public problem in 2005. Neighbors in Villa Avellaneda had already taken over an abandoned bar to run a soup kitchen, so they decided collectively to start offering new jobs—“dignified jobs” as opposed to sweatshop jobs—through these six micro-enterprises. Their rationale for forming cooperatives as opposed to traditional businesses really was tied to their circumstances: they 15

Rothschild, Joyce and Allen Whitt. The Cooperative Workplace. Cambridge University Press, New York: 1986, 15.

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21. Extending the Bottom Line sought to literally convert slave-wage jobs into cooperative jobs. Additionally, offering these jobs helped solve massive unemployment in the neighborhood; all in all these enterprises together created nearly 50 jobs. But, as I came to realize in my six months interning at La Alameda, it was so much more than just a job. What sustains La Alameda is the commitment of its members to creating a new economy—an economy of respect, of worker ownership, of control. The cooperative has survived because of the will of its members, who have come to recognize the social and community benefits—or “social rewards”– of cooperative production. Much to my disbelief, at La Alameda these social and community benefits were more important to members than the paycheck they took home at the end of the day. In fact, the incredible history of La Alameda speaks volumes to its members’ dedication. Before La Alameda became the worker cooperative that it is today, it was a neighborhood assembly. The “assembly” functioned as a local governing council that formed spontaneously in the barrio after the December 19-20 economic and political crash. Members of La Alameda started meeting on a regular basis in a local park to discuss strategies on how to deal with rising unemployment, homelessness, and hunger in their community. By June 2002 the group of neighbors decided to start a soup kitchen to provide meals for hungry community members. They had no place to serve the food, so they decided to “squat” in an otherwise abandoned and unoccupied bar.16 Community members, activists, individuals, the homeless and the employed came together in an amazing organizational feat to take over this bar. On the day of “the takeover,” about a dozen people tenaciously remained inside the bar despite the police’s failed attempts at eviction, including antics like the hosing down of those inside with a fire extinguisher. Those inside stayed put with the help of approximately 100 others from forty nearby assemblies and organizations.17 In the following three months, members took turns sleeping and living in the bar in order to prevent the possibility of an eviction.18 One member reflected that without such a tight-knit community of mutual support, the takeover would never have been possible: “With the process of the takeover, when there were entire families living here inside [. . . ] It was because of the solidarity that everyone had in that moment that we were able to recover 16 17 18

Informal Conversation with Paula, June 8, 2007, la Alameda. Informal Conversation with Paula, June 8, 2007, la Alameda. Fern´ andez, Ana Mar´ıa. Pol´ıtica y Subjetividad: Asambleas Barriales y F´ abricas Recuperadas. Colecci´ on Pensar en Movimiento, Buenos Aires: 2005, 141.

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Part VII Research this place from the police.”19 Takeovers like this were common within the Recovered Factories movement. In the period following the 2001 crash, legal precedence was created to establish a formal process for expropriation of abandoned property. If the “squatters” can prove that the abandoned property can serve a public good, they may be granted legal ownership. After five years of negotiation, in February of 2007 members of La Alameda were granted legal expropriation of the bar. After establishing the soup kitchen in 2002, members of La Alameda decided to form the six micro-enterprises that today make up the cooperative. The bakery is the oldest of the enterprises, when in March of 2003 La Alameda was granted start-up capital from the city of Buenos Aires. The other five businesses followed suit when in 2004 a similar grant was given by the Federal government as part of a national Economic Development Plan, “Manos a la Obra”. From this phenomenal history we find the worker-cooperative La Alameda creating dignified jobs for community members.

What Sustains La Alameda: Social Incentives Now we return to the question of incentives: why do residents of Villa Avellaneda choose cooperative work? Much of it has to do with their histories of working in sweatshops. After working 18- hour days, fearing their boss, and making less than $10 a week, they are spent. Many suffered from malnutrition, and were entangled in an endless cycle of debt with their boss. In some extreme cases, workers and their children even suffered physical abuse. These workers, the majority of them Bolivian Aymar´a immigrants, have been demoralized and exploited. They want nothing more than their dignity back—which is exactly what they can gain from cooperative work. With values of workplace democracy, equality, self-management, control, comprehensive education, and community, the cooperative is at the opposite extreme from sweatshop labor. These social, community-oriented, and empowering incentives for individual members are all the reason to choose cooperative work. Many current members of the Cooperative La Alameda stumbled upon the soup kitchen while living on the street, digging for food from dumpsters after escaping the sweatshop. Every single member of the Cooperative who had 19

“Con el proceso de desalojo, cuando hab´ıa familias enteras viviendo ac´ a adentro [. . . ] Fue por la solidaridad que la gente tuvo en ese momento, que recuper´ o este lugar de la polic´ıa.” Mateo, Personal Interview. 08 June 2007.

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21. Extending the Bottom Line come from working in a sweatshop emphasized the importance of his/her new-found social benefits and of the way s/he was treated with respect at La Alameda. These social benefits include the flexibility in one’s hours and access to the soup kitchen, but more importantly the fulfillment of those basic human rights that members were denied in the sweatshops. Mar´ıa, herself Aymar´ a and trafficked across the Bolivian border, elegantly articulated how empowered she feels at La Alameda: “I have learned so much—mostly, that I have rights. Now, I have the right to speak. I love talking with people here, and in addition, I love listening to the stories of my friends. It’s more than a job here—because, on a human level, you grow all the time.”20 Mar´ıa, and others like her in the co-op, work because of the importance of community, self-empowerment, and personal growth. These social incentives are highly valued in the cooperative workplace— valued as much or more than the usual material incentives of conventional wage-labor. In each enterprise at the Cooperative La Alameda, there are no employers, no bosses, and no managers. All enterprises have what is called a responsable: a person who is in charge of the finances. But the responsable also works, equally as the other member-workers do, in the collective. Each month, the members of each enterprise meet to discuss and distribute the month’s profit. That profit is dispersed between everyone, equally allocated depending on the number of hours each member has worked. Therefore, those who have worked the most number of hours receive the most pay—regardless of their specific position or title in the cooperative. This practice of equality is very important for members of La Alameda, many of whom have experienced inequality regularly given their immigrant/minority status and their history of exploitation in sweatshop labor. In sharp contrast with the traditional capitalist business, all of the enterprises are self-managed. This affords workers at La Alameda an added level of freedom: the flexibility to decide how, when, and how much to work. For example, a few members of the clothing store have worked out a system to take turns watching each other’s children: when one is working, the other is watching the kids, thus freeing them from paying for child care.21 All members of La Alameda receive training on administration and management in order to more effectively run their cooperative enterprises. Prioritizing comprehensive education is a core cooperative tenet; minimizing the possibility of managerial corruption or abuse. Think about it: when everyone learns 20

21

“Aprend´ı muchas cosas—que yo tengo derechos. Ahora, tengo derecho de hablar. Me gusta hablar con la gente. Me gusta conversar, y adem´ as, me gusta escuchar a los cuentos de mis compa˜ neros. Es m´ as que un trabajo- porque, humanamente, creces todo el tiempo.” Mar´ıa, personal interview. 08 June 2007. Dora. Personal Interview. 01 June 2007.

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Part VII Research how the finances are managed or how to facilitate a meeting, each member can hold the others accountable and no one can be taken advantage of. Finally, La Alameda is for many of its members a close-knit, even familial community. The family is important not only on a social level but is also deeply cultural; for the Bolivian Aymar´ a, family is everything. Many members of La Alameda have not seen their Bolivian families for many years and may even owe their very survival to the collective support of La Alameda. When I asked members of the Cooperative why they had stayed with La Alameda for so long when they could have found better paying jobs, most answered: because it’s a part of my life, because La Alameda is my family, because the Cooperative is my community. One member of the ceramics store especially moved me with her response: Frankly, I don’t have a family, I don’t know my family. . . but here [La Alameda] is my family. I have become accustomed to them as my family. [. . . ] For this reason, I cannot leave them [. . . ] I have to support them in their struggle, to the end.22 The attachment Sara feels to her workplace is not uncommon amongst La Alameda cooperative members—her conviction to stand by La Alameda through thick and thin demonstrates the importance of community as an overriding social incentive to keep working at the Cooperative. What’s more, La Alameda has created for Sara not only financial security, but also the kind of security only a family can provide: community, comraderie, a social network, and stability. The power of a case study like La Alameda cannot be overlooked. With scarce resources and a rough start in a rougher neighborhood, it is a wonder the cooperative has survived. If the story of La Alameda teaches us anything, it is that the success of a workplace has everything to do with the commitment of the people who work there. The social solidarity within La Alameda is what has carried it—that passion and commitment made what may have seemed unfeasible entirely possible. La Alameda has been able to carry itself with nothing more than the faith of its members.

22

“Francamente, no tengo familia, no conozco a mi familia. . . y ac´ a hay mi familia. Me acostumbr´ e como mi familia. Todos en la Alameda son mi familia. Por eso, no puedo dejar. [. . . ] Tengo que apoyarles en la lucha, al u ´ltimo. No puedo dejar a ellos.” Sara. Personal Interview. 15 June 2007.

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Combating the Critics: Sustaining the “Unsustainable” I’ve used La Alameda as the case study in this essay because it provides a powerful message that the longevity of a business need not be measured based on profit margins alone. It shows that social, cultural, and political factors must also be taken into account to more realistically assess the sustainability of an enterprise. It proves that the hard-and-fast economics of a business cannot be looked at in isolation from other factors that contribute to the sustainability of an enterprise. [still, even if there are other reward to working for a cooperative, radical and mainstream economists would both emphasize that a cooperative must be economically viable. Coops should not be satisfied with paying poverty wages, or less, bc there are other benefits. This might do in the short term, but in the long run, it will probably fail. Our challenge is how to help build viable, sound coops. Still, nay-sayers among us will reject alternatives as unsustainable, inefficient, and counter-productive. Cooperative business models emphasizing the equal distribution of profit, the democratic running of meetings, and the practice of workers-as- owners strays from the traditional emphasis on profit maximization. Many economists take issue with cooperatives’ practice of self-management. Their argument is based on: the theoretical belief that self-management leads to inefficiency and the ineffective control of production. Basically, since workers are the ultimate decision-makers, a cooperative will lack the discipline and the competitive drive necessary to ‘exploit’ their own labor. These theoreticians argue against the viability of worker cooperatives because they believe it will promote shirking, reduce management power, waste resources, and thus decrease productivity.23 Classical economists here equate productivity with the division of labor and effective management control. This generally implies a high degree of separation between positions and between wages. In the conventional model, productivity is highest when workers can be controlled and disciplined, with low wages maintained to motivate workers to compete so they can move up the ladder. In the cooperative model, productivity is maintained through collaboration instead of competition. Unconventional economists and theoreticians 23

Luhman, John Teta. ”Three Questions from the USFWC Conference”. Grassroots Economic Organizing, Riverdale, USA, 2007. http://www.geo.coop.

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Part VII Research argue just the opposite as those classical economists: that cooperatives are actually more efficient due to workers’ greater incentives to innovate and cooperate, thereby increasing employee morale, increasing work performance, and decreasing shirking. They argue that self-management lowers costs because supervisory and administrative overhead is minimal. These scholars and economists include D.C. Jones (1986), John Luhman (2007), Sam Bowles, Ben Craig & John Pencavel (1995), Betsy Bowman & Bob Stone (1994), amongst many others. The Mondrag´ on Cooperative Corporation (MCC) in Spain serves as a fantastic example to prove this point: that productivity can actually be maximized alongside self-management, low pay differentials, and low turnover. Mondrag´ on is a collective of 260 cooperatives with over 100,000 workers; considered today the largest and most successful cooperative in the world.24 Between 1970 and 1987, real sales increased by 260%, with annual sales in 1987 at $1.57 billion.25 While being immensely productive, the cooperative keeps the wage differential at 4.5 to one between the highest and lowest paid worker (compare that to an average of 400:1 in the US26 ), and created 1800 new jobs between 1986 and 1987 in the midst of a deep recession throughout Spain. Today, the co-ops account for about 6% of industrial employment in Basque county,27 and have expanded to production in 40 countries with annual sales at more than 16 billion Euros.28 Mondrag´on proves that high productivity, high employment, and equal wages need not be mutually exclusive. Mondrag´ on does not operate on the principle of profit maximization alone, and neither does La Alameda, nor do most producer and worker cooperatives. Even though La Alameda is not as highly productive as Mondrag´on, it continues to thrive despite its lack of traditional measures of profitability. It has expanded since my 2007 visit; now employing sixty and launching “Mundo Alameda”, the brand name for its line of “sweatshop-free clothing”, with over 25 original apparel designs sold at locations around the city

24

25 26

27 28

Davidson, Carl. “One Worker, One Vote: US Steelworkers to Experiment with Factory Ownership, Mondragon Style”. SolidarityEconomy.net, 27 Oct. 2009. http://www. solidarityeconomy.net. Morrison, Roy. We Build the Road as We Travel. New Society Publishers, Philadelphia: 1991, 170. Davidson, Carl. “Pittsburg: Worker Coops Meet to Save the Rust Belt and the Rest of US, Too.” SolidarityEconomy.net, 10 August 2009. http://www.dailykos.com/story/2009/8/10/764568/-Pittsburgh: -Worker-Coops-Meet-to-Save-the-Rust-Belt-and-the-Rest-of-Us,-Too. Morrison, 173. Davidson, 27 Oct. 2009.

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21. Extending the Bottom Line and in their own storefront in Villa Avellaneda.29 With 11,117 cooperatives flourishing in Argentina today, and over 30,000 in the US, one begins to wonder if sustainability can be measured on criteria that extend beyond profit maximization. These new criteria operate on the premise that profit maximization need not be the single bottom line. Instead, the cooperative business model suggests multiple bottom lines, with social benefits leading the way. Other bottom lines include teamwork, favorable public policy, financial sustainability, successful social networks, low turnover rates, transparency, and workplace democracy. If the cooperative can successfully reach those bottom lines, then it is sustainable—just as a capitalist business is sustainable if it has successfully maximized its profit. As much as traditional economists may reject this new approach, we must challenge ourselves to seriously re-consider what “sustainability” truly means. To me, if a business is financially viable and provides for its workers a stable and meaningful job, then it is sustainable, regardless of high profit margins.

Bringing it Full Circle: “Out of Crisis Comes Opportunity” 30

We know that the time is now for new economic beginnings. Bob Dylan’s words here are timeless: “When you got nothin’, you got nothin’ to lose”. People are taking risks right now to create new livelihoods for themselves out of a broken economy. And it’s not just that they’re creating impressive alternatives—time banks, cooperatives, CSA farms, complimentary currencies, the list goes on. While these alternatives are growing in numbers, their existence is nothing new. What’s different now is that the alternatives are more visible, more popular, and more accessible. They’re seeping into mainstream public imagination. They’re no longer the far-flung, utopian projects that exist on the fringes. They constitute a movement. This movement is heavily organized and highly plugged-in. Just in the last ten years, five regional groups have formed to create support networks for area cooperatives, including the Network of Bay Area Worker Cooperatives (NoBAWC), the Western Worker Co-op Conference, the Worker Owned and Run Cooperative Network, the Eastern Conference for Workplace Democracy, and the Federation of Workplace Democracies in Minnesota. In 2004, 29 30

Mundo Alameda. “Quienes Somos”. 01 September 2009. http://www.mundoalameda. com.ar/sitio/quienes.htm Chinese proverb.

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Part VII Research the US Federation of Worker Cooperatives formed out of a national conference.31 People are recognizing the importance of not only creating jobs, but of creating jobs that impart a social and community value. It is the social and community value of cooperative work that will sustain the movement past this period of economic crisis. As the case study of La Alameda illustrates, people want to work for more than just money. Examples of cooperatives like La Alameda continue to create stable, dignified jobs for thousands in Argentina who work in any of the 11,117 co-ops. And, that number is still growing steadily today, eight years after the Argentine financial crisis has past. Bringing it back to the US, I don’t think momentum for these alternatives here will dissipate once the crisis period is over. Instead, I’m convinced that this is just the beginning. We’ve seen that the cooperative movement in Argentina—and now, the US—has grown and strengthened with very little public support or resources. Industrial players are increasingly participating in this movement as well—just last month the United Steel Workers Union announced a new partnership with Mondrag´ on.32 Such a collaboration will serve to strengthen the movement’s visibility and political viability. As elements of the “Green Economy” have been written into Obama’s stimulus plan, we can envision the Cooperative Economy likewise making its way into public policy. Just imagine how the movement would grow given its own stimulus package! To conclude, I end with a challenge: let’s invest in the cooperative sector. It’s created community, it’s created camaraderie, and it’s bringing democracy into the workplace. These values are not only vital to a workplace on their own, but they also contribute to more sustainable and stronger businesses. They lead to decreased turnover rate and overall increased productivity in the long-run. Let’s contribute to these alternative enterprises in the US, today—they have carried our community through this crisis; now they have the potential to carry our economy into the future.

About the Author Annie McShiras is a writer, advocate for economic justice, and member of the U.S. Solidarity Economy Network (http://www.populareconomics. org/ussen/). She lives and works in Vermont, where she focuses on promoting local, organic food systems. 31 32

Hoover, 242. Davidson, 27 Oct. 2009.

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References Bowman, Betsy and Bob Stone. “Cooperativization as Alternative to Globalizing Capitalism”.Grassroots Economic Organizing, Riverdale, USA, 2007. http://www.geo.coop. Craig, Ben, John Pencavel, Henry Farber and Alan Krueger. “Participation and Productivity: A Comparisonof Worker Cooperatives and Conventional Firms in the Plywood Industry”. Brookings Papers on Economic Activity. Microeconomics, Vol. 1995, pp. 121174. The Brookings Institution Press, Washington D.C.: 1995. http://www.jstor.org/ stable/2534773. Davidson, Carl. “One Worker, One Vote: US Steelworkers to Experiment with Factory Ownership,Mondragon Style”. SolidarityEconomy.net, 27 Oct. 2009. http://www. solidarityeconomy.net. Davidson, Carl. “Pittsburg: Worker Coops Meet to Save the Rust Belt and the Rest of US, Too.” SolidarityEconomy.net, 10 August 2009. http://www.dailykos.com/story/2009/8/10/764568/-Pittsburgh: -Worker-Coops-Meet-to-Save-the-Rust-Belt-and-the-Rest-of-Us,-Too. Dora. Personal Interview. 01 June 2007. Fern´ andez, Ana Mar´ıa. Pol´ıtica y Subjetividad: Asambleas Barriales y F´ abricas Recuperadas. Colecci´ onPensar en Movimiento, Buenos Aires: 2005. Fontenla, Eduardo H. “Cooperativas que Recuperan Empresas y F´ abricas en Crisis”. Equipo Federal del Trabajo. Ed. 34 (2007).10 Nov 2007. http: //www.newsmatic.epol.com.ar/index.php?pub_id=99\&sid=1101\&aid=28621\&eid=34\ &NombreSeccion=Cooperativismo\&Accion=VerArticulo Hoover, Melissa. “Another Workplace is Possible: Co-ops and Workplace Democracy”. Solidarity Economy: Building Alternatives for People and Planet. ChangeMaker Publications, Chicago: 2008. Informal Conversation with Paula, June 8, 2007, la Alameda. Instituto Internacional de Estad´ıstica y Censos (INDEC), Argentina. “Evoluci´ on de la tasa dedesocupaci´ on por aglomerado. 2001 en adelante.” 21 April 2008. http://www.indec.mecon.ar/ Jones, D. C. “Participation in Worker Cooperatives in Poland”. In R. N. Stern & S. McCarthy (Eds.), International Yearbook of Organizational democracy, vol. 3: The Organizational Practice of Democracy, (pp. 431 451). John Wiley & Sons, Ltd, New York, NY: 1986. Klein, Naomi and Avi Lewis. “Forward”. Sin Patr´ on: Stories from Argentina’s Worker-Run Factories. Haymarket Books, Chicago: 2007. Levy, Marcela L´ opez. We are Millions: Neo-liberalism and New Forms of Political Action in Argentina. Latin American Bureau, London: 2004, 11. Luhman, John Teta. ”Three Questions from the USFWC Conference”. Grassroots Economic Organizing, Riverdale, USA, 2007. http://www.geo.coop. Mar´ıa, personal interview. 08 June 2007. Mateo, Personal Interview. 08 June 2007. Morrison, Roy. We Build the Road as We Travel. New Society Publishers, Philadelphia: 1991. Mundo Alameda. “Quienes Somos”. 01 September 2009. http://www.mundoalameda. com.ar/sitio/quienes.htm. Rothschild, Joyce and Allen Whitt. The Cooperative Workplace. Cambridge University Press,New York: 1986. Sara. Personal Interview. 15 June 2007. Trigona, Marie. “Update on occupied factories in Argentina: Factory in the Hands of Workers”. 14 Aug. 2009. http://geo.coop/node/380.

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University of Wisconsin Center for Cooperatives. “Research on the Economic Impact ofCooperatives”. March 2009. http://www.ncba.coop/pdf/ReportFULL.pdf. Zibechi, Ra´ ul. “Worker-Run Factories: From Survival to Economic Solidarity.” Dispatches from Latin America: On the Frontlines Against Neoliberalism, South End Press, Cambridge, USA: 2006.

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22. Lessons and Opportunities from Canada’s Social Economy Research Program Rupert Downing Canada’s first national research program on the social economy was created in 2005 as part of a multi-stakeholder initiative to elevate community economic development and the social economy as a major force for progressive socio-economic change. The Canadian Community Economic Development Network1 and its partner network in Quebec (le Chantier de l’economie sociale2 ) convened discussions amongst organizations of the co-operative and non-profit sectors to press the federal government for a major national initiative. Concern about increasing poverty, rural and urban decline, the impacts of globalization and government cuts to social programs on socio-economic conditions spurred interest in a more united front amongst organizations with common social justice values. This was particularly rooted in the work done by the CED Network to improve public policy at local, provincial and national levels to enable alternatives to corporate domination of the economic agenda. Members of the coalition proposed five major action items that consultation suggested were critical: Capital funds to grow cooperatives and social enterprises; program dollars to support community economic development organizations and initiatives; improved access for social enterprises to programs for small and medium sized businesses; a national structure for the co-construction of public policy, and; research to strengthen the social economy as a united movement.3 The then Liberal government of Prime Minister Paul Martin agreed to meet with members of the coalition, and announced C$132 million for a federal “Social Economy Initiative” in its 2004 budget addressing all of the proposed action items4 . Martin himself was a Member 1 http://www.ccednet-rcdec.ca/ 2 http://www.chantier.qc.ca/ 3 http://www.ccednet-rcdec.ca/files/Policy%20Brief%20Final-EN_2005.pdf 4 http://www.envision.ca/pdf/SocialEconomy/FederalSocialEconomyInitiative.pdf

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22. Canada’s Social Economy Research Program of Parliament from Montreal and was impressed with the advances made in Quebec through its community economic development movement, and the growing coalition around “l’economie sociale” as a solution to inequality and unemployment. Other federal political parties were also approached with some success to maximize all-party support. However, the 2006 election saw the defeat of the Liberal government, and a minority Conservative government came to power that cut many components of the Social Economy Initiative. The research program survived and was funded at C$15 million over five years through seven inter-related grants by the Social Science and Humanities Research Council (SSHRC) structured as “Community University Research Alliances” whereby practitioner and university organizations co-direct and share resources for research activities.5 SSHRC has a long history of funding these Alliances to encourage community based research partnerships.

Description The research program is divided into six regional research alliances and a national hub, all seven of these grants awarded through a competitive call for proposals. The objective of the program is to strengthen the social economy through research that informs practice, public policy, and academic studies. There are over 300 researchers involved in both university and community/practitioner settings. There is a National Board overseeing the program representing the universities and practitioners that were awarded the grants and the national organizations of cooperatives, community economic development and non-profit sector organizations behind the original proposal for the research program.6 There is also a Public Policy Facilitating Committee that focuses on maximizing the impact of the research findings on public policy. The regional research centers also have governance boards made up of university and practitioner organizations, with sub committees that focus on the different subject areas that have been determined to be priorities for those regions. The National Hub is co-directed by the Canadian Community Economic Development Network (CCEDNet) and the BC Institute for Cooperative Studies at the University of Victoria. Engaging social economy stakeholders in discussing the implications and uses of research findings is a priority for all of the research partners. In the last year, a public policy symposium has been held in Atlantic Canada to en5 http://www.sshrc.ca/SITE/about-crsh/president/Social%20economy-CIRIEC-07.

pdf 6 http://www.socialeconomyhub.ca/?q=content/our-mission-and-objectives

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Part VII Research gage stakeholders in policy development,7 a Summit on the Social Economy has been held in the Arctic,8 and a series of national tele-learning sessions and newsletters have been produced on themes that cut across the research (for example, the unique role of the social economy in promoting food security, affordable housing, poverty reduction, and municipal development). A Student Network9 has been created to promote the engagement and leadership of university students and a number of events held to encourage student dialogue. A series of fellowships have also been awarded to practitioners and students to further research that has national implications on subjects like the social economy and the labor movement, sustainable development, and indigenous models/approaches. International research has also been a priority. The program has produced two major public policy papers that analyze literature and public policy trends on the social and solidarity economy across the world.10 In addition, program researchers have engaged in international events such as the U.S. Solidarity Economy Network Conference in Amherst Massachusetts and the World Social Forum in Belem Brazil. Four international observers (from Argentina, the US, the UK and Japan) provide input on comparative international research from their respective jurisdictions. A key priority in the final year of the program (2010/11) is producing a concluding public policy paper with the help of engagement sessions with stakeholders in different locations around Canada on “Building a People-Centered Economy in Canada: Next Steps for Public Policy”.11 A series of Issue Papers have also been commissioned to mobilize knowledge amongst social economy organizations on research findings on key subjects for strengthening the social economy, including: Social Enterprises and Social Innovation; Procurement; Social Financing; Governance, and; New Business Models for Sustainable Development. This research in 2010 will support a National Summit on a PeopleCentered Economy organized by a coalition of organizations, including those involved in the original Social Economy Initiative, to be held in the nation’s capital in May/June.12 While the grants for this phase of the research program end in 2010/11 and the current Conservative government in Canada has no intention of renewing them, other proposals are being developed to build on the program with strategic national research led by social economy 7 http://www.msvu.ca/socialeconomyatlantic/English/colleqE.asp 8 http://dl1.yukoncollege.yk.ca/sernnoca/news 9 http://socialeconomy.info/en/english 10 http://www.socialeconomyhub.ca/?q=content/public-policy 11 http://www.socialeconomyhub.ca/sites/default/files/PublicPolicy.pdf 12 http://www.ccednet-rcdec.ca/en/summit

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22. Canada’s Social Economy Research Program organizations in partnership with university researchers.

Lessons and Opportunities The original purpose of the coalition of groups involved in proposing a national “Social Economy Initiative” was to promote an alternative approach to the prevalent private-sector dominated neo-liberal agenda. The analysis was that civil society associations, non-profit community organizations, co-operatives, credit unions, social enterprises, community economic development organizations together made up a substantial “social” component of a mixed economy alongside private and state sectors, and a vital force for social change. However, their contribution and value went unrecognized; they had little voice or influence and were fragmented. It was particularly important to the organizers of the initiative that an alternative, people-centered approach to the economy should be fostered, promoted and scaled-up, and this was an imperative for them in the face of eroding socio-economic conditions and an increasingly contested political environment. Research represented an important tool in this effort, both to produce evidence of what the social economy is as a combined force and sector in both society and the economy, what outcomes it does and could achieve, and also to influence government, other stakeholders and ultimately the public. The research, and associated engagement activities on findings, was also used to promote the adaptation of effective practices and systems amongst cooperatives, non-profit community organizations and other institutions. The overall evaluation of the research program has yet to be completed, but using these original perspectives, some lessons can be identified.

Movement Building Research findings clearly indicate that the impact of the social economy has been highest in those jurisdictions where building a unified movement has been a priority. In Canada, Quebec and Manitoba stand out as the two provinces where government policy has been influenced to create a supportive environment for social economy organizations and opportunities for the social economy to grow. In both places, a united coalition of community economic development, cooperative and civil society movements has been created to agree on and pursue common policy objectives. Political structures have also been created for social economy organizations and government

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Part VII Research representatives to work together to “co-construct” public policies.13 The research has fed into these structures to equip organizations with evidence and information to further cement movement relationships and advance policy development. For example, on the East Coast research participants have now formed an “Atlantic Council for Social and Community Enterprises” to unite social economy organizations based on models that they identified from the research as being relevant for adaptation to their settings. In those jurisdictions with highly fragmented component organizations of the social economy greater emphasis has been needed on creating understanding and a sense of shared identity and values. Events in Iqaliut, Nunavut (the Canadian Arctic) and Halifax, Nova Scotia in 2009 organized by the research partners have helped with this agenda. Indigenous people’s organizations (Inuit and Metis) in the north were involved with other community participants in learning from the research at a Summit sponsored by the Canadian CED Network, the northern research centre for the social economy and the Government of Nunavut. This resulted in the creation of a northern strategy for strengthening of the social economy adapted to the realities of land-based sustainable livelihoods in the Arctic. In Nova Scotia, participants generated a partnership strategy to strengthen the social economy as a critical component of public policy to support communities and their sustainable development. At the national level the public policy facilitating committee of the research program birthed the original idea for a Summit on a People-Centered Economy, which has now become the focus for movement building efforts in 2010. The national research outputs and engagement activities are designed to support the discussion at the Summit leading to a common agenda for development and policy construction across the components of the social economy. At the international level as well, the research indicates that those jurisdictions with unifying structures to bring together non profit, community development, cooperative and social enterprise organizations have had success in strengthening the social economy as a political and societal force.14 In Europe, the emergence of a federation of cooperatives, mutual societies, associations, foundations and other social-purpose enterprises in Social Economy Europe has provided a unifying voice and organizing structure.15 CIRIEC International (International Centre of Research and Information on the Public, Social and Cooperative Economy) contributed European-wide research 13 http://www.ccednet-rcdec.ca/files/Loxley\&Simpson.pdf 14 Crystal

Tremblay, Advancing the Social Economy for Socio-Economic Development: International Perspectives, University of Victoria, September 2009. 15 http://www.socialeconomy.eu.org/?lang=en

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22. Canada’s Social Economy Research Program that strengthened movement building and public policy recognition.16 The Brazilian Forum of the Solidarity Economy (FBES)17 has played a similar role in that country working jointly with the National Secretariat on the Solidarity Economy of the Federal Government on co-constructing public policy and mobilizing a movement involving sixteen national civil society organizations and a multitude of local and regional cooperative and community organizations. Participatory action research on mapping solidarity economy organizations in Brazil has been an important component of their movement-building agenda, together with “incubation” roles in universities.18 In both of these examples, as with Quebec, there is evidence that movement-building structures and agendas to unify the social economy, supported by relevant and democratically controlled research efforts, have contributed to the movement taking a more powerful and central place in social and economic policies and discourse. There are now some clear opportunities to build on these Canadian research findings and strategies to link up with interests in other places and build cooperation in movement building oriented research at the international and global level. This is already being done through connections in the World Social Forum movement. The projects of the Alliance for a Responsible Plural and Solidarity Economy, including a global dialogue on co-constructing public policy for the solidarity economy,19 also present opportunities. The work of the Network for the Promotion of the Social Solidarity Economy (RIPESS) and its continental sub-networks could also be important. Making these connections could help build a new “knowledge commons” of inter-related efforts to mobilize knowledge, identity, and capacity for a global social and solidarity economy movement in the face of the struggle for dominance by elites whose system represents such a catastrophic challenge to our communities and planet. However, the experience of the Canadian Social Economy Research Program also suggests that movement building as an explicit objective needs to be a constant focus in managing research across diverse partners. Research funders and their academic partners are not used to working with civil society organizations intent on building their own capacity and relationships as a movement. Academic structures and objectives are often directed at outputs and outcomes that serve individual academic interests and pur16 http://www.socialeconomy.eu.org/spip.php?article420 17 http://www.fbes.org.br/ 18 Chantier

de l’economie social and Forum Bresilien d’Economie Solidaire, Osez la Solidarite: Le Partage de pratiques d’economie sociale et solidaire au Bresil et au Quebec, March 2008. 19 http://aloe.socioeco.org/page67-projet_en.html

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Part VII Research poses that have little to do with supporting transformational change. The following section deals with some of these challenges.

Community/Practitioner Engagement From the outset of the Social Economy Initiative partners insisted that relevant research was an important tool, but that for it to be relevant it needed to be structured so that practitioners and communities had a real voice and role in its direction and implementation. Successful experiences in Quebec and Manitoba with Community University Research Alliances pointed to this model being appropriate. However, the eventual design of the “Social Economy Research Suite”, as it was called by the research funder, presented some challenges. The overall research objectives in the funder’s proposal call were vague and all encompassing, baring little relationship to the objectives proposed to the government. The national “hub” of the research program was awarded after most of the regional research alliances were approved, so there was little national coherence. Most of the grants were awarded to universities to administer, resulting in most of the resources in fact flowing to academics. There were concerns about the degree of involvement of practitioners in the process by which research projects were approved within the program and the criteria for those approvals. Preliminary evaluation of the extent of community/practitioner engagement shows a varying degree of power and resources being allocated to them across the seven grants. Analysis of the multiple research projects and papers produced suggests that many of them were extensions of existing academic interest adapted to the new language of the “social economy” but with little attention to how they contributed to policy, movement building, or understanding of that concept. While practitioners value the legitimacy, authority and research capacity of university partners within the program, there are questions about the relevance of individual research projects, and the extent of engagement of stakeholders in research design, and knowledge mobilization for them to use the results, for policy advocacy for example. Several regional research centers had extensive policies on community university partnership and decisionmaking, but some did not. There are strategic gaps at the national level in key areas of research related to the role of the social economy (in aboriginal communities, to support sustainable development, for example) that are difficult to fill after $2 m in national research monies were cut from the program. “Mapping” the social economy and its outcomes at the national level became difficult as agreement on methodology and definitions could not be reached across the research partners, exacerbated by the lack of sta-

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22. Canada’s Social Economy Research Program tistical data from government. Engagement activities were under-resourced relative to research projects themselves. Communications aimed at media, stakeholders and the general public were weak as were efforts to build in government dialogue. While both empirical and qualitative research studies produced valuable evidence of the activities and outcomes of the social economy in different settings, analysis of the policy and movement building implications of those studies was rarely attempted by academic researchers involved. These dynamics are not uncommon in community university partnership research programs and are the subject of ongoing efforts to improve research funding and academic systems in Canada.20 There are important lessons to be gained so for future efforts in Canada, elsewhere, and particularly for future international cooperation on research on the social economy. It is imperative that research on the social economy is directed and led by the civil society organizations and networks that are committed to mobilizing knowledge to strengthen the social economy. Academic partnerships are an important ingredient to carrying out that research on a rigorous basis, and many students and faculty in the “academy” are also activists in civil society. However the institutional barriers within universities to giving power and leadership to civil society partners make it essential to structure partnerships to give a clear leadership and resource management role to those partners. This relationship needs to be defined around clear movementbuilding objectives where knowledge mobilization, communications, and engagement activities are priorities provided with adequate resources. Empirical and qualitative research on the social economy and its outcomes should be based on participatory action research methods that engage the “subjects” of the research in determining the language, definitions and methods involved. Mapping exercises should encourage dialogue and the creation of understanding amongst social economy organizations, learning from the experiences in Brazil and Quebec on the use of mapping to engage stakeholders in identifying how they see themselves as part of a larger movement. If research is to be a relevant tool to the social economy in promoting transformational change, then attention needs to be paid to how that change can be achieved. The inter-related environmental, social and economic challenges facing communities and the world requires an approach to research that illuminates the possibilities of alternative systems and futures that the social economy is seeking to create. These alternatives need to be placed in the context of a critical analysis of the current system and 20 http://web.uvic.ca/ocbr/assets/pdfs/CU%20SSHRC%20Report_Final2009.pdf

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Part VII Research its challenges at both the macro and local level. Attention must be paid to ensure that the outcomes being created are relevant to real issues facing real people in real communities. The importance of the social economy can be addressed in terms of dealing with peak oil, climate change, environmental degradation, homelessness, poverty, social exclusion, economic inequality, democratic governance, the self-determination of indigenous people and many other issues. More attention needs to be paid to the strategies needed to strengthen cooperation, build movements, and systematize and scale up the work of the social economy. Learning from one another about what strategies are working and why is critical, as is collaboration on policy development that systematically considers what policies are barriers to the strength of the social economy, how they can be changed, and what should replace them. This item is perhaps the most urgent subject today for international collaborative research and dialogue on the social economy given the global nature of the socio-economic and environmental crisis and the need for creative solutions to it that transcend current paradigms. Finally attention needs to be paid to “leadership development” in any research program, amongst both students and practitioners. Top down approaches to creating knowledge and then imparting it to others have no place in a movement that values social and economic equality. Engagement of younger people in both universities and practitioner settings has been a success of the Canadian research program, building a new generation of activists equipped with experience and knowledge that can help build the movement.

Conclusion The original purpose of the Social Economy Initiative in Canada was to present and strengthen an alternative vision of social and economic development to that of the pre-dominant neo-liberal agenda. The global economic crisis and its related environmental and social challenges have made that purpose even more urgent. The research program on the social economy has provided resources and tools to present that vision, and created opportunities for movement building amongst actors in the social economy, many of whom did not have a picture of themselves as part of a larger societal movement and force. It has also generated evidence on the unique outcomes that the social economy is creating and could create, while providing analysis of the failings in public policy to support those outcomes. From these building blocks a next generation of action is now being discussed that uses those research findings to take forward a more unified movement for a

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22. Canada’s Social Economy Research Program people-centered economy. An opportunity exists to build on this example and those in other places, to create an international “knowledge commons” for organizations that are working to create change to our current socio-economic system. Participants in the World Social Forum and related networks of the social and solidarity economy have the possibility to champion this effort and build a lasting platform for evidence-based collaboration and action.

About the Author Rupert Downing is the Co-Director of the Canadian Social Economy Research Program (http://www.socialeconomyhub.ca/) on behalf of the Canadian Community Economic Development Network(http://www. ccednet-rcdec.ca). He was the Executive Director of that Network of community and social economy organizations for seven years, and has worked on social justice issues on several continents for 30 years with grass roots community organizations, labour and social movements. He was a policy director , and set up the Ministry Responsible for Community and Cooperative Development, in the British Columbia Government. Rupert Downing also directs the global dialogue on public policy for the social and solidarity economy for the Alliance for a Responsible, Plural and Solidarity Economy (http://aloe.socioeco.org), grows organic vegetables on Vancouver Island under the direction of his wife Christine, and engages in solidarity education with his grand children in Seattle and Liverpool.

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23. Research on the Economic Impact of Cooperatives: Phase I Results Lynn Pitman1 Cooperatives occupy a unique niche in the United States economy. They are engaged in a broad range of businesses: electricity distribution to rural farms and homeowners, bargaining and marketing services for agricultural producers, delivery of home health care services for the elderly. Cooperative businesses have provided an effective “bottom-up” solution for meeting needs that are poorly provided by the market , and have been responsible for many market innovations. Nonetheless, no comprehensive national statistics about U.S. cooperative businesses exist to quantify and describe their impact on the U.S. economy, and in the communities where they operate. To begin to address this lack in basic information, the U.S. Department of Agriculture (USDA), which provides research, development and technical assistance to cooperatives as part of its support of rural development and agriculture, awarded a major research grant over 7 years to the University of Wisconsin Center for Cooperatives (UWCC). UWCC collected and analyzed data on 17 subsectors that were defined by the USDA at the outset of the project. The first phase of the study, completed in April 2009, provided an initial snapshot of the size and scope of cooperative activity.

How big an impact? The study identified over 29,000 cooperative firms across the U.S., operating at 73,000 locations and owning over $3 trillion in assets. These co-ops directly accounted for over $500 billion in revenue. Wages and benefits totaled 1A

version of this article appeared in the May/June 2009 issue of Rural Cooperatives magazine.

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over $25 billion, and supported 853,000 jobs. There are an estimated 118 million cooperative memberships in the U.S., with individuals often being members in more than one co-op. When mutual insurance policy holders are included, that number rises to over 351 million. There are additional impacts from the direct business activity of cooperatives that ripple through the broader economy. A cooperative’s costs include outlays that are revenue for other businesses. Wages, dividends and patronage refunds that are paid out by the cooperative to individuals who then spend that income on goods and services of other businesses. To gauge the true size of the economic “footprint” of cooperatives, these secondary economic impacts also need to be part of the analysis. The study estimated that the total impacts from cooperative economic activity, including secondary impacts, account for nearly $653 billion in revenue, over 2 million jobs, almost $75 billion in wages and benefits paid, and a total of $154 billion in income.

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Sector Commercial Sales & Marketing Social & Public Services Financial Services Utilities Total

Economic Impact of U.S. Cooperatives: Aggregate Impact by Sector* Revenue Income Wages Firms Employment ($Ms) ($Ms) ($Ms) (No. FT jobs)

$201,207

$37,737

$13,810

3,463

422,505

$7,523

$2,213

$1,690

11,311

424,505

$394,364 $49,808 $652,902

$100,660 $13,392 $154,002

$51,177 $8,292 $74,969

9,978 4,536 29,288

1,133,353 162,873 2,143,236

*Analysis does not include houseing cooperatives.

The commercial sales and marketing sector encompasses cooperatives that provide agricultural marketing, processing, and supply services, biofuels refining companies, consumer cooperatives that buy wholesale on behalf of consumers, arts and crafts cooperatives that supply and sell the work of artist members, and other cooperatives that operate across a wide variety of economic subsectors. Across all economic impact measurements, farmer cooperatives account for the largest share of this sector. Social and public service cooperatives include firms that provide a diverse array of healthcare,housing, transportation, and education services. While housing cooperatives dominate this aggregate economic sector in terms of the number of entities, economic impacts of housing co-ops were not reported. Assessment and tax practices for housing co-ops vary significantly by municipality, making it impossible to achieve data consistency. The healthcare subsector accounts for the largest share of employees and members within this aggregate sector. While this sector accounts for a tiny fraction of the economic impacts that were measured, the largest share of identified cooperatives – over 38% – fell within this category. These cooperatives are organized to meet a broad range of health-related goals, though most are purchasing ventures to lower costs for hospitals and other service providers. Financial service cooperatives encompass credit unions, banks within the farm credit system, mutual insurance companies, and a cooperative finance group, which is comprised of a variety of financing organizations that lend to cooperative firms and banks. Credit unions and mutual insurance companies account for the largest number of firms, establishments, memberships, and

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23. Research on the Economic Impact of Cooperatives employees, but the cooperative finance subsector accounts for the largest share of assets within the financial services economic sector. This subsector includes the National Consumer Cooperative Bank, an Association of Corporate Credit Unions, the Cooperative Finance Corporation, and the Federal Home Loan Bank System, and account for a significant portion of cooperative economic activity. These institutions are owned by their members, are controlled by a board elected by member institutions, and are operated to provide benefits to their member banking institutions. Utilities cooperatives provide electric, telephone, and water and waste services. Cooperatives that provide electric utility services, including generation and transmission, dominate this aggregate sector in terms of total economic activity. Many of these entities resulted from federal enabling legislation in the 1930s for rural infrastructure development. Water and waste cooperatives often perform a quasi-public function and provide valued services to their communities. Aggregate Impacts: Revenue ($Ms) Commercial Sales & Marketing Farm Supply & Arts & Marketing Consumer Crafts Biofuels Other $128,339 $2,124 $237 $10,302 $60,205 Social & Public Services Healthcare Childcare Housing Transport Education $5,212 $421 $0 $567 $1,323 Financial Services Credit Farm Mutual Coop Unions Credit Insurance Finance $74,882 $15,382 $226,572 $77,528 Utilities Electric Water Telephone $43,347 $2,582 $3,879

Total $201,207 Total $7,523

Total $394,364 Total $49,808

Producer or Consumer? Most cooperatives can be categorized as either a ”producer” or ”consumer” cooperative. A producer cooperative serves its members by bringing their products to market, while a consumer cooperative purchases goods or services to sell to its members. Producer co-ops are found almost exclusively

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Part VII Research in the agricultural and arts and crafts subsectors of the commercial sales and marketing sector. Consumer cooperatives can be found within all four economic sector groupings, and account for 92% of the co-ops identified in the study. “Purchasing” (or business-to-business) and ”worker” cooperatives are variations on the producer/consumer split. Purchasing cooperatives are similar to consumer cooperatives in that they collectively purchase goods or services to sell to members, but the membership is comprised of businesses and other organizations instead of individuals. A worker cooperative is a type of producer cooperative where the “product” provided by members is labor. Approximately 80% of all worker cooperatives are found in the Commercial Sales and Marketing sector; the remainder is found in the Social and Public Services sector. While approximately 19% of purchasing cooperatives are found in the Commercial Sales and Marketing sector, 66% are in Social and Public Services, 4% in the Financial Services sector, and 11% in the Utilities sector.

Where the numbers came from Unlike data-reporting agencies of many other countries, the U.S. Census Bureau does not identify cooperatives in any of its census or business reporting surveys. The UWCC used a variety of resources to conduct its own census of cooperatives in the commercial, social services, financial and utilities sectors that were specified in the USDA grant. Some sectors of cooperative activity are well-documented, and comprehensive listings were available from government or trade associations. For other sectors, a more laborious primary population discovery process was necessary to identify and build co-op lists. Once a census was complete, economic data was collected using a variety of methods. Some sources were able provide aggregated business activity data as well as lists of cooperatives, and about 85% of the data on direct cooperative economic activity was collected in this manner. Standardized surveys and uniform sampling methodology were used to collect key business indicators from individual cooperatives on the remaining lists. To estimate the secondary economic impacts of cooperative business activity, the study used IMPLAN, an input-output modeling system. Steps were taken with the analysis to ensure that the impacts were conservatively projected, thus, the results of this study are likely to underestimate cooperative activity in the U.S.

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How do you define “cooperative”? In many cases, it was unclear whether an identified organization should be considered a cooperative. As baseline criteria, the study used the USDA definition of a cooperative – an organization that is owned and controlled by patron members, and operated for their benefit, distributing earnings proportional to use. These defining characteristics were identified through incorporation, tax filing, and member activity information obtained through surveys. However, there were sectors or situations in which organizations met some, but not all, of these criteria. For example, co-ops which provide services like childcare or healthcare may be democratically controlled by their user members, who benefit from the services provided. But as nonprofit educational or charitable organizations, these co-ops legally do not have owners, and cannot make any earnings distributions. Other cooperatives, especially within regulated industries, might include nonmembers on the board who could exercise voting privileges. The study identified and documented these “boundary” issues in the census, and delineated boundaries within sectors that could be supported by data collection methods.

Additional research results The first phase of this project has established a substantial economic presence of cooperatives in the U.S. economy. However, simply looking at the magnitude of cooperative business activity provides an incomplete analysis of the wider economic and social influences of cooperatives. The ownership structure of cooperative firms is fundamentally different from other forms of business organization, and is the foundation for a different decision-making process at the firm level. To lay the groundwork for research on the more complex impacts of the cooperative structure, the project also funded eight discussion papers. The papers address methodological and empirical approaches for exploring deeper issues on the economic and social significance of cooperatives, and, in part, will form the basis for subsequent phases of this research project. (For the full report, see: http://reic.uwcc.wisc.edu/)

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About the Author Lynn Pitman is an Outreach Specialist at the University of Wisconsin Center for Cooperatives.

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Community Economies Collective: Three Members Research in the Solidarity Economy One of the most important things about research for us is that we do it with other people. We feel inspired and supported by each other and the people in the enterprises we are researching. We focus on economic processes that we think are making the world better. Through our research, writing and teaching we aim to produce knowledge that cultivates possibilities; this is what J.K. Gibson-Graham call “a politics of possibility”. Beginning from the framework of diverse economies that understands the economy as multiple and largely non-capitalist, we investigate and write about the “other worlds” that are here now.

Example: Worker Co-operatives Janelle Cornwell In a time of economic contraction, co-operatives of varying stripes are collaborating! Local, regional and national alliances of worker cooperatives are developing the cooperative economy through skill sharing, education and inter-cooperation. My research focuses on Worker Co-operatives in the Connecticut River Valley of Western Massachusetts and Southern Vermont. Entering its fifth year in existence the Valley Alliance of Worker Co-operatives (VAWC) is made up of eleven worker co-operatives in the Connecticut River Valley of Western Massachusetts and Southern Vermont.

Members voting at meeting of the membership of the United States Federation of Workplace Democracy in New Orleans 2008, courtesy of The Valley Alliance of Worker Co-operatives.

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Community Economies Collective Research VAWC is collaborating with United States Federation of WorkerCooperatives, and local researchers to (among other things) publish a book about the local movement. VAWC recently conducted a pilot project that employs a staff person, paid for by member dues and a seed grant from the Co-operative Fund of New England to run an ad campaign, develop a member manual, measure the economic impact and shared identity among members, and to develop and strengthen the co-operative economy through inter co-op purchasing and cross-sector collaboration. The project was so successful that member co-ops agreed to make it a permanent position that will be directed and funded by the co-operative businesses themselves. For more information please see: www.valleyworker.org, http://www.usworker.coop/front

Example: Community Supported Agriculture A Case Study of North Amherst Community Farm Ted White My research looks at Community Supported Agriculture (CSA) using case studies from Western Massachusetts and examines the ways in which CSA encourages diverse economic practices. CSA has had a significant impact on food proapprentices and CSA share holders work duction and consumption, but how Farm together in the fields at Simple Gifts a commuabout other realms? In other words, nity supported agriculture project in Amherst, could participation in CSA be a MA. This 35 acre suburban farm is owned as gateway for thousands of people a land-trust by a non-profit organization called North Amherst Community Farm who manages to become more knowledgeable, in- the land and presents various educational prospired and involved in creating di- grams on site. verse community-oriented solidarity economies beyond agriculture? Since CSA is becoming increasingly popular, can it be a leading light to offer pathways away from traditional capitalism? This study will contribute to our knowledge of the wider impacts of CSA and, more generally, to our understanding of how small scale, diverse economic alternatives develop and become integrated (or not) into the larger economic context. I hope my work can help make pragmatic practices of a diverse economy more visible to policy makers but most importantly I hope it can just help regular folks find new entry points for participation in economies that feel right and soulful to them. 296

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Example: Participatory Action Research for Community Based Development Fostering Art and Culture in the Greater Franklin County Abby Templer and Leo Hwang-Carlos Franklin County, Massachusetts is a culturally rich region where artists and artisans contribute to a diverse range of economic activity that is difficult to measure using standard economic metrics and is challenging to address through a dependence on exogenous outside development efforts. The aim of this project is to highlight and support the diverse economic activity of the artists and artisans in the region. Fostering Art and Culture Project’s Creative Economy Summit at Greenfield Community Making visible the rich economic College activities already in practice can help the region foster a positive economic identity—shifting away from the portrayals of a region in need—and provide an opportunity to direct funding towards community centered, or endogenous economic practices. Through the use of participatory action research (PAR) with a group of artists and cultural ambassadors, we will create a community partnership of people who: are taught how to recognize various forms of economic activity, are given tools and resources to record and document these activities, and provided consultation on identifying activities and endeavors that can strengthen those activities. Through the Fostering Art and Culture Project (FACP) we will create a venue through which this data can be shared and disseminated across Franklin County and beyond. Janelle Cornwell, Ted White, Abby Templer and Leo Hwang-Carlos

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24. Women, Feminism, and the Solidarity Economy Julie Matthaei Capitalism started the process of women’s liberation, but cannot finish it. Women’s oppression, and the domination of the feminine, are built into the soul of capitalist institutions. In our struggles for liberation, women are playing a key role in the construction of a new paradigm of economic life, the solidarity economy.

Capitalism and Women’s Liberation As feminist historians have shown, capitalism, as it developed in the U.S., embodied patriarchal values. Only men – white, propertied men – were allowed to vote in the early U.S. Among whites, a woman’s proper role was to be married to a male breadwinner and household head, serving her family through unpaid homemaking. Historians have called this the “cult of domesticity.” Women who didn’t do so – and their husbands – were viewed as failures; and those who couldn’t find husbands were viewed at the biggest failures of all. When poor families had difficulty living on a husband’s income, they sent their children out to work before their homemakers. Gender polarization and hierarchy coexisted with rigid racial-ethnic segregation, including slavery, which broke up families and distorted gender roles. In other words, early U.S. capitalism was patriarchy writ large in the economy, interpenetrated with class and racial-ethnic oppression. However, the dynamics of capitalist development have acted to break down these structures of rigid class, race, and gender ascription. U.S. capitalism’s anti-aristocratic, “all men are created equal” founding values were embodied in a dynamic marketplace competition based on equal property rights and equal opportunity to pursue wealth. Its class structure, while pyramidal, was flexible. Un-propertied white men were given the right to break through class prejudice and compete their way up through the hierarchy, through hard work and enterprise. Even though most failed at this unequal competition, a few succeeded, or their children did, and were crowned

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24. Women, Feminism, and the Solidarity Economy as the real winners, the “self-made men.” This meme of equal opportunity spread to other oppressed groups, and over the last century and a half, on the heels of the anti-slavery and Civil Rights movements, women fought for and won equal rights in the economy, in terms of the equal opportunity to compete with men, as well as political rights. This shift represented a sea change for women. Widely accepted norms which divide all social and economic activities into either women’s work or men’s work have been overturned. Belief in a God-given sexual division of labor has been replaced by the condemnation of sex discrimination, and the forced imposition of rigid gender economic roles is widely unacceptable. With the support of feminist movement, individual women have fought their way into most traditionally white-male-dominated jobs, including the highest status positions. Meanwhile, the “virus” of feminism has spread to women and men throughout the world, bringing its infectious and inspirational affirmation of women’s rights and economic abilities to a wide array of progressive struggles.

The Limits of Women’s Liberation Within Capitalism The experience of the past 40 years in the U.S. has revealed the limitations of women’s ability to liberate and empower ourselves by playing, and even winning, the racist-capitalist-and-still-patriarchal economic game as it is constructed by our dominant economic institutions: First, to play and win at that game, women have been forced to act like the hegemonic “economic man”: narrowly self-interested, competitive, individualistic; focused on money; and motivated by greed.1 In other words, we have had to actively reject our feminine, caring sides, or at least limit them to our family and community lives. Second, since the good jobs were designed for bread-winners with the assistance of homemakers, it is difficult if not impossible to succeed as an “economic man” and also do women’s traditional caring work, especially the unpaid and time-consuming work of raising a family and caring for the ill and elderly. “Successful” women have to minimize or farm out (to other women) their unpaid caring labor.2 This is a big sacrifice for the “successful” career woman, and also builds exploitative relationships with other women 1 Ferber,

Marianne and Julie Nelson. Eds., 1993. Beyond Economic Man. Chicago: University of Chicago Press. 2 Folbre, Nancy, 2001. The Invisible Heart: Economics and Family Values. New York: New Press.

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Part VIII Movement Building right into one’s family. Another way of saying this is that the game is stacked against women (or men) with active commitments to caring for children or other family members. Third, the likelihood for a woman to win in the capitalist-organized economic competition is low, even if she gives up her caring work and acts like a traditional man, given the pyramidal structure of the job hierarchy. This is especially true in the global South, where the availability of highpaying jobs is extremely limited relative to the population of women, and where unequal access to primary education denies most citizens any chance of competing for such jobs. The converse of this point is that, if she does “succeed” in the economic competition, a woman has to accept that her success is conditioned on the fact that most women, and most people, will continue to be losers, many without their basic needs filled. Fourth, if they want to maximize their chances for success in the capitalist economy, women have to focus on maximizing their employer’s profits, co-creating an economy focused on GDP growth and rampant competitive consumerism. This often requires doing things which seriously damage workers, consumers, suppliers, the local community, government, and the earth upon which we all depend for life. Playing the game involves contributing to the current grave crises in finance, climate, energy, food, water, employment, and soul, which not only undermine our well-being and that of our families, but also threaten the very existence of humankind. As Riane Eisler, author of The Chalice and the Blade,3 has said, “What’s the use of struggling to get the top berths of the boat if the boat is sinking?” It is time for women and feminists (and men!) to realize that we need to stop following in “economic man’s” footsteps, trying to win at the economic game which they have been playing. It is clearer than ever before that there is something deeply wrong with the dominant economic system and it needs radical transformation. We are in a moment of deep systemic crisis. We can not continue with business as usual. But what can we do?

TINA, TATA, the Solidarity Economy, and Women In the 1980s, British Prime Minister Margaret Thatcher coined the phrase “There is No Alternative” (TINA), to affirm that the free market capitalism, based on narrowly self-interested individualism, is the only viable economic 3 Eisler,

Riane. 1987. The Chalice and the Blade: Our History, Our Future. New York: Harper Collins.

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24. Women, Feminism, and the Solidarity Economy system. People are naturally selfish and competitive, the argument goes, and only capitalism can harness our human nature to produce what we need. Capitalism may eventually self-destruct, like the Roman Empire did. But there is no alternative way forward, according to this view. The very good news in this time of crisis is that the people of the world have not all been listening to Margaret Thatcher. Instead, we have been responding, individually, in groups, in movements, and in communities, to the crises all around us in new and creative ways, and constructing ways of being and doing economics which are more in sync with our needs. Without any grand plan, women and men across the planet are rediscovering or inventing transformative economic practices and institutions. Their diverse practices are being shared, cross-pollinated, and developed in the “anti-globalization” or globalization from below movement against neo-liberal economics. The 1999 Seattle demonstration against the WTO was a watershed in this development of a global civil society, because it built alliances across two great fissures: labor and environmental activists marched together, initiating a powerful Blue-Green Alliance, and Northern countries joined with the South’s protests against the injustices of the global economic order. The globalization from below movement has developed a proactive and visionary arm in the form of the World Social Forum movement, whose motto is “Another World is Possible.” The conscience and wisdom of this movement is being forged by the interactions of the world’s great movements – worker, peasant, women’s, anti-racist, lesbian-gay-trans, ecology, disability – which are teaching us new ways to be and do that do not oppress others, or the earth. Some refer to this coming together as a global civil society movement, the second superpower. In the past ten years, activists in these movements and progressive academics are coming to realize two things. First, instead of TINA, There is No Alternative, TATA -There are Thousands of Alternatives -actually applies. The world’s peoples are producing an astonishing abundance of life-affirming solutions to the economic problems we are facing. Second, as diverse as they are, these qualitatively distinct, transformative economic practices and institutions are beginning to form the basis of an economic way forward. The people, institutions, and movements involved in them are starting to identify themselves as part of a distinct, “solidarity economy”– and beginning to connect to one another, work to support one another, and to come together to demand the political changes we need. Solidarity economy institutions and practices vary by country, and especially between the North and the South. In the North, and among the privileged classes, they have a strong focus on social responsibility to others and to earth, including fair trade and simple living, social entrepreneurship

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Part VIII Movement Building (entrepreneurship with a social mission), and corporate watch-dogging. In the South and among the poor, they focus on peasant resistance to proletarianization, such as Villa Campesina and the MST (Landless Workers’ Movement); income-generating actions such as microcredit, the creation of cooperatives of all types, and factory take-overs; and resistance to corporate encroachment, especially among indigenous peoples. They can occur within or outside of markets. Solidarity economy practices and institutions are identifiable by the presence of distinctly noncapitalist values. While very few of them embody all of these values, all embody one or more of them. Solidarity economy values include: an anti-oppression stance, i.e. a commitment to maximizing equality, not just providing equal opportunity, in all dimensions (race, class, gender, sexuality, disability); sustainability and regeneration of the planet; social responsibility; cooperation above competition; relocalization and community development; participatory political and economic democracy; diversity; and economic human rights, particularly the right to fulfillment of basic human needs. As the diverse solidarity economy initiatives interact, in local communities, and across the globe, these values are becoming increasingly integrated. Women have been key players in the construction of transformative, solidarity economy solutions to capitalist crises, for three main reasons. First, women are severely disadvantaged with capitalist labor markets due to their lesser access to family income and education, because of their caring labor obligations, and because of the persistence of sex discrimination and sexual harassment.4 Second, these same caring labor obligations can motivate women to extreme resourcefulness when their families,’ especially their children’s, basic needs are not being met. Thirdly, women’s gender training to prioritize caring for others and the concrete provisioning of their needs often leads us to craft economic solutions which are distinct from capitalist ones; solutions which place the provisioning of needs above other values.

4 Cote,

Ethel. 2009. “Women and the Social Solidarity Economy: Reasons for Women’s Participation,” Paper Presented at the Forum on the Solidarity Economy, Amherst, Mass., March.

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The Solidarity Economy and Women’s Enterpreneurship: Micro-Credit, Cooperatives, and Social Enterprises The amazing entrepreneurial response of poor women (and not poor men) to microcredit and lending circles around the world attests to the bottled up creative energies of women. While most of these ventures are protocapitalist and limited in their impact, they do redistribute capital towards the bottom, and can have a transformative effect in terms of women’s and community empowerment.5 Women have also been very involved in the setting up of producer and worker cooperatives across the world, many with explicit community-serving goals. Women are well-suited for cooperatives because they are less drilled in competitive self-interest, and more used to thinking in terms of group well-being. Conversely, because cooperatives are democratically run by producers, workers, and/or consumers, women can incorporate their need to perform caring labor more easily. Some inspiring examples: Representing a coming together of women’s, labor, environment, immigrant, and First Nation movements, the Chantier de l’Economie Sociale created a program of day care and elder care cooperatives, based on the right of all families to caring support, and subsidized by the government.6 In Brazil, the National Secretariat of the Solidarity Economy (SENAES) implements a program to incubate cooperatives as an employmentgeneration strategy among the poor. The program is staffed by university professors and social workers, and women constitute the majority of its participants. (http://www.mte.gov.br/ecosolidaria/sies.asp) India’s Self-Employed Women’s Association (SEWA) organizes very lowincome self-employed women producing in the informal sector in a type of producers’ cooperative/union, complete with a cooperative bank, training, advocacy, and support circles (http://www.sewa.org) In 1965, Japanese women started the Seikatsu consumer cooperative, when their local milk supply became contaminated by toxins. Determined to find an alternative to the toxic milk they had been buying in their stores, they created direct links with farmers producing organically, innovating 5 Kabeer,

Naila. 2009. Keynote Speech, International Association for Feminist Economics, Boston, June. 6 Neamtam, Nancy. 2008. “Chantier d’Economie Sociale: Building the Solidarity Economy in Quebec,” in Allard, Jenna, Carl Davidson, and Julie Matthaei, eds., Solidarity Economy: Building Alternatives for People and Planet. 2008. Chicago: ChangeMaker (http://www.lulu.com/changemaker).

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Part VIII Movement Building the direct consumer-farmer linkages that are now spreading in the U.S. in the form of community-supported agriculture. The SC now has 600 consumer coops, with 22 million members, and has also spawned worker coops, boycotts of detergents, GMO’s, and hormones, and many other projects (http://www.seikatsuclub.coop/english/). One amazing aspect of the women’s cooperative as a tool for solidarity economy transformation is that they have become a powerful vehicle for women’s feminist and anti-classist/caste consciousness raising. In stark contrast to superexploitative low wage jobs in capitalism’s burgeoning informal sector, which force women into a supersubordinate, disempowered position, worker-owned cooperatives work to train and empower their members. Research indicates that women’s cooperatives actually create a feminist consciousness-raising process among their members, by providing them with a safe and supportive space in which to learn how to resist and transform the male domination they are experiencing in their homes.7 Another new solidarity economy form of enterprise which women across the world are heavily involved in is “social enterprise.” Social enterprises are private businesses, traditionally or collectively run and owned, which transcend the nonprofit/for-profit divide: while they pay a return to capital invested, they are started with, and organized around, the explicit goal of filling social needs.8 Such enterprises are feminist in that they uplift the subordinated feminine quality of caring, which has been excluded from the core of capitalist firms, directly integrate feminine caring values into the mission of the firm.

Women, The State, and Solidarity Economy Initiatives Women’s determination to provision their families’ needs has also led them to spearhead solidarity economy movements to confront state power. For example, when women in Peru were unable to feed their families during an economic crisis, they formed community kitchens and demanded that the state furnish them with funds to purchase supplies and pay the workers. Their demands that their children receive milk resulted in a successful “glass 7 Bisno,

Amy. 2010. “Voices from the International Cooperative Movement: The Case for the Empowerment of Marginalized Women through Cooperative Enterprises.” Wellesley College. Unpublished paper. 8 Bornstein, David. 2007. How to Change the World: Social Entrepreneurs and the Power of New Ideas. New York: Oxford.

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24. Women, Feminism, and the Solidarity Economy of milk” program, also funded by the state.9 Another example of women acting directly, is Nobel-Prize-winning Wangari Maathai’s Greenbelt movement of reforestation and women’s consciousness-raising in Africa, a womengenerated, grass-roots led response to the failure of capitalist-organized economic institutions and the Kenyan state to maintain the environmental integrity necessary for their survival. Still another well-known example is the Cochabamba rebellion in 2000, in which women and men in Bolivia, unable to afford water after a neoliberal water privatization program, protested in the streets until the pro-people, anti-neoliberal government of Evo Morales was installed, and the program reversed.

Solidarity Economy Values: Money, Women, and Feminism A key aspect of emergent solidarity economy practices and institutions which expresses women’s traditional sensibilities, and resonates with feminist values, is their break with capitalism’s privileging of monetized activities. It is fair to say that, over the past two centuries, the capitalist economic system has systematically worked to insert the desire for money (and the power over others and over resources that it affords) as the core value, supplanting all else. Greed is good; a person’s value is measured by their income and wealth; and a woman (or man) who performed unpaid care work in the home is not working, unproductive, and excluded from GDP calculations. Solidarity economy initiatives reverse this trend. First, they reject money as the key means to fulfillment, even the fulfillment of material needs, realizing the value of the nonmonetary activities and transactions. Knowledge that access to income through capitalist economy sources is unstable at best and precarious at worst, especially in these times of crises, has helped fuel this recognition. Indeed, constructed as responses to economic crises, unemployment, and lack of income, many solidarity economy practices involve the minimizing of spending, or the filling of needs without the use of money. Reversing the valuation of income-generating work above all else, the solidarity economy values doing things yourself (DIY) or ourselves (DIO), like planting vegetable gardens; sharing, open source, freecycling, gleaning; or finding ways to swap or barter. This valuation of the nonmonetized extends to a valuation of unpaid caring work in the family, or community work, both 9 Villareal,

Altagracia. 2009. “Women and Food Sovereignty in Mexico,” Presentation at the Forum on the Solidarity Economy, Amherst, Massachusetts, March.

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Part VIII Movement Building the traditional province of women. It also means that women are strongly represented in these aspects of the solidarity economy. Solidarity economy initiatives also transcend the obsession with money – the “all values can be reduced to money” approach – by redirecting attention to the primacy of supportive, healthy relationships to human well-being Workplaces are not just places to produce output – they are places where workers spent time together, and are in relationship. The creation of more egalitarian, cooperative, and mutually beneficial relationships in workplaces is a focus of the solidarity economy, not just because it results in a better product, but also because of the positive effect of such work relationships on the workers themselves. Similarly, the practice of fair trade – through which consumers are willing to pay more for a good because they know the producer and the planet are being treated fairly – reflects the valuing of healthy, mutually beneficial economic relationships above money. There is also a recognition of the value of healthy communities – as a source of mutual support, information, innovation, and as a source of mutually fulfilling relationships. The connection of this focus to women and feminism is clear. Women’s work has, historically, been the work of creating and maintaining relationships, in families and extended families. And a core focus of feminism has been the transformation of these relationships, particularly the intimate husband/wife relationship, from a relationship of domination and disempowerment to a mutually supporting, loving one.

Solidarity Economy and the Provisioning of Needs Solidarity economy initiatives correct the capitalist focus on greed and money in another way – by refocusing the economic discourse from the generation of profits and output, to the issue of the provisioning of human needs. As such they reflect women’s traditional work and sensibility, and build it into the core motivation for production and consumption. Feminist economists, among others, have long proposed the provisioning of needs as the proper focus of economics10 (Nelson), as the proper goal of economic life. A prime example of solidarity economy organizing around provisioning is the burgeoning food sovereignty movement. This movement, in which women play the primary role, is based on the simple demand that all people should have the right to healthy food. Farmland should be cultivated, first and foremost, to feed the people, not for export crops. City dwellers should 10 Nelson,

Julie. 1993. “The Study of Choice or the Study of Provisioning: Gender and the Definition of Economics,” in Ferber and Nelson eds., Beyond Economic Man.

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24. Women, Feminism, and the Solidarity Economy have access to urban gardens to grow their own food. The food sovereignty movement opposes industrial agriculture and genetic engineering, which, although highly profitable, produce unhealthy products, pollute the environment, and destroy small farmers. It also advocates for access to land for all those who want to farm it. Interestingly, the movement has defined food sovereignty as requiring “an end to all forms of violence against women.”11 The focus on the centrality of the provisioning of needs also means that people’s basic needs have priority above relationships of private property. In particular, if there are needy people, and resources that are unused – like uncultivated lands, or boarded up factories, or vacant homes and apartment buildings—people should be able to use them. Land-takeovers by the MST in Brazil; factory takeovers in Argentina and elsewhere (even Republic Windows and Doors in Chicago); housing squatting and the anti-eviction movement throughout the world; all are part of this growing practice. One of my favorite examples is when mothers in Denmark whose children needed a place to play cut down the fences surrounding a large abandoned military facility, jump-starting the development of a solidarity economy community called Christiania.

Domination, Subordination, Feminism, and Solidarity In their most evolved state, self-defined solidarity economy practices and institutions actively reject not only gender, race, and class hierarchies, but the hierarchical top/bottom, winner/loser, domination/subordination meme that is at the core of capitalism. They reject the notion that one advances oneself by “bettering,” exploiting, beating, or dominating others; that the rich and powerful are good, and winners, and the poor are bad, losers. Instead, they strive to be deeply egalitarian, and empowering, especially to those who have been oppressed, including women. Their core is mutuality, cooperation, the search for mutually beneficial “win-win” solutions. This generates a stance of openness to learning and transforming in liberating ways, in response to input from the most oppressed groups. Feminist activism and theory have played an important role in developing this general anti-oppression stance, a stance which moves beyond identity politics (feminists are women, anti-racists are people of color, etc.). As a movement which has brought women together across class, race, sexuality, religion, country, 11 Patel,

Raj. Plenary Speech, Canadian Summit on a People-Centered Economy, Ottawa, May 30, 2010)

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Part VIII Movement Building it has learned to incorporate in its platform opposition to all of the other forms of oppression which affect women. The breakdown of oppressive economic hierarchies of all types – not just gender hierarchy – has become a basic tenet of feminist activism and theory in the U.S., as a result of the interventions of Black, lesbian, working-class, and disabled women.12 What emerges on the other side of the transformation of our domination/subordination-based economy is the solidarity economy. At the core of the solidarity economy is an understanding that we are all in this together, part of an interdependent whole. We can not assure our own flourishing if we do not also assure the flourishing of everyone else, including the most downtrodden, and of earth. We can not experience well-being if we are not also in right relation with other human beings, and with nature. Instead of competing with one another to move up the class hierarchy, we need to work together to find solutions to our economy’s crises that work for everyone.

Conclusion: The Solidarity Economy, Caring, and The Empowered Feminine Capitalist development began the process of women’s liberation by drawing women out of the home and into capitalist-organized labor markets. The limits of equal opportunity feminism have channeled women’s resistance and creativity into more transformative, solidaristic economic forms. Now women are playing a major part in creating the solidarity economy all over the world. A key part of our contribution is to transform caring from an activity which embodies subordination and takes on the brunt of capitalist oppression, to a strong feminine activity – undertaken by men as well as women – which emphatically and nonviolently affirms life, and refuses to collaborate in the mistreatment or abuse of oneself, of others, or of earth. The rising of women and of the feminine represents “a radical social change that starts in the most intimate of spaces” and extends into the economy and across the planet13 (Patel). As it finds creative expression in the proliferation of solidarity economy practices and institutions across the planet – these institutions are, in turn, further transforming women out of the subordinated feminine, and teaching both women and men to relate to others 12 See

for example, hooks, bel. 1984. Feminist Theory: From Margin to Center. Boston: South End Press and Mohanty, Chandra. 2003. Feminism Without Borders: Decolonizing Theory, Practicing Solidarity. Durham: Duke University Press. 13 Patel, Raj. Plenary Speech, Canadian Summit on a People-Centered Economy, Ottawa, May 30, 2010)

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About the Author Julie Matthaei has been active in anti-war, feminist, ecology, lesbian/gay, and anti-racist movement in the U.S. since she went to college at Stanford in 1969. She teaches economics – including Feminist Economics and the Political Economy of Gender, Race and Class – at Wellesley College. Julie has written two books on gender in U.S. economic history, An Economic History of Women in America (1982) and, with Teresa Amott, Race, Gender and Work: A Multicultural Economic History of Women in the U.S. (1996). She co-edited Solidarity Economy: Building Alternatives for People and Planet (2008), and is a co-founder and boardmember of the U.S. Solidarity Economy Network (http://www.ussen.org/).

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25. Organizing Against the Economic Crisis by Creating a Bank Tenant Association, City Life/Vida Urbana Steve Meacham Before Jean Bertrand Aristide became president of Haiti in 1991, he was a radical priest organizing in the slums. The oligarchy challenged him by asking if he believed in the class struggle. He responded that essentially the question was not relevant. Just like the earth goes around the sun, the class struggle continues regardless of whether he believes in it. The only relevant question is, he said, “Which side are you on?” Boston has experienced almost 2500 foreclosures since January, 2008. If you assume two units per foreclosure on average, thats almost 5000 households faced with forcible eviction from their homes after foreclosure. Such a number of people losing their homes in one city from a natural disaster would elicit considerable sympathy. This disaster, however, is human-made, is nationwide and should elicit our outrage. The richest and most powerful institutions in the country used their control of the market to try to get even richer at the expense of the majority. Part of this process was creating “predatory loans.” United for a Fair Economy and others have documented how these loans were especially directed at communities of color. The predatory nature of the mortgage crisis, however, goes far beyond these millions of bad loans. It was a predatory context more than individual loans. That context was the speculative real estate bubble, created by Wall St. financial institutions. Dean Baker of the Center for Economic Policy and Research has noted that real estate values tracked incomes for 100 years, until about 10 years ago. That was about the time of the collapse of the stock market bubble. Capital moved into real estate and created a new bubble. This forced people to pay inflated prices, even when buying the most humble house in

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25. Creating a Bank Tenant Association their neighborhood. They were told to buy at all costs, by political leaders, lenders, even sometimes by pastors, because it was assumed that house prices would keep rising forever. When buyers said they couldnt afford the price, financial institutions promised refinancing, a promise never fulfilled once the bubble ended. We have a chant that we use at weekly demonstrations against banks, most recently in front of JP Morgan Chase on May 20, 2010. “Pain for the many, profits for the few, Shame on Chase, Were coming for You!” This slogan captures the situation well. Chase had record profits in the first quarter of 2010, what the New York Times called a “perfect game” of profits. Foreclosures rose sharply in the same first quarter. While President Obama called on banks to reduce principal, Chase said they wouldnt do that. Locally, at the time of this writing (June 1, 2010) Chase will not discuss non-profits offers to buy occupied foreclosed buildings in cash; Chase insists on evicting first! This brief description of Chase shows why the members of our Bank Tenant Association experience the mortgage crisis as an attack. The question, as Aristide might suggest, is how do we respond?

The Crisis and the Political Moment The financial/economic crisis, along with the last election, is arguably a “political moment.” Political moments are times of potential conflict and change, for good or bad. They are times when large structures of power are revealed to have obvious contradictions, when the common sense of one era doesnt seem to make sense anymore. President Obama initiated a new program (Making Homes Affordable Program) to solve the ongoing mortgage crisis. There has been widespread criticism that this program has been ineffective, primarily because it does not require anything of the banks. Its all voluntary. Also, the loan modification process does not work well without principal reduction for properties that are under water (building value less than loan value). When Obama recognized this problem earlier this year and called for banks to make principal reduction a central feature of the loan modification process, many banks refused or only paid lip service. Again, there was no requirement. The one proposal made by Obama that would have put teeth in this program was allowing bankruptcy judges to reduce principal on the first mortgage (like they can on a second home or a yacht). This was defeated in the Senate. After the vote, Sen. Dick Durbin (D. Ill) commented that they (the banks) own the Senate.

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Part VIII Movement Building Wall St. banks resistance to meaningful loan modification is endangering the system as a whole, exposing the contradictions of modern day financial capitalism. At the same time, this is a moment when localized street level resistance is effectively defending people against this attack and pointing the way toward systemic change. This resistance is changing what is “common sense.” In Boston, one new important arena for this local resistance is postforeclosure eviction defense. While most discussion nationally has focused on the need for “workout counseling” and loan modification before foreclosure, eviction defense after foreclosure has proven to be perhaps a more effective arena, both for individual cases and systemic change. Working with Legal Services folks, City Life organized the Bank Tenant Association in the summer of 2007 to organize against foreclosure evictions. Since then we have stopped the overwhelming majority of evictions of those families that manage to reach us. We are working with hundreds of households. For former tenants, we have won large move-out settlements, or banks have backed down and accepted rent. In increasing numbers of cases, banks are even selling properties to occupants, usually former owners, at the real current value, sometimes half or less of the old loan value. This reduction of principal is almost unachievable by normal loan modification efforts. It has been made possible by a committed and growing movement of Bank tenants, willing to engage in dramatic protests, including civil disobedience, alongside more standard legal defense.

The Bank Tenant Association City Life has used the method of post-foreclosure eviction defense to gain leverage for negotiations with the banks. This wins results for individual households and defends working class communities. Key to doing that is the Bank Tenant Association (BTA). The BTA is composed of occupants of foreclosed buildings, both former owners and tenants. We stress that, after foreclosure, everyone is a tenant of the bank. The BTA also includes some people not yet foreclosed who feel that foreclosure is imminent. While we dont discourage anyone from trying to avoid foreclosure, we emphasize that foreclosure is not the end of the struggle, but rather the beginning of phase two of the struggle. One of the problems of current workout counseling is that foreclosure is seen as complete failure. This puts ordinary people at a decided disadvantage. In any negotiations, the side that cant walk away from the table is probably going to lose. Therefore, we encourage owners to lose their fear

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25. Creating a Bank Tenant Association of foreclosure. We encourage former owners and tenants to understand that they have the power to stay in their homes. What are the key features of a Bank Tenant Association that would allow it to be replicated in another city? This summary will look at what is sometimes referred to as the 5 masses mass canvassing, mass meetings, mass casework, mass actions, and mass political discussion.

Mass canvassing There are various ways to identify buildings in foreclosure. Its crucial to reach those buildings just before foreclosure takes place, before the banks can send representatives to intimidate occupants into moving. In Boston, we focus on the list of buildings scheduled for a foreclosure auction, the final step where the bank typically takes control of the building. Canvassing is labor intensive. Where do the troops come from? In Boston, there are several sources for the 100+ volunteers that have been involved in monthly canvassing. Bank tenants themselves are the most important component. They can relate to the anger and shame people are feeling better than anyone, since they are living it. It is remarkable how many people come to weekly meetings, come to bi-weekly leadership meetings, come to weekly protest actions, and canvass on weekends. In addition to bank tenants, law students, especially from Harvard, have organized the No one Leave Campaign. When schools are in session, 75 to 100 volunteers help out with mapping and canvassing. These students are from several universities and many different backgrounds. Religious institutions wanting to contribute to solving the crisis also help. Most important, the Jewish social service group Kavod House has canvassed monthly with City Life since late 2007. Radical activists, including those from other movements, want to make a link to the housing crisis and our base through helping canvass. Such activists, acting as City Life volunteers, have anchored our work in some of Bostons neighborhoods. Canvassing is very effective. People in foreclosed buildings are generally very motivated listeners. Canvassers go door-to-door knowing that the information they bring is literally the difference between eviction and staying in their homes. Volunteers are easy to recruit. The effectiveness and dramatic, public nature of the struggle causes many to seek us out.

Regular mass meetings The BTA meets every week in City Life offices, bringing over 100 weekly. Separate meetings in East Boston 3 times a month draw about 20 each time.

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Part VIII Movement Building These meetings cover many issues and have many purposes: • Develop solidarity. We urge people to leave their shame at the door. We try to end the isolation characteristic of individual foreclosure and eviction cases by encouraging people to share their stories even in their first meeting. This involves a lot of “testimony”, often very emotional. As some leaders say, we cry a lot of tears at City Life. Some of these tears are from pain and stress. Many present their stories of victory and cry tears of joy. • Planning for protests and public actions. We are now organizing almost weekly protests in front of bank offices or in front of the homes of families we are defending. These protests are disciplined but militant, sometimes risking arrest. The success of these protests in winning back people’s homes makes it clear that building a movement is the best way to handle individual cases. • Explanation of eviction rights. You dont have to move just because the bank says so. We are constantly empowering people to know their rights and represent themselves in court. • Building unity between former owners and tenants. Former owners have been some of the most aggressive and determined tenant leaders against the banks after foreclosure. Solidarity between tenants and small owners overcomes a historic split in our struggle. • Political education/discussion about the nature of the crisis. A key part of responding to the crisis is having an accurate and empowering understanding of what caused it. We oppose any attempt to individualize the struggle or blame the victim. • Recruiting volunteers. We emphasize the collective nature of the struggle and the need to give back. • The sword and the shield. Each meeting presents the strategy of The Shield and The Sword. The Shield is legal defense. We are not depending on legal defense to win outright, just to hold the bank off while The Sword takes effect. The Sword is public pressure and protest. • Multi-lingual. All meetings are bi-lingual in English and Spanish, sometimes using other languages as well. East Boston meetings are primarily in Spanish.

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Mass Casework Engaging tenants The foreclosure crisis is thought of as a problem for homeowners. But 75% of households evicted after foreclosure in Boston are tenants, 47% statewide. Some of these folks are tenants of owners facing foreclosure in the same building. Since tenants have relatively more rights in eviction defense than former owners, engaging the participation of tenants can really help the owners win. This is important in building unity. Many tenants are living in absentee owned buildings facing foreclosure, usually 2-3 family buildings or condos. This is the result of a host of investment schemes gone awry, including condo conversion scams. For example, many buildings were converted to condos and sold to straw owners. We say “straw owners” because they never intended to move in and the rent was not nearly enough to cover the mortgage. These were simply speculative investments, based solely on the hope that the Ponzi scheme of escalating real estate value would continue. None of the tenants in such buildings will ever be assisted by Obamas HAMP program, which is designed for owner occupants. Such condos or absentee owned buildings probably should be foreclosed, but the occupants, the tenants, should be protected against eviction and supported in gaining control of the building. Intake and orientation Canvassers emphasize getting names and numbers of folks living in foreclosed buildings. All contacts coming from the canvass receive calls that orient people to our strategy and invite them to the next meeting. Canvassing is our main source of new folks, but people also find us in other ways (referrals, community meetings, press reports, etc.). Increasingly, homeowners are coming to our meetings from outside Boston. We are not canvassing there, but the word has spread that there is an alternative to the frustrating failure of loan modification. Case management – eviction process and the “public letter” When starting a BTA, there is sometimes space for following each case in a detailed way, but our experience is that this soon becomes impossible. CLVU is tracking about 750 cases right now. We are thus forced to handle legal education through our mass meetings and peer counseling rather than primarily through individual counseling by staff. City Life organizers very consciously avoid a “client” relationship with members of the BTA.

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Part VIII Movement Building Each foreclosure eviction case has two tracks to follow. One is the “shield” aspect of the eviction process. Bank tenants face a series of legal actions by the banks, including cash for keys, notices to quit, summons to court, answers, discoveries, etc. Sometimes this aspect is taken over by legal services attorneys who officially represent bank tenants. On the other hand, we are able to counsel people to successfully represent themselves in various stages of the eviction process. The second track is the “sword” aspect. We have started to encourage each building occupant to write a “public letter.” These are moral statements sent to the bank explaining what people want. The arguments made are not legal but ethical and moral. These letters are “ccd” to many local political leaders and get initial publicity for each case. These letters put mortgage companies on notice that they face serious resistance. They also help residents stay involved in their own case. Sometimes members read their public letters to our meetings. These are moving moments. The letter will go into what the bank did to the family, the long disappointing process of negotiations, and the broken promises. The letter connects the foreclosure to other problems. Health problems without insurance cause financial distress. Sons and daughters are serving in Iraq or Afghanistan while their families are being evicted here. People have lost their jobs in an economic crisis caused by Wall St. The letters show the intersection of class and racial inequities over many different issues. To stay in touch with the vast and growing base of bank tenants, volunteers call every single household almost every week to remind them of meetings and protests and offer a chance to update about their situation.

Mass action Eviction blockades When people who are regular members of the BTA run out of legal options, we consider an eviction blockade. In Mass., a constable must give 48-hrs notice before a truck eviction. In that time, we organize a protest in front of the building at the moment of eviction. Some are willing to resist arrest and chain themselves to the doorway. Weve called blockades over 20 times since early 2008. Three times the banks came through our lines, evicted the family and arrested our people. These protests are very emotional, garner lots of media attention, and give huge visibility to the Bank tenant movement. When the same bank doing the evicting has also received huge bailout money, is making record profits, and has an offer on the table from us to buy, they have a huge public

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25. Creating a Bank Tenant Association relations problem: their utter disregard for residents of foreclosed buildings is on public display. We do blockades only where we are making a demand that the occupant can follow through on pay rent to the bank or buy back the building at appraised value. Both these demands put focus on the central issue of the foreclosure crisis the creation of the housing bubble and its bursting. In one blockade, we were defending an elderly brother and sister, both legally blind. They had been scammed into a bad loan by their niece, who walked away with the money. Their family offered to buy the building back from Deutsche Bank at the real value (about half the loan value), but the bank initially insisted on eviction. This case received a great deal of publicity and certainly didnt make Deutsche Bank look very good. The blockade was successful and these folks home has been purchased by the City and will be resold to them. For many in the BTA, the blockades and civil disobedience connect emotionally with the civil rights movement. We show clips from “Eyes on the Prize” to encourage discussion about this connection. Some have referred to our blockades as “getting across the Pettus Bridge” (a reference to the march on Selma, Alabama). In 2009 and 2010, we have more and more often called vigils at the homes of families we are defending before the eviction, to be more proactive. Just before Christmas and New Year, 2009, and again at the end of January, 2010, we held vigils that were enough to win back peoples homes at real value. Offensive protests and campaigns The blockades are technically defensive but help expand the movement rapidly. We also have campaigns that target the offices of major banks. For instance, we have held many rallies directed at Deutsche and Bank of America. Deutsche Bank was our original target, since it was the largest forecloser and evicter in Massachusetts in 2007. Deutsche insisted that, as a “trustee” for investors, they bore no responsibility; their servicers were responsible. Even though the servicers have Deutsche power of attorney, Deutsche insisted they had no influence. Through protests in 2007, we got Deutsche to issue a letter to their servicing companies urging them to consider other choices than mass eviction after foreclosure. When this letter had no effect on the servicers, we organized a protest of over 100 people at the Deutsche Bank PGA golf tournament near Boston in August, 2008. In August of 2009, we protested the pre-tournament dinner. This has attracted significant attention from German magazines and TV. The Bank of America campaign emerged from an “unsuccessful” blockade on Sept. 5, 2008. That eviction and the attendant arrests sparked a mass movement, still ongoing, to demand that B of A stop evictions after foreclo-

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Part VIII Movement Building sure and accept the rent. An example was a 2009 Valentines Day protest, done jointly with Rising Tide, an environmental group. While protesters were outside, many entered to close their accounts, “breaking up” with the Bank on Valentines Day. We chanted “Roses are red, Violets are Blue, Freddie Mac did the right thing Why cant You?” (referring to Freddie Macs decision to stop post-foreclosure evictions). More protests followed, some linking with labor union demands against the Bank. A more offense-oriented campaign includes our strategy of Block Rebellion. In these campaigns, we organize all residents in a small district to make a demand on all the banks owning foreclosed property to stop all evictions, to sell back to owners at real value, to sell other units to non-profits for future cooperatives of mutual housing corporations. We have targeted 3 areas of the City for these rebellions. One Block Rebellion rally of 100 in Dorchester on a Saturday night in the pouring rain was covered by the New York Times on March 22, 2010.

Mass political discussion Coalition work and legislation CLVU links its direct action and organizing to several broad coalitions. Our legislative initiatives go through those coalitions. The most important one is the demand for “just cause eviction,” sponsored by the Mass. Alliance Against Predatory Lending. Simply put, the banks should have a reason to evict after foreclosure. Currently, the banks foreclose and become the landlord. Occupants, now tenants of the bank, offer to pay rent to the bank. The Bank refuses the rent and thus evicts “no-fault”. Just cause eviction requires that the bank have reason other than the simple fact of foreclosure. Such legislation would dramatically change negotiations with the foreclosing banks. They would be much more likely to sell at real value or do meaningful loan modifications before foreclosure. The legislation would be very effective and would cost the public nothing. Nevertheless, it wasnt even an option until the spring of 2008. Bank opposition was too strong. It failed in the legislative session ending in July, 2008, but it was introduced again in the 2009-10 session. As the movement has grown, so has our power. The State Senate passed a version of just cause 37-0 in April (that just covered former tenants, not former owners). We are trying to get it to the floor of the House by July 31, 2010. We are also supporting an initiative at the City level where Boston would refuse to put its money in any bank that engages in post-foreclosure, no-fault evictions, or other irresponsible behavior.

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25. Creating a Bank Tenant Association Radical analysis and narrative The BTA model of organizing raises issues that are at the center of the political debate around housing and financial capitalism. A popular, radical perspective on these issues is an enormous asset in doing this direct action organizing. The following are some principles we emphasize: • The financial institutions created the crisis. They should pay for it. This means that foreclosing banks should (1) rewrite loans to current, real value, (2) accept rent from occupants, and/or (3) resell foreclosed buildings to occupants or non-profits at the real value. This can solve the crisis without waiting for government bailouts. • We want the government to act, to provide money and new regulation, but we have a strategy that allows us to win even if the government does not act. • The financial crisis is one of speculation, and the tendency of speculation to take over is directly linked to the growing gap between the rich and everyone else. That gap not only impoverishes us, it also leads to a situation where investors have no productive outlet, and hence turn to speculation. • We have the right to defend our homes and our communities, regardless of what the court says is the legal status of our claim to our homes. • The communities and people hurt by this crisis are disproportionately people of color. Recognizing this publicly helps organize a resistance that benefits everyone. • When we emphasize the sword and the shield, the understanding is that we are going into a battle. We have to prepare accordingly. The tendency of capitalism to create growing inequality, followed by speculative bubbles, helps us put forward a narrative quite different from the dominant one. Predatory loans are not just individual mortgages. There was rather a predatory lending environment characterized by deliberately inflated real estate values. People did not “buy more house than they could afford.” People simply purchased whatever housing was available at inflated prices. BTA meetings create time to discuss these issues. In the summer of 2008 and 2009, we sponsored a Summer Institute, part of the Radical Organizing Conference series, that presented workshops on many different political

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Part VIII Movement Building issues, alongside skill-building workshops. This activity links the housing crisis and the organizing against it to a host of other issues wages, trade, health care, etc. That creates broader support for our organizing and trains new leaders.

Conclusion There is a truck that delivers free food to pantries in Boston. On the side of the truck is a quote from a Brazilian bishop that reads, “When I gave food to the poor, they called me a saint. When I asked why the poor have no food, they called me a communist.” Any radical movement must hold together various “contradictions.” It must address immediate needs but also do it in a way that makes progress towards changing the system that caused those needs to exist. It must work on the individual problem but in a way that addresses the general situation. It must address both the short term and the long term. Each movement must be true to the issue that galvanized it but also see beyond that issue to larger issues of justice. The movement must allow for action and reflection; the struggle is a school but sometimes you need an actual school. In these ways City Life hopes to continue not only to provide food for the poor but to always ask why the poor have no food or housing.

About the Author Steve Meacham has been an organizer for almost 40 years, working in housing, community, labor, and anti-war movements. He has worked at City Life for over 10 years. Working with City Life, Steve has promoted an avowedly radical model of community organizing.

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26. Viral Spiral: How the Commoners Built a Digital Republic of Their Own David Bollier One of the great, untold stories of our time is how the commoners built a digital republic of their own on the Internet, using digital technologies. It is an epic story of ordinary citizens inventing their own democratic polity online, and re-imagining our economy, our culture and our democracy over the long term. The story is not well-known in part because it is a distinctly non-Washington story, one that has arisen largely beyond the gaze of policymakers, politicians and the media. You may be wondering, Who are these commoners and what is this “digital republic”? Let me start by saying, the commoners are not mere consumers. Consumer shop and buy. Nor are the commoners citizens as such. Citizens tend to focus on government. The commoners are something different. They are people who participate in communities of mutual support based on shared interests and ideals. A commons arises whenever a community decides that it wishes to manage a resource in a collective manner, with a special regard for equitable access, use and sustainability. On the Internet, a commons often consists of self-organized amateurs who collectively create pools of music, video, and other information—and then share them with each other. They add to the pool, improve it, transform it into something new, and circulate it. It turns out that social collectives working together in cyberspace are not only a satisfying social experience, but a powerful mode of economic production. This is a theme that Harvard Law School professor Yochai Benkler has explored a great deal. What distinguishes the digital republic from the image that you may have of bloggers in their pajamas, kids playing violent online games or exchanging silly messages on Facebook, is the sovereignty of the commoners. The people in countless online communities have created an independent realm of culture that legally cannot be taken private or commercialized by corporations without the consent of the commoners themselves. That is because

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26. Viral Spiral they have created their own free software platforms; they use licenses to assure that the content will be available for sharing; and they self-enforce a social ethic that sustains the commons. Some of the more prominent commons projects out there include: free software and open source software; Wikipedia and scores of wikis on specific topics; the Internet Archive; Flickr; Creative Commons-licensed content; and social networking sites. But I’m get ahead of myself. I need to start by explaining this chapter’s title1 , and then give a brief overview of why the commoners wanted to create their own digital republic in the first place. The “viral” in “viral spiral” borrows from medical language to refer to the mysterious, almost-magical way that new ideas and memes spread by way of the Internet. “Spiral” refers to the ways that the innovations made by one Internet cohort become the platform for a later cohort to builds on top of. So you get this upward spiral of progress and innovation that is independent and mostly outside of the market economy. The story of the viral spiral starts with copyright law and some of its basic premises. Copyright law is not a natural right ordained by the universe, but a civil creation with utilitarian purposes. It is intended to spur the creation of knowledge and progress. It does this by giving creators a timelimited monopoly on their works. The assumption is that by giving them a property right—one with exceptions and limitations like fair use and limited terms—creators will be able them to sell their books or music or films in the marketplace. Creators will be able to earn a livelihood and any investors will be rewarded. The implication of assigning copyright protection to works is that anything with copyright protection has value—and that anything without copyright protection is probably worthless. This is called the “public domain.” Traditionalists have regarded the public domain as a dusty old attic—a junkyard of old, worn-out stuff—government reports, sheet music from the 1920s, old books that no one wants to read any more. Within copyright scholarship, the public domain has usually been described as the “opposite of property” and “the dark star in the constellation of intellectual property.” It’s revealing that the first substantive law journal piece about the public domain was not published until 1981, and the second, not until 1990. This is where the story of the viral spiral begins—when the public domain was discovered as a source of great value. 1

Viral Spiral is also the title of a book I wrote, published by The New Press in January, 2009. If this chapter has whet your appetite on the topic, take a look at the book at www.viralspiral.cc/download-book.

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Part VIII Movement Building If Galileo discovered that the planets moved and William Harvey discovered that blood circulates in the body, and Isaac Newton discovered that an object in motion tends to stay in motion. . . . . . well, Richard Stallman, a shaggy-haired fellow with a resemblance to an Old Testament prophet, was arguably the first to demonstrate the value of the public domain. Stallman is the legendary hacker and the inventor of free software. Stallman takes great pains to distinguish his idea of “free” as in freedom, not free as in free beer. Stallman was one of the original computer hackers, at MIT, in the 1970s. As the PC industry began to take off in the early 1980s, software—which had previously been freely shared—began to be treated as private property. It was becoming quite valuable. At about this time, this gentleman, Bill Gates, left Harvard College as an undergraduate after he was accused of using federally funded software code for commercial purposes. Stallman was intent on maintaining software code as a commons—something that could be freely shared, improved and used for the community of hackers. The problem was, there was no legal means for doing this. There was only copyright law, and anything that was not treated as private property was considered part of the public domain. But that was no solution because anyone can take something from the public domain, make the most minor changes to it, and then “take it private” by claiming copyright protection for it. Stallman’s great contribution was to create a protectible public domain—a commons of software code. He did it by inventing the GPL, the General Public License, which is a license based on one’s rights as a copyright holder. The GPL essentially says that you can freely use this software to create new software, without charge or restriction, so long as any new software that you create is also licensed under the GPL, too. This ensures that all follow-on software programs will be freely available, and legally cannot be taken private. It means that people would be willing to freely contribute their creativity and energy to a software commons because they would know that IBM or Microsoft or Oracle could not claim it as private corporate property. The GPL was an attempt to protect what Stallman called the “Four Freedoms”—the essential right of programmers to run a program for any purpose; to study and adapt it; to share it with one’s neighbor; and to release improvements to anyone. The GPL and the Four Freedoms represent the beginnings of a potent political vision for cyberspace—a tool for building the digital republic. Stallman might have languished in obscurity but for the rise of the Internet and the steady expansion of copyright law that began in the 1970s and continues to this day. In the 1990s, the industries that most depend upon

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26. Viral Spiral copyright law—film, music, publishing, information—began to step up their quest for more expansive, longer-lasting copyright protection. The idea took hold that if a little bit of copyright can produce more money and GDP, then a lot more copyright protection will produce a gusher of new creativity and economic growth. What resulted might be called the Great Copyright & Trademark Blowout. Here is a list of some of the more notable laws enacted in 1990s: • The Sonny Bono Copyright Term Extension Act, a.k.a. “Mickey Mouse Protection Act,” retroactively extended the terms of copyrighted works by twenty years. (Mickey Mouse was due to enter the public domain in 2003; then the Disney Corporation succeeded in getting this law passed.) Copyright protection is supposed to spur new creative output—and here we have the spectacle of giving incentives to dead authors to create new works! Of course, the retroactive copyright protection was a pure giveaway to major copyright industries. • The Digital Millennium Copyright Act, a law that gives copyright holders the unilateral right to lock up digital content and prevent fair use such as reverse engineering. The law is widely reviled as a hindrance to innovation, competition and cultural freedom. • Trademark “dilution” and “tarnishment.” Other laws in the 1990s gave companies broader protections under trademark law, which amount to broad rights to control the public meanings of trademarked products and logos. • A shrinkage of fair use right has also limited the public’s rights, mostly through court rulings over the past thirty years. For example, The Nation magazine’s 300-word excerpt from Gerald Ford’s 200,000-word memoir was deemed not to be fair use. For years, West Publishing claimed a copyright on the page numbers of federal court decisions and fought tooth-and-nail to protect this putative “originality” and value-added. • Then there was the 1976 copyright law, which made everything “born copyrighted.” This has far-reaching implications when the Internet and digital technologies became pervasive because those technologies made copies in the normal course of operating—a fact that made the legality of so many digital functions presumptively suspect or illegal. Finally, you also got a lot more bullying by copyright and trademark holders, especially against little guys. Here are some examples:

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Part VIII Movement Building • Tom Forsythe, a photographer who created a series of photos of Mattel’s Barbie doll in strange and sexually suggestive positions for his exhibit, “Food Chain Barbie,” was the object of full-scale litigation by Mattel. Forsythe eventually won, but only after his pro bono law firm spent more than $1.5 million defending him. • Binky vs. the Trix Rabbit. The editor of a ‘zine featured Binky, a cartoon character made by Matt Groening, punching out the Trix Rabbit. Groening sued, and the ‘zine was seized and literally destroyed. “The Illegal Art” exhibit, which toured several years ago, exhibited an “illegal” copy of the rare, banned ‘zine cover. • Martin Luther King Jr.’s estate has asserted a copyright in the “I Have a Dream” speech, and sued CBS News for using video footage of the speech without authorization. • Prankster Kembrew McLeod obtained a trademark from the U.S. Patent and Trademark Office on the term, “Freedom of Expression.” Then when AT&T happened to use the term as the name for a special calling plan, McLeod sent AT&T a cease-and-desist letter—which was summarily ignored . . . and McLeod didn’t have any resources to vindicate his rights in court. I could go on and on. There are countless examples, many of which I gathered into a book that I wrote a few years ago, Brand Name Bullies. The point here is that copyright and trademark holders have won huge expansions in the scope and terms of their intellectual property rights over the past 30 years—usually at the expense of the public’s fair use and public domain rights. This is often portrayed as a great victory for fairness and economic growth . . . but only if you ignore the public and future creators. When everything is sequestered in an envelope of property rights, it is hard for newcomers to create something new. It is hard for artists, educators and the public to quote and copy and share existing works. In essence, culture is diminished and locked up. Culture is re-defined as a marketplace, period, and regulated by one’s ability to pay—or one’s willingness to endure the transaction costs of obtaining permission. The irony was that all this was happening just as digital technologies and the Internet were making it far easier to share and copy things. In fact, virtually everything that happens on computers and the Internet involves copying something . . . and under a strict interpretation of the law, most of it was illegal unless it was a paid transaction or permission obtained. So

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26. Viral Spiral intellectual property law and Internet culture were going in diametrically opposite directions in the 1990s and even now. It is here that the Viral Spiral took another twist, building on the pioneering work of Richard Stallman. In the late 1990s, Lawrence Lessig, then a law professor at Harvard Law School, was coming to see that software code was increasingly playing the functions of law. It was creating new ordering principles that invisibly determined how people could interact with each other on the Internet. Code was coming to regulate people’s speech, their interactions with each other, their rights as consumers, and much else. Lessig was a constitutional law scholar, not a copyright scholar, from a conservative Republican background. He clerked for Judge Richard Posner and Justice Scalia. In 1999, at a time when most people were still trying to figure out how the Internet worked, and what it meant for law and markets, Lessig published Code and Other Laws of Cyberspace. It became an instant classic because it provided a sweeping theoretical framework for thinking about freedom on the Internet. Lessig broke with the libertarian assumption of Silicon Valley that freedom naturally occurs, Adam Smith-style. He argued that freedom must be actively constructed on the Internet. He was inspired by Mitch Kapor, an early tech entrepreneur, who in 1991 wrote that on the Internet, “architecture is politics.” Lessig’s famous formulation was “code is law.” There were other folks who realized that copyright law was a major impediment to new creativity and culture, especially in digital contexts: John Perry Barlow, James Boyle, Pamela Samuelson, Yochai Benkler, Jessica Litman, Peter Jaszi and many others. All of these folks realized that the public domain is a source of great value, and needed to be protected. But given the political realities of changing the law—that is, the dominance of the MPAA, RIAA and other copyright industries on policymaking—the big challenge was HOW? How to make sharing legal on the Internet? How could ordinary citizens—commoners—get around the stifling, impenetrable complexities of copyright law and secure the public domain . . . for free speech? For new creation that builds on existing works? For satire and cultural commentary? For reverse-engineering? Lessig’s bold idea was to have the Supreme Court declare the Copyright Term Extension Act unconstitutional because it did not abide by the Constitution’s stipulation that it be for a “limited term.” This would be the first constitutional challenge to copyright law itself. He argued that the length of copyright protection had been extended so many times—11 since 1960—that he said it amounted to “perpetuity on the installment plan.” I devote a chapter in my book to the lawsuit, Eldred v. Ashcroft. Improbably enough, the U.S. Supreme Court accepted the case even though it had

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Part VIII Movement Building not had a trial at the district court level. Lessig’s strategy was to appeal to the “originalists” like Scalia and Thomas to uphold the plain language of the Constitution. But he lost in February 2003 by a 7-2 vote. The Justices didn’t much like the law, but they weren’t willing to override Congress’ power to enact it. They didn’t think any harm from the law rose to a constitutional level, and cited the adequacy of fair use doctrine. Only Stevens and Breyer dissented. Lessig later confessed his naivete. As the case was working its way through the courts, Lessig and others realized that it would never be enough to win a court case. It just wouldn’t do enough to reform copyright law. A larger, private effort—even a movement—needed to be started. But what? In May 2001, Lessig convened a rump caucus of law scholars, computer techies, artists and others at the Berkman Center at Harvard. Their goal was to find a way to “brand the public domain”—to find a way to protect shared content and enable legal sharing. At first, Lessig and a group of a dozen or so thought they would build the equivalent of a “land trust” for works, and act as curators of a huge inventory of public domain works. But there were all sorts of tax problems and legal liability issues for that scenario. Then they realized that the GPL was a big success in protecting a commons of software code. Why not something similar for other types of creative work? The upshot, after many months of deep research and debate, was to found a new nonprofit group, Creative Commons, which would offer free public licenses that copyright holders could attach to their works. The licenses would signal to the world, in advance, that the work could be freely copied and shared, provided certain conditions were met. They devised six basic licenses. All licenses require an attribution of ownership, or an Attribution license. Creators could choose to tag their works “NonCommercial”—so that anyone is free to use it however they wish, so long as it is for noncommercial purposes. They could choose to tag a work “No Derivatives,” which means you can’t alter the photo or song, or remix it. They could choose “ShareAlike,” which is a license similar to the GPL in requiring any derivative works to also use the same license—which means that all “downstream” uses are always free to use however you want. And you could choose several of these licenses at once, as in a NonCommercialShareAlike license. The licenses come in three forms—Legal Code—a full license in lawyerreadable language; Digital Code—a machine-readable translation of the license so that other computers could identify the licenses; and Commons Deed (or “Happy Deed”—a plain-language summary of the license. The licenses were released in late 2002, just as the full social potential of the

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26. Viral Spiral Internet was taking off with a new generation of software known as Web 2.0. Now it may strike some people as a mystery why these boring legal licenses are terribly significant, or how they could possibly become the foundation for a major international movement of commoners who believe in “free culture.” That is a bit of a mystery, but one important reason for the huge success of the licenses is what I call The Great Value Shift. Around 2002 and 2003, the Internet infrastructure was maturing and reaching a new flashpoint. It was starting to facilitate all sorts of novel forms of social interaction—a phenomenon that has come to be called Web 2.0. The explosion of activity that has occurred on the Internet is largely about the incredible efficiency of user-driven value creation on open platforms. The companies that recognized this early—eBay, Amazon, Google, Yahoo—have been the biggest successes. Open platforms have had huge disruptive effects on business strategy and organizational behavior. They are changing the very definition of wealth. On the Internet, wealth is not just financial wealth, nor is it necessarily privately held. It is often “socially created value that is shared, evolving and non-monetized. It hovers in the air, so to speak, accessible to everyone. The Great Value Shift is also changing the value of traditional property rights—because open access and use can prove to be more valuable than outright “ownership” (exclusion) in the traditional sense. I am reminded of a quip, “The only thing worse than being sampled on the Internet is not being sampled.” Value increasingly comes from being accessible and circulated, not from being tightly held as private property. The Great Value Shift is one reason that the music industry finally capitulated and has gotten rid of digital rights management for most of its online music. The strict and exclusive property rights claimed for CDs were pissing off consumers. It was also shutting down the social circulation of the music, which is a major source of value-creation for markets. In any case, the CC licenses—with the help of the open Internet and Web 2.0 software—have spawned countless online commons. The licenses have enabled “socially created value” to express itself and protect itself within commons that the commoners devise themselves. That which is generated within the commons can stay within the commons—a core principle for protecting the commons as a vehicle for value-creation. The first users of the CC licenses tended to be tech sophisticates, avantgarde artists, bloggers, activists and the rebellious of spirit. Using the licenses serve as a kind of social signaling—a way to show your cultural identity. The CC licenses were a symbolic way to stick it to Big Media and affiliate with more eccentric, homegrown, authentic culture.

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Part VIII Movement Building But the licenses were more than symbolic. They allowed a creator to both share a work and assert their rights under copyright law. The licenses are based upon copyright—they are not a flouting of it. Cory Doctorow—a budding sci-fi writer at the time and editor of Boing Boing blog—was the first book author to use a CC license, in 2003. He released his first novel, Down and Out in the Magic Kingdom, under a CC By-NC-ND license. Within three years, it had been downloaded more than 700,000 times for free. But it had also gone through seven printings, many foreign translations and two competing audio adaptations made by fans. There are lots of other examples in publishing that I could talk about, but the licenses have been far more popular on the Web, and for music, video and photography. But one clear sign that the CC licenses had come of age came last year, when the band Nine Inch Nails released its album Ghosts I-IV under a CC NonCommercial ShareAlike license. It posted audio files of the album on its official Website, inviting free downloads. The band did not do any advertising or promotion, but it still sold 2,500 copies of an “Ultra-Deluxe Limited Edition” version of the album at $300 a pop, which sold out in three days. It also sold a mere “deluxe edition” for $75 and ordinary CDs for $10. Within a week, the band had made over $1.6 million from over 750,000 purchases. Considering that normally, a band gets only about $1.60 per CD from the record label, Nine Inch Nails did quite well for itself—especially when it later released the album for distribution through conventional retail channels. The licenses are now estimated to be used on more than 150 million Web objects—music, video, blogs, academic articles, and much else. You can search for CC-licensed works on Google, Yahoo, Flickr and many other sites. Flickr now has more than 75 million photos on its site that can be re-used for free under CC licenses. Academics—who don’t usually publish to make money anyway—are among the biggest users of CC licenses. By using a simple Attribution license, academics can release their works on the Internet and achieve their biggest goals—to be read and to build a reputation—without triggering any legal confusion about the ability to share and copy their works. The viral spiral unleashed by free software, the CC licenses, and open platforms is reaching into at least five other realms of life and transforming them. In my book, I devote a chapter to each of them. Let me quickly review them. First, the sharing economy goes global. After the CC licenses were released in December 2002, people in countries around the world came and asked, “Can we use the licenses in our country, too?” So Lessig set up an international license-porting project based in Berlin that helps oversee the

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26. Viral Spiral process of adapting the licenses to the particular legal system of a country. The first countries were Japan, Finland, and Germany. Right now, six years later, there are more than 50 countries that have ported the licenses, with another twenty in progress. By far, the most significant national champion of the CC licenses has been Brazil, which, under President Lula, has cast itself as the first free-culture nation. Lula appointed Gilberto Gil, the renowned singer-songwriter, as his minister of culture—and Gil became a tireless champion and international ambassador for free culture. The government promotes free software and CC-licensed content, and has put a great deal of government information out under CC licenses. Creative Commons has spun off a new organization, iCommons, which is dedicated to expanding the free culture movement. It has hosted major international conferences in Rio de Janeiro, Dubrovnik and Sapporo over the past four years that have brought together remix artists from Brazil with free software hackers from Amsterdam, counter-cultural activists from Croatia and judges from South Korea, and Web entrepreneurs with Wikipedians and indie filmmakers. Second: The rise of open business models. As more and more businesses have come to understand the Great Value Shift that I mentioned earlier—namely, that user-driven value-creation tends to be more efficient, creative and fun than conventional business models—there is now a huge amount of experimentation in open business models. The most money comes from owning a major platform, such as Google, eBay or Facebook. Not everyone can do that, of course. Still, there are lots of examples of entrepreneurs and individuals using open platforms to “get discovered”—and then make money by striking a conventional business deal. It is now commonplace for Big Media to identify its hot, new talent by trolling the Internet. Ana Marie Cox parleyed her notoriety as a political gossip on Wonkette blog into a job as Washington editor of Time magazine. Perez Hilton, a Hollywood blogger, got a lucrative job on E!, the cable TV channel. There are lots of musicians who find audiences by releasing their stuff on the Internet. I came across a Boston-based band, Two Ton Shoe, that got a call from a club owner in South Korea. Music fans kept asking if he had any CDs by the band. Turns out that hundreds of people had found the music over the Internet. So a promoter brought the band to South Korea, and the band played four sold-out concerts to screaming fans. Another emerging open business strategy is to build or interact with a spirited community to which things may be sold. This amounts to “building a market around a commons.” The idea is to build a conversation, a flow of information, and social trustworthiness—and then build a market “on

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Part VIII Movement Building top” of it. An example is Magnatune, an online record label that lets people stream music for free and pay whatever price they want, from $6 to $15, knowing that half of the money will go directly to the artist. The company makes much of its money by licensing music that gets out there for movies, advertisements and other commercial uses. M.I.T. professor Eric von Hippel has written extensively about various communities collaborating with companies to produce innovative new products. For example, sports equipment manufacturers interact with the cutting-edge athletes in extreme skiing, sail-gliding, rock-climbing and other sports. It turns out the biggest enthusiasts in these sports are developing their own makeshift equipment innovations—which the sports companies are eager to commercialize. A community of customers acts as a cheap and reliable source of R&D and product development. Because of the Internet, the once-distinct roles of “producer” and “consumer” are blurring. A third viral spiral is the Open Educational Resources, or OER, movement. The basic idea of this movement is to use the tools of free software, CC licenses and social commons to reinvent learning and education. The goal is to make them more accessible, affordable and exciting. So, for example, M.I.T. in 2001 began to put all of its course curricula up on the Web, for free. Anyone could see the syllabus, the lecture notes, class assignments, problem sets, simulations, exams and video lectures. M.I.T. did this at a time when everyone else thought that universities should try to monetize their courses, through distance education classes. The M.I.T. OpenCourseWare initiative has now been emulated by dozens of universities around the world. There is even an OCW Consortium with more than 120 affiliated institutions in 20 nations. M.I.T. has had a major impact on Chinese education because of the OCW initiative, and students around the world in rural villages idolize M.I.T. as the pinnacle of science education. Another key open education project is Rice University’s Connexions project, which is a major international repository of teaching materials that are contributed by teachers and students themselves. It has more than 5,800 learning modules that are used in more than 194 countries—everything from electrical engineering and music theory to nanotechnology and history. All of it is free and freely modifiable, and uses CC licenses. A piano teacher from Champaign, Illinois, posted a 276-page book on music theory on Connexions—a book that was soon downloaded more than 7.5 million times! Connexions users have since translated it into many languages, and these are also now available through Connexions. Open access scholarly publishing is another major OER development. The Internet permits both wider dissemination and lower costs than all previous

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26. Viral Spiral forms of publishing. And since academic publishing is not oriented to making money, but just covering costs, it is perfectly suited to academics. There are now more than 4,900 OA journals active, including several prominent ones affiliated with the Public Library of Science. It has helped that the National Institutes of Health have insisted that all NIH-funded research—all $31 billion worth of it!—be made available for free no later than one year after its commercial publication. Let me just suggest the diversity of the OER movement by citing the One Laptop Per Child project, which seeks to bring cheap laptops to children in developing countries; open textbook projects that seek to create free, modifiable textbooks as a way to undercut soaring textbook prices; and all sorts of specialized academic websites that have worldwide participants. Fourth, science is discovering the commons as a way to accelerate discovery and innovation. One of the big problems in science these days is that there’s just way too much information to sort through and use intelligently. A simple Google search for pyridinium turns up 393,000 results—which is way too many to sort through. Every day, there is so much new scientific literature generated that it would take a single person 106 years to read it all. Scientific knowledge is structured in very special ways, and yet the tools for exploiting it have not developed nearly as fast as the output of new knowledge. The Internet has done lots of great things for social networks, games and porn, but little for science. CC started a Science Commons spinoff to try to act as a catalyst for making scientific research more accessible and interoperable—and to lower the transaction costs of sharing information or even physical biological samples. Creative Commons also started an “open data” project to help make databases be able to “talk” with each other, despite copyright and technical barriers. It is also trying to bring the kinds of computerized efficiency of Federal Express to the bureaucratic process of sharing tissue samples. A final viral spiral involves citizenship: The commons is becoming a platform for a new species of citizenship. Free culture enables new types of citizen practices. People can do things directly as citizens, and organize with their peers more effectively than ever before. There is no need to use proxy-intermediaries. Examples: • The bloggers who debunked, in advance, mainstream pro-war news coverage about Iraq. • Students who exposed the flaws in Diebold electronic voting machines. • Activists who publicized dangers of the drug Zyprexa by placing damning corporate documents on the Web, which later resulted in

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Part VIII Movement Building $1 billion in fines for the drug company. • There have been the Internet-based, people-driven campaigns led by Howard Dean, Ned Lamont, Ron Paul and Barack Obama. “Digital citizens” operating on the commons constitute a new type of democratic polity. They value and honor such radical ideas as open access, freedom to participate, transparency, talent and innovation, social equity, and decentralized authority. As digital citizens, individuals do not simply have the option to “participate” in someone else’s institutional agenda. They can “make history” themselves. They can self-organize themselves through their own autonomous commons, and introduce new items to the national conversation on their own terms, in their own voice. I call the new species of citizenship “history-making citizenship” because it does not depend upon one’s economic station in life, as it did in the 18th century; or upon proxies like political parties or the mass media. The commons is, indeed, a new social metabolism for governance and law. Inspired by law professor David R. Johnson, I write in my book that “a commons is a kind of biological entity operating in a complex cultural ecosystems. It has its own internal systems for managing its affairs, interacting with its environment, repairing itself and defining its own persistent identity. It is a force by which ordinary people can express their deepest interests and passions, directly and without institutional mediation, on a global stage. This is an unprecedented capacity in communications, culture and, indeed, in human history.” As this brief tour suggests, the expanding universe of free culture has many sprawling, robust fronts indeed. It offers dramatically different sorts of platforms for generating value, empowering individuals and communities, and transforming government and democratic culture. Precisely because the viral spiral is so decentralized, driven by personal passions, socially based, creative and highly efficient, I expect many new twists of the viral spiral in the years ahead. This essay is licensed under a Creative Commons Attribution 3.0 license. For details, visit http: // creativecommons. org/ licenses/ by/ 3. 0/ us .

About the Author David Bollier is an independent author, activist and scholar of the commons. He is the author of several books including Viral Spiral: How the

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26. Viral Spiral Commoners Built a Digital Republic of Their Own (The New Press, 2009), Founding Editor of Onthecommons.org and Co-Founder of Public Knowledge, a Washington, DC-based advocacy group dedicated to defending the information commons.

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Part IX.

Policy and the State

27. The Solidarity Economy, State Organization and Political Power Nancy Neamtan1

An Emerging Social Movement: The Solidarity Economy I am first and foremost a practitioner who has worked for over the past 25 years in building a movement for economic democracy in Quebec, a small French-speaking nation within Canada. I began my involvement at a local level, working as a community organizer trying to respond to people’s social needs, be they access to decent housing, health services or literacy training. As was the case with many others, we gradually realized that the fundamental problem we were facing was the fact that our economic system was creating more and more poverty and social exclusion, even in one of the richest countries of the planet and that if we did not take the challenge head on of finding new ways to develop our economy, we would never solve the problems we were facing. This intuition, which was controversial for many progressive militants at the time (because it forced us to get more and more involved in economic development with all the compromises this can sometime entail), has proved in the long run to have been the right choice. Today, the solidarity economy, under a variety of different expressions depending on the regional or national context, is a growing movement internationally that seeks to change the very fundamental logic on which neoliberal economics has based itself. The fundamental goal of the solidarity economy movement is to put the economy at the service of human beings, rather than putting human beings at the service of the economy, which is more or less the situation today. 1 Adapted

from a talk on given at the World Social Forum 2010, Porto Alegre, Brazil, January 28

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27. The Solidarity Economy, State Organization and Political Power Today, across the globe, social movements have taken on the challenge of moving from opposition to proposition not only on environmental issues and on broad global issues, but through involvement in the day to day challenges of producing and exchanging goods and services based on the values of solidarity, equity, democracy and of course with the greatest respect for our ecosystems and the survival of our planet. The Chantier de l’´economie sociale, the organization for which I work, is an example of the new forms of organizations that are emerging within this movement. The Chantier is basically is a network of networks, bringing together solidarity economy enterprises – both cooperatives and non-profits, social movements, including the union movement, the women’s movement and others, and local development organizations with the mission to promote and develop the solidarity economy. We work in partnership with similar networks across the world, including the Brazilian Forum on the Solidarity Economy, with whom we have developed a strong and constructive partnership over the past years. The Chantier has been able to bring together a wide variety of organizations and movements to develop the social solidarity economy in a very concrete way. For example, in collaboration with labor controlled pension funds, we have been able to develop innovative financial instruments that invest patient capital in collective enterprises while continuing to respect their social mission and respect local, democratic control. We have launched campaigns with environmental groups to encourage consumers to develop responsible buying practices through social and solidarity economy enterprises. We have negotiated favorable public policy at a federal level (Social economy initiative 2004) and a Quebec government action plan involving 8 different government departments in 2008. We have signed a partnership agreement with the City of Montreal to help increase the contribution of the social solidarity economy to the quality of life and the development of the city. The solidarity economy movement has had to face many complex challenges as it has grown: challenges that involve a wide series of issues including access to capital, new ways to trade and exchange, implementing democratic management within enterprises, training, working conditions, the link between the formal and informal economies and so on. We have made progress in many parts of the world and we have begun to build continental and intercontinental networks to learn from each other and to reinforce our capacity as a movement. RIPESS, the Intercontinental Network for the Promotion of the Social Solidarity Economy has held, three major international events, one in Quebec (Canada) in 2001, another in Dakar (Senegal) in 2005 and one last year in Luxembourg. The next

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Part IX Policy and the State international forum will take place in Asia in 2013. Since the creation of RIPESS in , we have been witness to the rise of new public policy recognition and initiatives in many countries, particularly in Latin America. We have seen the emergence of a social economy agenda in international institutions such as the International Labor Organization and the OECD (Organization for Economic Co-operation and Development). Though we are fundamentally a grass roots movement that is growing from the bottom up and that is seizing more and more space in the economic realities of our respective countries and continents, we are confronted every step of the way by the issue of political power and state organization. This is no surprise. How can we build a solidarity economy, how can we democratize economic activity without new forms of political power and political organization? These new forms of political power and organization cannot be rethought only on a national basis. The issue of global governance structures is a central question in this debate. However, I will not adventure onto this subject as it is not my sphere of expertise. But even if, as an international movement, we succeed in changing the direction of international bodies and international trade agreements, the fact remains that we must still confront the important question of how to organize political power at a national and even local level. For it is at that very level that many decisions that affect our daily lives are carried out and it is at that level as well that there is a need for fundamental change. This is indeed the challenge that many newly elected progressive governments are struggling with in Latin America. There is no question that gaining power is a huge step forward . . . but the next step – what we do with that political power, how does one organize government – is often filled with complex challenges and important stumbling blocks.

The Relationship Between the State and Civil Society The first question I will discuss is the question of the relationship between the state and civil society in the exercise of political power. This issue of course must be put in the context of the overall fight for political democracy. The right to vote in free elections is, as we all know, a fundamental component of democracy which unfortunately is still inaccessible in too many countries across the planet. Since the first World Social Forum in 2001, some progress has been made in certain parts of the world. In Eastern Europe, systems of representative

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27. The Solidarity Economy, State Organization and Political Power democracy have been more firmly implanted and in several Latin America countries, progressive governments have been elected and in some cases have implemented constitutional changes to reinforce the democratic functioning of the State. At the same time, particularly in certain countries or sub-regions in Africa and Asia, repressive regimes have maintained their control. In several parts of the globe, regional conflicts are so intense that national and international institutions are unable to maintain any form of governance. But even in countries with strong democratic traditions, representative democracy has shown its limits. Some limits are linked to the control of the wealthy and powerful over the electoral process: lobbies, control of the media and outright corruption have undermined the legitimacy of elections in some of the richest nations. But beyond this, I would dare to say that in North America and Europe, despite its long tradition, representative democracy is in crisis; participation in the electoral process has declined in many countries and cynicism towards the political elite has reached new heights. This is true at the national level in many countries and often even more the case at the state or municipal levels of government. People have the impression that no matter who they vote for, nothing changes. And thus they seek out other ways to make changes in their lives. This is why, while traditional representative democracy has declined, new forms of democracy have been growing in a wide diversity of forms. Local development based on community empowerment, new forms of local governance, participatory budgets, citizen assemblies, and other forms of democratic civil society institutions are playing important roles in redefining the exercise of political power. The rise in the number and diversity of associations, and particularly solidarity economy organizations and enterprises, have opened new political spaces to intervene in fundamental issues such as the environment, quality of life, the role of culture etc. In fact, civil society organizations, through local, national and international networking, have become central actors in the exercise of democracy today. There is no question in my mind that civil society has a fundamental and strategic role to play in the exercise of political power. This is not a temporary phenomenon; it is part of a fundamental transformation of the exercise of political power. I am convinced that there is no going back. Civil society cannot be limited to playing a role of opposition until the taking of power through democratic elections. We are in a historical process in which representative democracy is showing its limits and the need for the institutionalization of participatory democracy is essential to the future of our democracies, where they exist, and a basis on which to

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Part IX Policy and the State build, where democracy is still part of the future. Participatory democracy commands new forms of organisation of the State. The traditional model of progressive governments, in the form of strong centralised institutions that take responsibility for all aspects of socioeconomic development through direct intervention, can no longer be considered the most appropriate model for the 21st century. Democracy must be based on active citizenship and for that to happen, there is a need for institutions that allow this active citizenship to flourish. In order for more decentralised, participatory forms of democracy to take place, there must be a sharing of power between elected officials and civil society on a permanent ongoing basis at all levels of state organization. This is not a simple goal to achieve, particularly because we must also maintain certain mechanisms that continue to respect principles of universality, equity and equality in the organisation of government. But we must take up the challenge. Top down solutions cannot work. No government, no matter how progressive it is, can have the flexibility and the intimate knowledge of local realities to be able to respond adequately to the specific needs of each community. This is even truer today than ever, for sustainable development demands a constant integration of economic, social, environmental and cultural concerns and objectives. It is at the level of community that this integration can take place. Our challenge is to identify the mechanisms and the structures, in each national context, that allow this integration to take place while assuring, through the exercise of state power, the checks and balances to protect basic rights for all citizens. There are no simple answers to this challenge. But once again, civil society is showing the way. Recently, I listened to a representative of an organisation of indigenous people from Peru who emphasized the need for his people to be able to control their land, their resources, their economy, their culture, and their local institutions. This is the same demand we are hearing from communities in my country, and in countries around the world, as citizens come together to empower themselves and take in hand their own development. The challenge now is to respect this bottom up empowering approach in which common territory and common culture become a space for new political institutions that work hand in hand with national governments to assure a better quality of life for all citizens.

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The Relationship Between Economic and Political Democracy The second question I want to discuss is the issue of economic versus political democracy. Once again, it is a sad reminder of the state of democracy in the world today, that even in countries where democratic institutions are functioning well, inequalities between the rich and the poor have grown over the past decade. The fundamental source of these growing inequalities resides in the economic system that globalisation and neoliberal ideology have imposed on all countries. Nation states can no longer fully control their economies as international trade agreements undermine the sovereignty of nations. Populations living in the South have been the primary victims of this form of development, but even in countries in the North, the poor have become poorer and the rich more wealthy over the past decades. But once again, over the past decade, civil society has begun to show the way forward. We have not only understood that economic power cannot be dissociated from political power; we have started to do something about it. The growing movement for economic democracy, that has manifested itself, principally through the social and solidarity economy, is an indication that the issue of political power has taken on an important economic dimension. This growing social and solidarity economy is rooted in relationships of proximity based on territory; its development is closely associated with local development and new forms of partnerships between different actors in an inclusive process of sustainable development, encompassing economic, social, cultural and ecological objectives. The last decade has clearly demonstrated that, even at the level of the enterprise, there is a need to change the forms of organisation and the exercise of power. The short term vision of ‘good management’, based entirely on the need to reward outside shareholders, has led to repeated economic, social and ecological disasters. This we all know. But when we talk about democracy in the workplace, neoliberal economists tell us that this cannot work because it is not efficient and we cannot be productive in a democratic work environment. Once again, they are dead wrong! And we have more and more proof to show it, through our practices within the solidarity economy. Even in more conventional circles, the effectiveness of the solidarity economy is beginning to be recognised. The best example is the fact that the Nobel prize for the economy in 2009, was awarded to an American economist, Elinor Ostrom, who has demonstrated that true good management, particularly of resources, is exercised not through big top down government

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Part IX Policy and the State bureaucracies, nor through the private sector, but through democratic citizen control, the very basis of the solidarity economy! The question of political power and economic power has always been at the heart of the vision of the solidarity economy movement. In 2002, I had the opportunity to be part of the first panel on the solidarity economy organised in the context of the World Social Forum here in Porto Alegre. Paul Singer, who one year later was named by President Lula as Brazilian National Secretary for the Solidarity Economy, was also on the panel whose subject was ‘Solidarity economy as a form of radicalisation of democracy’. The solidarity economy had already been identified as a key component of the struggle for democracy and we were convinced, as we still are today, that the challenge of building democracy in the context of globalisation had to be expressed at all levels and in all spheres of life.. If it was true in 2002, it is even truer today. Democracy, as the means of exercising political power, must be present not just in the political sphere but in all aspect of our societies, including our economies. State organisation must respond to the aspirations of men and women across the planet by allowing them to be actors and not simply spectators in the development of their communities, of their nations and of the planet. Our political institutions cannot simply promise to solve economic problems in place of its citizens. They must allow them to have access to the tools to participate actively in the transformation of their daily lives. They must allow them to be part of the decision making processes, to act together not only on the political front but within the heart of the economy. In that sense, the need for institutionalised forms of participatory democracy goes beyond our political institutions. It must also become an integral part of our economic institutions in the construction of a true economic democracy. And once again this requires new forms of state organisation to achieve this goal. What the solidarity economy proposes fundamentally is a new relationship between the market, the state and civil society. It does not seek to replace the state but recognises that the sphere of the economy must be redefined to allow democratic forms of control and governance, not only through state intervention but at every level of governance at all levels, from the enterprise right up to the level of global institutions. The resolution of the relationship between political and economic power cannot be limited to building more democratic forms of economic activity at the local or enterprise level. The best example is the fact that, despite this growing grassroots movement, national governments responded to the recent financial and economic crisis in a very traditional way, bailing out banks and multinationals with public funds without confronting the underlining reasons for these crises. The inability of the growing economic alternatives

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27. The Solidarity Economy, State Organization and Political Power movement to influence governments’ action in this crisis is a clear indication of it’s weakness on a national and international level. But it would be a serious error to underestimate the importance of the solidarity economy movement. For the solidarity economy is much more that a multitude of initiatives that allow communities and people across the world to develop a sustainable model and to respond to their own needs without rejecting the values of solidarity and social justice. What the solidarity economy is demonstrating, with more and more ambition and capacity, is that it is possible to create and develop economic activity, to create goods and services, to organise trade in a totally different economic logic than that which dominates our economies. In our relationship to the state and political power, we are innovating not only in our demands and proposals, but in the very process of constructing economic policy. Researchers speak of the need for a process of coconstruction of public policy, in which civil society is an active participant in defining and implementing policies in favour of the solidarity economy. This is an important political choice; it is an example of the importance of new forms of participatory democracy. For decades, the private sector has imposed its agenda in the area of economic policy. Why should we, actors of the solidarity economy, representatives of all social movement, be shut out of this possibility? After all, we have real expertise and are best able to define the ways in which governments and civil society can work together for the common good.

Conclusion In conclusion, in the debate on state organisation and political power, it is essential to remember that the issue of political power cannot be separated from the issue of economic power. Economic power for the people cannot be fully achieved without access to political power. The role of the state in the economy is fundamental. But political power will remain fragile and transitory without a fundamental transfer of economic power from the minority to the majority through the construction of a true economic democracy. This is the challenge that all social movements must take on in the next decade. As an active member of the solidarity economy movement, it is my profound hope that the new agenda for the World Social Forum will allow this dialogue to take place, and the solidarity economy movement will have its place at the table in this important debate.

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About the Author Mrs. Neamtan is President/Executive Director of the Chantier de l’´economie sociale, a non-profit organisation administered by 32 representatives of networks of cooperatives and non-profits, local development organisations and social movements whose mission is the promotion and development of the social and solidarity economy. Since 1999 she has been Co-Director of the Community University Research Alliance on the Social Economy and a member of the Board of Directors of RIPESS Intercontinental.

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28. Reimagining Society Julio Rafael Chavez The story I wish to tell is of the construction of popular power and begins in the western city of Carora, capital of Torres Municipality, Lara State, of the Bolivarian Republic of Venezuela. Carora has about 200,000 inhabitants and covers some 6,300 square kilometers (2,430 square miles) of land. This land consists mostly of semi-arid areas and areas for agro-industrial developments in sugar, wine, dairy, and craft production. There are also important developments in the raising of goats, cattle, swine, and poultry. Coupled with a rich cultural, artistic and intellectual tradition, Caroras resources make these lands of great importance in the potential production of goods and services. However, the retrograde colonial heritage and local governments that previously served the interests of the Caroran oligarchy pursued a model of exploitation and exclusion with great contradictions. That model remained in place until the popular election of myself as mayor of Torres Municipality on October 31, 2004. I was the first leftist mayor in the history of the city, and was the first municipal-level executive in the county to implement the program and the policies promoted by President Hugo Ch´ avez Fr´ıas. Hugo Ch´ avez became president of the country in December 1998, defeating the traditional right-wing parties that had ruled for more than 40 years in Venezuela and had succeeded in establishing a bourgeois, neoliberal system of oppression and domination. These decades of misrule had largely undermined the creative capacity and democratic exercise of the Venezuelan people. After Ch´ avez election, a Constituent Assembly was called to draft a new constitution to consolidate the republic and begin the process of comprehensive transformation of the structures of power which had sustained the old state. The new constitution aimed also to bring into being, over time, the new socialist state. This goal was part of a global political vision that covered all areas of national life. This vision would gradually permeate state structures to continue down to the regional level and finally to the municipalities. As the primary units of government and the territorial expression of local authorities, municipalities are where the process of building another type of society from

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28. Reimagining Society the bottom up should begin, with the organized population as both actors and historical subjects of the transition to a socialist model that is more just, more humane, more caring, and more Christian than the previously existing system. We must take into account the existing socio-political, cultural and historical context at the end of the model of representative democracy formerly dominant in Venezuela, and at the start of the constitutional process driven by Hugo Ch´ avez within the framework of participatory democracy. Six years after Ch´ avez election to the presidency, I became the mayor of Torres, a municipality with major social contradictions, high levels of inequality, injustice and a monopoly of power concentrated in the hands of a few families who shared control of the municipality and the rewards of that control. This situation was untenable and led us to make important governing decisions that directly confronted the interests of the entrenched local oligarchy. They perceived that their interests were not reflected in the decisions and change of direction in the social, economic, cultural and sporting events that began to come to this region. We were at a crossroads. What were we to do? One way was to rule under the traditional political system, keeping the old decaying state on life-support and continuing its practice of acting formally as a representative, inclusive model, but in actual practice designed to follow the logic of capital, ensure the interests of elites and make a government for the minority, supported by local religious and media power. A totally different way, one faced with great obstacles, was the road of transition to the principle of participatory democracy, in which the priority is social well-being, a government not for the people but with the people, people consciously organized as a historical subject of this radical transformation, under policies that really provide for effective popular participation and foster forms of self-government. Following the guidelines and the example of President Ch´avez, and without any hesitation, we chose to go the hard way, the way with more obstacles. Ultimately, we were sure that that was the right road. This road was the accumulated product of a debate that lasted for years and which synthesized the reflections and experiences of the revolutionary movement from the viewpoint of critical thinking and scientific socialism, taking as a reference the fundamental guidelines of the national project of Simon Bolivar and the constitution of the Bolivarian Republic of Venezuela. It was then that we proposed for the Municipality of Torres the political plan called Five Constituent Moments for the Building of Popular Power. This plan contains a set of medium and long term strategies designed to bring about the transition from the old bureaucratic model of municipal

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Part IX Policy and the State government (patronage with high levels of inequality, exclusion, and large land ownership imbalances from the neoliberal rentier model) to a Bolivarian municipality organized as a participatory democracy. Under this plan, the state implements public policies that promote an endogenous development model. This model integrates the vocation and potential of the region, favors human beings and is not governed by market signals and the logic of capital accumulation. Logically this political plan, due to the concrete reality of this town, had to start with the first constituent moment or initial phase. The inspiration was the example of President Ch´ avez convening a National Constituent Assembly to draft a new constitution and begin dismantling the politicallegal platform of the old state. In the case of Torres Municipality the people were called to a Municipal Constituent Assembly by the decree of February 28, 2005. In the Assembly, the people would collectively discuss new ordinances that would define the new municipality that we aspired to build and not the one we had. With a methodology designed to create an unprecedented process of active participation we compiled draft ordinances for the Bolivarian Municipality of G/D Pedro Len Torres. The new ordinances contained all the direction we needed to begin to get into tune with the principles of the new constitution, to dismantle the old bourgeois state and to start building the new Bolivarian municipality on this new platform as the primary unit of the new republic. From the political point of view, this first constituent moment amounts to a kind of valve that triggers a process of active participation of the community in public affairs over which they could have a say. For the first time in 45 years the people were called to openly discuss new ordinances (a process that had been reserved for the council elected by the people every five years to represent them) that are in tune with the new constitution. It started an interesting process of transferring power to the people through knowledge-based tools and the recognition of the infinite wisdom that lies in the popular imagination and consciousness, to advance the construction of a new political culture and another model of a more advanced society where the people one day become the State. After approving the new city ordinances and beginning to lay the foundation on which we could build the new state, the second constituent moment could begin. Known as participatory planning, it is nothing less than the decision to put into the hands of the organizations of popular power 100 percent of the municipal investment funds entering the municipality from oil royalties known as LAEE and FIDE, and the rest of the investment for the entire municipality within one year. Absolutely all the resources are managed and executed by the communal councils and other organizations of

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28. Reimagining Society popular power and not at the discretion the Mayor and his staff. In the past the executive never took into account the priorities of communities, except when those priorities would also help private companies and contractors affiliated with the local oligarchy. The drive for participatory democracy requires of us the promotion of new forms of community organizing that address the themes of training and control. Toward that end communal councils arise as an expression of genuine self-government in a given territory. This is the third constituent moment, the bringing together of more than 550 communal councils in the municipality of Torres in the Venezuelan state of Lara. Communal Councils are understood as the organized cells of the new communal state expressed in a territory where other organizations of popular power also have an active presence. This third constituent moment coincided with the formation of communal councils throughout all of Venezuela, as mandated by law. Given that our people were advancing in the process of the transfer of power, the democratization of knowledge and the continuous exercise of the constitutional principles of mutual responsibility and coordinated action, we facilitated the process of the mass formation of the communal councils across the length and width of Torres Municipality. We had better organizational successes in rural than in urban areas of the city. It is important to note that communal councils in our municipality are dominant in some regards. They have allocated more resources than those allocated by the city government itself throughout the year. After advancing the first, second and third constituent moments according to the guidelines outlined in the policy plan for the municipality, we arrived at the fourth constituent moment also known as the New Land Policy of Torres Municipality. Readers should understand the historical context of administrative policy in Torres Municipality. Because of its size, Torres had been divided into 17 parishes, which were essentially designed with the needs of bureaucratic patronage in mind and which express large territorial imbalances and a huge social debt. The idea of combating this perverse distribution of land arose from the discussions within the communities and communal councils in the territory. Higher levels of coordination and organization take place through the communes. Instances abound where two or more neighboring communal councils take into account criteria of territorial and population affinity, vocation, needs and potential for crafting the community development plan in order to advance new political-territorial divisionsthat is to delete the lines of division between one parish and another to make way for a new conception of land policy. This new policy enables the communities to occupy,

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Part IX Policy and the State put into production and defend new communal lands. In the context of this fourth constituent moment a new way of organizing the political-geographic spaces in our town emerged from the community. This new organization of land confronts the large territorial imbalances that went hand in hand with neoliberal policies, creating large concentrations of people living in smaller spaces, collapsing public services, preying on the environment, favoring internal migration that resulted in the abandonment of the fields, falling productivity and the emergence of large cities, real shrines of consumerism in contrast to the difficult conditions of survival of our farmers. Now the debate over territorial divisions must resolve in the medium and long term the contradictions generated by capitalism in the heart of the city, which has no capacity to produce what it consumes. In the particular case of Torres, the proposed new territorial policy intends to move from the 17 parishes legally recognized in the municipality to about six communal territories. The Municipal Constituent Assembly directed the formation of five constitutional powers to be set in these territories. These five branches of communal government are the executive power or government of the commune, the new legislature or communal parliament, the communal moral power, the communal judiciary and the electoral power. These powers organize the functioning of other emerging powers in the territories, new municipalities and the joining of communities belonging to different municipalities or states that allows us to break with the old political-territorial division and move forward. In all of this, the people are always leading and in the process of building a model of society from the bottom up that approximates the real utopia of the Bolivarian dream. From this creative debate with all the organizations of popular power in assemblies of citizens of Torres Municipality, we have advanced along a path unknown until now. This process is a particularly good way to build popular power in the context of a transition, where the old regime still lives and the new begins to germinate. It was expressed in practice in the new Municipal Constituent Assembly that began to lay the foundations of the new model. Then the decision was taken to create a process of participatory planning to transfer 100 percent of the investment resources of the municipality to be consciously organized by the people, who prioritize the needs, and not at the discretion of a mayor or any other officer. The decision was implemented through communal councils and not through contractors or cooperative enterprises, with excellent results. Next, we created the communal councils as new primary organizations of popular power as well as producer councils, workers councils and other organizations of popular power that emerged in the heat of the revolutionary process. The question arises of what economic model to implement in our country to resolve inequality of the neoliberal

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28. Reimagining Society model. In 2008 we convened an international economic forum in Carora with researchers, academics, intellectuals and revolutionary leaders of the continent to further analyze and discuss in different working groups the global crisis of big business and the need to build a socialist production model from the local up that takes into account the specific realities of the region, vocation, weaknesses, strengths, potential and planning on new communal territories. This new production model should move towards new relations of production, taking over the means of production and ultimately creating an ecologically sustainable, integrated production model. The goal is to eradicate the vices and the logic of capital and to put men and women together at the center of the transformation that is shaking the old building of neoliberal bureaucracy. The results of this interesting and productive initiative led to major projects, plans and programs to develop small and medium-sized social production enterprises in the new communal territories under the leadership of Edo and the active participation of organizations of popular power. These projects combined the activation of all the social missions and recently there is a powerful instrument of cohesion and coordination in the gestation process: the United Socialist Party of Venezuela (PSUV). Finally, we want to introduce a question that could conclusively prove the effectiveness of the political plan executed in just four years in Torres Municipality. Considering the fact that the media, both print and radio, in the city are controlled by the same sectors of the oligarchy that also subordinate religious power, the question arises: What has been the experience in electoral politics in Torres before, during and after application of the political plan called Four Constituent Moments in Building Popular Power? In other words, is it possible to win elections by transferring power to the people? The answers are easily seen in the election results of the last five years in the municipality. Taking into account national and local events, it can be seen that we have not lost a popular vote since the beginning of the process of building peoples power. This includes when the referendum on constitutional reform lost nationally and regionallyhere in the town of Torres it won. Comparing the elections of 2004 and 2008 shows that in four years we more than doubled our popular vote to win in five parishes, sweeping the 17 parishes that comprise the municipality. That is to say, from every point of view it is necessary and appropriate to make progress in the process of the transfer of power so as to build, with the people as historical subject, the path towards socialism in the twenty-first century.

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Part IX Policy and the State

About the Author Julio Rafael Chavez is the mayor of Carora, Municipality of Torres, Lara State, Bolivarian Republic of Venezuela.

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