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An Economy that Works for Everyone

The rise of solidarity economy initiatives charts a new third way between capitalism and communism

The New York Times ran an article summarizing a recent report from the Bureau of Economic Analysis at the US Department of Commerce; apparently “American private businesses earned profits at an annual rate of $1.659 trillion in the third quarter,” the highest dollar amount on record. Earlier this year, the US Census Bureau reported that 2009 saw the income disparity between American citizens at the highest ever on record


Something has gone wrong; the invisible hand of global capitalism, the one that was supposed to lift all boats, has instead lined the pockets of transnational corporations at the expense of the financial security of everyone else, both in industrialized and non-industrialed societies.
Even after the worldwide repercussions of the housing bubble and economic crisis, neoliberal economics remain the guiding principle of policymaking behind the closed doors of institutions such as the International Monetary Fund, World Trade Organization and the governments of wealthy nations. This means the concentration of wealth in a few hands and the outsized influence of transnational corporations will continue.


But such is life in our democracy, a choice between two sides of the same coin, where global commerce is organized by the dichotomous systems Market driver of productivity and State control mechanism: capitalism or communism, run by the invisible hand or state bureaucrats. The choice is simple—the Soviet Union collapsed, did it not?


In his book of essays, The Art of The Commonplace, Wendell Berry calls both capitalist and state run structures modern incarnations of the same oligarchic, top down rule that characterized feudalism. He goes on to assert that “the limitless destructiveness of [our] economy comes about precisely because a corporation is not a person” but rather “a pile of money to which a number of persons have sold their moral allegiance…unlike a person, a corporation does not age…it does not come to see the future as the lifetimes of the children and grandchildren of anybody in particular. It can experience no personal hope or remorse.”
Slowly, people are beginning to realize that there is a third sector of the economy that the systemic ignoring of its value has let our political notions of progress become too far detached from reality and that, in Berry’s words, “powers not exercised by the government must return to the people.”


Social economies, or this third sector that seeks to reinsert human priorities and values back into economic practice, can be found all over the world, whether they explicitly use the term or not. Social economies fall on a spectrum ranging from completely voluntary systems, such as a gift or barter exchanges to social enterprises like worker cooperatives or the fair trade movement. As defined by the Canadian Social Economy Research Partnership, social economies are initiatives characterized by service to members of a community, autonomous management, democratic decision making, principles of empowerment, and mutually collective benefit.


In isolation, these local efforts and the values they stand for could be dismissed as novelty; taken altogether however, they can provide a viable alternative to the status quo. Hence, the term “solidarity economy,” a relatively new phrase for initiatives representing all three economic sectors that seek an alternative singular to the destructive tendencies of mainstream capitalism.


Because of the diverse and grassroots nature of these initiatives, there is no hard definition for what makes up the parameters of the solidarity economy. Definitions vary according mostly to region; there are now formally established solidarity economy networks in Peru, Bolivia, Argentina, Venezuela, Canada, the European Union, U.K., U.S., and most recently in the broader region of South East Asia. While various components of these economies may have existed for years, the establishment of these networks owes much to increasingly widespread access to networking platforms like internet directories and online mapping technologies.
John Samuel, the keynote speaker at this Asian Meeting of Solidarity Economy and Socially Responsible Business in Manila, defined the principles of the solidarity economy as concerned with the four pillars of an economic life cycle: ethical production, ethical market, consumption and investment.


Production might include worker controlled cooperatives and initiatives that recognize the commons. Examples might include a local food movement or community currency initiatives, both of which equitably maximize the benefit to the stakeholders involved; self-organizing systems like cooperative food storage or mutual insurance; ethical investment organizations such credit unions, or more broadly, charities.


Shifting institutional power from the bottom up is a gradual and arduous process. Reforming the destructive tendencies of unfettered capitalism will need the sustained efforts of generations to come, for which coalitions like the solidarity economy will be crucial.


Kevin Karner, a student at the University of Minnesota, is an intern at On The Commons.