The Solidarity Economy

by Bethan Mure

This article appears in our current print issue—Solidarity Economics, winter 2017—and is available to buy from our magazine shop (click here).

We live in an unprecedented period of human history. Climate change, ecological destruction, inequality, precarious livelihoods, historical levels of human migration; our present and future are being disrupted by the unrelenting onslaught of consequences emanating from our economic system. Resistance is exploding, taking many forms at various scales, I suspect not all of it to the liking of Stir readers. The good news is ideas and actions to forge new pathways out of this mess are bubbling up everywhere, imbued by a stubborn belief that another world is possible. Unfortunately, though belief in the possibility of systemic change is a prerequisite, it does not follow that it’s inevitable. As the Twentieth Century’s famous community organiser Saul Alinsky said, “If you ain’t organised, you are not going to contend.” If we are to contend, solidarity imbued with intelligent compassion is a prerequisite. 

One definition of solidarity from the Nuttall Encyclopedia that seems robustly relevant to our times is, “a community of interest or responsibility; also that community of being which binds humanity into one whole, so that each affects and is affected by all.” 

The dominant economic system of the last 40 years has divided and fragmented us. The question is whether the concept of solidarity can help us forge a new economic system that “binds humanity into one whole.” Aristotle defined economics as the management of household resources for the benefit of the householders. Might not then solidarity economics be defined as the management of our community—the regional and planetary commons —for the benefit of people and planet? Let’s explore the conceptual terrain and then some initiatives that reflect this approach.

Social Economy? Solidarity Economy? Clarifying the Conceptual Blur

The social economy evolved conceptually from a categorisation of human economic activity into three broad systems of the economy: the private, the public and civil society. Each of these systems is distinguished by very different values, priorities and logics. Distinguishing the First System are private ownership and the profit motive. In theory, its actors range all the way from microbusinesses to multinational corporations; public service and the planned provision of goods and services, usually through some kind of government authority, distinguish the Second System; self-help, mutual aid, and reciprocity distinguish the Third System—its actors infuse their economic activities with social purpose.

These hard and fast distinctions are simplistic; in reality the boundaries between the three systems are blurred and interactive. But it is significant how much creativity within the Third System originates in failures or inaction on the part of the other two systems. This is particularly the case for the ‘social economy’ where social purpose is embedded in market-based trading. Co-operatives, credit unions, some forms of community economic development, community land trusts, trade unions, fairtrade, nonprofit associations, and charities—all are intended, to an extent, to defend people, communities, and regions that have been marginalised by ideology, market failure, and inadequate public policy.

In contrast to economists rooted in the ideological assumptions of free markets, free movement of capital, and free trade, social economists argue that reciprocity should be the central principle around which markets, trade, and capital are organised. They claim that community and societal benefit should be a fundamental component of any value proposition, and that the homogeneity and centralised corporate power of mass markets—focused on growth and profit maximisation—are a central part of the problem. 

Some advocates look upon the social economy as a construction site for strategies, tools, and institutions that can challenge the hegemony of the first and second systems. Seen in this way, the social economy aims to socialise the first and second systems, unlocking the possibility for their transformation. 

I argue that the solidarity economy should not be conceptually conflated with the social economy. If you think of the three systems as being wedges of a big circle distinguished by their values, priorities and animating logic, the solidarity economy would be a relatively small circle cutting across all three systems.  

Why do I think this is important? Quite simply, time is not on our side. The challenges we all face are huge, urgent and complex. Alliances need to be built across the three systems. The idea of the social economy transforming the other two systems as a way forward is naïve. The solidarity economy presumes that in all three systems there are people, organisations, networks, businesses, and governments that are beginning to perceive the world differently. Each system, to one degree or another, has creative actors who (imperfectly) share the values of social justice, inclusiveness, ecological sustainability, and deeper, democratic forms of participation. They are seeking and developing dynamic ways to express these values in practical, policy and political terms. Viewed this way, ‘solidarity’ is much more than a concept. 

First, it is a framework for the co-production of strategies that strengthen the resilience of communities, regions, and societies. Second, it elevates the idea of advancing the common good together rather than going it alone. Third, solidarity is a vital motivational resource, and a renewable one. It is a resource that we need to nourish within ourselves and with each other in order to sustain the effort required to navigate transition in the turbulent times we live. 

Actors in the solidarity economy are striving to be ‘glocal’ in their approach. This means locally and regionally building alternatives that advance a fairer, low carbon economy. But it also means organising in ways that build the collective capacity to animate, educate and agitate to change the systems, national and global, that block the diffusion and scaling up of impacts being demonstrably achieved. 

This collaborative impulse is critical, since innovations demonstrating the benefits of more localised sustainable food systems may be restrained or even undone by agribusiness subsidies and the World Trade Organization’s rules that treat food as an industrial commodity. To think otherwise is naïve. The world’s largest social movement La Via Campesina is a prime example; it has organised global capacity to advance food sovereignty and security in the regions where people live. 

Federating into networks, coalitions and movements with a shared agenda and greater capacity is key to advancing the solidarity economy, as transition to a fair, low carbon future is meeting fierce resistance. Forging allies across the three economic systems is vital and necessary. 

If solidarity economics is to be transformational, if it is to shift the economic paradigm, it will be through joined up global actors and movements working to change from a) growth to resilience, b) competition to co-operation, c) efficiency to sufficiency, d) right to possess to well-being, e) the freedom of markets to fairness and equity, f) concentrated private ownership to decentralised and democratic ownership, g) the inalienable rights of private property to the commons, and h) our right to dominate nature to our dependence on it.

These are not theoretical propositions. They are choices about what is most important as we co-construct a collective capacity to address the challenges before us. Keep them in mind whilst reading the three cases I have selected.

Solidarity is a vital motivational resource, and a renewable one.

Co-Investing and Co-Producing Food Systems Change

Since 1965 the Seikatsu Consumer Co-operative in Japan have been reshaping relationships between consumers and private farmers to advance ecological farming methods and fair prices. Founded as a Teikei, a partnership between a small group of consumers and a farmer, it carries a colloquial meaning indicative of the Seikatsu philosophy—‘Food with a Farmers Face on it’. This modest beginning now involves 32 county level co-operatives that are federated at the national level. Not content with an agenda of fair prices and ecological growing methods, it has been transforming the processing, packaging, recycling, and distribution into a system that meets exacting environmental and carbon standards—work undertaken by 600 firms owned by 17,000 worker-owners. Well over $1 Billion (US) of annual sales and $450 million in equity is embedded in the system, the result of retained earnings but, even more importantly, the voluntary investments of $11 per month by members up to a maximum of $3500. 

For the last 15 years the co-op has been branching out to other sectors, such as social care and renewable energy, seeking to imbue solidarity and co-operation among different sectors in ways that reflect their approach to transforming the food system. Little wonder they won the Right Livelihoods award. Seikatsu means ‘Living People’, an apt name for co-op members who view themselves as co-investors and co-producers creating the change they want to see in the world.

Restructuring Property Rights to Secure Affordable Housing in Perpetuity

Consider a modest experiment in Vancouver, Canada, one of the world's most expensive housing markets. Through what can be thought of as a public-social partnership, the project linked up an alternative form of land tenure known as Community Land Trust (CLT) to create 358 units of perpetually ‘affordable’ housing. Construction is now underway on four pieces of urban land in Vancouver, which has been leased for 99 years to the CLT at a steeply discounted lease rate from the market value of $27 million. This translates into $25 million of equity, the financial cornerstone of a housing project that will cost $110 million. The balance is being financed by what began as a foundation based investment capital fund ($11 million), equity from two nonprofit housing partners ($5 million), a provincial government investor ($4million), the sale of commercial space ($5 million), and debt financing of around $60 million from VanCity Savings Credit Union. Importantly, VanCity also put up the initial $2 million in risk capital to finance the advanced planning and negotiations required to move from intention to action.  

The operating partners are two nonprofits specialising in different segments of the lower income population and a co-op that will serve mixed-income tenants. Rental-rates are based on what I call ‘solidarity pricing’—top rates are set at 90% of market value and the lowest rate is set at 31% of market value. The business plans set out that once the contingency funds are built to the levels required, profits will be split between the CLT and the city, with the stipulation it is reinvested in affordable housing. Importantly, there are no ongoing subsidies from any level of government. Moreover, it now appears the city is interested in pursuing other projects based on model and, happily, other cities in the metropolitan area are taking note.

Going Fossil Fuel Free—Democratically and Locally

Kristianstad is a district municipality that covers 1,300 square kilometers of prime agricultural land in southeast Sweden. Of its 25 communities the largest has 33,000 residents and the smallest is home to 150 people.

Back in 1999 its elected representatives made the decision to become the first fossil-fuel-free municipality in the West. Within nine years, Kristianstad cut its use of fossil fuels in half. Not only that, it was already producing renewable energy for export beyond its municipal borders.

How? First, the political leadership articulated and held the vision. Second, staff planning and co-ordination, engagement of citizens, and partnership development gave the vision more credibility. Third, municipally-owned energy and waste management companies put all the pieces together. Smart and profitable, they design and execute projects to realise this vision in partnership with both private and public sectors.

Crucial to Kristianstad’s strategy has been the capture of diverse waste streams to produce biogas. By 2008, 4 million litres of vehicle fuel were being produced, enough to fuel the entire municipal transportation fleet. By 2018, a decade later, 800 buses in southeast Sweden will be fueled by biogas alone. The Biogas produced is also used to generate enough electricity for the average energy consumption of 4,000 American homes. 

Another means of transforming waste into energy has been the use of wood chips to feed combined heat and power systems for district heating in two of Kristianstad’s larger towns (of 41,000 residents). Where the population is less dense, wood- and straw-based fuels feed mini-district heating systems and/or individual buildings. This combination of district heating, small-scale heating, and biogas yielded an annual direct carbon reduction of about 140,000 tons by 2009.

That’s not all. Another initiative in Kristianstad is harvesting wind power. By 2008, this source was generating electricity sufficient for 6,500 average American homes. Output sufficient for 50,000 homes is targeted for on-shore wind, and is already on its way to being achieved. The same target has been set for future off-shore wind farms.

Lennart Erfors, Kristianstad’s climate strategist, notes many benefits of fossil-fuel-freedom. A big one is the money that householders and the municipal government are saving and the quick paybacks gained from shutting off the oil tap. Municipally owned businesses are making money, reducing carbon and delivering public benefits, while systematically reinvesting in transition.

These examples are signposts of what is possible. Diversifying, decentralising, distributing, and democratising the ownership of production is an important and generative contribution to transitioning out of the mess we are in. But we dare not separate our local and regional building of alternatives from the resistance to the economics and politics that dominate the degenerative economy. It will be a hard won fight. We are in it together. Solidarity economics is a pre-requisite

For the last four decades Michael Lewis has been engaged in community economic development and the social and solidarity economy. An internationally connected practitioner, researcher, writer and speaker, his work currently emphasises multiple sectors critical to our transition to a fair, low carbon economic system. He is also co-author of the Resilience Imperative.

Solidarity is a vital motivational resource, and a renewable one.


Info & Credits

Published in STIR magazine no.16, Winter 2017

Written by Michael Lewis

Illustration by Bethan Mure.