5th RIPESS Global Forum of Social Solidarity Economy

Building SSE as an alternative model of development Manila, October 15-18, 2013 Program
RIPESS Working Paper on

Differences and Convergences in Social Solidarity Economy Concepts: Definitions and Frameworks
Drafted by Emily Kawano, Sept 10, 2011 Working group: Ana Leighton, Red de Economía Solidaria de Santiago – Chile; Eric Lavillunière, Institut Européen pour l’Économie Solidaire (INEES) – Luxembourg; Emily Kawano, U.S. Solidarity Economy Network; Sunil Chitrakar, Mahaguthi Craft with a Conscience – Nepal; Madani Koumare, Réseau National de Promotion d’Économie Sociale et Solidaire – Mali; Francoise Wautiez, Alliance 21 This working paper came out of discussions, held at the RIPESS Board Meeting in Paris, March 28-31, 2011. Our intent was to explore social solidarity economy concepts, definitions and frameworks used in different continents and countries. Following a session that included the whole board plus some guests, a working group met to further clarify and articulate convergences and differences. Our goal was to deepen our understanding of each other’s concepts, and the specificities of local contexts, rather than to reach agreement on a single concept or definition. We did find however, that often what appeared at first glance to be differences, disappeared or narrowed considerably in the process of deeper exploration. We agreed on many broad aspects of the social solidarity economy: 1) The Social Solidarity Economy is an alternative to capitalism as well as other authoritarian, statedominated economic systems in which ordinary people play an active role in shaping their economic lives. 2) Social solidarity economy is an ethical and values-based approach to economic development (as opposed to growth) that prioritizes the welfare of people and planet over profits and blind growth. We re-affirm the values expressed in the RIPESS Charter which includes: a. humanism b. solidarity/mutualism/cooperation/reciprocity, including globalization of solidarity (antiimperialism) c. social, political and economic democracy d. equity/justice for all including the dimensions of gender, race, ethnicity, class, age, sexual orientation, etc. e. sustainable development f. pluralism/inclusivity/diversity/creativity g. territoriality/localism/subsidiarity supports decision-making and management on as local a level as makes sense. 3) Self-management and collective ownership in the workplace and in the community is central to the solidarity economy.

a. there are many different expressions of self-management and collective ownership including: cooperatives (worker, producer, consumer, credit unions, housing, etc), community-owned enterprises, commons (participatory governance, for example community management of the forests in Nepal). In Africa the term cooperatives is avoided due to negative connotations. Instead they use the term collegial management. 4) The solidarity economy has a focus on the empowerment of women and other marginalized groups, as well as anti-poverty and social inclusion work. 5) We recognize the importance of linking with social movements because ‘we’ can’t do it alone. 6) There are many fertile bases that hold great potential to develop as allies. Some of these bases are partially aligned with, but are not a part of, the solidarity economy such as the popular economic/informal sector. Others identify with a particular aspect, such as green, organic, or fair trade, that is aligned with solidarity economy values, but may be in conflict with other values in important, structural ways. Nonetheless there is great potential to build alliances and mutually supportive collaborations. b. Popular economy and informal economy – the popular or informal sector of the economy is very important given that a many people, particularly in the global South, depend on it for their livelihoods. For example, ¾ of the population in Mali are involved in the informal economy. The popular economy is comprised of economic activities that are not covered by formal arrangements such as taxation, labor protections, minimum wage regulations, unemployment benefits, or documentation. Many self-employed workers, micro-enterprises, traders, and mutual aid practices are part of the popular economy. The popular economy is not the same as the solidarity economy, but is aligned in many ways because the actors often find collective ways to provide for social and economic needs, such as lending circles, community kitchens (comedores populares), mutual aid, mutual insurance systems and so forth. In Venezuela the Ministry of Popular Economy is very close in their orientation to the solidarity economy. c. Organic, green, fair trade – There are many trends and movements that reflect solidarity economy values and yet may or may not be included in the solidarity economy. An example of the latter would be Wal-mart, which has its own brand of Rainforest Certified Fair Trade Coffee but at the same time, engages in union busting and uses its massive market share to depress prices and wages. Yet there are certainly practitioners in these sectors that are valuable allies and others that are already part of the social solidarity economy. 7) It is important to build micro to macro strategies: a. Building practice on the ground – this is the core of the social solidarity economy that the research, policies, advocacy and communication supports and enables. The concrete practices are often grounded in concepts of autonomous development and self help, as opposed to ceding responsibility to the local or national government. b. Research – we must be able to make the case for the SSE through quantitative and qualitative data. A wide range of research is called for, including academic, community-based, action research, data gathering, and systematization of experiences. c. Policy work on local, regional, national and international levels – we seek to create policies that enable, not direct, the SSE.

d. Advocacy – this work includes organizing and pushing for policies, legal statutes, and various other types of support for the SSE. e. Raising visibility – since the framework of the SSE is relatively unknown, we must engage in raising awareness about, and engagement with, the SSE. Our target includes the general public, potential allies, and practitioners who are part of the SSE, but who do not identify with the framework. Two central strategies to raise visibility are: i. education – education about the SSE and its many aspects can take many forms, including workshops, forums, trainings, seminars, and classes. Education is often the first step in the process of SSE mobilization, organizing or economic development. ii. communication, media, social media – articles, books, video, media coverage are all important ways of raising awareness about the SSE. We need to develop a library of these resources. FURTHER EXPLORATION OF TERMINOLOGY AND CONCEPTS: We accept that on each continent, there are different areas of focus, entry points and specificities that result in the use of different terminology relating to the social solidarity economy. Terms such as societal transition, movement for transformation, change in paradigm, alternative model of economic development, may be used in different places and in different circumstances depending on political, historical or cultural sensitivities. For example, in some circles in Asia, the term solidarity economy is viewed with suspicion as a close cousin to socialism. The social solidarity economy does not exclude participatory, democratic forms of socialism but RIPESS recognizes that each region must decide what language and framing is most appropriate to their particular circumstances. Social economy vs Solidarity Economy: The social economy is commonly understood as the “third sector” of the economy, complementing the “first sector” (private/profit-oriented) and the “second sector” (public/planned). The third sector includes cooperatives, mutuals, associations, and foundations (CMAFs) and are collectively organized, and oriented around social aims that are prioritized above profits, or return to shareholders. Some consider the social economy to be the third leg of capitalism, along with the public and the private sector. Thus, advocates of the social economy push for it to be accorded the same legitimacy as the public and private sectors, with a corresponding level of support in public resources and policy. Others, on the more radical end of the spectrum, view the social economy as a stepping stone towards a more fundamental transformation of the economic system. The solidarity economy seeks to change the whole social and economic system and puts forth a different paradigm of development that upholds solidarity economy principles. It pursues the transformation of the neoliberal capitalist economic system from one that gives primacy to maximizing private profit and blind growth, to one that puts people and planet at its core. As an alternative economic system, the solidarity economy thus includes all three sectors – private, public and the third sector. The solidarity economy seeks to re-orient and harness the state, policies, trade, production, distribution, consumption, investment, money and finance, and ownership structures towards serving the welfare of people and the environment. What distinguishes the solidarity economy movement from many other social change and revolutionary movements in the past, is that it is pluralist in its approach - eschewing rigid blueprints and the belief in a single, correct path; the solidarity economy also values and builds on concrete practices, many of which are quite old, rather than seeking to create utopia out of thin air. Thus the solidarity economy explicitly has a systemic, transformative, post-capitalist agenda. The social economy is a sector of the economy that may or may not be part of a transformative, post-capitalist agenda, depending on whom you’re talking to.

Social solidarity economy and regional contexts RIPESS uses the term social solidarity economy to embrace both the solidarity economy and the more radical end of the social economy. We understand that the political, cultural, and historical realities on each continent, and indeed in different countries, call for a flexible approach to terminology, approaches and entry points. For example, in Europe, the social economy is quite strongly rooted, and pre-dates the framework of the solidarity economy. In general, there is decreasing support for the social economy on the national or EU level, but more support on the local level. The emerging RIPESS-Europe network therefore works with both social economy and solidarity economy organizations and includes sectoral as well as territorial organizations/networks. Quebec builds on the concept of the social economy and seeks to create a movement for transformation that is very practical and grounded at the local, territorial level. In the rest of Canada, the emphasis is on the territorial framework. RIPESS-LAC (Latin America and Caribbean) uses the solidarity economy framework. Despite some differences in definition, there is broad agreement that about its systemic and transformative agenda and that it is built around a core of ethical principles. Brazil’s solidarity economy definition was built by practitioners over many years through forums, meetings, and consultations. Solidarity economy is articulated in three dimensions: 1) economic – self management and a broad concept of enlarging democracy 2) culture – trying to change the paradigm of competition and replace it with cooperation and 3) political – a concern for human development, not the promotion of a particular sector, eg. cooperatives, etc. The social movements in Brazil are extremely fragile at present, and the solidarity economy is involved in integrating resistance with building alternatives in agriculture, health, global justice, and women’s movements to overcome forms of exclusion. The U.S. was able to start with a fairly blank slate and the U.S. Solidarity Economy Network deliberately chose to work within the solidarity economy framework, as an unambiguously transformative movement. The Asian Alliance for the Solidarity Economy takes the social enterprise as a starting point along with the need to build solidarity economy supply chains. See below for more. Africa works with both the social economy and solidarity economy frameworks. In Mali there have been efforts to construct a legal and institutional framework to support the SSE and this process came up against the issue of definition as well. RIPESS does not seek to constrain these specificities, but rather to find areas in common between continents, and to work in an organic fashion, towards greater convergence or harmonization. (Daniel’s diagram?) Social enterprise/entrepreneurship: - Ben, the Asian Alliance for the Solidarity Economy (AA4SE) sees the social enterprise at the heart of economy and is focused on the need to build supply chains (producer, financial, trade, etc.). They define social enterprise as having these characteristics: sustainability, high level of autonomy, management of risk, paid workers, explicit community benefit, citizen initiative, people over capital, participatory, limited distribution of profit to avoid profit maximizing behavior (by limited returns for investors). In the short run, there’s no expectation for 100% compliance – but the long term goal is to develop greater alignment over time. The SSE must to educate the big firms because we want to be the main economy, not the alternative. - Carlos – coming from the trade union movement, we have some concerns about these criteria.. For example, Coca-cola could easily fulfill the criteria. Surely we can find grounds for agreement, but we aren’t there yet. - Ana: At the Medellin meeting we felt that it can be easier to find common ground with small scale social enterprises, than the big cooperatives and networks.

- Madani: There’s a deep interest in social entrepreneurship. A sector of health and social service cooperatives and mutual societies has developed, which is one of the priorities in Mali. These social enterprises need to be able to access credit. The focus is shifting towards the creation of wealth, not eradication of poverty. - Eric: In Europe there are social enterprise platforms in France, Italy, and the UK. One of the challenges to be aware of is that the social welfare tradition is being dismantled and privatized. Sometimes privatization is done through social enterprises. Some see social enterprises as part of social welfare state, but others see them as a social business that enables the state to shed its responsibilities. - Emily: In the U.S., social enterprise is defined as having social aims at the core of their operation. They are a mix of capitalist and democratic, collective enterprises. SEN sees social enterprise networks as allies, but we do not have very deep working relationship. Solidarity economy enterprise The definition of a solidarity economy enterprise varies and is still in flux. In Brazil it must be democratically, collectively managed (broader than the family – but this is always a debate because the family economy is strong), regular ongoing activity and there are measures to encourage women’s equity, and environmental sustainability. Quebec’s definition is similar. In the U.S., the definition of a solidarity economy enterprise is still a matter of debate, though there’s a strong pull towards the democratic, collective management criteria, with those that fall outside being included in a broad category of allies. Corporate social responsibility (CSR) - Daniel: we think that social entrepreneurship is too close to corporate social responsibility (CSR), so we don’t use this term. - Madani: It’s not about CSR – Social enterprises bring together different projects and initiatives so that people can get jobs, etc. based on the values of the SSE. - Denison: thinking aloud from Malaysian experience, the question has arisen as to whether there are other models operating with their own strengths and weaknesses. Most CSR involves businesses engaged in, or donating to support, charitable work. However, some businesses have moved on towards community support. Social entrepreneurs have emerged in areas that aren’t being provided by the government or market, for example in education, childcare, or hospitals. One wealthy man donated 50% of his profits to support the development of a commercial center that includes a park, and eldercare, provided by small operators. It also includes a university, because the donor realized that he needs an educated workforce. Some Muslim Malay communities have pooled their savings and invested in shares of large companies. Their equity stake is backed by government guarantees. Many of these companies are huge, and the profits are plowed back to its members. There might be less solidarity at the community level, but they employ many people. The cooperative movement has moved away from being community based to being publicly listed. Trade unions A question was raised about the relationship of the SSE to trade unions. In Europe, it differs from country to country. EU Commission on Labor (?), trade unions have a great deal of influence. We have shared interests around quality of work. In the U.S. there is a growing exploration about the role of the labor movement in job creation and economic development. In Latin America, there is participation of trade unions in the solidarity economy movement, at least UITA (Int’l Union of Food Workers) and Brazil. In Brazil there’s a strong involvement through CUT which has a commission devoted to establishing linkages with the solidarity economy. This is an important recognition, but Brazil is the exception. There are 62 trade unions that are part of UITA and we have lots of experience with the solidarity economy, ranging from micro to macro. For example Argentina trade unions manage their own health care system for thousands of workers. The problem is awareness of, and self-recognition and identification with the solidarity economy. There is however, a strong will to move forward and UITA perceives the solidarity economy as a very close sector.

Investment and SE Business In the Philippines, the poor can save, but savings are small. The institutions that collect these savings do not invest in SE. We’re trying to develop a model that mobilizes the savings of poor for SE initiatives instead of borrowing from World Bank. When you borrow from the people you call it tax but pay no interest. If we can prove that SE can provide a better return than mainstream investments, then we can argue that the government should issue bonds and use the money for SE. Ben: We need to think of RIPESS as a business, like the World Fair Trade Organization, in order to have greater legitimacy and generate more support from the government and investors and also to get free of the constraints imposed by donor dependency. We should think about doing business with each other – south-south solidarity trade. Moving forward We agreed that these discussions are very important and that we need to have them at every meeting, with perhaps a different focus to clarify points of convergence and differences. Eg. next time look at ethical or political dimensions. We also need to be clear on the objectives beyond convergence and differences, to the future of RIPESS as a political actors. The second objective is to strengthen the ability of RIPESS to take on national and international level initiatives and make public declarations.

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