Anna Ürmössy

Catalan Integral Cooperative: How can an alternative exchange system

reduce inequality and unfairness?
-An examination of the cooperative’s exchange system from 2010 until 2018

Topic

This case study analyzes the Catalan Integral Cooperative (CIC) and its exchange system,
focusing on its effect in reducing inequalities and unfairness since 2010.

Rationale

In the age of rapidly growing wealth and income inequalities [CITATION Fac18 \l 1038 ] and
environmental damage caused by production fueled by the urgency for economic growth
[ CITATION Ste96 \l 1038 ] it is necessary to start examining more equal and sustainable
options. Theoretically, the case study describes the fundamental structures which can be used
to build up an alternative economy. Since the CIC has an almost ten-year-old history, it can be
used as a representative example of an attempt for a more equal and sustainable social and
economic system. Therefore, one can make a realistic conclusion of the success of this
particular pursuit and also generalize that conclusion to efforts for similar systems. The CIC
has so far been examined either in a descriptive manner [ CITATION Geo17 \l 1038 ] or in the
context of how it executes the ideas of the degrowth movement [CITATION Pra32 \l 1038 ] .
However, this study explores the CIC from the perspective of how the organization affects
inequalities. The conclusion is be valuable to organizations who wish to decrease inequalities
by creating alternative economic models.

Research question and focus

The case study focuses on the exchange system developed by CIC, examined in the active life
of the cooperative (from 2010 onwards). It is be taken into account that the CIC is not only a
separate entity, but also part of the bigger degrowth movement. The unit of analysis is the
economic exchange system developed by the CIC. The two main points of interest are the
ECO currency and the network that connects local producers and consumers called the
Anna Ürmössy

Catalan Supply Center. It is clear that the system created by the CIC is much more
complicated and overarching, however in this study I mainly just focus on these two aspects.
The reason for this, is that these are the two most important components of the exchange
system, since the network provides the opportunity for the exchange, and the currency
provides the means. The research question and the sub questions are the following:

How does the exchange system introduced by Catalan Integral Cooperative reduce
inequality and unfairness?

1, How does the ECO currency increase economic equality?

2, How does the Catalan Supply Center make the trade fairer between producers and
consumers?

The nature of the research is exploratory (Yin, 2003), in order to evaluate the effects of the
exchange system on the given inequalities. Furthermore, since the problem at hand is a global
issue and the CIC offers a local remedy for it, which can be used as a model in other affected
areas as well, the research is instrumental (Stake, 1995), aiming for general conclusions.

Type of issue

The CIC is a Catalan organization that aims to create more equal and sustainable living. The
cooperative was started in 2010, by a group of Catalan activists, from anticapitalistic grassroot
movements. The CIC seeks change in various aspects. First of all, they feel the need for a
social transformation: they advocate equality, social justice, solidarity and autonomy from
the state in their general principles1. Secondly, the cooperative strives for economic change:
they encourage non-monetary forms of exchange, and they prefer to use money only as a form
of exchange rather than a means to create more money. Therefore, they have their own
exchange system with the currency (ECO), which cannot be converted to Euros or made
interest on, however in can be used for any purchase in the CIC, such as for food or housing.
Furthermore, the cooperative provides a service to connect local consumer groups with small
producers via a network of pantries (Catalan Supply Center)2, with the aim of creating a
cooperative economy, freed from the profit seeking nature of the outside market. Thirdly, the
CIC strives for environmental sustainability, by degrowth. Their overall goal is to create a

1
https://cooperativa.cat/en/general-principles/
2
https://cooperativa.cat/en/catalan-supply-center/
Anna Ürmössy

cooperative public system, in which basic needs like food, housing, healthcare and education
are not treated as commodities, but are provided to everyone [ CITATION Geo17 \l 1038 ] . The
CIC organizes itself horizontally, by the principles of decentralization and direct, participatory
democracy. Besides the economic organization, the cooperative also offers legal advice,
develops technologies better suited for the producers in CIC 3, and provides funding for
various other autonomous projects4.

The main issues of this case study are two inequalities resulting from the current economic
system. The economic inequality of both opportunity and outcome arising from the nature of
our monetary system is the first issue. [ CITATION Ath15 \l 1038 ] The problem originates from
the fact that once a person has ‘spare’ money, it is relatively easy for them to multiplicate that
money by making investments for example. Therefore, it becomes desirable to accumulate
huge amounts of money, often only to make more money from this. [ CITATION Ath15 \l 1038 ]
However, those who do not own any investable assets stay behind in this ‘competition’ and
the wealth gap between the ‘rich’ and everyone else grows tremendously [ CITATION Tho14 \l
1038 ]. In the case of Spain in 2013 the top 10% owned 57% of the total national wealth, while
the bottom 50% only possessed 7% [CITATION Fac18 \n \y \l 1038 ]. The second examined
issue is the exploitation of people by capital-owners, such as profit seeking companies. The
root of this problem, according to Marx (1867), is the distorted nature of the exchange system
favored by capitalism. In a non-capitalist economy, the aim of commodity exchange is to
acquire another commodity, that one needs. We might exchange a commodity for money, but
our motivation is to buy another commodity with the money. However, in the capitalist
exchange system, the motivation changes: the new goal is to generate profit. The new
intention is to invest money in a commodity, and the desired outcome is to resell that
commodity for more money, thereby gaining a profit. This exchange system leads to an unfair
situation because the producer and/or the consumer has to be exploited if the capitalist wants
to earn profit [ CITATION Kar67 \l 1038 ]. I focus on how the currency ECO introduced by CIC
and the Catalan Supply Center provide a fairer exchange system for the members of the
cooperative and how the rules set for the currency ECO can prevent economic inequalities.

Conceptual framework
3
https://cooperativa.cat/en/xctit-office/
4
https://cooperativa.cat/en/territorial-network/autonomous-projects-of-collective-initiative-apci/
Anna Ürmössy

The inequality in Spain has shown a growing tendency in the past decade both with regards to
the Gini coefficient and the difference between the income of different deciles (OECD, 2019).
Furthermore, Spain has a high poverty rate (0,155) compared to other countries in the
European Union, and has the third largest poverty gap in the EU (OECD, 2019). Moreover,
Spain has the third highest unemployment rate in the world: in 2017 more that 17% of the
workforce was unemployed, but the rate in 2010 (when CIC started its operation) reached
almost 20% (OECD, 2019). In the time of these crises the attention of Catalan activists turned
to an alternative idea, namely the degrowth movement [CITATION Pra32 \l 1038 ]. This
movement, which originates from the French décroissance, strives for steady-state economy,
ecological sustainability, democracy, and social justice [CITATION Gio18 \l 1038 ]. The
movement was an excellent response to the issues emerging in Spain during the 2009
economic crises, because, as Demaria Schneider, Sekulova, aand Martinez-Alier (2013, p. ?)
puts it, “degrowth opts for less competition, large scale redistribution, sharing and reduction
of excessive incomes and wealth”. After many demonstrations leading up to its funding, the
cooperative was started, operating along the ideas provided by the degrowth movement, and
working towards a solidary economy [CITATION Pra32 \l 1038 ].

Methodology

I collected data from various kinds of sources, including interviews, videos, articles and
academic papers related to the CIC. My sources were English and uncomplicated Spanish
materials, the method used was secondary data analysis. To gather information firstly, I
looked at the website of the cooperation and extracted the most important pieces of
information, with a special focus on the Catalan Supply Center and the currency used by the
CIC. Secondly, I used the search terms ‘Catalan Integral Cooperative interview’ and
‘Cooperativa Integral Catalana entrevista’ in Google to find interviews with funders and
members of the CIC. I used the interviews with the funders to see what social and economic
problems made them feel that they had to start the cooperative. I encountered a Master’s
thesis [CITATION She12 \l 1038 ] written about the cooperative, which includes some valuable
qualitative descriptions of the cooperative, interviews and results of a questionnaire answered
by members in its appendix. The answers of the CIC members to the questionnaire were
excellent sources to gain a personal understanding of how the changes brought by CIC are
experienced amongst people. Thirdly, I have found the CIC’s channel on a video sharing site,
Anna Ürmössy

where the members share videos mainly of their everyday work and activities 5, such as their
events and meetings. I used these videos as a way of more direct ‘participant observation’.
Fourthly, for further information I relied on academic articles written about the cooperative,
such as Chiengkul’s [CITATION Pra32 \l 1038 ] and Demaria et al.’s [CITATION Fed13 \l 1038 ]
articles, and the in-depth study by George Dafermos [CITATION Geo17 \l 1038 ] which he
conducted about the CIC. I analyzed the data by firstly coding it in three categories: ideology,
supply system, currency, then looked for the aspects of equality and fairness in all three
categories. I used all the sources to formulate a triangulated opinion on how the exchange
system of CIC reduce inequalities.

Findings

The Catalan Supply Center’s (CAC) task is to connect local, small producers to local buyers
via self-managed pantries. The small producers are called “self-employed” members, who
benefit from the legal advantages of being part of the cooperative, such as that they do not
have to pay the high tax which the state would require them to pay for being self-employed.
[ CITATION Geo17 \l 1038 ] Furthermore, for the exchange of goods within the cooperative, they
are not obligated to pay the VAT (Value Added Tax) either [ CITATION She12 \l 1038 ], which
would be otherwise 21%.6 These conditions allow the producers to sell their merchandise
cheaper. By collectivizing these producers, the CIC offers them protection of the state laws,
that give advantage to bigger companies and creating harsh conditions for the small
producers. The pantries, where the food distribution happens, ran by local groups, who make
orders through the CAC. As Enric Duran, the founder of the CIC says:

Each of [the pantries] interacts with farmers and food producers in their
local area. Together, they guarantee equitable food distribution for the entire
territory. (Duran, 2014)

The suppliers are payed in ECO currency, which can also be used to purchase a wide range of
products. The currency follows the Fair-coin model, which targets to establish a
democratically controlled monetary form. [CITATION Cam18 \l 1038 ] The aim of this currency
is to encourage barter-like exchange and to an extent restore the non-capitalistic system
[ CITATION Kar67 \l 1038 ]. With ECO one cannot invest, or make an interest using the currency,

5
https://vimeo.com/cooperativa
6
http://catalonia.com/invest-in-catalonia/businessguide/tax-system.jsp
Anna Ürmössy

its only purpose is to exchange it for goods.7 This quality of the currency prevents exploitation
and the accumulation of wealth, therefor it reduces inequality, one of the main issues
described in the conceptual framework. The collective tries to provide the basic needs of all
the members by a subtype of ECO, called eco-basics.

It differs from the “eco” in that whatever currency is left at the end of the
month cannot be accumulated; in other words, it can’t be added to whatever
you get for the following month. This currency provides access to food,
housing, and other expenses for basic necessities, according to each
participant’s situation. (Duran, 2014)

The other main problems identified in the framework are poverty rate, poverty gap and finally
the high rate of unemployment. These are also addressed by the exchange system developed
by the CAC: the small producers in the organization are protected, therefor they do not
become unemployed or impoverished, furthermore the local pantries offer job opportunities.
The eco-basic system creates a safety net against poverty, by providing the basic needs, such
as food and housing to every member.

Conclusion

The CAC and the ECO currency provide a chance to fair exchange of goods and a steady
economy without dependence of big companies, aiming for profit. Relating back to the
original research questions one can conclude that ECO currency decrease inequalities by
discouraging profit orientation and wealth accumulation, moreover, the eco-basic-system
addresses the basic needs of the members, promoting social justice in the spirit of the
degrowth movement. [CITATION Pra32 \l 1038 ] The CAC establishes a fairer trade by
connecting local producers with consumers, creating a barter-based, exploitation-free
exchange between them. The short-term impact of the CIC’s exchange system is reduced
inequality, protection from state laws and a community based, local economy. However, the
ideological background behind the exchange system promotes a long-term change in values
and consumption habits as well [CITATION She12 \p 115-121 \l 1038 ] . As one person from the
CIC states in Carlson’s questionnaire:

7
CIC: General Principles and Aims https://cooperativa.cat/en/general-principles/
Anna Ürmössy

“I learned to share more, worry more about the needs of the community as a whole, and to
listen and lead to the views of all.” [CITATION She12 \p 121 \l 1038 ]

The switch in participant’s thinking can be a foundation to a shift from an unpredictable and
instable capitalist system, to a community based, stable and autonomous economic system,
and in my opinion, this is the true strength of the CIC initiative. The system they are working
towards would fight against inequalities, not by offering remedy for the symptoms, as
government policies usually do by aids for example, but by tackling the root of the problem,
which is, as I see it, exploitation, individualism and the lack of solidarity. In my opinion the
CIC’s response to the crises of our age is exemplary and their methods could be used to
reduce inequality and unfairness outside of Catalonia as well.
Anna Ürmössy

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