Friday, October 3, 2008

Towards the Solidarity Economy

John Samuel

Keynote presentation at the Asian Conference on Solidarity Economy and socially responsible Business on October 3, 2008 in Bangkok

Ethics is what makes the economy humane- an enabling force for exchanges among people, societies and countries. Devoid of ethics, economy can perpetuate predatory forces of dehumanization, commodification, violence and war. Economy needs to be an enabling process that helps human beings and environment to sustain and thrive. And Economics devoid of ethics can be extractive, exploitative and imperialistic. In fact, both Adam Smith and Karl Marx began their search for viable economy from strong ethical premises.

Solidarity is an act of identifying with other human beings with a shared sense of destiny, dignity and responsibility. Solidarity is based on the principles of mutual empathy, mutual support and the greater common good. Solidarity helps us to go beyond the greed of the self to the need of other people, societies and countries. Solidarity does not depend on the principle of the ‘Survival of the fittest’. It seeks to promote the sustainability of human beings and environment.

Economy signifies an interface among human beings and societies that facilitates the link between natural and social resources to meet the human needs and comforts. Economy also signifies the dominant modes of production and distribution. The notion of market represents the dynamics of demand and supply of goods and services among human beings, societies and countries.

However, the market-place is not a neutral space of such exchanges based on demand and supply. Any mode of exchanges among human beings and societies are driven by power relationships and value assumptions. Hence the market place is inherently political. The key question is whether the dominant power-relationships and political process within the market shape the choices and values of human beings or whether a universal framework of human values and sense of solidarity drives the power relations within the market. The assumption behind the free market economy is that the invisible hand of the market is capable of dealing with all human demands and needs in an efficient way. However, the so-called free market economy is driven and controlled by few very rich companies and few powerful countries. Most of the poor countries and poor people at the receiving end of the so-called free market economy. The Solidarity Economy is a critique of the extractive economic paradigm of the free market variety and at the same time it is an effort to build alternative vision of an ethical economy. The alternative search for the solidarity economy on the one hand seek to promote an ethical normative framework for a people-centered economy and on the other hand seek to learn from the various practices of enterprises and business based on the principles of solidarity.

Solidarity Economy is an effort to reiterate and rediscover the ethical basis of a viable, sustainable and socially and ecologically responsible economy. Here are some of the perspectives on the Solidarity Economy:

1) Ethical basis for a solidarity economy needs to be based on the values of cooperative solidarity, economic and ecological sustainability, accountability, human rights, democratization, diversity and justice- social, economic and ecological.
2) Seeks to promote alternative practices and thinking to challenge monopoly capitalism and exploitative economic paradigm. Market is too important to be left to the fancies of finance capitalists in search of perennial profits and their subservient policy makers

3) Seeks to democratize economy, knowledge and technology.

4) Seeks to promote fair profit in a vibrant and enabling market place It places people and environment before the profit

5) Promoting Local Economies that are accessible and affordable to the poor and marginalized people.

6) Would advocate for trade justice and national and international public policies to promote fair trade across the world.

7) Anticipates long term social and environmental consequences of economic behavior.

8) Proactively seeks to engage with stakeholders to promote accountability and to make them realize the consequences of their actions at the market place, society and the world.

9) It promotes the public policy perspective that those who have greater economic resources at their disposal have a greater responsibility towards the society and environment.

An Economy which creates monopoly of power- through monopoly capitalism and imperialism- will undermine the values of democracy, human rights and perpetuate violence and war. Wherever there are human beings and wherever they exchange goods and services, there will be a market. But the question is what are the guiding principles of such exchanges, and who control the modes and manner of those exchanges. When markets and economy get captured by few forces of monopoly and those who have unbridled thirst for profit and power, the ordinary human beings become the victims of the market- without any sense of agency or bargaining power.

The solidarity economy perspective is not against the creation of wealth. It supports ethical entrepreneurship and human creativity and efforts to create wealth. Competition is not a bad word. But exploitation is an obscene act. Profit is necessary to sustain any vibrant economy- as profit helps people to create enough surpluses for the greater good. But profit becomes obscene when it based on extracting and exploiting people, nature, countries and continents.

The Solidarity Economy is based on four ethical pillars of Ethical production, Ethical Investment, Ethical market and Ethical Consumption. The solidarity perspective seeks to reiterate that human beings are capable of cooperative solidarity and ethical business. The Solidarity Economy is for fair profit and viable and sustainable economic paradigm that sustain environment, people and societies.

The solidarity Economy perspective seeks to encourage people and communities to enter the market and assert their capacity to negotiate and bargain in the market. Such perspective promotes vibrant local economy – including production and exchanges of services at the grassroots level. The democratization of economy, transparency and accountability of the investors, producers, market and consumers are the defining forces of a solidarity Economy.

1. Ethical Production.

Human beings will have to produce both goods and services for their survival and comforts. Ethical production will be guided by the basic values of human dignity, fair wages and conditions of work and environmental and social responsibility. The Solidarity Economy perspective seeks to support small and media scale enterprises and sufficiently decentralized production practices. Most of the poor people are producers as well as consumers.

It may not be always possible to have small or medium level productions modes to serve the need for growing economies and demand. So it may also be necessary to have big production facilities of goods and service. This where it is important to ensure the corporate accountability to the workers, communities, shareholders and consumers. It is important to move beyond the usual public relations rhetoric of the “corporate social responsibility to Corporate Accountability. However, the fact of the matter is most of the big multinational corporations, while subscribe to the rhetoric of corporate social responsibility, tend to have scant regard for any accountability mechanism. Many of them tend to violate the statutory regulations, perpetuate corruption of politics and economy, and tend to maximize profit at the cost of workers, communities and environment. Solidarity Economy perspective seeks to demand strong ethical guidelines- such as corporate accountability, ecological sustainability, human rights, and fair wages.

While the value of their labour does not increase the prices of consumer goods keep increasing. Most of the small and medium level farmers who produce agricultural commodities hardly get any bargaining power in the market place, as most of the time it is the middle men who often tend to control and influence the market. The producers often do not get any opportunity to bargain with the value chain and get fair returns for their labour

2. Ethical Investment

Ethical investment is based on the basic values that motivate the process of investment. Here, investment is not merely a means to maximize profit, but also a means to serve the large society in terms of generating gainful employment, protecting the environment, promoting human rights and democratization. Ethical investment place people ahead of profit. While ethical investment too seeks to make profit, it will challenge the unbridled and unethical thirst for profit. Ethical Investment requires transparency, accountability and social responsibility in the process of seeking a fair return on the investment.

Ethical investment is not merely about finance. It involves investment in terms of time, resources, ideas and process for the greater common good of humanity and environment. It would actively discourage investment in those industries that perpetuate environmental pollution, unbridled greed, violence and war. Ethical investment is both about the choices of values and the manner of investment.

3. Ethical Market.

Market is a means for exchanges of goods and services. Ethical Market is a means to serve the larger society- in a fair, predictable, efficient, effective and sustainable manner. Market is necessary for all our social and economic sustenance. However, when Market becomes God, the power tend to get accumulated in the hands few who would use market as a means to amass wealth and power at the cost of basic values.

An ethical market is an important link between investor, producer and the consumer. The so-called Free Market has been never free. Hence, it is important to have optimum regulations by the state and the society to make sure that market is a means to serve and exchange. It is often those middle men who control the market. Traders tend to control the market forces through influencing the finance market, commodity market and consumer market. The principles of an ethical market should make sure that the producers and workers do get fair returns and consumers do get quality services and goods.

While the State should encourage and enable ethical market mechanism, it is not the business of the State to control the market. It is important to have optimal regulatory mechanism to protect the local and national economy from the predatory finance and speculative capitalism.

4. Ethical Consumption.One of the reasons for the environmental degradation, increasing inequality and increasing morbidity is the unethical consumption. When market and money become the God, they are means of desire. The modern markets tend to demands through selling desires. Advertisements are the means for selling new desires to create new demands for the products and services. As a result people tend to derive their sense human self-worth not through creativity but through consumption. When people tend become less creative and more productive, consumption becomes a mode of life itself. The rich countries and people waste huge amount of precious resources – including non-renewable energy- through unethical consumption. Unethical consumption focuses more on the self, than the society. Unethical consumption focuses more on the status of the consumer rather than sustainability of the environment.

Ethical consumption needs be based on the values of need, environmental sustainability and social responsibility. An ethical consumer will ask the question whether the products and services that he/she consumes harm human beings and environment. Ethical consumer will always discourage wasting resources- particularly food and energy- and seeks to share and maximize the use of the consumer goods and services.

The resources of the earth are not limitless. It is increasingly clear that exponential growth of human activity and market forces damage the ecology of the planet. A relatively small minority of people and countries tend be richer and richer and large majority of people are impoverished every day. This is unethical. This is what solidarity Economy seeks to challenge and change. The Solidarity Economy seeks to humanize the production, investment, market and consumption. It seeks to challenge the commodification and dehumanization at all levels. It is based on the principle of creativity, community and communion. Solidarity Economy is local and global at the same time, where every consumer is a citizen who can claim his/her right and seek to enlarge the freedom of others.

The Solidarity Economy seeks to enhance and enlarge human freedoms to enjoy and sustain life and environment. It seeks to economic and political empowerment of all people across the continent, cultures, gender and colour. It seeks to challenge imperialist economy and politics- an economy of violence and war. It is a search of an enabling economy and empathetic market that would help us to expand our choices in a sustainable, responsible and just manner. As Gandhi said, we have everything to meet everyone’s need but not greed. The solidarity Economy is one more step for us and the next generation to reiterate that “Another world is Possible”


Ron Robins said...

Very interesting thoughts!

Like you, I agree that ethical behaviour must be at the core of business and economic activity. I began to follow ethical investing and finance some forty years ago and have a site that you might want to take a look at. It's now one of the most popular ethical investing sites on the web. It's at

Best wishes, Ron Robins

JS Adoor said...

Thanks Ron Robinson. Very inspired by your good work...we need many leaders like you ...everywhere in the transform it and make better tommorrow.

John Samuel