Towards a Participatory Recovery Plan

July 20, 2009 By Atlee McFellin


Atlee McFellin's ZSpace Page

[Contribution to the Reimagining Society Project hosted by ZCommunications]


"The militant organizations which the proletariat erected against Capitalism -Trade Unions in the economic and the Party in the political - are unable in the nature of things to counteract this process of dissolution, since they have no access to the life of society itself and its foundations: production and consumption."

Martin Buber, Paths in Utopia, 1949.


Section One - Introduction

The religious philosopher Martin Buber made this statement in 1949 as he looked back upon the revolutionary struggles of the nineteenth and twentieth centuries. In his book, Paths in Utopia, he traces the concept of revolution and what he called the "Utopian Concept in Socialism." He found something lacking in the thoughts of different revolutionaries like Proudhon, Kropotkin, Marx, and others because he felt they did not fully acknowledge the important role cooperatives can play in daily life and how they can help build a more effective movement for the fundamental transformation of society. More specifically, he saw this rather costly shortcoming of past struggles in their lack of established federations of producer, consumer, and "full" cooperatives. The same can be said of political and social movements today. I believe if we are to build a successful movement for a participatory society, then we must also build alternative institutions like cooperatives to strengthen the overall movement and provide liberating institutions that can help people take control of their own lives within the process of fundamentally transforming society as a whole.

Credit unions as well as cooperative housing, businesses, and social services like day-care and healthcare are all examples of institutions we could form as infrastructure for our movements that would help strengthen our efforts and provide examples of the society we wish to create. In building this infrastructure we would be providing for one another materially and emotionally, while developing our collective ability to govern the society we hope to spread far and wide. The various social movement organizations that exist today seem to neglect the development of cooperative infrastructure, but they and the communities they serve would benefit enormously from it. Buber's view is important to understand today not only because contemporary movements largely ignore this potential infrastructure, but also because the economic crisis thrusts upon us the need for immediate solutions for people's day-to-day lives beyond our usual strategies, with dire consequences should we fail.

It would not only provide housing for the homeless, food for the hungry, work for the unemployed, and an overarching participatory societal framework among them, but it would provide emotionally for people in terms of comfort and security. Otherwise, we are forced to live in authoritarian and/or capitalist institutions, which keep us estranged, anxiety stricken, and insecure. Many of us know too well what happens when progressive movements cannot galvanize hope amongst those suffering in times of great need. Desperation and suffering without hope can give rise to comfort and security in the authoritarian, if it can provide for them. Before we can go over how movements today can incorporate Buber's approach, we must determine what in today's society would be similar to the cooperatives movement Buber refers to.




Section 2 - A Brief Overview of The Social & Solidarity Economy Movement Today

The cooperatives movement Buber refers to exists in a variety of different forms today with different understandings of their relation to capitalism and so-called modern liberal democracies. Some talk openly about their movements aspiring to replace capitalism and to be part of a movement to create a more participatory society, while others just see themselves as options for those in need of solutions. Some call themselves a social economy. Others call themselves a solidarity economy. Some stick to the word cooperatives, while other include both the words social and solidarity in their framing. Regardless, it is essential to work with each of them, though recognizing to what degree they will be part of the overall movement for a participatory society, just as we should also take part in unions or political parties.

There are two different global networks that would fit to one extent or another into Buber's understanding. The first is called the International Cooperative Alliance (ICA), which doesn't express itself or operate as an alternative to capitalism, but the work they do is expanding a global cooperative infrastructure that with the right support from social movements, etc. could make great strides in that direction. The other global network is the Intercontinental Social Solidarity Economy Network (RIPESS), which does view itself and operate as an alternative to capitalism with the hope of replacing it. ICA claims that there are over 800 Million members of cooperatives that are a part of ICA worldwide, while RIPESS hopes to reach 100 Million over the next few years. They both seem like viable options to support, especially if we in the US want to help build a global movement at the same time as we build a participatory society here.

In Canada there is an excellent model of what an alternative economy could look like and how it could work with various movements to build a participatory society here. Le Chantier de l'économie sociale is one example of an organization within what is called the Quebec Social Economy that acts as a cooperative of cooperatives to serve the expansion of the social economy and social movements with an elected steering committee open to all those within the social economy. Over the years they have built up support, so they can effectively push the government of Quebec to fund the expansion of the social economy, while giving them complete autonomy from governmental interference in how the money is spent.

Within the US there are two different networks worth mentioning. The first is the National Cooperative Business Association (NCBA) and the National Cooperatives Bank (NCB). They are both a part of the ICA and do not see themselves as an alternative to capitalism. Regardless, they are quite large with cooperatives all across the US and with a decent financial infrastructure already set up with the NCB, although the NCB is not very internally democratic. The other is the US Solidarity Economy Network (USSEN), a network of organizations committed to a different kind of economy, a non-capitalist one grounded in mutual support, equity in all dimensions, cooperation, participatory democracy, and sustainability. Currently, USSEN is made up of a variety of different types of organizations. They are primarily made up of research institutes as well as cooperatively owned and operated workplaces including food cooperatives and cooperative housing. One of their member organizations is the National Federation of Community Development Credit Unions, so they too have their own financial infrastructure to some extent, though there doesn't seem to be much interaction between the CDCU Federation and the rest of USSEN at the moment. The federation is much more internally democratic then the NCB as well.

The biggest shortcoming of any of the networks mentioned, even USSEN, which seems to be the most strategic one for our movements in the US to coalesce around, was the lack of actual engagement with other movements. Those of us who are involved with different movements, whether they are at universities, workplaces, or communities, found that many within USSEN didn't have much experience with other social movements. Their experience comes directly from building the types of alternative institutions that make up the US Solidarity Economy Network. This is not a bad thing as much as a limitation that must be transcended in order for all our movements to grow into a force capable of fundamentally transforming our society.


Section 3 - The Economic Crisis and The Infrastructure Our Movement Needs

The crisis started with housing and the financial system. People lack access to adequate, affordable housing on a massive scale, as Wall St. executives' pockets grow ever deeper from the poor's plight. They push for lower wages and help fight against the growth of unions. Then they manipulate people into loans to buy homes they can't afford. When the money comes due and people can't pay up the court and police evict them from their homes, throwing them out onto the street. When those Wall St. executives stop making money because the poor can't pay up they run to the government to be bailed out. Instead of allowing these financiers and their mega-banks to continue to ruin our lives and steal our money, let's organize around building a participatory financial system that we can use as part of our movement's foundation. People need immediate solutions and that includes housing and jobs, so why haven't we advocated and worked to create cooperative housing, community land-trusts, and cooperative businesses of various sorts, so people can get back into good homes and provide for themselves and those they care about?

We could provide immediate solutions for people in need, while building a movement of people democratically owning and governing their homes, neighborhoods, economy, and society as a whole. In terms of housing, since cooperative homes have immensely lower rates of foreclosure, they are a viable option for a government looking for solutions and we can build them as a part of our larger participatory society. They can form or work with neighborhood associations and consumer councils to help establish inter-cooperative systems, alternative currencies, participatory budgeting, just generally working to support various movements, and vice versa.

An entire society is not made up of housing though and people need more than just homes. We need a functioning economy and this economy is going to need some sort of financial system. Even though much of the financial system we have today acts more like a parasite then a productive sector of society, a participatory financial system is very important in effectively building an overall participatory society. Credit unions are internally democratic and anyone who opens an account becomes a member with one vote on electing board members and additional elements related to governance and policy. Some credit unions are started by labor unions, while others focus on community development and low-income communities. The community development credit unions (CDCUs) are even federated together on a national level and part of USSEN. If various movements make it a point to work with their communities to become members of these credit unions, especially the CDCUs, people could get money for homes, etc. from a different financial system that is part of an overall movement for a participatory society.

The crisis means people don't have sources of income to provide for themselves and those they care about. We need to build cooperative businesses as part of the infrastructure for our movements across the nation, united with housing cooperatives, CDCUs, etc. Additionally, if the green jobs movement is going to put people back to work, while addressing climate change and our need for fossil fuels, why can't those jobs come from green worker cooperatives? If we are serious about building a movement for a participatory society, why don't we actually build it starting with food, housing, healthcare, and other businesses? People have many needs that aren't being met by this failing economy and we need to be able to address all of them and start building our own infrastructure for the type of economy and society we believe in.



Section 4 - Strategy for Building a Participatory Society's Initial Infrastructure

It should begin with the development of the financial infrastructure we will need for the overall project of building movement infrastructure and the foundation of a participatory society, but that is surely not the only important element. This participatory financial infrastructure must have adequate funding from individuals through accounts in CDCUs and other credit unions, but it must have other ways by which to attract larger institutional investors from around the world, including pension funds and what are called sovereign wealth funds. This is something social movements will most likely fear. Besides the financial aspects, we need to have a strategy for how movement organizations will interact with CDCUs and other credit unions, what types of projects we should start, how it can evolve over time, and how it can relate to the rest of our strategies for fundamentally transforming our society.

The social economy in Quebec provides an interesting model for how we could undertake a similar project within the US. As a result of the economic crisis in Canada in the 1980s, Quebec labor unions, social movements, and non-profit organizations worked to create the Quebec Solidarity Fund and other investment funds related to building the social economy. These investment funds maintained a diversified portfolio, minimizing risk and maximizing returns, to strengthen its ability to invest in the growth of the social economy. After establishing the investment fund, they then worked with different credit unions that loaned money for a wide-variety of enterprises related to the different types of cooperative institutions. The partnership between the investment funds and credit unions helped ensure the expansion of a participatory and community-accountable financial infrastructure throughout Quebec that was helping to grow the social economy. It expanded more participatory and cooperative governance practices throughout the social economy as a whole between the different cooperative businesses, housing, credit unions, social movements, and non-profits.

The central piece in Quebec that allowed them to begin this massive project was the different investment funds and history of credit unions that allowed the social economy to control their own finances. They could easily work together allowing them to expand their social economy, while ensuring it had an overall participatory, decision-making structure. The US and Quebec and quite different from one another though. We cannot count on labor unions to help start a fund for us to use to loan money for alternative institutions, but that doesn't mean there aren't other sources of funding. There are a number of different cooperative investment funds already in existence within the US. There is the Cooperative Capital Fund of New England and a few others like the Northcountry Cooperative Development Fund as well. Creating additional investment funds that are internally democratic and part of a movement for a participatory society won't be difficult. It is likely that another one will be set up sometime in the fall of 2009, as it is already in the works. There are already a number of different funds that offer grants and loans for these types of projects, but they are not internally democratic and federated together with the projects they help finance. If we are to be successful in building a unified movement for the fundamental transformation of our society, we have to work to establish an alliance or federate the already existing cooperative development funds with the projects they help finance. In doing that we would be establishing a participatory decision-making structure for the foundation of our movement as a whole.

Investment funds, cooperative development funds, etc. won't be as effective in terms of building a participatory society without credit unions through which money from the fund can be loaned because that process will allow us to more easily federate the different cooperatives together from the start, while founding them on an alternative financial system. Fortunately, we have the CDCU Federation and numerous other credit unions throughout the US that we could work with if we made this strategy a central part of the strategy of already existing social movements across the nation. Movement organizations can work with the credit unions by encouraging people to open accounts in them. By having certain credit unions like the CDCU Federation as the main institutions through which loans are given out for movement infrastructure, we can ensure that we expand the infrastructure in much the same way as they did in Quebec. Because we can work with a national infrastructure of already existing financial institutions, we have a much greater potential to expand our own participatory society from the beginning.

As movement organizations work with credit unions to expand participatory projects, they can also work with communities to establish consumer councils from neighborhood associations and cooperative housing projects. They could push their own candidates for city councils, education boards, or other political positions as well. Since movement organizations will also help to establish cooperative businesses at the same time, neighborhoods, especially people living in the cooperative housing, should be in a position to benefit from them.

As the movement in communities spreads, while bringing people into immediate contact with the financial institutions needed to help develop financial self-management, social movement organizations, credit unions, consumer councils, and cooperatives can work to establish the decision-making systems needed to solidify relationships among all these different groups and interests. There are a number of different types of cooperatives needed first like those focused around food, housing, and healthcare, but we will need to expand into other types depending on the needs and interests of the different communities themselves. As this process continues, those attempts to create councils in neighborhoods and running candidates for various governmental positions can begin a larger process of transformation.

Movement organizations can work with existing cooperatives and communities to push for more local and participatory control of the budget, which could be used to help fund the expansion of this participatory society infrastructure. Candidates could also be run as part of a process of transferring decision-making power to neighborhood councils for more participatory planning. This strategy is not meant to replace other, already existing strategies for change, but it is meant to provide a new direction for movements in the US that can help strengthen already existing practices, while providing them with the foundation or infrastructure that will allow us to provide for people in the short-term.

We also need to focus on building this infrastructure at the national in addition to the local level. We need to learn from the ‘green jobs' movement in how to successfully push the government to support our infrastructure. The main difference will be that, if done successfully, we can build the movement from the ground up instead of top down like the ‘green jobs' movement. In Quebec they got the government to put significant financial support behind the social economy and so can we, except ours can be part of building a movement to replace capitalism and to fundamentally transform our society in all the different spheres of life. In order to be successful in making this a reality though, a timeline is important.

Fortunately, one is relatively easy to establish. This coming June, June of 2010, just a little over eleven months away, is the next US Social Forum in Detroit, Michigan. What we need to do is be prepared for this conference with the capacity to reach out to the organizations and people beforehand, so as to build this strategy into the larger movement. This will help us get away from the limitations of the social forum model, which revolve around its reluctance to form any type of solid campaigns or decision-making structures and be just a space for workshops and the formation of informal relationships or networking, into a space where we can establish the different aspects needed to build this participatory infrastructure.

What it will take is the establishment of principles to help all the cooperative development funds interact with another, something that exists to a certain extent already, to get the important CDFI on the same page, which won't be that difficult either, and a concerted effort to get as many social movement organizations committed to the strategy. This process concludes with the dissemination of massive amounts of literature about it at the forum itself, a few different workshops or panels about it and the different elements, and a resolution at what is called the People's Movement Assembly, which is as much of a participatory democratic decision-making body as the social forum has right now. If we can pass a resolution at the assembly, while making sure to do these other elements, we can go away from the social forum with a solid movement behind building a new infrastructure for our movement as a whole, one that will surely be a powerful force for change in the new decade that can be a decade of the change we want to see.


Section 5 - Concluding Remarks

World Systems theorists Giovanni Arrighi and Beverly Silver refer to World War II as a great civil war between nation-states competing for world hegemonic control in the wake of the failures of the British Empire. We can turn to others like Wilhelm Reich and Erich Fromm who see the rise of fascism and totalitarianism as the product of the immense suffering that plagued Western European civilization in the aftermath of World War I and the inability of those movements for the liberation of humanity to provide for people and effectively turn the crisis situation plaguing society into the birth of an emacipatory one. As we stand before the greatest economic crisis the US has faced since the Great Depression, and before a world increasingly divided in the wake of the attempts of the US to dominate the world, can we say convincingly that the future of this world will be one of peace before it is one of war?

If today we are seeing the breakdown of an oppressive global order perpetuated by the US, then we have to ensure that our government does not try to regain its global dominance by forcing our world to degrade further into war. Are those of us whose goal is a participatory society ready and capable of providing a solution to the economic crisis, one that will be capable of transforming our society before the hope for change degrades into the cynicism and nihilism that turns liberating movements to authoritarian ones? If we are to be capable of building the movement we want, to achieve the goals we want, we have to be able to provide solutions for people that include liberating institutions that provide for people in a way that shows them the benefit of the society we want to create. If we cannot provide those solutions, those institutions, and movements, then people who once had the hope for liberatory change could turn to another force that exists and can provide for them, which may be a brutal, authoritarian one.

Section 6 - Epilogue - An Overview of the Social Economy Development Fund

A) The Social Economy Development Fund -
A proposal for an investment fund that would specialize in the creation of fixed-income financial vehicles to assist in local, sustainable, cooperative, participatory economic development. The fund will partner with community development credit unions, credit unions, and community banks to offer loans for related projects.

B) Executive Summary -
1. The Investment Fund - The investment fund will attract investors in order to provide funding for participatory / cooperative businesses, housing, and other projects through CDFIs, community development, and cooperative development institutions.

2. Financial Intermediaries - The financial vehicles of the fund will come from bundles of loans lent through partnering CDFIs and will focus on innovative types of nation-wide participatory / cooperative projects. The fund will back the loans given out, so we can start projects that other lenders might not consider.

The Fund will make investments in these organizations and businesses by collaborating with community lending & investment institutions in three ways:

A. Shared risk lending. The Fund will provide criteria for loans which will be primarily underwritten by lending institutions. A portion of the risk will be taken by the Fund.

B. Loan purchasing. The Fund will, in the long term, consider the purchase of entire loans in order to keep capital flowing.

C. The Fund will make equity investments with community development and cooperative development venture capital funds.

3. CDFIs & Economic Democracy - Each person who takes out a loan or opens an account through a community development credit union or credit union becomes a voting member with one vote. As the number of people and associated development projects expand, so too can cooperation and economic democracy among them. We can incorporate each of the projects, CDFIs, CDFI members, New Economy Roundtable (NER), Solidarity Economy Network (SEN, and social movement organizations together from the beginning into a more cooperative / participatory democratic system.

4. Overall Participatory Project - The fund, financial intermediaries, and even social movement organizations can work together to support each newly emerging project and help them develop the support networks necessary for ensured success. As numerous projects emerge, all of the constituencies can work to expand cooperative relationships of economic democracy among projects on larger scales as the need emerges. This could include housing and business projects, but also social movement organizations, even neighborhood associations and movements pushing for participatory budgeting / planning.



C) Rationale & Overview -
The nation is struggling to find solutions during this economic crisis. For many though, it is not simply about ending the crisis, but about what type of recovery we want and who will benefit from it. Many organizations and individuals like those within NER or SEN have come together to advance a different notion of recovery and development, one grounded in principles such as these:

* Solidarity and cooperation
* Equity in all dimensions (race, class, ethnicity, gender, etc.)
* Social and economic democracy and self-management
* A balanced division of labor
* Sustainability
* Pluralism, grassroots-level organizing, diversity
* People over profits

What we need in order to be successful in building this social economy is a way for those of us who share these beliefs to build it together. Though we are a diverse group whose efforts span the entire nation, we need a more central way by which we can allocate resources to those who need them. Towards that end we wish to build a central investment fund that can be used to attract investors who are interested in building this social economy and generate market-rate returns at the same time.
In partnering with Community Development Financial Institutions, especially internally democratic ones, we can link together those individuals and organizations working to build this social economy and help address the needs of the people during this economic crisis with the financial intermediaries that can help them grow. Overall, NER, SEN, social movement organizations, and individuals affiliated with CDFIs will be the primary undertakers/marketers of development projects. These will include but are not limited to the types of projects listed below.
CDFIs will grow because of the variety of organizations becoming involved with them, encouraging people to open accounts, and starting up development projects as well. NER and SEN development projects will grow because they will have access to financing in a participatory and accountable manner and because they will be a part of an active and supportive community dedicated to their success. Social movement organizations will benefit from having access to the finances needed to develop their own projects and a larger cooperative system that addresses a variety of needs within their communities. Each constituency will benefit from the involvement of the others and overtime a more cooperative economy and society will emerge.

D) Potential Project & Development Areas -
Local, Sustainable, Cooperative, Participatory Economic Democratic Development -
Community Supported Agriculture
Affordable Cooperative Housing / Development - permaculture gardens, rooftop gardens
Community Land-Trusts
Renewable Energy Production / Building Retrofitting (...also see Co-op Power)
Zero-Waste Business / Manufacturing - including food cooperatives
Retail, Restaurants, Cafeterias
Healthcare Services Cooperatives

NOTES

Martin Buber, Paths in Utopia, (New York, NY: Macmillan Publishing Co, 1988). P. 139.
Buber considered the full cooperative as the union of both producer and consumer cooperatives whereby traditional roles like "worker and consumer, production and consumption, industry and agriculture are all integrated into a larger whole." Maurice Friedman, editor, Martin Buber and the Human Sciences, (Albany, NY: SUNY Press, 1996)P. 276.
"Credit unions are financial institutions formed by an organized group of people with a common bond. Members of credit unions pool their assets to provide loans and other financial services to each other.
Credit unions differ from other banks in several ways: not-for-profit cooperatives, owned by members, and operated by mostly volunteer boards." National Credit Union Association (NCUA)
For an overview of differences in the cooperatives sectors around the world see Jones & Kalami, Trust, Inequality and the Size of the Co-operative Sector: Cross-Country Evidence. Annals of Public and Cooperative Economics 80:2 2009 P. 165-195
For an overview of this process see Viallancourt, Social Economy in the Co-Construction of Public Policy, Annals of Public and Cooperative Economics, 80:2 2009 pp. 275-313.
"A community land trust is a private non-profit corporation created to acquire and hold land for the benefit of a community and provide secure affordable access to land and housing for community residents. In particular, CLTs attempt to meet the needs of residents least served by the prevailing market. Community land trusts help communities to: gain control over local land use and reduce absentee ownership, provide affordable housing for lower income residents in the community, promote resident ownership and control of housing, keep housing affordable for future residents, capture the value of public investment for long-term community benefit, and build a strong base for community action." Institute for Community Economics (ICE).
For more information see the National Association of Housing Cooperatives (NAHC)
For a detailed history of the social economy in Quebec and the concept of the social economy, see Marguerite Mandell, "The Social Economy in Quebec", VIII Congreso Internacional del CLAD sobre la Reforma del Estado y de la Administración Pública, Panamá, 28-31 Oct. 2003
For more information on cooperative development funds, networks, etc. see Community-Wealth.org at: http://www.community-wealth.org/strategies/panel/coops/support.html.
For more information on participatory budgeting see www.participatorybudgeting.org.
For more information on participatory planning see http://www.urbanhabitat.org/node/920
Giovanni Arrighi and Beverly Silver, Chaos and Governance in the Modern World System, (Minneapolis, NY: UofMinn Press, 1999). P. 264.
Willhem Reich, The Mass Psychology of Fascism, (NY, NY: Farrar, Straus, & Giroux, 1970)
Erich Fromm, The Anatomy of Human Destructiveness, (NY, NY: Macmillian, 1992).