Furnishing the Social Solidarity Economy

by Alex D'aloia

by Alex D'aloia

By Alexander D'Aloia

Introduction

The basic tenets of classical economics are generally known as: individuals are rational, profit maximisers, and the best way to ensure their wellbeing is continuous economic growth. Much human experience is lost in this account, however. Many actions take place in the economy that cannot be rationalised as being for individual benefit. In response, scholars and policy makers have been working with ideas that highlight these actions and ensure that the economy serves social ends. One of these conceptions is the Social Solidarity Economy (SSE). Although it is a concept with long historical roots, in its current iteration the SSE is a relatively modern theoretical framework that is situated as, in part, a response to neoliberalism. In particular, by making visible and emphasising those actions within the economy that prioritise solidarity and mutual benefit, it aims to situate the economy within society, rather than subsume society to the economy (Pastore 2006).

In contrast with some other critical theoretical frameworks, the SSE is not intended to simply be a tool for analysis and critique; instead, its proponents want it to be a framework to help direct and coordinate socially meaningful interventions in the economy. Consequently, it is important not just to theorise about the SSE, but to study it in the field, where it is being implemented by government officials, members of workers associations and cooperatives, and even individuals. In response to this gap in the literature, this article studies the case of Ecuador where the government is explicitly applying the concept of the SSE in their policy making. This case study has been chosen, as Ecuador was one of the first and only countries to enshrine the SSE in its constitution, and has possibly the greatest number of government institutes dedicated to its propagation (UNRISD 2016). In particular, I focus on the Instituto Nacional de Economía Popular y Solidaria (IEPS)[1]—which develops policy surrounding the SSE to be enacted by other ministries.                

My discussion, after briefly outlining what exactly the SSE is, focuses on the program Mobiliario Escolar.[2] The research is drawn from fieldwork I conducted as part of a minor thesis for a Master of Development Studies. Over one month, I conducted a series of semi-structured interviews with both staff from the IEPS and participants in the program, generally in and around Quito.

Mobiliario Escolar is organised by the IEPS, in coordination with the Ministry of Education. Its goal is to grow and strengthen the SSE in Ecuador. It aims to do this by procuring furniture for public primary schools from workers associations, cooperatives and the like. Rather than a single contract, a multitude of tenders are drawn up, with individual actors, workers associations or cooperatives receiving the contracts. Consequently, in theory, the millions of dollars spent ($21 million in 2014) are distributed to those who would otherwise be excluded from this economic activity. As will be discussed, the SSE is not a precise term. Nevertheless, this ambiguity is what allows for its potential to be a policy narrative, in the sense used by Tate (2015)—a framework to guide policy and action, and help coordinate disparate actors. When suitable bureaucratic restraints are set around the use of the concept, the SSE appears as a potentially useful concept to help guide the economy in support of society.

Theory of the Social Solidarity Economy

One of the few elements agreed upon about the SSE is the lack of consensus around its precise definition. This has come about for a variety of reasons, including language differences through to the history of the term. Some of the key academic debates revolve around whether to treat it as a methodological approach, an actually existing economy, or a discipline.[3] Other disagreements are simply around the myriad of terms (social economy, solidarity economy, popular solidarity economy, etc.), each of which might contain or exclude a slightly different set of actors. Very recently it appears that the literature is settling on the term “Social Solidarity Economy”. Nevertheless, in spite of these differences, there is sufficient agreement around the SSE for us to be able to trace an outline of what it concerns, and what it can potentially offer for policy formation.

While the origins of the term likely lie with the concept of the "social economy", from the French literature during the Industrial Revolution (Bastidas-Delgado and Richer 2001), the bulk of the work currently being done on the SSE stems from Latin America, and South America in particular. There, the concept of the SSE has moved beyond its conception as an oppositional term to neoliberalism, and has become a theoretical framework in its own right. In particular, it has borrowed from Polanyi the idea not merely that the economy should not be self-regulating, but that in fact it cannot be self-regulating (Polanyi 2001). Following this, most theorists have used the ideas of Laville to arrive at an expanded definition of the "economic" whereby it signifies not just the narrow idea of rational decision making in a situation of presumed scarcity, but a much broader conception of “relations between human beings and the natural environment from which they derive their sustenance” (Laville 2010, p. 77).

It is into this history that South American academics have injected their own ideas around the purposes of the SSE, even if these ideas are quite diverse (Chavez 1997). To a large extent, this diversity in ideas and conceptions stems from the fact that in South America the SSE is seen as a concept still developing in both theory and practice (Abramovich and Vázquez 2007).  Consequently, the range of potential actors and actions one could consider a part of the SSE is potentially limitless. Proponents of the SSE, however, avoid this difficulty by not treating it as a "really existing" economy (Chavez 1997). Instead, in South America, the SSE is largely treated as an approach to, or a lens for viewing how the economy is much more than simply the market. One of the leading theorists of the SSE describes it as "an intellectual process guided by explicit and socially relevant values... not merely explicative and predictive" (Chavez 1999, p. 126).

Consequently, the SSE is largely a focus on actions, rather than actors. This is where the "solidarity" part of the Social Solidarity Economy becomes important. The basis of the SSE is to focus on those economic actions that represent not simply profit motive, but a desire to cooperate and work in ways that benefit those around us. It must be acknowledged, however, that the line between private and public gains is not always clear; therefore, there may never be a perfect delineation between what is and is not a part of the SSE. However, this does not actually present a problem for theorists and practitioners of the SSE. As previously stated, its primary purpose is not to describe a “really existing economy”, but to draw our attention to certain aspects of the economy and “make visible” actions that previously went unobserved or under-appreciated.

Nevertheless, as previously mentioned, the SSE is intended not just to be a lens for analysis, but also a tool to direct action—a “policy narrative” in the sense used by Tate (2015). It is a tool to assist the central task of policy production—“to generate alliances and support among competing bureaucracies.“ (2015, p. 5). In this way, it is essential to not just study the SSE from a theoretical perspective, but to see how the theory operates to guide practice. While my research reveals potential for the SSE to be an alternative way to guide policy, more than anything, it highlights the need for further research into the effects of reorienting the discursive framework of government, and whether this has the potential to dislodge “the market” from primacy of place in conceptions of development.

The Social Solidarity Economy in Practice

As previously mentioned, Ecuador is one of the nations that has gone furthest with legislating the SSE. In 2011 the government passed the Ley Organica de Economia Popular y Solidaria, a law that established who and what would be considered a part of the SSE for governmental purposes, and the actions that the government was going to take regarding the SSE. While the exact rules around membership to the SSE are complex, in short, workers associations, cooperatives, and small businesses and sole traders earning below a certain threshold are legally considered a part of the SSE. Similarly, while there are a range of activities the government is obligated to take, there is one key part of the law which is relevant to this discussion—namely, that the government has to procure goods and services from the SSE wherever possible.

Mobiliario Escolar is part of a wider network of tenders that aim to fulfil this legal requirement, called Ferias Inclusivas.[4] Mobiliario Escolar is an excellent example of the process of conducting a feria, and will be used as a case study. In this program, when the government needs to procure furniture for primary schools, rather than going out to tender for one single, large contract, it breaks it up into many small contracts. The process is roughly as follows: the government advertises their intention to buy school furniture. Those who fit the criteria of the SSE law can apply. At the same time, the IEPS also negotiates fixed pricing with suppliers of raw materials. Once applications have been received, the IEPS breaks up the work into a lot of small contracts, ensuring every eligible applicant receives some work. Cooperatives and workers associations are given proportionately more work to encourage individuals to form groups. The workers then go about making the furniture. Through this whole process, the IEPS monitors the production and offers help and training where necessary. Finally, the desks and tables are delivered to the relevant schools, the most local wherever possible.

The extent to which the theory met practice in Ecuador was surprising. To begin with, the definition of the SSE was quite consistent across all groups. As expected, the staff at the IEPS had the clearest understanding of both the definition of the SSE, and who was considered to be a part of it. In nearly all instances they focused on the law, using its definitions to work out who was a part of the SSE. Interestingly, although this helped limit the theoretically infinite number of participants in the SSE, it had the effect of shifting focus away from actions, as is often looked at in theories, and turned it on subjects. Nevertheless, the somewhat ambiguous nature around who can claim to be a part of the SSE was still evident. Matching Nelms’ observations, “officials’ delimitations were not permanent, but provisional” (Nelms 2015, p. 119). While I was there, the IEPS was just in the middle of a change in policy direction. Whereas up till then there had been a strong emphasis on small and family run business, the IEPS was putting more emphasis on workers associations and cooperatives. This was for a variety of reasons, both practical and ideological, but it showed that the slightly ambiguous nature of the SSE allowed for suitable flexibility for the IEPS, while the law ensured definitions did not become unwieldy.

By and large, participants in the program shared similar conceptions of the SSE as the IEPS staff, albeit in a more general perspective. For them, solidarity was emphasised. In the words of one participant, “the SSE means it’s not for me. It’s not for you. It’s for everybody.” She spoke about training up those who wanted to participate in Mobiliario Escolar. These were not official training sessions (although she did assist with these), but instead she reported that people often passed by her workshop asking how they could get involved in the program. Her simple response was “I’ll hook you up. I’ll teach you.” Throughout the program were many stories of informal assistance offered between participants, even though there were rarely any material returns.

This reflects the most fundamental aspect of the SSE—that people are not just profit-seeking individuals, but are members of society who, under the right circumstances, will actively seek to cooperate with one another for mutual benefit. This is hardly a revolutionary insight. Instead, what is novel is that the IEPS was well aware of this aspect and actively encouraged cooperation. In fact, in many ways Mobiliario Escolar was predicated on it. For example, when one producer came up with a new, more efficient way to bend the wood for the backs of chairs, the IEPS got them to travel to other parts of the country to demonstrate this method, helping other producers match his efficiency. This way, the operation of the SSE has some similarity to Ostrom’s idea of collective action (Ostrom 1990), albeit without any actual common pool resource and a much greater potential role for government.

However, for the SSE to have any real potential for policy impact, it must provide real benefits for participants and society as a whole. Mobiliario Escolar clearly did the former and, potentially, the latter. These benefits can be roughly divided into the tangible and intangible. Tangible benefits include things, such as greater income and training, that have clear and practical effects on participants. On the other hand, intangible benefits, such as greater social cohesion and “democratising” the economy, match with the theorised benefits of the SSE yet are more ephemeral and difficult to quantify.

The tangible benefits of Mobiliario Escolar were largely what was to be expected, i.e. training and extra income. The training offered by the program came in two forms. The first dealt with the processes of procuring and contracting with the Ecuadorian government. This was the form of training most commented on by participants, but was essentially training in how to partake in the program itself. The other key type of training was the more practical skills in furniture production. These were delivered in a combination of formal sessions and informal cooperation between producers. Formal sessions were organised by the IEPS and delivered by the suppliers of primary materials. Particularly appreciated examples included MIG welding and powder-coating—skills that until recently had been uncommon in Ecuador.

The extra income was also much commented upon by participants. The proportion that the revenue from Mobiliario Escolar contributed to each participant’s overall income varied substantially, from roughly 20% to almost all of it. For the majority of participants, it was over half. Notably, and matching with the theories of the SSE, participants rarely referred to this as income. Instead, what they generally referred to was how this extra money allowed participants to improve or increase their production. With the notable exception of one participant, who had inherited a lot of equipment from his father, all participants said the extra income went toward equipment for their workshops. This was particularly relevant, as much of the money from the program was distributed in advance, predicated on the work to be done. In this way, Mobiliario Escolar became a major source of credit for these small producers, allowing them to expand and diversify their work.

This segues nicely into the more ideological benefits of the SSE and Mobiliario Escolar in particular. Possibly the biggest benefit the SSE aims to provide is ensuring the economy serves society, rather than the other way round. When viewed as a single part of a wider web of projects, Mobiliario Escolar is an appropriate, if not uncomplicated, response to this objective.

When explained to me by an official with the IEPS, great emphasis was placed on how Mobiliario Escolar redirects resources to people who would otherwise miss out. Participants themselves referred to this as “opportunity”. Previously, when the government had needed goods, they simply made one large contract. The factory tended to be mechanised, consequently generating less employment, and much of the money spent by the government went to a relatively small portion of the population. In contrast, Mobiliario Escolar is seen by both staff and participants as allowing a wider population to access this opportunity. It is important to note that participants themselves framed this as access to opportunities rather than income. In fact, one participant was emphatic that “they haven’t gifted us [the money]. They’ve made it so that our efforts generate our money.” This reaction to the program sits in an interesting intersection between traditional development (jobs, money, etc.) and a more holistic style of development, in the manner of Sumak Kawsay (Buen Vivir). For although it was the material aspects of the program that were highly praised, they were framed in such a way as to express the development of the individual, more than the economic situation of the individual. Admittedly, further research would be required to explore the precise interactions of these two concepts.

Currently, due to the exceptionally high cost of importing machinery into Ecuador, this small-scale production is still competitive relative to large factories. Nevertheless, the staff at the IEPS generally did not see this as hugely significant. One staff member told me that “you can’t measure it in monetary terms, because if you save $2 million, that $2 million represents a mountain to those who you would otherwise contract [for the purchase of furniture].” This is the quintessential essence of the SSE—making the economy serve society, rather than the reverse. Officials emphasised that many of those receiving the money were eating more, sending their children to school, and getting sick less. This effect was amplified by the fact that every contractor I spoke to had to employ several people to cope with the workload.

Two cases in particular are excellent examples of this. These were the largest cooperatives in the program. They were based in San Jose de Chimbo, a region that had been famous for making guns until it was outlawed in 2007. Scores of small tradespeople were rendered unemployed almost overnight. Those from the cooperatives reported much hardship, and even suicides. The government used Mobiliario Escolar to redirect funds to the region, taking advantage of an already existing pool of wood- and metal-working knowledge. While the production of furniture has not replaced the arms trade to the same level as previously, the participants in the program were certainly grateful for the opportunity to continue working.

Nevertheless, this apparent “democratisation of the economy”, as locals referred to it, was not unproblematic. To begin with, programs like Mobiliario Escolar do not represent people “having meaningful control over political and democratic forces” (Friant and Langmore 2015, p. 65). Participants still entirely relied on the IEPS to negotiate ferias inclusivas with other ministries. Although the law specifies that departments must procure through the SSE wherever possible, it is up to said departments to decide if this is financially or logistically feasible. For instance, as I was finishing my fieldwork, the IEPS was beginning negotiations with the Ministry of Education for another round of Mobiliario Escolar. However, many within the ministry wanted plastic school furniture, as apparently it is more durable. If this occurred, it would largely mean the end of the program, as the machinery needed for injection moulded plastics are not affordable for small producers. This complicates the idea, common to writing on the SSE, of putting society above the market. For in this instance, it is government that seems to be above the market. Under ideal circumstances, government should represent society and this should therefore present no contradictions. However, this does allow for strong possibilities of patron-client relationships. Government doesn’t necessarily represent all of society, after all.[5]

Similarly, with the recent crash in the oil price, Ecuador has been having budgetary difficulties. As one official explained to me, schools need to replace books and uniforms constantly, as children grow up and books get damaged easily. On the other hand, even old, slightly broken furniture will serve. Consequently, although Mobiliario Escolar aims to tame economic forces in people’s lives, and direct them with greater equality to those who have missed out, in this modern globalised economy, it appears that the program can’t offer protection from crashing commodity prices.

Conclusion

Despite decades of critique of neoliberalism as a global economic structure and protests against its consequences, many governments still seem to quest after economic rationalism in the belief that what is best for the market is best for society. Of those critiques, the SSE is just one thread, and its proponents do not proclaim it to be a solitary solution. Instead, it is an ongoing experiment, an attempt to ensure that we do not continue to reify the market, and instead make sure economics serves social needs. For proponents, this means focusing on people’s natural inclination to cooperate and work for mutual benefit. Nevertheless, what marks the SSE as different to other theories is its emphasis on practice and, consequently, experimentation.

By focusing on the actually occurring, and aiming to offer a practical guide to policy makers, the SSE appears to have benefitted participants in a variety of ways. These range from the individual-level incomes that employees of participants garner, through to the group-level benefits of encouraging social cooperation via the formation of cooperatives and workers associations. Furthermore, and perhaps more importantly, when considered as part of a wider system of ferias inclusivas, Mobiliario Escolar is even aimed at macro-level change. “Solidarity” in this context wasn’t only individuals cooperating, but the whole of Ecuadorian society.

Nevertheless, there is a wider lesson to be drawn from Mobiliario Escolar and the SSE more broadly. That is the benefits of practice focused theory. Rather than taking much of the status quo as given, the SSE starts with the end goal of the economy serving society, rather than the reverse and, through encouraging social support and solidarity, works out how to get there. It is inherently experimental, and can be somewhat disjointed due to the lack of consensus around definitions. Nevertheless, what it does do successfully is create visions of alternate economics, in some ways similar to the ideas of Gibson-Graham (2006), and not just for theorists but for policy makers. What is important is that these visions appear to have real capacities to change systems. In this way, one of the most important aspects of the SSE isn’t necessarily its specific policy recommendations, but its example as a way of guiding economic policy that isn’t based on the primacy of the market.


Alexander D'Aloia is a PhD Candidate at the Australian National University, College of the Arts and Social Sciences.


References

Abramovich, AL and Vázquez, G 2007, ‘Experiencias de la economía social y solidaria en la Argentina’, (Experiences of the social solidarity economy in Argentina) Estudios Fronterizos, vol. 8, no. 15, pp. 121-145.

Bastidas-Delgado, O and Richer, M 2001, ‘Economía social y economía solidaria: Intento de definición’, (Social Solidarity Economy: Attempt at a defninition), CAYAP Revista Venezolana de Economía Social, vol.1, no. 1, pp. 1-27.

Chavez, R 1997, ‘Economía política del economía social. Una revisión de la literatura económica reciente’, (The political economy of the social economy. A review of the recent economic literature), CIRIEC-España, vol. 25, pp. 141-162.

Chavez, R 1999, ‘La economía social como enfoque metodológico, como objeto de estudio y como disciplina científica’, (The social economy as a methodological lens, as an object of study and as a scientific discipline), CIRIEC-España, vol. 33, pp. 115-139.

Friant, MC and Langmore, J 2015, ‘The Buen Vivir: a policy to survive the Anthropocene?’, Global Policy, vol. 6, no. 1, pp. 64-71.

Gibson-Graham, JK 2006, A postcapitalist politics, University of Minneapolis Press, Minneapolis.

Laville, JL 2010, ‘Plural economy’, in K Hart, JL Laville and AD Cattani (eds), The human economy: a citizen's guide, Polity, Malden, MA, pp. 77-83.

Nelms, TC 2015, ‘”The problem of delimitation”: parataxis, bureaucracy, and Ecuador's popular and solidarity economy’, Journal of the Royal Anthropological Institute, vol. 21, no. 1, pp. 106-126.

Ostrom, E 1990, Governing the commons : the evolution of institutions for collective action, Cambridge University Press, Cambridge.

Pastore, R 2006, ‘Diversidad de trayectorias, aproximación conceptual y pluralidad de proyectos de la Economía Social’, (Diverse trajectories, conceptual approximation and plurality of the social economy) Documentos — Centro de Estudios de Sociología del Trabajo (Impresa), Facultad de Ciencias Económicas, Universidad de Buenos Aires, Buenos Aires.

Polanyi, K 2001, The great transformation the political and economic origins of our time¸ 2nd edn, Beacon Press, Boston.

Tate, W 2015, Thugs, Drugs, and Diplomats, Stanford University Press, Redwood City.

UNRISD 2016, “Promoting social and solidarity economy through public policy” in UNRISD Flagship Report 2016: Policy Innovations for Transformativ Change, UNRISD, Geneva.

Endnotes

[1] Note that the terminology from Ecuador is more along the lines of  “Popular Solidarity Economy”. Although the term has a slightly different origin from the “Social Solidarity Economy”, and is technically different, in Ecuador the two terms are used interchangeably. For this reason I have used “Social Solidarity Economy” throughout.

[2] Mobiliario Escolar literally translates as “School Furniture”.

[3] Although slightly dated, for an excellent summary of these debates, see Chaves (1999).

[4] This translates as “Inclusive Fairs”, with “fair” in the sense of “school fair”.

[5] It should be stressed that during my fieldwork, I saw little evidence of patron-client relations at work. Nevertheless, it is important to remember that I was in Ecuador for little over a month.