For example, in a cooperative commonwealth, a credit union helps to develop worker cooperatives, provides financial services to cooperative members and low-interest loans to cooperative stores (to buy a building, for instance) and housing cooperatives. The cooperative store deposits its money in the credit union, and increases its reserves so it can make more community loans. The housing cooperative members run their own management, security, and maintenance companies as worker-owned cooperatives that also service the credit union and the cooperative store, and use the credit union for their financial services. The residents also own cooperative sewing factories, catering enterprises, childcare centers, and home care facilities, which sell to, and use the services of, the other cooperatives. The model can also encompass industrial cooperatives in recycling, alternative energy production, laundry services, and manufacturing. The links are made wherever member-owners use the services of, or buy supplies from, other cooperatives and community-based enterprises. In this system, everybody is part of several different, but interlinked, cooperatives. The interlinked cooperatives also help one another out and work together on issues of social need. For instance, in the case that one cooperative goes through financial challenges or additional affordable housing is needed in the community, some of the surplus from a profitable cooperative can be directed towards these needs. Bartering, gifting, and fair trade relationships are all incorporated into these activities and exchanges (see below under solidarity system).
What is a Solidarity System?
The term cooperative can be loosely defined to include any kind of economic cooperation in a solidarity system, but my definition privileges cooperative ownership and cooperative enterprises. By solidarity system, I mean a non-hierarchical, non-exploitative, equitable set of economic relationships and activities geared toward the grassroots—that’s of the people (people before profit), indigenous, participatory, based on human needs, humane values, and ecological sustainability. In the solidarity system, surplus, or profit, is shared in equitable ways, through democratic decision making, and used for the common good. Risks are collectivized, skills are perfected, learning is continuous, and economic practices are sustainable (both ecologically and from a business point of view), bringing collective prosperity. Capital is democratized and widely owned or controlled. In this system, capital is subordinate to labor, as in David Ellerman’s sense (labor rents capital rather than capital renting labor); and returns go to labor rather than to capital. In a solidarity system, we follow the guidelines of seventh generation thinking and are stewards of the commons, mother earth, and our ecology.
By solidarity system, I mean a non-hierarchical, non-exploitative, equitable set of economic relationships and activities geared toward the grassroots—that’s of the people (people before profit), indigenous, participatory, based on human needs, humane values, and ecological sustainability.
It is also a system where marginalized and oppressed people use their sense of solidarity (gained from experiencing similar racial, social, political, cultural, and/ or economic domination and exploitation) to motivate them to join together economically to combat their oppressions and economic exclusion and exploitation. The sense of solidarity also helps to keep the group together, and is a basis for establishing trust within the group.
A solidarity system recognizes the evils of racism, sexism, and patriarchy and deliberately addresses oppression and exclusion by developing values, policies, and practices to mitigate them. It aims to give voice and power to those who are usually without them.
The notion is that there is not any one group, or one person, running off with all the “spoils.” The wealth and prosperity are truly recirculating in the community. And community members, especially those who do the work and need the resources to live, are the ones who decide what happens to the resources. In a system that includes shared prosperity, shared decision making, and collective economic activity, economic democracy spills over into other social and political spaces, and enriches civil society, as well as family and individual wellness.
Of particular importance, but that we don’t talk about enough, is the fact that resources are not solely financial. It’s not just about market relationships. In fact, we should be able to do away with the price system, as African American scholar W.E.B. Du Bois hoped. Very early in the 1900s, he wrote that African Americans should be at the forefront of creating intelligent cooperation that would dismantle the price system and set up an economy based on the common good, supporting the common good.
It is now our business to give the world an example of intelligent cooperation so that when the new industrial commonwealth comes we can go into it as an experienced people and not again be left on the outside as mere beggars. … [I]f leading the way as intelligent cooperating consumers, we rid ourselves of the ideas of a price system and become pioneer servants of the common good, we can enter the new city as men and not mules.
And so this system that I’m describing would not be so dependent on market forces and a price system, but would be more about human need and human relationships—an economic cooperative ecology of caring community. This would include not just whether you bring capital to an economic venture, but what other resources and agency you bring, and how you participate with others (social capital).
One of my colleagues, Curtis Haynes at Buffalo State University, uses the concept of social energy, which was inspired by Du Bois. Haynes explains social energy as not just sweat equity—where you earn equity because of the work you put in, the in-kind work—but also the other kinds of energies, such as the enthusiasm, caring, and the persistence that you put in to support the business and keep the business going. Social energy is about the quality of social interactions cooperators put in, and the support they provide for the good of the enterprise and for their fellow cooperators. It’s a type of social capital, according to Haynes. So much of the productivity in, and success of, cooperatives and solidarity economy relationships results from that kind of energy and the quality of social relationships, the trust and leadership that are built. It’s not just the money put in or the hours worked but, more importantly, it is about this energy—the connections made with other people, how we work together to solve problems, make decisions, and how and when we take leadership (agency). Understanding that this social energy is just as important as financial contributions is another way to think about “the new system,” and another way to think about how we democratize capital. It’s about enthusiasm, caring, persistence, and concern for community. We need democratic, people-centered, community-based, collective, sustainable economies that produce prosperity for all and protect mother earth.