Key words: sustainable community, social business, transition movement, cooperatives,systemic innovation, resilience.COMMU...
The transition to a new economy capable of placing the commons at its core forces us toreverse deep rooted paradigms, such...
This whole chapter supports the argument that the current crisis is not only economic or circumstantial but systemic; and ...
The impossible hamster-      With labor, unless there is legislation such as a substantial reduction of working hours (NEF...
There are two arguments that could make growth in rich countries compatible with SD: de-materialization and technological ...
The Future We Want (UN 2012a) –main output from Rio+20— might therefore commit a fatalmistake when supporting unconditione...
crisis times were identified (World Bank 1990) as a systemically harmful for Macroeconomics,called to consider values more...
renewable sources of energy or –as more globally proposed in this document— buildingresilience‡ before future impacts.3. A...
destination of public investments, until the return of the external debt used to partially financethose infrastructure pro...
documents. The principles gathered are: equitable distribution of wealth; economic equity andfairness; intergenerational e...
of the cooperative business model as an alternative means of doing business and furtheringsocioeconomic development. UN’s ...
It is a desirable and seductive proposal. It pledges that if people dare to share and cooperate they could meet the best a...
These Transition groups being set up worldwide (Transition Network 2012) through bottom-up driving forces, but they still ...
-   Economic re-localization implies to opt between two often incompatible options. On the    one side, cost efficiency, f...
ago, that it will take “a Great Ecological Spasm to convince people that something is wrongwith an economic theory that de...
CASSE Center for the Advancement of the Steady State Economy (n.d.) ‘Steady State Quotes’. [WWW] http://steadystate.org/wp...
- (2012a) ‘Economic Growth and Sustainable Development: an Incompatibility in Practice’. [WWW] Global  Transition 2012 htt...
LNE, La Nueva España (2010) ‘La UE critica el modelo radial de AVE que impulsó Álvarez-Cascos’. Ordóñez J.A.,  14/12. [WWW...
-   (1776) ‘An Inquiry into the Nature and Causes of the Wealth of Nations’. [WWW]    http://geolib.com/smith.adam/woncont...
-    (1987b) Our Common Future. Annexe 1: Summary of Proposed Legal Principles for Environmental Protection and    Sustain...
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Cooperatives, communities and social businesses towards a systemic proposal.

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Why and how could a systemic proposal of sustainabilty could be forwarded.

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Cooperatives, communities and social businesses towards a systemic proposal.

  1. 1. Key words: sustainable community, social business, transition movement, cooperatives,systemic innovation, resilience.COMMUNITIES, COOPERATIVES AND SOCIAL BUSINESSES: TOWARDS A SYSTEMIC PROPOSAL Alejo Etchart January 2013Editor’s introductionVery few things have inspired me, to believe that another world is possible, quite like my visitto Mondragon Cooperative in the Basque Country, Spain. As such we are very lucky to havethis blog post written by Alejo Etchart, a long time worker at the Mondragon Cooperative, adedicated Transitioner and an academically trained environmentalist and economist. Alejo hasa unique position of experience and one I think of great value. In his article he identifies thecore and fundamental flaws of our current economic system and then goes on to put togethera practical proposal for an ‘evolutionary reconstruction’ (not reform or revolution) towards afar more fitting and desirable system. And what adds particular weight to his proposals is thatthese are not just nice ideas, Alejo, is by and large speaking from a position of provenexperience.AbstractThe inability of Economics to internalize social and environmental externalities makes it so thatit essentially serves to Capital through a debt-based economic growth; thus moving away fromits primary goal: the correct distribution of scarce resources in order to satisfy human needs.As a consequence, unless a dramatic change in the path of development is implemented, oureconomic system is leading us to an abyss. On the flip side, the re-localization of economiesand lifestyles, linked to the rise of social businesses and to the potential of cooperatives as asocial form for a more equitable distribution of wealth, inspires an opportunity to reorienthuman evolution towards wellbeing-generation and towards the creation of a system that isreslient to the threats that the world is facing. Hundreds of cases now exist in whichneighborhood communities are assuming an increasing role in the decisions that affect theirown future. The key to an encouraging future might lie in providing these socially andenvironmentally desirable approaches with economical viability.1. IntroductionSara Robinson (2012) reflects perfectly the strong agreement that seems to exist as to thereason underlying the growing problems that threaten our common future: Capitalism hasfailed. It can be argued that Capitalism has brought high levels of wellbeing to developedcountries and development to developing ones, but it can hardly been denied that it has beenat the cost of rising inequality and multidimensional insecurities: of resources availabity,biodiversity, economic, energy, food, water and climate insecurities, among others) (Dodds etal. 2009; Djoghlaf and Dodds 2011). These insecurities increasingly threaten our survival as acivilization, and we lack a widely shared vision of an alternative system – other systems of theindustrial era, such as State Communism or Fascism, are far from being real alternatives. 1
  2. 2. The transition to a new economy capable of placing the commons at its core forces us toreverse deep rooted paradigms, such as the imperative need of economic growth (Jackson2012), the availability of abundant cheap energy or the supremacy of competition overcooperation as the best driver to efficiency (Felber 2012). These paradigms have to bechallenged if we are to reallocate the distribution of goods, work and money. And we mustalso find new governance models that boost a process so that our planet and its current 7billion human inhabitants can decently live and leave a livable world for the next generations.No responsible long-term analysis could defend that unconditional economic growth candeliver such livable future, and any added conditionality is lowly plausible (Etchart 2012a).This article suggests that a combination of the concepts of ‘social business’ and ‘cooperatives’,in a local community dimension, could create a sustainable evolution focused on buildingresilience. Many references are made to the Spanish case to illustrate the grotesque visionthat presides most of the current concepts of development.After this introduction, Chapter 2 details the fundamentals of economic failure. Section 2.1explains the reasons why the perspectives offered by an economic growth-led world are fatal ifthe economy remains oriented to primarily serve to financial capital, unable to internalizesocial and environmental externalities. Section 2.2 is a collection of statements fromprestigious economists that affirms this. Section 2.3 points to the bias with which the basis ofCapitalism was misinterpreted as the origin of the inevitable imbalances that it causes. Chapter3 focuses on suggesting alternatives. Section 3.1 defends the vision of an ‘evolutionaryreconstruction’ as a superior alternative to reforms or revolutions as the way to implementchanges, and introduces some concepts that are presented later on as keys to it. Section 3.2argues that the concepts of ‘green economy’ and ‘corporate social responsibility’ areinsufficient as systemic proposals and defends the significant potential of social businesses,when they are enacted through cooperatives and implemented in local communities. Section3.3 suggests some of the values around the commons that a new economy should gather andrefers to some working examples of which the Transition Network is a remarkable one. Section3.4 covers the challenges that community-based, cooperative social business approaches musttackle to become strong systemic proposals. Chapter 4, finally, shows the conclusions.2. Economic failure and the unfeasibility of economic growth 2
  3. 3. This whole chapter supports the argument that the current crisis is not only economic or circumstantial but systemic; and that any myopic, growth-based solution will only postpone an increased crisis by a few years or to next generations. 2.1. Rationale The Spanish Real-Estate bubble (Salvados 2012a), is one of the many cases that demonstrate the subordination of national governments to the economy and the financial markets. Naredo (2012) shows how politicians are often mere instruments used by the owners the economic power. The recent fiasco of the Summit Rio+20 (Etchart 2012b) demonstrates how economic power uses national governments to prevail over all other forms of power in global governance. The economic failure builds on the very conception of the economy. Economics is the discipline that tries to solve the problem of resource scarcity to meet infinite human needs, thus the science for resource allocation (Ayres 2008). If resources were unlimited, Economics would not exist. There are four key groups of resources that need to be allocated. Firstly, we know that Economics is unable to properly account for the scarcity of environmental resources (Brundtland et al. 2012). The Kyoto Protocol was the first attempt and we now know it has failed dramatically (Helm 2008). Then we know that labor is not a scarce resource; in fact, it’s underused or overly abundant. The economy only really serves capital and land, which are the remaining two groups of resources considered by Economics. Among the two, evidences like real-estate speculation or the massive purchase of African land by China, make it clear that capital is the dominant resource served under the current system. When a system fails partially, it fails as a whole (RAI n.d.). Therefore, our current concept of Economics is invalid for its aim: the global resource allocation; not only optimal, but even assumable by the major system it belongs to: the Biosphere. Interests on loans are a primary form of capital remuneration, when money is lent through financial entities. Interest does not exist without debt, and indebtedness assumes a level of economic growth enough that, in the future, we are able to pay for both our future needs and those of our current needs that we cannot afford today. The problem comes when in future the capital will still need interests, thus more indebtedness, thus more economic growth. Permanent economic growth is simply impossible in a world with limited resources that the economy is not able to consider. The higher the growth, the more it will be at the expense of those non-considered resources: environment and labor:- As per the environment, the rents from economic growth do not pay off the resource basis that it depletes and on which it is built. Neither prices reflect the environmental costs. The environment is mostly out of the equation at the time of considering the optimal resources allocation. The costs of environmental degradation are not reflected in marketplaces but borne socially, either today or in the future (Zarsky 2002). As a consequence, the only possible end for the environment, in an economic growth-based development, is continuous degradation (Hardin 1968). 3
  4. 4. The impossible hamster- With labor, unless there is legislation such as a substantial reduction of working hours (NEF 2010) that takes labor to be again scarce, economic growth will be at the expense of the wage sum. In other words, it will increase unemployment or reduce salaries. This is indeed happening all across Europe. Economic growth is not essential to employment. It does not guarantee a higher or better employment when, as it is currently happening, the rents from economic growth are accumulated by financial capital. A simple reflection on the very basis of Economics therefore shows that sustained economic growth is not only impossible in practice, but, given the current imbalance of resources, is systemically oriented to serve the capital in dcetriment of environment and labor. In fact, statistics show how capital clearly accumulates the rents from economic growth. For the UK, numbers show (UNCTAD 2012) that from 1960 to 2010 economic GDP grew by over 30-fold*, but the share of wages in GDP, compared to capital remuneration, diminished (from 61.3% to 59%); while the population grew by 18.76%† during the same period. If we assume that population growth has not precisely occurred among the wealthiest, the comparison of this numbers is conclusive. The Brundtland Report does not only state the definition of Sustainable Development (SD), but, in the second chapter (WCED 1987a), it dedicates over 20 pages to clarify and reinforce the concept. It highlights which are the imperative needs to be met though development: those for jobs, food, energy, water and sanitation. Later, it states: “Meeting essential needs depends in part on achieving full growth potential, and SD clearly requires economic growth in places where such needs are not being met. Elsewhere, it [SD] can be consistent with economic growth, provided the content of growth reflects the broad principles of sustainability and non- exploitation of others”. Economic growth is therefore not imperative in developed countries, where the essential needs are generally met. The report says that a minimum of economic growth, as required by financial institutions, can be environmentally sustainable only if industrialized nations shift their growth towards less material and energy intensive activities. * https://www.google.es/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_gdp_mktp_cd&idim=country:GBR&dl=en&hl=en&q=uk%20gdp%20stats † https://www.google.es/publicdata/explore?ds=d5bncppjof8f9_&met_y=sp_pop_totl&idim=country:GBR&dl=en&hl=en&q=uk%20population%20stats 4
  5. 5. There are two arguments that could make growth in rich countries compatible with SD: de-materialization and technological improvements. But, as detailed next, they are both toounfeasible to be relied on.Daly and Townsend (1993) think that de-materialization is in reality an unachievable concept,since a growth that pretends to satisfy the needs of the world’s poor must be based on thingsneeded by the poor, which are not precisely information services but material things such asfoods and clothes. It is therefore evident, that, in order to leave room for materializedeconomic growth in developing countries, rich ones should not focus their policies on growth.In other words, growth in developed countries is incompatible with SD in practice.Many proponents of economic growth, remarkably the World Bank (Stern 2004), have longdefended the existence of an Environmental Kuznets Curve that will finally reverse theincreasing link between economic growth and environmental degradation through a de-materialization of the economy, but this theory has long been disputed and denied (Etchart2009). Many calls have been made for decoupling the economy from resource use, butresources remain being taken from the future at an increasingly higher rate (StakeholderForum 2007). It is vital to distinguish between relative and absolute decoupling. Evidences fordeclining resource intensities (relative decoupling) are easy to identify, but the increases in thescale of economic activity drive to increases in absolute resource use. De-materialization hasnot emerged and nor, with rapid economic growth and population increases, is it likely tocome anywhere near the kinds of cuts in emissions and impacts needed to make our currentlives sustainable. Professor Tim Jackson (2009), calculates that carbon intensities would haveto fall 16 times faster than they have done since 1990, if all nations aspired to the average EUincome today (Jackson 2009). On the other side, unless growth in the richer nations iscurtailed, the ecological implications of a truly shared prosperity become even more dauntingto contemplate.On the argument that technology could save the world from climate change, the IPAT identity(TSSP 2003) proves the very high unfeasibility of that argument, when not only technology, butalso population and affluence (or consumption level) are considered for measuring theenvironmental impact. The IPAT identity implies that even to reach what many say is the fartoo high level of 450ppm CO2 concentration by 2050 (SGF 2009), with 2-3% developed worldand 5-10% developing world growth, we would need energy-efficiencies 11 times higher thanwe have been able to gain so far (AP 2010).The discourse for the reliance on a de-materialization of the economy or on technologicalimprovements has proven too weak to prevent a full consideration of the precautionaryprinciple, as defined in the Rio Declaration. Assuming that Capitalism’s propensity forefficiency will allow the economy to stabilize the climate and protect against resource scarcityis, at least, extremely dangerous. Call it green or grey growth, as Chandran Fair (2008) stated,“policymakers must concede that economic growth has met its nemesis in climate change, andthey should not be seduced by the market’s quick fixes”. 5
  6. 6. The Future We Want (UN 2012a) –main output from Rio+20— might therefore commit a fatalmistake when supporting unconditioned and sustained economic growth. Since poor countriesneed economic growth to overcome poverty and the rich do not renounce economic growth,the prospects of a world driven by these political arrangements are bleak. Being the need todeliver a decent world to following generations a categorical imperative [objective to beunconditionally pursued] it seems clear that the reins of development cannot be left to thegovernment leaders who seem unable to withstand the pressures from the most economicallypowerful (Etchart 2012c). Ban Ki Moon’s statement (UN 2009) gains greater importance: “Ourfoot is stuck on the accelerator and we are heading towards an abyss”.2.2. Economists and economic growthWhen K. Boulding (QFinance n.d.) said that “anyone who believes that exponential growth cango on forever in a finite world is either a madman or an economist”, he was clearly referringonly to myopic economists, because many others have claimed against this paradigm (Daly1987). J.S. Mill (1848) declared over one and a half centuries ago that the increase of wealthcannot be unlimited. J.K. Galbraith (1956) warned that our concern for growth in the numberof goods produced (the growth rate of GNP) will necessarily have to give way to the moreimportant quality of life they provide. H.E. Daly (1977) proposed to replace the ‘more is better’by the much wiser axiom of ‘enough is the best’. J.S. Mill (1848) stated one century before theevidence that. E.F. Schumacher (1989) certifies that a lifestyle that is based on unlimitedgrowth can not last long. He affirmed that the simplistic concentration of efforts in productionand technology is dehumanizing; that work must be decent and meaningful before efficient;and that nature and natural price can simply not be priced, creating a school of thoughtfollowed by Robert Constanza, Amory Lovins, Paul Hawken and many others. Jackson (2009)reflects the great challenge of our times: economic growth is necessary for our wrongeconomy not to collapse, in a world that cannot support that growth without collapsing, forreasons both environmental and social, as follows from precious paragraphs. Jackson (2012)concludes that economic growth is not the solution to the crisis, but precisely the underlyingcause of it. Even J.M. Keynes (1935), whose proposals for expansion of public expenditure in 6
  7. 7. crisis times were identified (World Bank 1990) as a systemically harmful for Macroeconomics,called to consider values more important than wealth. He said that the challenge for changedoes not lie as much in new ideas as in escaping from the old ones, which have grown with usinvading every corner of our minds. Keynes rallied against orthodox economists whose logicled to the disastrous Great Depression, because that logic boosted the spiral of speculation.Paradoxically, the application of Keynesian approaches during the first stages of the currentcrisis is said to have caused a governments-led speculation (El Confidencial 2012) that hasmultiplied the effects of the crisis. So that the ideas that the world now needs to escape frommight now precisely be the ones that his school posited.Nevertheless, economic growth, as Bass (2007 :2) confirmed, remains “ considered aninviolable principle rather than people’s rights and welfare, or environmental processes andthresholds”. We are, therefore, watching a case that perfectly matches what Einstein stated:“We can’t solve problems by using the same kind of thinking we used when we created them”(Stakeholder Forum 2008).2.3. Re-reading Adam SmithThe rationale of the Capitalist system was built on A. Smith’s (1776) ‘The Wealth of Nations’.But this rationale left aside a previous key contribution from Smith (1759), ‘The Theory ofMoral Sentiments’, whose consideration would have led to a dramatically differentinterpretation of the proposal that all will be well if people are allowed to follow their self-interest. The world has interpreted self-interest as equal to profit maximization. Adam Smith,who is often attributed with the origins of both Economics and Capitalism (Rodríguez Braun2008; Cuevas Moreno 2009), might be at least as critic as Karl Marx (BBC 2009; Casassas 2011)with the Capitalism that ended up being built from his proposals. Neoliberalism is classed bymany as the current stage of Capitalism (Li and Zhu 2005).Following the interpretation of Profesor M. Yunus (2008) (developer of micro-credits andNobel Peace Prize 2006), the interpretation of Capitalism treats people as one-dimensionalbeings. But people are multi dimensional, as Smith saw two and a half centuries back. Whilewe all have a selfish dimension, we also have a selfless one. The theory of Capitalism, and themarketplace that has grown up around the theory, makes no room for the selfless dimensionof the people. If the altruistic motivation that exists in people could be brought into thebusiness world, there would be very few problems that we could not solve.If people were given the opportunity, they would come into the market place to express theirselfless urges by running special types of businesses specifically designed to improve the lot ofhumanity in general. Charitable efforts have always been with us, and they are noble andneeded; but business has a greater ability than charity to innovate, to expand, and to reachmore and more people through the power of the free market. Imagine what we could achieveif talented entrepreneurs and business executives around the world devoted themselves togoals such as ending malnutrition, providing shelter for the homeless, using unlimited 7
  8. 8. renewable sources of energy or –as more globally proposed in this document— buildingresilience‡ before future impacts.3. Alternatives forwardThis chapter defends the creation of a new governance architecture designed to deliversupport to citizens, based on their own needs and capacities.3.1. Reforms, revolution or evolutionRobinson (2012) thinks that there are three ways to change, which include reform, revolutionor evolutionary reconstruction.Reforms. The case of SpainTo tackle the current crisis, efforts have been focused on economic reforms, keeping theeconomic growth as the essential objective, without considering that the crisis is not onlyeconomic or circumstantial but systemic.The case of Spain is symbolic of how politicians are making reforms trying to recover from thecrisis to a model that is similar to the one that has led to the current crisis. Incomes for thosein the system’s borders, as well as investments in education and research, that constitute thesolid pillars of a country’s future, are dramatically cut; the President of the Governmentrecognizes that “Spain is a very weak position for its excessive indebtedness” (Rajoy 2012a)while regulations are approved to recover creditworthiness within the EU (Rajoy 2012b);financial institutions whose corrupt or inept management are in the root of the crisis arerescued with public money. All that, in honor of an economic growth that is only an escapeforward, because a debt-based economic growth assumes that next generations will be able topay for what ours cannot afford, even though in relative terms less and less people will have totake responsibility for covering the costs of an increasingly old age population (given thereversal of the population pyramid), with lower and lower salaries (as the reality is showing asa logical consequence explained in Section 2.1) and with an exhausted natural base. If anycertitude exists, it is that the next generations will simply not pay for our debts. Thus thecollapse of a kind of reformed system remains inevitable; and this can be affirmed evenwithout considering environmental arguments.In Spain, the general public astonishingly contemplates higher tax rates to finance a debtcaused by, among others, sumptuous infrastructures –high speed rail (Etchart et al. 2011),highways and airports (DFC 2011), macro libraries (El País 2011), etc. (Salvados 2012b)—, thatsystematically fail to meet the budgets used to justify them, both in the costs side and in theincomes generated once finished. Big infrastructures have long been the preferential‡ Resilience is originally the ability of a unit to absorb external impacts while still meeting its essential functions. E.g. osteel can be ordered with a resilience of -40 when below this temperature it starts to lose the needed materialhardness. A definition applied to social regards is: “In the context of exposure to significant adversity, resilience isboth the capacity of individuals to navigate their way to the psychological, social, cultural, and physical resourcesthat sustain their well-being, and their capacity individually and collectively to negotiate for these resources to beprovided in culturally meaningful ways.” (Michael Ungar, Resilience Research Center). 8
  9. 9. destination of public investments, until the return of the external debt used to partially financethose infrastructure projects and the interests on that debt has become the priority. It is verywell-known, and it has even been denounced by the EU in the case of the HSR (LNE 2010), thatthe underlying reasons for so many public infrastructure projects are merely political; this is,based not in real demands or needs or in scientific studies, but in power dealings andcorruption, either personal or collective – for example, the widely known irregular financing ofpolitical parties and administrations though a 5% commission for land re-qualifications orpublic concessions. Former Spanish Judge Baltasar Garzón, now removed from the bench by itspolitical enemies (NYT 2012) considers that, in the Spanish case, “corruption and economiccrisis go hand in hand” (Salvados 2012c). The list of Spanish politicians charged withcorruption§ is embarrassing.RevolutionOthers, more and more, given the grotesque political (lack of) vision, claim for a revolutionthrough a kind of popular uprising, pursuing a completely radical change. Nevertheless,revolution is dangerous. History shows that many revolutions moved out of the scope of theirwell-intentioned precursors when they could not control the extremist movements aligned inchaotic movements.Evolutionary reconstructionThe final approach is that of ‘evolutionary reconstruction. The Transition Movement, whichgathers over 2,000 community groups, aligns with the thesis by Gar Alperovitz (2012) aroundan ‘evolutionary reconstruction’ as a superior alternative to reform or revolution. Leaders likeMahatma Gandhi followed such an approach. Alperovitz proposes to dedicate our energies tothe construction of new and parallel institutions to the currently existing ones, withoutconfrontation. Governments from all around the world are devastated for the lack of incomes.As old institutional infrastructures decline and even collapse due to the income reduction thatthey are suffering worldwide, and fail to meet their commitments, the new ones would beready to take over.The following sections defend that taking this evolutionary reconstruction forward implies thecreation of social businesses, local cooperatives and governance units focused on the reallyimportant things like creation of wellbeing and the building of the resilience needed to facefuture impacts, either social, environmental or economic. These new institutions would makecitizens more responsible of their futures and allow them to gain a voice on the decisions thataffect them.3.2. Social businessesThe current debate about ‘green economy’ is around its guiding principles rather than aboutits definition. A document by Stakeholder Forum (2012a) gathers fifteen guiding principles of agreen economy that consolidate existing international agreements and other proposals,cutting across the Stockholm, Rio and Johannesburg declarations, and three other relevant§ http://soliobrera.cnt.es/secciones/934-lista-de-politicos-imputados-por-corrupcion-y-que-a-pesar-de-todo-estan-presentes-en-la-politica.html 9
  10. 10. documents. The principles gathered are: equitable distribution of wealth; economic equity andfairness; intergenerational equity; precautionary approach; right to development;internalization of externalities; international cooperation; international liability; information,participation and accountability; sustainable consumption and production; strategic,coordinated and integrated planning; just transition; redefinition of well-being; genderequality; and the safeguarding of biodiversity and pollution prevention.Being the financial profit out of the list, it can be understood that these principles are just thesocial and environmental profiles required in the economy. If the economy was able tointernalize the positive and negative, environmental and social externalities that are listedabove, then seeking profits would carry not only financial, but also social and environmentalreturns. But is this likely to happen now? Previously, in Section 2.1 we talked about how thesystemic economic failure, as well as the weight of evidence, make it illusory to happen. In themeanwhile, these principles might only be applied to social business.Corporate Social Responsibility (Corporate Watch 2006), on the other hand, seems unable toinclude altruistic criteria in traditional businesses. It’s too often used it to sell more throughgreen washing (Dahl 2010) than as a way to reflect a real and honest ethical commitment withsociety.However, a new concept of business is emerging that fully internalizes social criteria: the socialbusiness. Following Prof. Yunus (2012), a social business is “a non-loss, non-dividend companycreated to address and solve a social problem”. It might be necessary to add “according to thegeneral principles of sustainability” (WCED 1987b) to include harmony with the environmentand so give the needed integral sense of sustainability to this proposal, although this mightalready be considered as included. EU’s Social Business Initiative (European Commission 2011)definition of social businesses agrees with Yunus’, but it seems to restrict its application tovulnerable and disadvantaged groups. We know, instead, that a social business can positivelyaffect the entire social pyramid. This nuance gains profile considering that we are allincreasingly exposed to poverty and exclusion.On the other side, the UN recently recognized the importance of cooperatives by celebrating2012 as the International Year of Cooperatives. This UN initiative was intended to raise publicawareness of the invaluable contributions of cooperative enterprises to poverty reduction,employment generation and social integration. The recognition also highlighted the strengths 10
  11. 11. of the cooperative business model as an alternative means of doing business and furtheringsocioeconomic development. UN’s Secretary General says that cooperatives have proventhemselves as having a resilient and viable business model that can prosper even duringdifficult times (UN 2012).In a time when the EU is losing position in global markets, due in part to a lack ofinternalization of externalities, a repositioning of the EU beyond financial returns mightprovide it with a solid position in the trend to a new economy, without the imperative need forglobal governance agreements; and so contribute to implementing an imperatively neededglobal change toward a re-localization of the economies (Etchart et al 2012).3.3. The values of a new economy and proposals that integrate themWe’re currently lacking a shared vision. All we have now to go forward is an emerging new setof values and the contributions from some visionaries. Values that say that the new economyshould protect the commons, include real costs, link prices to the real value of use and, aboveall, foster the values that have historically been the essentials of human happiness:community, nature, family, health, creativity… Values that have been depreciated by anindividualist pattern of development.Many of us believe that in the ‘small is beautiful’ (Schumacher 1973). Some of us, further,advocate for proposals that place local communities as the cells of a sustainable evolution. It isabout a more localized economy, where local people build a significant part of their wellbeingusing local resources in a creative way. Nevertheless, local resources would hardly provide acomputer, a washing machine, a motor vehicle, a telephone or a complete transportationsystem, so these proposals are far from being about autarky.The re-localization of living patterns is pointed by many authors (see Etchart et al. 2012) as animperative to partially restore the autonomy, security and control over the ways to satisfy ourbasic needs. This alternative has been ousted by the option for large corporations, by the bigsize. Although this option was initially justified by economies of scale, corporations havefurther found an enormous power that has allowed them to control governments, media,financial agents, and finally, the mass public. The accumulation of power has turned themarket economy into an enemy of democracy, of really free markets (Dake 2010). This kind offreedom is based, by nature, in a small scale.Re-localization intends to take to a more human scale those services that can be locallysupplied, that, among others, might include: generation and use of electricity, watermanagement, food, P2P services, shared use of goods, spaces for senior or children. They canbe sourced through local production and consumption cooperatives, time banks, localcurrencies and other local institutions.This way would reinforce the connection of people with their own creativity –now inactive forhaving been unnecessary for so long—and with other members of their community. Thealienation of individualism and consumption would dissipate, and more time would beavailable for family and friends. And some current delirious ideas about the values that makeup real richness of our lives would change dramatically. 11
  12. 12. It is a desirable and seductive proposal. It pledges that if people dare to share and cooperate they could meet the best available quality of living (Robinson 2012). Further, it is proving to be feasible. Indeed, it is the core of resilience-building proposals such as Transition Network, Post carbon Cities or the originally Swedish Ecomunicipalities**. These proposals extol the virtues of local communities to regenerate the economy by giving value to the local capacities available to face a common future, self-providing with the most needed resources. At the same time, they are proving to provide people with higher wellbeing through a reinforcement of the communities they live in. The Transition Network’s Initiatives suggest a process of experimentation risen up from local communities in order to:- raise awareness about the need, responsibility and feasibility to act before climate change, peak oil and other threats,- consolidate community feelings,- explore the capabilities that they have to help themselves meet their needs and aspirations, and- start community initiatives; oriented to build resilience and more prolific and fruitful livings. Of particular interest is the approach by Transition Network’s project REconomy††, that tries to provide with tools to help local community groups build a new kind of local economy. Such initiatives might inspire the dawn of a generation of social businesses initiated by responsible citizens that embrace alternative ways of development, empowered through their living communities and fuelled by motivations of responsibility, justice, or food-, energy-, water- or climate-security, rather than by institutional support. These socially innovative initiatives are proposing a different way of thinking in order to solve the problems caused by prevailing paradigms of obsessive economic growth, cheap energy, wealth accumulation, competition and individualism. They rely on the assets that exist within communities, reorienting them to resilience-building and to serve the common wellbeing, while meeting the above referred basic principles of sustainable development. Thus, the key to their success is not the financial capital, but the social one, so financial credit is not a critical issue to overcome. On the other side, these initiatives are generating resilience in social groups. Reality shows increasing threats in several dimensions: economic (unemployment, budget cuts, energy and food insecurities, poor perspectives), social (inequality, migrations, outrage, aging population), environmental (climate change, resource depletion) and political (short-term view, transferring to next generations increased economic and environmental debts). Those communities with a higher cohesion and sociologic diversity, a better use of energy and water, a lower reliance on external, distant sources, and that are prepared to help those who become more affected by external impacts, will be more resilient. Resilience and reinforced community-living can be seen as the two sides of a same coin when talking about the ability of people and social groups to face adversities. ** http://www.transitionnetwork.org, http://postcarboncities.net/, http://www.instituteforecomunicipalities.org/ †† http://www.reconomy.org/ 12
  13. 13. These Transition groups being set up worldwide (Transition Network 2012) through bottom-up driving forces, but they still need to be promoted with top-down incentives if they are to be globally adopted. These incentives should not only spread the voice for the case but also, critically, focus on building the economic viability of community approaches that are socially and environmentally desirable –thus completing, and fundamentally rebalancing, the three scopes of sustainability. It is about fostering innovation for social business models that, through resilience-building, address wellbeing; compared with traditional businesses that, through economic growth, address wealth. It would be too simplistic to think that people are not prepared to assume their responsibility. A paradox of the world’s development is that every new generation is the best prepared ever and human knowledge expands in all fields, but at the same time poverty, unemployment and the physical threats from development become more and more daunting. There is an additional directional force spreading Transition initiatives: cross-wise, scaled- across adaptations of benchmark practices implemented in certain places to the local circumstances of other distant places. The above-referred networks are some of the ones that are contributing to spreading the practices, although hundreds of other non-associated examples exist. Wheatley and Frieze (2011) gather some of them in a book published in 2011. Among the recommendations for that book, P. Senge (2011) –guru of organizational development—, reflects perfectly the vital contribution of community approaches: “If there is any hope for us it lies in rediscovering and recreating community – bringing forth our DNA as social animals into today’s world”. The necessary innovation to be promoted is thus not technological but social –or, rather, systemic. A reading of some pre-Rio documents (‘Resilient People, Resilient Planet (…)’ (UN 2012b), the original Draft Zero (UN 2012c) and the previous Coordination Notes (Lalonde 2012) with this vision in mind, shows how they align with it (Etchart 2012d). But, regretfully, this vision could not overcome the stupidity that governs the world with visions that are as myopic as the one of the economists referred by Boulding. It might be a fatal consequence of the tragedy of the commons (Hardin 1968). 3.4. Challenges Previous sections have defended community-based, cooperative social businesses as a feasible way to build resilience, empower citizens, commit each of us to our own future and lead to more fruitful living experiences. Nevertheless, such businesses must face a number of challenges in order to become wide-spread systemic proposals. Some of them are introduced by Robinson (2012), among which:- The basic infrastructure that would allow re-localization is not yet mature. Research would be necessary with the aim of getting these alternative proposals to connect economic viability to what is socially and environmentally desirable.- They are far from being shared by governments at different levels, probably due either to ignorance or to mistrust in the ability of people to decide their future. 13
  14. 14. - Economic re-localization implies to opt between two often incompatible options. On the one side, cost efficiency, for many industrialized decades, has meant manufacturing in large centralized factories, while local resilience reportedly demands increased costs due to lower economies of scale. The challenges for these proposals are not trivial. Before its complexity, a systemic way of thinking is needed when setting out solutions (Allen 2011), radically opposite to the single dimensional way of thinking that is cliché in a world of specialists (Ecimovic et al. 2002). The change involved might cause vertigo; but if our generation does not make the change we will be deeply irresponsible to future generations. In any case, those who think that such vision is idealistic might realize that what is really unrealistic is to continue developing using the same patterns that have generated the current systemic crisis. The Peruvian philosopher C. Cuello (1997) said that any holistic conception of sustainable development is a challenge to those understandings that proclaim change while leaving untouched the basic structures of the present model of industrial society, because it would necessarily imply fundamental changes at all levels of social, economic, political, and cultural structures, thus a fundamental restructuring of present society. 4. Conclusions The increasing threats that our civilization faces mirror a failed economy that drives the world to a fatal future. Governments have richly shown their subordination of policy to an economy that systemically fails to meet its goal of allocating resources efficiently, but is rather an instrument to maximize the returns of capital. Resilience-building practices are necessary to face the resulting multidimensional threats. When these practices are addressed bottom-up in local communities, implemented from citizenry, it further generates more fruitful living experiences. Many cases already exist where the reinforcement of local communities are already showing to be a powerful approach to development. Nevertheless, this approach still face major challenges to become systemic proposals, among which is to build the economic viability of their socially and environmentally desirable approaches. Nevertheless, no impediment prevents people from starting to test desirable ways to face the future. Nothing prevents people from starting to create cooperative social businesses. Such process can start today, with a full faith that they will adapt better to people’s needs than the capitalist old structures. After discussing the reasons why continuous economic growth is not only impossible but the ultimate cause of the systemic crisis, this document has tried to introduce some of the recent concepts that may enlighten the path to a systemic sustainability: resilience-building as a goal and the combination of social businesses and cooperatives in a local dimension as a form of implementation. The process of community-led change has already started and the number of good practice benchmarks is growing. The generalization of approach might take time if it is not more actively supported by top-down measures, but the motivation of the people involved is high enough not to be conditioned by the lack of support. As H. Daly (1991 :194) affirmed 35 years 14
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