Economic Slowdown, Degrowth, & the Solidarity Economy

Economic Slowdown, Degrowth, & the Solidarity Economy

A Paper by Paul Shrivastava, Concordia University, Montreal, Canada, delivered at the 10th Rhodes Forum, Plenary Meeting #3, "Building Solidarity Economies"

Thanks M. Montes, A. Pabst for organizing this session and centrally positioning the critical issue of reconnecting finance and business with ethics and ecology in face of the Perfect Storm of Global Financial Crisis, Global Ecological Crisis, and Global Poverty Crisis.

In my two recent books published this year, 1) “Lessons from the Global Financial Crisis”, published by the Stanford University Press, and 2) The Global Carbon Crisis, published by the Greenleaf press, we examine this question from ethical, aesthetic, sustainability, and crisis management perspectives.

In this session, I will make brief remarks on building solidarity economies which represent an important answer to the multiple crises we face.

1. Let me begin with some Global Economic Trends – an incontrovertible fact is that the world economy is slowing down, and a plausible forecast is that we will NEVER return to the go-go growth of the past few decades.

North America, Europe - Treadmill – 1 to 2% growth rates. Japan’s has experienced the “lost” decade, with -2% to +2% growth rate. China India, are in a Slow-Fast lurch, cutting growth expectations from 9 to 12% to almost half those numbers.

We will never return to growth rates of the past decades because:

a) Ecological boundaries being exceeded, breached,

b) Technology is unable to contain its own damages, or improve productivity at increasing rates,

c) Acceleration of life, consequent alienation and stressing of humans.

So, this is a time of great need for new models of finance and business that are innovative and productive, models that challenge conventional financial growth, and boost employment in ways that are socially and environmentally sustainable, and ensure flourishing of all humans and nature.

2. The “Degrowth Perspective” challenges the current paradigm of financial growth and seeks broadly social, communitarian, spiritual fulfillment. In May, 2012 we organized the International Conference on Degrowth in the Americas, in Montreal. You can read about it at (www.montreal.degrowth.org)

This discourse in the Anglo Saxon world can be traced to EF Schumacher’s “Small is Beautiful”, the ecological and social movements of 1960s, and more formally in the steady state economics of Herman Daly, and the field of Ecological economics. It has counter parts in:

French (Decroissance literature), the work of Serge Latouche,

In Spanish (the concept of Buen Vivre), good life through community, spiritual, interpersonal growth

And in India’s - Gandhian Sarvodaya economics – which conceives sustainable development as Sarvodaya through Antyodaya, (i.e. the welfare of all by serving the weakest in society). Focus is on rural mass development, of the poorest of the poor, through cooperation and collective endeavor, human scaled appropriate technologies, equal rights and privileges for women and men, poverty eradication, increased employment, social justice and equity, and smaller ecological footprint.

3. In the Degrowth perspective the “Solidarity Economy” (others call it - social economy, cooperative economy, collective economy, gift and barter economy, etc.) is the solution to the ills of market dominant economies.

Luckily solidarity economy niches already exist in many places and sectors in the form of Non-profit, charitable, cooperative organizations, such as, credit unions, agri-coops, coop banks, consumer coops, worker-owned enterprises, YMCAs, soup kitchens, charity hospitals, community radio, community ecotourism, day-care centers, noon-profit housing, etc.

In Canada they have been around for over 150 years. They are places and methods connecting finance and business with social justice, ethics and ecology.

They are present in all countries – agriculture, artisanal products, social services, and now social medias

rise in social entrepreneurship, more enterprises created, more types of services – social, ecological, health, financial,

showing resilience, lower volatility,

emerging new organizational forms

mega-cooperatives – (Amul India, Mondragon Spain, DesJardin Bank, Montreal,)

B-Corporation – 1600 formed in past year

Global NGOs,

Hybrids – for-profits working for non-profits

4. Canada and Quebec S-Economy

Canada’s social economy –

200,000 non-profit organizations

$90 billion a year and employ 1.3 million people

10,000 Canadian cooperatives generate $37 billion per year and employ 150,000

S-economy is the fastest growing sector of society,

Productivity + employment in S-Econ rising faster than in Market Econ - halving of productivity gap every 12 years, generating jobs 2.5 – 3 times faster than Market economy.

Quebec social economy — includes local and community

economic development organizations; and the women’s, social housing, labour, and environmental movements

10,000 organizations,

100,000 workers

$4.3 billion sales.

Public policy geared to “maintaining” rather than “building” social economy - which is still seen largely as philanthropic and outside the economic sphere,

5. Challenges of Expanding the S-Economy

Legal and institutional infrastructure, need for laws and policies. Despite their existence for over 150 years, policies in Canada started appearing only in 1996.

Financing challenges – patient capital, impact capital

Globalization challenges

Big Defense, Mining, Oil Industries are outside, and resisting

6. Trans-sectoral transdisciplinary systems economics - Systems Approach to studying not “economies” but “life systems”

         Food-Water System

         Mobility System

Habitat System

         Cultural system

         Governance system

Goal – from wealth maximization to intergenerational sustainability,

Method – from economistic empiricism to transdisciplinary experiential solutions,

Scope – from national policies +inter-nation treaties to bioregional and global governance

Curtailing killing and polluting industries (defense, mining, industrial agri-husbandry), favoring life affirming industries (info systems, bio systems, health-wellbeing, etc.

7. The role of civil society actors, and small and medium enterprises.

         Creative entrepreneurship, creative services

         Bottom-up governance

         Generate pressure and motivation for policy changes.