Latin America's new solidarity economy

Latin America is looking for alternatives to corporate globalization, and with good reason. 

The Center for Economic Policy Research recently summed up results of the neo-liberal experiment enforced on the region since roughly the mid-1970s. Between 1970 and 2000, tariffs on imported goods were halved, on average, and most controls on investment inflows and outflows were lifted or drastically reduced and state-owned enterprises were privatized on a massive scale. (In the 1990s alone they amounted to 20 times the value of Russian privatizations after the collapse of the Soviet Union.) Per capita income and economic growth would take off, the International Monetary Fund promised. In fact, "income per capita for the region grew by more than 80% from 1960-1979, but only about 11% from 1980-2000 … the region has suffered its worst 25-year economic performance in modern Latin American history, even including the years of the Great Depression."

Resistance to corporate globalization started with the 1994 uprising of the Zapatistas. But Latin American social movements have also been busily constructing viable alternatives. Governments opposing neo-liberal policies have recently joined in this construction, voted into power by clear majorities in Venezuela, Brazil, Argentina, Chile and Bolivia. In Mexico, with elections coming July 6, an anticorporate globalization front-runner is increasing his lead.

The alternatives cropping up around us are highly varied, both between and within countries. On a recent trip to Argentina, Brazil and Venezuela, we visited some of these initiatives and talked with their creators. 

photo caption: Intercooperation in Caracas. L to R: author Betsy Bowman, Supermercal manager Carlos Sánchez, and philosophy grad student Yvonne Caldera, in the Supermercal branch in the Katya district. Subsidized basic staples at this chain are very cheap.

We went because we'd heard that the solidarity economy was on the march in these countries. Since 1989 we have been active in the worker cooperative movement in the United States. In the wake of 19th-century utopian religious communities, the US created thousands of housing, rural electric, farming and child care co-ops and credit unions. A social change-oriented part of the movement started in the 1960s; now, roughly 300 co-ops run by about 10,000 worker-owners who share profits and vote on policy and managers are in existence. Often located in college towns such as Amherst, Berkeley and Madison, they print books, consult on computers, and make bikes, furniture, photo-voltaics and precision valves. The movement newsletter we've helped edit since 1993, Grassroots Economic Organizing, helped start our US Federation of Worker Cooperatives. But our movement is small compared to that in nations with deeper traditions. We have about the same number of worker co-ops as France but 4.8 times France's population. 

Worker co-ops are part of "the social and solidarity economy," which can be defined as production, distribution and consumption activities aimed at democratizing the economy and thereby subordinating profit to human ends. It embraces movements for ethical consumption, fair trade, local currency barter systems, microfinance and credit unions, socially conscious investment and all forms of cooperatives. Our trip tended to confirm our belief that worker co-ops and the solidarity economy are major tools for deep and positive social transformation.

Let's start with Carlos Sánchez, manager of a Supermercal grocery co-op in Caracas, elected by his neighborhood assembly. He proudly pointed to basic staples-flour, oil and milk-that were also products of co-ops.

Such "intercooperation" did not happen overnight. Instead of nationalizing on the Cuban model, the Chavez government, wielding the new constitution of 1999, launched a national plan in 2001: oil wealth went to universal literacy and health care and to a fund to extend credit to workforces that hoped to start up (or convert to) worker co-ops. Behind the fund is a full cabinet-level Ministry of the Popular Economy. There are glitches. Some Best Western hotel workers we met wanted to form a co-op but feared that as new owners they'd lose union-protected benefits. Still, "cooperatives are the businesses of the future," holds former Planning and Development Minister Felipe Pérez-Martí, since workers who own their firms must seek efficiency and success. Moreover, if as economic agents "people are solidaristic, they will elect a solidaristic government."

As government-supported cooperativism was elicited in Venezuela, co-ops were springing up in Argentina like mushrooms. The metaphor is not entirely apt, since for a period in 2002-2003 elements of a full solidarity economy-neighborhood assemblies; community gardens, kitchens, dining and cultural spaces; local currencies and skill banks-had appeared in Argentina in all their variety. The 2001 crisis had made it cost-effective for many Argentine business owners to lay off whole workforces, seek bankruptcy protection, stash capital in tax havens, abandon debt-laden factories and-presto!-massive unemployment and poverty. For older workers this capital flight was an economic death sentence. To hold onto jobs and machines, many occupied workplaces with government permission. Why not then form a cooperative and produce and ask for expropriation? The slogan "Occupy, Resist, Produce" arose. Many co-ops, often without union support, now face former owners who, seeing the plants they abandoned operated profitably by wo
rkers, want them back. Worker co-ops are the part of the solidarity economy of 2002 that survives and thrives, reflecting Argentina's deep worker co-op tradition. 

Take Cooperativa Unidos por el Calzado (CUC), formerly a major Gatic shoe factory. The owners had racked up large debts to workers and the state. Again invoking workers' needs, and with union support, they applied for and got new subsidies but then cut pension and wages further as they declared bankrupty. It was the last straw. The factory was under a judge's control when the workers, with neighborhood support, took occupancy, cooperativized and restarted production. The cooperative has since been granted a 5-year expropriation in which to prove itself. It is keeping its head above water as we write.

Hold on a minute! It may be said here that this occupation and cooperativization stuff is plain theft! A re-affirmation of private property rights would put people like CUC in jail. And second, this co-op scheme is impossible because of the greediness inherent in human nature. 

To the first complaint we note that private property is always conditional and never absolute. A corporation, for example, is chartered by the people to serve the public good, and this charter can be withdrawn when it ceases to do so. 

To the second, aside from pointing out that these "impossible" co-ops exist, we remark that, like greed, generosity is also a human possibility. Which of these (and other) possibilities gets brought out enough to appear as "human nature" depends on which of these possibilities is rewarded and brought out by the dominant social practices.

For our parts we are inclined toward Perez-Marti's observation that setting up a cooperative system "is like a virtuous circle, where the ownership structure generates solidarity, and the solidarity in turn generates stability in the business." So, "in the long term, under stable relationships, I don't gain that much by stealing, and all sides benefit more from not stealing."

Still, there is a radical incompatibility between a regime that allows one human to profit from the labor of another merely because the latter works on the former's private property, and a regime in which the workplace is held in common and all profits (and losses) are shared. Neither has a monopoly on morality. But they make mutually exclusive claims as to what morality itself is. History seems to be asking us to make a choice between them.

We will devote a third article to the solidarity economies of Brazil and Mexico.