Social and solidarity economy for sustainable development: its premises – and the Social Economy Basel example of practice

The social and solidarity economy (SSE) is a viable strategy in dealing with some contemporary problems known both in industrial and developing countries. SSE is contextualized against the background of recent developments: the liberalization of goods and capital flows worldwide, continued industrialization, and the increased global division of labour. Addressed is how local populations could reach certain objectives and satisfy certain needs using techniques characteristic of SSE and, thus, carve out a social and economic space of their own vis-à-vis anonymous markets, global actors, and local and national elites. Within this self-governed space, it is suggested, a path can be laid for the necessary transition towards local, social, and ecological sustainability. The Social Economy Basel (SEB, founded 1996) will serve as an example to suggest how SSE principles could be operationalized into organizational practice.

to lose their potency in the absence of global fiscal policy such as through the UN. Under these circumstances state-level deficit spending will to some extent dissipate through capital export flows into an unspecific global space, unless such spending is restricted to nationally confined or nationalized enterprises. Monetary policy, being a last resort, however, also comes with risks and lack of vigour: speculative bubbles (in housing, foods, minerals, stocks), liquidity trap-type stagnation, inflation, and growing wealth and income disparities. Given credit expansion, only those who already have assets and wealth are getting access to credit and, therefore, to more wealth and income through wealth. Even though these patterns are broadly recognized, secondary redistribution of wealth and income are fought tooth and nail on both company and national levels. The very costly 'solution' of underemployment, unemployment, social and economic marginalization, health impairments, illegal underground economies, crime, and ecological damage for short-term gain seem to be preferred. These, however, are mostly paid for by the general taxpayer on a 'socialization of cost' basis.

Social and solidarity economy in a problem management context
When the economy threatens people's very existence, when free-roaming capital and trade deprive entire population strata of an opportunity to be productive in intact ecological systems, time is ripe for turning to local resources and potentials. It is time to implement the social and solidarity economythe sooner the better. Networking and building on local resources is bound also to revitalize and bring forth a new understanding of community. These may possibly include an already existing alternative economic and social movement sector.
The social and solidarity economy (SSE) can be understood as a kind of counterculture, counter-economy, counter-democracy. It challenges the conventional societal and economic system. It is rooted in democratically run companies and creates a totally novel understanding of the social bond and connectedness in our society.
We are currently witnessing the greatest crisis in socio-economic life of the twentyfirst century since the 1930s. Today, as before, a secure livelihood and existence lies at the root of the problem. Poverty is spreading and deepening, though some maintain that it has globally been reduced according to UN applied standards. Novel ways must be devised, and some 'old' efforts must be revived in order to ensure the physical and sociocultural existence of much of the world's population. SSE can be understood to be such a renewed effort. According to civil society notions, it seeks to establish democratic economic and social structures for the preservation of everyone's existence. According to SSE, society must cease to be subject to autocratic economic firms, institutions, and systems.
For the time being, it is to be expected that the process of world industrialization will go on: the free flow and flight of capital from countries will continue, and jobs will continue to be exported, playing countries against countries, societies against societies. The poverty of the global South will continue to be exported in various forms also to the core as capitalism is preserved. Periodic and global growth phasesthough a temporary reliefwill not change this underlying trend.
However, world industrialization and its consumer life-styles will no longer be sustainable over the next generations. Too huge is the use and loss of resources, too burdensome the impact on populations through damaged natural environments. The problem of securing people's existence worldwide will, thus, be exacerbated manifold, especially given the still significant world population growth. Problems in sustaining life for all, however, will be maximized when the presently known industrialization process will be faced with physical and environmental resource scarcity as severe impediments to growth. Industrial production will, then, have to be downsized. Scarcity in energy and other physical resources on which the present system depends will create bottlenecks and conflicts to be managed by new economic and social ways. For many, though, it would not be wise to wait much longer. It would be wiser to use the time still available to prevent more drastic problems and to create a platform to deal better with the ones still to confront us.
Novel approaches are needed now, let alone in the near future, to guide us through problems and to restructure society into a socially and ecologically sustainable pattern. When acting today, it is imperative to include those who have been socially or ecologically hurt by present institutions. When acting, institutions can be created that are prepared to manage the severe bottlenecks and social and ecological problems yet to come. In sum, today already new institutions are needed for a sustainable, predominantly regional, more labour-intensive socio-ecological system. In many ways the SSE approach can contribute towards such goals: . It does not aspire to keep pace with the growth-driven 'industrialism' of multinationals; it rather seeks to get away from it. It will seek more qualitative over quantitative growth. . It is more labour-intensive and pays lower wages; it aims at building communities, making individuals independent of those with concentrated privately owned capital. . It does not seek to abolish the market economy, but rather to find relative protection from it and build resilience against its blackmail and extortions. . It emphasizes resourcesnot deficitspeople have, particularly in those who have been labelled as lacking resources by traditional labour markets. . It does not seek to divide up communities but to expand them by pooling resources for mutual use. . It aims not for a short-term, but for a long-term synergetically derived existential security for an ever increasing number of people.
If SSE is to achieve these goals, it must ascertain that those working in its organizations have a stake in the assets as they build them. In addition, democratic structures must ensure that assets gained are not unconditionally privatized or 'autocratized' due to a lack of social control over them. In addition, if SSE is to be successful, it must recognize its adversaries and seek to deal with detractors through permanent open discourse.
Social and solidarity economy as local economy SSE is to be seen as a political and economic strategy to combat, denounce, and boycott internationally mobile capital which has traditionally resisted any socio-economic ties and responsibility to a specific locality and its population. Furthermore, SSE must consider how it can take over certain areas of goods production and services production from freefloating international capital. Alternatively, SSE must demand tributes for it. For example, the local population does not need multinational providers of health care and prepared foods who take surpluses out of town as they supply the necessities of life.
SSE also must find political strategies preventing the outflow of resources and surpluses generated by local populations. Simultaneously, it is challenged to develop ways to beneficially reinvest these surpluses under local control. Finally, SSE must arrive at ways to practise local-level 'import substitution'. Here the rule of thumb is not to import things that can be produced locally. Import substitution is known to have been a potent state policy in various countries aiming for industrialization and emerging country status. The SSE can use it similarly for its own goal attainment.
The above are but a selection of strategies that could be employed under SSE. They all will gain in importance as the present economic system runs into impasses on an increased scale. They all can further gain in strength if simultaneously embedded in new social movements engaged more for social justice and ecological caremovements that work for social and ecological sustainability. Such alliances will both be a first step in a revival of self-control over destinies on the local level, of resilience against being blackmailed by anonymous market forces and their powerful actors, and be a social solidarity platform for transitioning towards downscaling industrial society and social and ecological sustainability.

Social and solidarity economy as a purposive organization
In practical terms the SSE could be conceived as a 'grass roots'-based, regionally oriented federation of democratically run 'local' enterprises, whereby networks between federations may be created to cover larger territories. Organized in various legal forms as cooperatives, associations, foundations, or corporations, the important criterion is that all should be organized for members to have control over capital and surplus value. How can a federation of self-managed firms, alternative banks, alternative retirement funds, and organizations provide mutual support and assistance for mutual reinforcement, stability, and qualitative growth? How can the SSE be constituted and built up? Such questions lead to a set of other questions like: (1) How is it possible to increase the inflow of resources from outside the network?
(2) How can the credit volume within the federation be maximized? (3) How can economic and socio-cultural integration be encouraged for the federation to attract outsiders to join?
The above questions can have various answers and possible courses of action, depending on the SSE's point of departure and the social and political setting within which it is embedded.
Preventing resources from leaving the SSE SSE business organizations can be stimulated and rewarded to some extent for making their purchases within the federation. This, in turn, can be facilitated through marketing information transparently showing the major categories and quantities of necessary purchases. At the same time such information can form the basis for setting up new companies that could meet demand arising from necessary purchases. Such new companies, then, would also be elements of an import substitution strategy. Mutual business relations in the federation can additionally be enhanced and stabilized by discount rates for members of the federation. Similarly, a certain quota for purchases within the federation could be set, and a local currency could be issued to go along with it. The latter would assure administrative efficiency. On the level of individuals working within the federation, it is equally possible to ask where and on what salaries are being spent. Here, too, detailed information can lead to establishing new companies within the federation as elements of an import substitution strategy. Conceivably such companies might be established in the food, restaurant, retail, clothing, entertainment, travel, child care, health care, construction, etc. segments of the economy. Again, incentives for individuals to spend their salaries within the federation can be designed. Of particular focus should be large-budget items such as those for housing. The average household spends up to 50% of the budget on housing, depending on location and income category. If pooled, such funds could be used to establish federation construction co-operatives and tenant-owned housing units.
Enhancing the inflow of resources into the SSE As part of an 'export strategy' SSE can locate business partners outside the SSE network. Typically, such partners can be found among 'friends' of the SSE that, themselves cannotor would not want tobecome SSE network members. Business partner friends of the SSE are most likely be found in new social movements and, possibly, also among labour unions, small-scale industry, crafts, retailers, and local banks. In a more general approach, the local population can be motivated and convinced to consider first the SSE network when purchasing goods and services and, thus, contribute to preventing capital from leaving the region and to building SSE as an alternative, local economic system. SSE federation volunteer staff could pursue the sole task of exploring new business opportunities and of organizing new business activities and SSE member firms. Lastly, given that small businesses are always under market pressures to the extent that they cease to exist, there are increased opportunities for co-operative enterprises to fill commercially the vacuum left behind and also to employ the labour power left behind in closures.
It is more difficult to include welfare state institutions in building a SSE since they are (still) seen as derivatives of traditional, global, capital accumulation strategies. To the extent that labour and educational subsidies are used by the welfare state for the social and economic integration of the unemployed and handicapped, these subsidies could also be spent within the SSE. For this to occur, SSE network firms would take on integration, education, and training functions on behalf of the welfare state. At the same time, the SSE could benefit from a new work force that has learned the new theoretical and behavioural tenets subscribed to by the SSE's alternative regional development path. Furthermore, it is to be assumed that integration and education efforts would show better results in democratic than in the usual autocratic work settings. Accepting welfare state labour subsidies could also allow the SSE to set up new firms that specialize in providing certain public goods and services, since some of the labour subsidies may not be used to compete 'unfairly' with private enterprise in the open market. Finally, welfare state-subsidized labour can be used within the federation to build lasting assets such as co-operatively owned housing. Here, subsidized labour would be SSE-organized to build their own dwellings to which they also contribute their budgets in terms of co-op tenant rentals.
In general, however, welfare state subsidies should be accepted with great caution. Should they be withdrawn, the SSE could bepolitically intended or notmanoeuvred into problems or crises. Furthermore, welfare state labour subsidies could take the form of short-term subsidies designed to put pressure on employees to find non-subsidized employment (at whatever conditions) or to be further marginalized as welfare recipients. Should the SSE co-operate with the welfare state under such conditions? Particularly if it cannot itself employ such individuals within its own federation enterprises without subsidies.

Creating credit instruments for the SSE
Enterprises and organizations need some liquidity to operate on a daily level. Not all liquidity is used all the time. Some of it, by definition, rests in deposits somewhere. Therefore, if the SSE succeeds in pooling operating liquidity, it can generate from it a source of credit to be invested within the SSE. The first step is to make liquidity within the federation transparent. The second is to get a business-to-business lending practice started within the federation, or to pool business liquidity in a designated account transparent for all. In a further step, a credit policy is to be defined so as to both credit enhance SSE while not endangering network firms in their need for liquidity. Here a collateral type of back-up system might also be useful. Simultaneously, the liquidity pool could also be used as collateral for outside local bank loans. Finally, the SSE federation could establish its own credit union co-operative and benefit additionally from individuals depositing their money from inside and outside the federation.
However, funds can also flow into the SSE from other outside sources. It is possible, for instance, that ideologically compatible retirement funds, banks or organizations, and individuals (especially from new social movement groups) can provide the SSE with credit or, in other words, invest in the SSE, its firms and economy. Investments could be direct with SSE firms, or indirect through a SSE investment fund.

Social and solidarity economy expansion and socio-cultural integration
A federation of local firms and other organizations is particularly dependent on maintaining unity and solidarity among its members. It is also imperative to avoid units leaving the federation, particularly when network solidarity has contributed to their success in various ways. The danger of 'privatizing' the benefits of solidarity must be foreseen. True, democratic control through self-management of capital and profits within firms and the network does provide a certain degree of protection from 'privatization'. Additionally, though, the federation must set clear entry and exit criteria. Such criteria may include a federation tax, fees for joining and leaving, or direct payments for services rendered through and by the federation. On the other hand, federation services to its members can contribute both to expansion and solidarity. For instance, the federation can provide certain insurance services, tax and financial counsel, legal services, market research, management consulting, communication services, leisure time services, and cultural events.
Socio-cultural bonds among individuals working or otherwise active in the federation can be promoted in various ways illustrated above, while access to such services can also be given and sold to outsiders. Since people active in the SSEas the experience of selfmanaged firms has shownare often also involved in social movement action, the federation's socio-cultural integration may draw from social movement action and cultural activities.
Another way to generate social integration is for the federation to issue its own hourbased currency which facilitates exchanges between individuals within the SSE network. With very few resources, the federation can implement an exchange and trading centre for its members and outside actors. A simple market web page or paper can for all participants list supply and demand and, thus, summarize all exchange possibilities. All members of the exchange and trading circle start at no cost to them with a certain number of hours to begin exchanging. Thus, adults and children can provide services to each other, pay for them in hours, and even move on to paying for goods in hours if they so wish. In such exchange circles all have a greater range of exchanges available than would otherwise be the case without the exchange circle. Finally, it takes but time and some skill to participate in such exchange circles. This is a labour time not capital-based approach to enhance both SSE growth and cohesion.
For the same purpose, currency-backed alternative local money may be issued by the federation. Alternative money is bought with 'official' moneyand can under certain rules be exchanged back into 'official' money. Using alternative money can be made more or less compulsory for firms and individuals within the federation. If desired, individuals and firms outside the federation may also be encouraged to participate. Participation may also be promoted by selling the alternative currency at a discount given certain conditions are met. As alternative money circulates, some of the 'official' money with which alternative money was bought can be invested in the SSE network and, thus, is a form of credit. In this sense, all who purchase and use alternative money also promote the SSE at no cost to them. As with the hour-based currency, the 'official money'-backed currency, too, contributes to SSE cohesion and growth.

Social Economy Basel: an example of SSE in action
The propositions set forth above suggest that community economies are diametrically opposed to the guiding principles, the principles of co-ordination and most guiding principles of the dominant economic system. SSE represents a unique economic culture in which firms and social and ecological needs are dependent on each other. To recognize this very interdependence, however, allows for society on a local and regional level to develop resilience against the odds of markets and free-flowing capital. Conceived thus, SSE can also serve as a platform from and with which to move towards qualitative growth and sustainability.
An example of such an effort is the Social Economy Basel. It saw its beginning with the Social Economy Association (SEA) founded in 1996. With its membership and a 'one member, one vote' system the association strives to build a prototype of SSE. The idea is similar to that of 'biotopes' which represent attempts to preserve biodiversity amidst and against the odds of industrial society and agriculture damaging biodiversity. The SEA Basel mission is to contribute to social, local, and ecological sustainability on a local and regional level. Its growth is kept at an 'organic' level so as not to depend on top-down outside funding. Human resources and funding needed for administrative tasks and growth emanate in grass root fashion bottom-up from 'the movements'.

The Institute for Social Economy
The SEA Baselbeing the first of its kind in Switzerlandimmediately began to cooperate with other similar attempts and likeminded organizations in Germany, France, and Luxembourg in starting the Institute for Social Economy. Some activities were joint efforts; for others the SEA Basel was acting alone. The purpose was to: . Inform the public about social economy and its potential in handling present and future problems of development . Offer public courses and conferences on issues pertaining to SSE . Advance professional, economic, political, and cultural skills of individuals involved in the SSE . Provide assistance through research and consulting for establishing SSE networks and financial tools . Give interviews and offer statements on SSE to mass media and encourage research and publications concerned with SSE and its development . Document the course of SSE development in conjunction with surrounding economic and social events at the local, national, and international level.
The social economy network co-operative The next operative step occurred in 1998 when SEA founded the Social Economy Network Co-operative starting with already existing worker self-managed firms and civil society movement organizations. Membership is open only for organizations. Each network co-op member has one vote irrespective of its size. Organizations with various legal forms are accepted as long as statutes guarantee the 'one member, one vote' principle, and that members may decide over employment practices and the use of surpluses. For-profit or not-for-profit organizations may be federation co-op members. As a result, the network co-operative is composed of a combination of commercial and civil societies. Especially the latter are grounded in new social movements such as the social justice, the environmental, and the women's movement. The network co-operative also considers civil society organizations as socially necessary producers of public goodsmostly information, education, politics, and culture. In Basel, therefore, they are part and parcel of the SSE, even though the value of their productionthough real and socially necessarycannot be monetized, as is true for other public goods. In terms of growth, the Social Economy Basel and its network co-op is kept in an organic growth pattern that does not depend on outside funding. The Social Economy Network Co-operative aims to: . Enhance the social, economic, and political cohesion among network members . Build a local platform for moving towards local, social, and ecological sustainability, and politically to mobilize social, economic and political forces towards this goal . Promote the exchange of goods and services among members of the network . Promote the exchange of goods and services between the network and firms, organizations and individuals outside the network . Locate new markets and social movement spaces and to establish new businesses and civil society organizations . Organize collateral guarantees for bank loans to federation members . Make micro loans for federation members, small co-op start-up businesses, and new civil society organizations . Engage in sustainability-enhancing investments . Issue alternative currencies Over the years, the network co-operative and/or the social economy association have provided collateral coverage for network members, granted loans and micro-loans to them, started small new for-profit businesses and not-for-profit movement organizations. The latter often have a food policy and urban agriculture focus (www.urbanagriculturebasel.ch). Investments have been made in a neighbourhood solar energy plant run by one network member. Social cohesion and SSE development is enhanced by a newsletter, the SSE fair, time-based exchange circles, and a Swiss Franc-backed alternative currency.

Alternative currencies of the social economy network
In 2002 the Swiss Franc-backed alternative currency BNB (GoodNetworkVoucher) was launched. In a pilot phase it was first tried only among members of the Social Economy Network Co-operative. Subsequently, it went public in 2005 to include individuals, businesses, and NGOs outside the co-op network. Some 120 firms and non-profit organizations presently accept the BNB. In so doing they receive free publicity. Participation is free of cost. The BNB is valid for 3 years, when bills in circulation can be exchanged free of charge for the new series. There is no penalty when BNBs do not circulate within a given time. All circulation is based on ideational movement energy and co-operation. Due to co-operation with the neighbouring social economy in Mulhouse (France), the BNB can be exchanged against the French SOLand vice versabeing used in the Alsace social economy network. One goal is to make self-produced energy units backing the BNB and to move away from Swiss Francs as the currency backing the BNB. Another goal is to combine the BNB hours exchange system with the Swiss Franc-backed BNB. This would allow for a very low-level entry path into the Social Economy Basel exchange system.

The surplus value of alternative currencies
Given the Social Economy Basel system as it is conceived and practised, the BNB has a significant surplus value. The BNB: . Is locally and democratically controlled money . Does not leave town or the region . Cannot be used for speculation . Helps in fighting undesirable global competition . Connects people interested in promoting local development for sustainability . Provides identity for those interested in local development towards sustainability, and allows them to display this identity . Serves as a general symbol for local development and the transition towards sustainability . Strengthens social movement energy for local development towards sustainability . Supports local business and NGOs ideationally and commercially as they support local development towards sustainability . Can consciously be spent in support of Social Economy Basel efforts to bring about sustainability . Generates funds for loans to federation NGOs and businesses working for local development towards sustainability . Generates funds for new start-up federation NGOs and businesses working for local development towards sustainability . Generates funds for investments in local renewable federation co-op energy production . Entails and teaches an alternative understanding of the nature and role of money . Stands for an economy embedded in society, not for a society dominated by the economy

Concluding remarks
Not all political systems have civil society well developed. As a result, it can be expected that new social movements, too, are not as prevalent in such societies. Equally, the co-op movement and tradition may not have had much attraction in some societies and economies. Furthermore, sustainable local development may be an objective for rural areasnot for a small urban space as is the case for the Social Economy Basel. Typically, new social movements have a lower density in rural compared to urban spaces. Alternatively, cities might be huge metropolitan spaces. In such situations, SSE might follow a 'Plan B', a modified local chamber of commerce approach. Under 'Plan B', a network co-op could nevertheless be envisioned for various small local businesses and NGOs intent on moving towards sustainable social and ecological development on the local or regional level. The same could also be conceived as a possibility for a segment or sector of a metropolitan area (somewhat like the neighbourhood housing construction and habitat co-ops in nineteenth-and early-twentieth-century European cities). Nationally or internationally mobile companies would be excluded from membership in the network co-operative for reasons articulated above. Many SSE guidelines and strategies outlined above would still hold, however. Their operationalization and application would follow a similar pattern, though some different outcomes, uncertainties, or risks might have to be considered.