What is Solidarity Economy?
Solidarity Economy is a different mode of production, which rethinks the relationship with profit. Find out how it works!
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The Solidarity Economy is an autonomous way of managing human and natural resources so that social inequalities are reduced in the medium and long term. The advantage of the Solidarity Economy is that it rethinks the relationship with profit, transforming all the work generated into benefits for society as a whole - and not just for a portion of it.
Understanding Solidarity Economy
In Capitalist Economy, winners accumulate advantages and losers accumulate disadvantages for future competitions.
In order for us to have a society in which equality among all members prevails, it would be necessary for the economy to be solidary rather than competitive. This means that participants in economic activity should cooperate with each other rather than compete.
The Solidarity Economy can only materialize if it is organized equally by those who associate to produce, trade, consume or save. The key to this proposal is the association between equals rather than the contract between unequals. In the production cooperative, a prototype of a solidarity company, all partners have the same share of capital and the same voting rights in all decisions. This is the basic principle of the Solidarity Economy. If the cooperative needs directors, they are elected by all and are accountable to them. There is no competition between the members and, if the cooperative progresses and accumulates capital, everyone wins equally.
The idea of the Solidarity Economy is to make society less unequal. But even if all cooperatives collaborated, inevitably some would do worse and others better, as a function of chance and the differences in ability and inclination of the people who make them up. So there would be winning and losing companies. Its advantages and disadvantages would have to be periodically equalized in order not to become cumulative, which requires a state power to redistribute money from winners to losers through taxes, subsidies or credit.
How does the payment work
In the solidary company, the partners do not receive a salary, but a withdrawal, which varies according to the income obtained. The partners collectively decide at a meeting whether the withdrawals must be equal or different. Many solidarity companies set limits between the smallest and largest withdrawals. But there is a tendency for solidary companies to pay more for mental work than for manual work so as not to lose the collaboration of more qualified workers. It is assumed that paying technicians and administrators better allows the cooperative to achieve greater gains that benefit all members, including those with smaller withdrawals.
the question of profit
It may seem that it makes no difference to work in a solidarity company or in a capitalist company because of the difference in withdrawals (earnings). But the main difference is the way to handle the profit. In the capitalist company, wages are scaled with a view to maximizing profit, as decisions are taken by managers who participate in the profits and whose position will be threatened if the company they manage obtains a profit rate lower than the average of capitalist companies .
In the solidary company, the scaling of withdrawals is decided by the partners, who aim to ensure good withdrawals for everyone and especially for the majority who receive the smallest withdrawals.
In cooperatives, the leftovers have their destination decided by the assembly of members. A part of them is placed in an education fund (of the members themselves or of people who may form cooperatives), another is placed in investment funds, which can be divisible (spreadable among the members) or indivisible (not redistributable among the members ), and what is left is distributed in cash to the members by some criterion approved by the majority: equally, by the size of the withdrawal, by the contribution given to the cooperative, etc.
The divisible fund is used to expand the cooperative's assets and is accounted for individually for each member, using the same criterion for apportioning the portion of surplus paid in cash. On the divisible fund, the cooperative accounts for interest, always at the lowest rate in the market. When a member withdraws from the cooperative, he is entitled to receive his share of the divisible fund plus the interest credited to him. The indivisible fund does not belong to the members who accumulated it, but to the cooperative as a whole. The co-workers who withdraw receive nothing from him.
Newcomers to the solidarity company must pass an evidential test to receive the same benefits as veterans. This test typically ranges from six months to a year. The indivisible fund signals that the company is not at the service of its current partners only, but at the service of society as a whole, in the present and in the future.
Solidarity Economy is an alternative mode of production, whose basic principles are collective or associated ownership of capital and the right to freedom.
