In order to deal with the climate crisis and have more satisfying lives, we need to build economies that consume fewer natural resources. In other words, we need to build a “solidarity economy” based on worker-owned cooperatives, self-provisioning and barter systems, and gift-based exchanges. (1)
To build popular support for a transition to solidarity economics, we need to demystify the concepts of growth and work.
This contention may sound far-fetched, but it is increasingly the consensus among economic activists across the globe who are working to build solidarity economies on a small scale. But often there is a disconnect between what people in these solidarity networks advocate and what most people in this world want for themselves. Many people want to work long hours and consume more things, and they believe their economy should grow. And yet, many who feel that way also know on some level that lives of constant work are not very satisfying, and that the climate cannot endure growth-based economics any longer, at least not if growth means more material throughput.
If we are to advocate movement toward low- or no-growth sustainable economies, we need to know how to cut back on growth without causing unemployment and hence poverty. In order to build popular support for a transition to solidarity economics, we need to demystify the concepts of growth and work, and we need to have clear answers to some hard questions about how our ideas will not run us afoul of what I call the “economic dependency trap of capitalism” – that once you have a large capitalist sector, people’s survival becomes dependent upon capitalists offering them jobs.
Economic Growth Does Not Equal Happiness
Economic growth (usually measured in GDP) has come to be the most commonly used shorthand for describing the health of an economy. The oddity of this is apparent in the following two hypothetical scenarios: First, imagine a society in which the average workweek is 80 hours. Workers in this society would pay others to care for their children and elders, buy premade food and consume commercial culture for entertainment. They would be stressed out and have high carbon footprints. Next, imagine an alternative scenario in which everyone works 20 hours a week. In this scenario, people have time for friendship and time to care for children and elders. They have time to enjoy making things and cooking for themselves and for each other. Most likely they are happier and have lower carbon footprints, as they don’t need to commute as much. They live in communities with stronger social fabrics, and are thus able to develop forms of pleasure that are not related to commercial consumption.
The first scenario is one that would have a four times higher GDP. GDP measures the amount of capitalist activity happening in an economic system. It does not measure well-being, inequality, health or environmental impacts.
One reason that capitalist economies require growth is that investors will only invest if they believe they will get more than they put into a given project after some period of time. Aspects of a capitalist economy can work like a Ponzi scheme: Many players can do well if the pie keeps growing. When an economy contracts, investors at the bottom of the pyramid can lose everything. As long as the economy grows, however, most investors improve their situations.
GDP does not measure well-being, inequality, health or environmental impacts.
One challenge for an economy not based on growth is figuring out how to obtain the investments that are needed for economic activity. We can do without much of what happens in a capitalist economy, such as advertising, the production of disposable or superfluous goods, and the sales and fees associated with for-profit health insurance. And yet, many forms of economic activity are crucial for good lives, and in any economic system, investment is necessary. Investment pays for things that we won’t see the rewards from for a while. Farmers need investment capital to buy inputs for a crop that they won’t be able to sell for a while. Producers of shoes need to invest in equipment and materials. If we don’t offer investors the returns they want, where do we get the investment capital needed to “grow” a healthy economy?
There are various ways to answer that question. Only capitalist investors need to make a profit to play the game. And as finance capital comes to dominate over other forms of capital, we have seen increasingly dysfunctional demands for ever-quicker returns. Investment in a healthy economy requires “patient capital”- capital that asks for a return, but a reasonable one, and over a fairly long time horizon. Governments at any level can leverage the money they have on hand, in things like retirement systems, to create public banks that are tasked with investing for the public good. (2) Nonprofit institutions can be formed to share the capital created by worker-owned cooperatives to invest when one cooperative has more than it needs at the moment. (3) To the extent that an economy has a non-capitalist sector, there are many ways to get the resources needed to invest in public goods that don’t rely on growth as an incentive.
Growth is not needed for investment, but that doesn’t mean that we don’t need some form of what some people mean when they use the word “growth.” Sometimes, when people talk about growth, what they mean is an increase in the quantity of goods produced to meet people’s needs. There are many parts of the world where people don’t have enough food to eat or enough material comforts to have a good life. It is also difficult to determine what materialist comforts are “necessary” to have a good life because in a capitalist-dominated culture, people come to value material consumption. But many people in the global North are finding ways to delink their desires from the treadmill of consumer culture. For those people, it is easy to argue that we do not need any more economic growth.
And yet, there are still millions of people in the world, including in the wealthy countries of the global North, with desperate needs for clean water, effective health care and transportation systems and access to the material wealth needed to lead comfortable lives. For those people, there is a need for more economic activity, if not growth. There is an equivocation in the word “growth.” We need to be careful when we use the word because when we use it to mean that we want more things to satisfy real human needs, it often gets understood as meaning that we need more GDP.
Sometimes when economies are growing in terms of GDP, they generate more activity that employs more people. But this is often not the case, as economists talk about “jobless recoveries” and countries in Africa post amazing growth rates, with simultaneous increases in poverty. (4) If we want to wean ourselves off of “growth” in the sense of more capitalist throughput, we need to figure out what to do about the problem of work.
Minimizing Waged Labor
Many people, including progressive economists, argue that we need full employment and more jobs. And yet most people don’t like going to work, and many jobs fuel the destruction of the planet and help corporations rake in the profits they use to manipulate our political system.
Building a transition to a solidarity economy has to involve finding ways to lessen the economic dependency trap of capitalism.
For human beings to survive, we do need to produce food and other material goods. We also need to engage in domestic work such as taking care of children and preparing meals at home. Feminist economists have argued that work such as this is productive activity and hence should be considered as important economic activity, even though it is not counted as producing growth or GDP. We can call this sort of work “meaningful labor” to distinguish it from the alienated labor associated with capitalist production.
A big part of a move to a solidarity economy is minimizing waged labor and bringing pleasure and meaning back to other forms of work. This can be done by creating meaningful jobs that people enjoy and by promoting policies that allow people to perform waged labor for fewer hours each day. It can also be promoted through the creation of worker-owner cooperatives, which enable laborers to have power over their work processes and to control the profits of their labors.
An Economic Dependency Trap
To move away from an economy based on constant growth, we must escape from the economic dependency trap of capitalism. Many people in Bhutan are able to lead healthy and satisfying lives with very little ecological throughput and almost no GDP, thanks to a national economic policy that prioritizes “Gross Domestic Happiness” rather than GDP, but those of us living in largely capitalist societies struggle to imagine doing the same. We become dependent upon our work to provide money for old-age insurance and medical care, money to buy the consumer items that provide the status that we believe is crucial to our social survival, money for food and money for transportation. Juliet Schor argues that as we become busier, we become more dependent upon buying to satisfy our needs. (5)
Thus, once a society has a certain level of capitalist economic relations, our ability to live well comes to be dependent upon businesses doing well and wanting to hire us to work. As a result, building a transition to a solidarity economy has to involve finding ways to lessen the economic dependency trap of capitalism.
People involved in the solidarity economy movement tend to shy away from these sorts of questions. Having found political systems largely unresponsive and feeling deep pessimism about political change, many prefer to build new systems rather than engage with the old. As a result, they advocate for building a solidarity economy in the here and now, without regard for governments and other large-scale political structures. (6)
Building a solidarity economy, however, requires that we deal at some point with the capitalist economic context in which smaller-scale solidarity projects exist. Unless we find ways to challenge capitalism, and particularly to lessen the economic dependency trap of capitalism, the ground those projects are growing in will continue to be unfertile.
Ten Ways to Challenge Capitalism
In my book Getting Past Capitalism: History, Vision, Hope, I outline 10 important steps for building a movement to challenge capitalism in realistic ways that don’t require waiting for a revolution.
Completing these steps would require us to:
1. Delegitimize capitalism.
This is necessary so that people are willing to talk about and analyze the impacts of this very important part of our social world. In movements for social justice, people have tended to say they are against “globalization” or “corporate globalization.” Many of us have internalized a sort of McCarthyism that marginalizes and ignores anything that reminds people of communism. When we gain the courage to name capitalism as our foe, we begin to speak clearly about our reality. Naomi Klein’s book This Changes Everything: Capitalism vs. the Climate names capitalism as a significant impediment to our ability to deal with climate change.
2. Challenge capitalist cultural memes.
Ideas such as “growth is always good” come to be seen as common sense. Annie Leonard’s short video The Story of Stuff challenged the idea that more is better and has helped thousands of people see the economy in a different way. We need more cultural production that challenges these pro-capitalist forms of common sense.
3. Create meaning in our lives that has nothing to do with consumerism.
Capitalism can come to colonize our sense of pleasure, making us unable to see how much pleasure is available without consumption. We can cook for ourselves and others and play games that are not commercialized. We can create community through nonprofit festivals and community gardens. As we rebuild the noncommercial aspects of our social world, we decolonize our sense of meaning in life.
4. Advocate for alternative economic indicators.
We can begin transforming how we think of the economy by getting progressive media to report economic news using alternative economic indicators. As we read and hear these alternative media, we come to see our present reality in new ways, paving the path toward a non-capitalist economy.
5. Challenge pro-capitalist free trade policies that are bad for labor and the environment.
One of the most important political struggles at the present time is the fight against the Trans-Pacific Partnership. If the TPP goes into effect, solidarity economy projects in many countries will have to compete with even more powerful forms of transnational capital. Small-scale sustainable farming in Mexico was largely destroyed by the North American Free Trade Agreement (NAFTA) that went into effect in 1994.
6. Build alliances between movements.
Fighting to reduce the number of hours we work has the power to bring together a wide variety of movements. Fighting for a 35-hour workweek without a reduction in pay could bring together feminist, labor and environmental organizers. Feminists often support shorter workweeks because such a change would enable women, who disproportionately bear responsibility for child care, to balance home and work with less stress. Environmentalists could be persuaded to support this campaign because, in general, people with more free time consume less and thus have a gentler effect on the environment. And labor unions would obviously support such a measure, as well. Recent studies have shown that when people work fewer hours, they usually produce just as much for their bosses. When the 35-hour week was introduced in France, the government gave tax incentives to bosses for the transition, and wages were not reduced.
7. Make the solidarity economy visible.
When people think that there is no alternative to capitalism, they are not interested in talking about its weaknesses. That’s why worker-owned cooperatives need to make more public statements about how they work, so the public as a whole can see that there are viable alternatives to capitalism. Many municipalities are moving to community choice aggregation schemes for electricity where the for-profit electric companies are left out. These moves can have a larger anti-capitalist impact if when we talk about them we highlight the ways they show that another world is possible and is on its way.
8. Support the development of community-controlled forms of capital.
In the Mondragón network of cooperatives in Spain, individual cooperatives all contribute to a bank that loans out money for the formation of new cooperatives. In this way, Mondragón has succeeded in developing a community-controlled form of capital. In the United States, there are local community development corporations that loan money for community projects and do not expect a fast return on their investment.
9. Develop each other’s identities as agents of change.
One danger in the present organizing context in the United States is that a lot of work is being done in professional nonprofits where members and supporters give money and sign petitions but are not actively involved. Social movements that lead to lasting transformation usually have ways to engage people deeply enough to make a lasting impact on how they see themselves. When movements develop people’s civic capacity, they can build momentum toward deeper changes. The Occupy movement pulled thousands of people into a life-changing experience. Many people who were politicized through that experience are continuing to work against foreclosures and inequalities in their local communities.
10. Make strategic decisions.
We can increase the power of our organizing if we take the time to read about movements for social justice and educate ourselves about how significant social change happens. The core aim is to put our energy into activities that are likely to make lasting change. We are entering a period of increased resistance to old forms of domination. We need to honor the significance of the opportunities and ask bigger questions about how our work can add up to lasting change.
The Path Ahead
As long as growth and employment rates are the measures of a healthy economy, our environmental interests will be at war with our economic interests, and what is good for capital will be seen as equivalent to what is good for people. We will be stuck with common headlines such as “Liberal Party Is in Trouble as GDP Slows and Unemployment Rises” or “Climate Bill Killed for Destroying Jobs” (not real headlines).
As we make progress in reframing our goals of building healthy economies, however, we may start to see headlines such as “Popularity of the Left Surges as Tax Increases on Financial Speculation Yield a 10 Percent Decrease in Poverty” or “Passage of Work Time Reduction Bill Creates Jobs for 10 Million” or “Genuine Progress Index (GPI) Increases as Carbon Emissions Decline.”
If we engage in large-scale struggles even as we build small-scale changes, we can build broad-based support for a real transition to a solidarity economy.
1. In the US, it is usually called “new economy”; in most of the rest of the world, and among more left-wing advocates in the US, it is called “solidarity economy.”
2. Ellen Brown and Hazel Henderson. 2013. The Public Bank Solution: From Austerity to Prosperity: Third Millennium Press.
3. Bruno Roelants. 2000. “Worker Co-operatives and Socio-economic Development: The Role of Meso-level Institutions.” Economic Analysis, V3, I1, pages 67-83.
4. See for example: J. K. Gibson-Graham, Jenny Cameron and Stephen Healy. 2013. Take Back the Economy: An Ethical Guide for Transforming Our Communities. University of Minnesota Press.
6. The ILO Reader. 2011 “Social and Solidarity Economy: Our Common Road Towards Decent Work.” 7. Bryce Covert. “Relax or Collapse.” The Nation 9/14/21, 2015, page 5.