ELSEN, S., WALUMANN, I.: Social economy: community action towards social inegration and the prevention of unymployment and poverty EJSW, Vol. 1, 1998 y"
European Journal of Social Work Vol. 1, No. 2, pp. 151-164 1998
Social economy: community action towards social integration and the prevention of unemployment and poverty
by Susanne Bsen and Isidor Waliimann
In these times, when unemployment, marginalizatlon and poverty are spreading while world capitalism takes Its course, new approaches for guaranteeing subsistence at the community level need to be explored. Social economy provides people with an alternative which is work-intensive, equitable, and integrative. It is based an the principles of grass-roots democracy and can be facilitated through community-based social work. First, this paper outlines how social economy can be constituted and developed. Secondly, it describes successful community-based business enterprises and federations of social co-operatives In Switzerland, Germany and Italy. These profiles provide evidence that community workers can'and must help to create, reinstate, and redesign social, political, and economic bonds within the community. .
1. introduction: The new social issues
Ac the end of the twentieth century—in the aftermath of world-wide economic, technological, and social changes and che endangerment or destruction of che natural basis of life—the industrialized nations are faced with problems never known before. Now chat the market economy no longer has any boundaries, the spheres of life within the limits of the local community are gaining importance, in terms of, autonomous problem solving and sustained patterns of development, as central areas of activity and learning. Promoting social and economic self-help within local communities, enabling people to re-establish or maintain their ability to be socially productive, and the active development of a community-oriented basis for this purpose are the central tasks of society.
The changing and broadening meaning of community as a place for masrering the challenges of life and as a framework for developing large-scale, fucure-oriented solutions to social, ecological, and economic problems corresponds to the broadening meaning of community-based social wock as a comprehensive effort to shape social life and effect social change.
This  interpreration of community-based social
work is a reflection of its original roots in the 'community work' which was first developed in the USA to cope with the economic, cultural, and social consequences of urban industrialization and che influx of settlers in the rural areas of the Middle West. Now, just as at the beginning of the Industrial Age, social gaps are becoming acutely evident and, hence, che cohesiveness of individual lives within che community needs tD be thoroughly reorganized.
Community work is a comprehensive approach to creating, reinstating or redesigning social, political, and economic bonds widiin the community. The most impressive example of this—and one still highly relevant to the problems being confronted today—was the work of Jane Addams and other coworkers ac Hull House in Chicago cowards the end af che nineteenth century. Hull House was an impetus for socially-oriented utban development and social work, it focused on public surveys on poverty and public health, assisting che political participation of the unempowered and fotcing che implementation of social reforms. It was a centre for inter-cultural learning and socio-cultural development, and last but not least, it created community enterprises as a basis for economic self-help,
The keys to understanding community work in
© Oxford University Press J99B
53
ics original sense are the comprehensiveness of its involvement: in regard to the needs -within ics own territory, the concept of radical democracy, independence from government and economy, the acceptance of people as competent individuals and, consequently, the belief in their powers of self-organization. The autonomy of this position can also be explained by the fact char the^ American brand of capitalism was not, or only to a lesser degree, flanked by social policies and chat self-help was always an essential requisite within society.
2. Social economy
Ic is co be expected that the world industrialization process will continue, capital will be drained off, and jobs exported. It is mote likely that the poverty of the rest of che world will come ca us, rarher than our affluence spread to it. Unemployment, underemployment, and poverty are more likely to spread and deepen, both here and elsewhere in che world, than to be overcome by means of current world capitalism, in spite of its expansion and periodic phases of growth. Moreover it is clear that neither world industrialization nor che currenc form of industrial society will be followed through in the next generations. The problems of guaranteeing subsistence will become increasingly critical once it becomes necessary to call a halt to world industrialization. Even existing industrial production may have to be reorganized and downscaled because industrially usable energy w'ili run out and industrialized output will no longer be tolerable for men or natute; meanwhile, the human population will gtow at a tremendous pace. (Waiiimann 1994; Wallimano and Dobkowsld 1997).
We need to find new approaches now for ensuring our subsistence. Currently, these are needed to provide people, deserted by internationally mobile capital, with security within their locally dependent structures; and later, during the contraction process, new approaches will be needed in order to maximize solidarity, to minimize the mass destruction of human capital, and to give society a new securicy for existence through sustained, work-intensive, regional
self-maintenance. Social economy offers' this kind of approach (Wailimann 1994;/Alinsky 1994;-Reiczes and Reitzes 1987).'. .   ';" .....
Social economy does.not strive to keep step with the multi-national corporations, but instead tries to avoid their clutches in an attempt to secure a basic .existence. Social economy is relatively work-intensive and ics salaries ore celarively low. It is primarily concerned not with high remuneration of labour, but with establishing equity and economic independence for everyone involved. It does not attempt to abolish the market, economy, but rather to offer a degree of protection from its methods of blackmail. It is not looking for deficits among che victims of the labour market or the financially-weak—or any other parr of the population—but rather for resources. It is not' seeking to divide a community, but rather co expand ic chrough the integration and interconnection of resources. It is not striving for short-term, but for long-rerm synergy effects and success. It is endeavouring not to establish shorc-term, but rather to establish long-term guarantees for subsistence for an ever larger number of people. If it is to achieve these goals,, it muse ensure that the men and women working in its organizations are participating itvehe capital base that they are building up. And finally, democratic structures must prevent this newly created equity from being unconditionally 'privatized' and extracted from the network, as a result of lack of social conrrols. The 'profits' that have been cteated by these joint efforts need to remain wirhiri the community.
Social economy can therefore be considered a ■grass-roots' based, regionally oriented federation of decentralized, auronomous enterprises run on the principles of basic democracy. Ac che regional level there may be further Units between federations. Organized either as co-operatives, associations, foundations, or stock corpotacions, it is important only-that the statutes of the organization guarantee that che members have control over the capital resources and the profits via grass-roots democracy.
But how can a federation of self-managed business operarions, alternative banks, alternative retirement funds, and organizations that deal with the reintegration of the unemployed provide murual sup-
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Community action towards social Integration and prevention of poverty 153
^^i^ssistance? How can social economy be can-2dland,ftbuilt:..up? This leads to four basic dbDS?Swhich.; can be answered with examples ftmlacnial i prac rice:
lHq.w-.can the flow of resources from a grass-roors (federation  into  the  privately  owned and jauthoricarian business sector be prevented? SHbw'ican'the input of resource: from outside the ^HecatioQ be increased?
lowican the credit volume within the federation Ibeimaxiraized? ^^Ho^^can business and web-cultural integration [ibe^encouraged and the federation opened to ^outsiders?
LJar^eacrf :of these questions there are several ^™ers"'iihd possible courses of action. They differ Kr^rdinglCQ the starting situation and the economic, Mlitlcal'farid' social setting, and need to be adapted IS^elever-changing state of affairs. Several potential ^^^Sready 'proven answers and strategies will be llgxrented in section 7.
fix-. •
^lEreyentlng the flow of resources faway'from social economy
lusi.nesses within a social economy can be encour-y^ed|tp argreater or lesser extent to purchase goods landjservices within the federation. Marketing news-Jpigers' that provide information about the main pur-ichases of .business enterprises can facilitate this. At " jsame'time, such information forms the basis for ^deciding whether and in what field it would be strategically feasible to establish new businesses within |lvthei:-federation which could meet these purchasing Speeds, i The mutual business relations can also be |feeilitated:and guaranteed with agreements on dis-f count rates for members, an internal paymenr system |such-as a 'federation check', or—-where appropriate— iwithi/'purchasing quotas'. l^lfAt the level of. individuals working within the ^federation, it is feasible to ask where and on what the ^salaries are being spent? Such details would provide pinformation about whether it could be practicable to ^establish businesses dealing with renovation, grocer-
ies, clothing, entertainment, travel services, or other services such as child-care or health care. It is also possible to provide incentives and different ways to motivate members to spend their income within the federation. Of particular inceresr is rhe equity formation potential of real estate. On average about 25— 40 per cent of salary income is-likely to flow out of the federation for living expenses. It would be quire simple, if rhese funds were amassed, ro assist in federation-owned, co-operative ownership of housing, and to even become actively involved in the renovation or building of new housing.
4. Increasing the input of resources in social economy
It is necessary to know which of the markets outside the federation production could be geared to. At the outset it is vital ro ascertain where, for instance, supporters of social economy can be found, which services and which producrs ate required and are being purchased by rhese people, and how chey could be encouraged to consider buying from enterprises within the federation? Also,, how can the general public be persuaded to select their products and services from rhe social economy rather than from businesses that are under the control of privately held international capital (Mb'venpiclc, McDonald's, and others).
Supporrers of social economy are most likely to be found among members of new social movements and possibly among the labour unions and small-scale industry and trades. Greater market opportunities for organizations and members may exist here, whether in the area of printing, banking, bookselling, health care, counselling and therapy, leisure-time, ere, making ir essential to look for market openings. Federation working groups or Specialist staff-members could be set to this task and prepare new business activities and enterprises.
It is considerably more difficult to find ways to use welfare stare funds designed for srop-gap relief and for the re-integrarion of the unemployed, underemployed and poor people. Businesses organized around grass-roors democracy within rhe federation
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154   Susanne E/sen and Isidor Waff/mann
could, on behalf of the welfare state, take on tasks of education and training in order to use the chance to ptovide education beneficial to social economy. And furthermore, businesses within the federation could use the unemployed to produce public goods and services. The greatest disadvantage in getting involved in this market opening—although considerable funding is available—is the fact that social economy would make use of compulsory work in order to raise the number of companies with a grassroots democratic structure - and to increase the number of workers within the federation. In reaching these goals the social economy directly contributes to the maintenance of welfare state clients as dependent consumers. Hence.this continues to help lead welfare state clients into capitalistic wage labour, a goal from which social economy, in reality, wants to refrain from. Furthermore, the federation would leave itself open to blackmail and dependency in- as much as welfare state funding can be rescinded at any time.
The situation can best be dealt with when marketable goods (products, services, teal estate) can be produced and built with the input of unemployed and impoverished people. Although capital (usually the petty capital of small trade) is subject to competition, there are more and more opportunities for cooperative enterprises. Currently there is considerable pressure to deal with the growing numbets of the unemployed by creating productive, meaningful activity. Hence it is conceivable that welfare state clients could build housing for themselves and others within a co-operative, and thus be participants in the products of their own labour. Nevertheless, the danger of dependency and extortion remains real. One possible way of dealing with these contradictions and disadvantages is to cake on only those welfare scare contracts where the clients are able to fill a permanent position, assuming this is the consensus among both parries. On the one hand, this would limit the levels of dependency and potential for blackmail and expand the work force of the federation, on the other, this would offer a guarantee of sorts that the federation, as a land of 'co-operative elite', would not distance itself from the rest of the populace. In short, if social economy participates in the welfare state  programs of integration, these
efforts should lead to permanenr integration and employment for the unemployed and impoverished, at least to the extent that that is what both parries want.
5. Credit creation in social economy using internal and external resources
The grearer rhe amount of temporary or lang-rerm surplus and liquidity that can be merged, the greater the chance of creating credicand subsequently providing the federation with funds for expansion. Surpluses can' be brought together in a more-or-less individualized manner, depending upon whether the federation has its own banking and credit institution. If it has none, the individual businesses can decide for themselves whether to give one another credit. If they decide to do so, it is also possible that a system of consultation and 'patronage' could be used to limit the danger 'of losses. By providing collateral and other securities for each other, businesses may also be able to have banks provide them with more flexible and higher sums of credit. As a mote general possibility of creating credit, both businesses and the members of the federation could use-only certain banks for their banking needs and for their surplus funds. In return,- it would be incumbent upon these banks to provide credit which, in accordance with common banking practice, is available in relation to the value of funds on deposit. If this cannot be negotiated, the federation will lose valuable opportunities for -financing and expansion. But businesses must be warned against becoming dependent upon banks, especially if these are active not only regionally and-nationally but also at the international level. Thus, it is advisable to draw credit from ideologically like-minded banks or from one's own credit institutions.
But funds can also flow into the social economy from outside. It is possible, for instance, that ideologically compatible retirement funds, banks or other organizations and individuals (especially from the new social movement groups) could provide rhe social economy with credit, orin other words, invest in the social economy, and, more specifically, in its
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Community action towards social Integration and prevention of poverty 155
?ia.-.v. .terprises; Hence credits may be paid dir-^^coiibusinesses; or through their own or other edi ^institutions andbanks. In the case of outside iriks^icswould'be "advisable to develop funds tied ilth&V^va^icernent of social economy.
L^^vancement and expansion of i uslness and socio-culturai uiitegratlon In social economy
f&IfederatiDn. of decentralized businesses is p'articu-^y|dep^endenD.upan the maintenance or unity and |ldyaItS;among its business enterprises. In particular, ^mjsjriecessary to counteract the danger or enterprises Ijprentually' leaving the federation once they have yacriieved'a'certain affluence because of their parti-
Sgpji^on, in.it, i.e. the danger of 'privatization' of
^gtofia*. without the federation receiving compensa-ktionlfor its contributions. A basic democratic contra!
iofrthar own capital
resources and prd&ts within the
pfompahies"and the federation provides a certain BigfWrfty    .     .   :,     .     .... . ...
Mdegree or security, but in addition certain explicit
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grilles" ior entering and leaving the federation need to !|lbe.iestablished. This might involve, for example, a |$federatian;t3x, fees for joining and leaving, or direct ^payments for any services drawn upon via or from Mthevfederatian. Furthermore, integration and synergy p'dt'jthe-federal level can also be achieved through joint IpeEvices in the area of insurance, tax and financial ^counselling, legal services, ofEte and communication ^services, market research and management cansuica-"fctuon, and the organization of leisure time and cul-f,v,tural events.
itpferfJChe socio-culturai bonds among .the individuals ^active in a federation can be promoted in various f^ays'and at the same time be accessible to outsiders. " |Since people active in social economy—as the experience- 'of• self-managed firms has:shown-—are often l^cjuite involved in. social action programs, socio-culturai integration for the federation may be Jinked ^'tp^the cultural events of such organizations. At the fysnme time this provides a way of opening up the
'■■federation to those outside.
^ -si-; Another concrete method is the use of a local, ■=i money-less form of exchange (which is incorrectly
seen by many as a means of guaranteed subsistence). The output of chis (shadow-economy) production is, however, so minimal that it can be regarded rather as pocket money. Much more significant is the effect that ensues from contact between people. With very few resources, the federation can implement a trading centre for its members and for outsiders with the help of a market newspaper and notes of exchange. This enables everyone, both children and adults, to provide services for one another. This way, the reciprocal conditions for a two-way exchange relationship are made easier and more general foe a particular community in which all possible services can be offered, requested, and traded. A central coordinating agency manages the membership contributions and trading accounts, which are granted interest-free start-up credit.
7. Steps towards developing social economy
With such modest efforts, how will it be possible to help establish an economic culture with a future and to follow new perspectives in everyday practice? In view of the requirements for societal development, three principles of action can be defined whose realization will provide the steps towards such a transformation.
The first step involves thought and action in the cote areas of development as a means of focusing individual efforts on the internal and external possibilities for development and on che possibilities of wotking in combination with others and as a network in a local community. The knowledge of societal needs for development can expand the perspectives in current practice. Traditional measures of employment can, for instance, be escablished as preparatory phases for setting up co-operative organizations. This does not mean, however, the removal of individual enterprises from the market, but rather their integration in a common economic network. This principle is also related to the creation of common economic models of subsidy and investment as a result of the servicing functions of capital based on the model efforts of the 'Equitable Pioneers of
156   Sussnne Elsen and Isfdor Watlimann
Rochdale' (founded in 1S44 and considered co be the fathers of che modern CD-operacive movement). In rhis kind of model, profitable activities are combined with communicy-orienced tasks. A concrete example of a case to be found in Luxembourg, in which success is hased on such a combination, will be presented below.
The second step involves systematic anchoring in che community as conscious integration and reintegration of economic efforts in the social and cultural structures of the community. The process of setting goals at the grass-roots democratic level, the linkage of learning and co-operative production, and co-operation of different forces in the surrounding territory are forms of restoring damaged economic, social, and cultural connections which are the determinants of human life spheres. A real-life example of anchoring in the community that was developed, and which led to further development, is the 'Coopetative am Beutelweg e.G.' in Trier and the community enterprises which .work with it in an integrated system (Elsen 1997; Elsen 1998).
The third step involves the development of an 'autonomous' grass-roots sector in a regional network. Community economies are diametrically opposed to the system of goals, guiding principles and principles of co-ordination of che dominanc economy. They represent a unique economic culture and are dependent upon the networking of enterprises and other organizations in their surroundings, in order to avoid being eliminated in an environment dominated by competitiveness. They need their own consciousness, supportive conditions, and the resilience to pursue theit own development. Such an effort to create a supportive network can be seen at the Verein für Soziale Ökonomie Basel (Basle Association for Social Economy).
The Basle social economy project
Units together to .guarantee an existence at the ground level. Create local circuits of money, goods and services. Prevent resources from being drawn away from a region by creating models for participation and grass-roots control of the use of profits. Don't- wait for governmental spending (even in
Switzerland funds are scarcer). The way to save thi ■ physical and sociocultural basis for human existence is to he found in the construction of a social economy. Its participants need capital resources that come from within the region and can be used for. the region. The businesses and organizations of social economy in Basle and their workers are counting on economic autonomy, social security and the stimulation of the . regional market. (Contrasce. 1997) ..
The Association for Social Economy
In 1996 the Interest Group for Social Economy was established with the goal of uniting and strengthening already existing social economic organizations and initiating che founding of new organizations and enterprises. In order to pursue its goals in a more comprehensive way, its members founded the Association for Social Economy on August 20, 1996.
The association 'builds' the foundation on which social economy is being formed and ir is developing, in a spiral-like pattern, into an ever larger network of organizations and individuals. From time to time die association itself, establishes companies and organizarions to fill certain gaps or co help maintain the patterns of growth. For this purpose it has the support of an advisory council and a group of sustaining members.
The association has established the Cooperative Network of Social Economy, the Association of Financial Services and the Inscicuce for Social Economy.
The Cooperative Network of Social Economy pursues the following goals: ■
o preventing loss of tesources and promoting investment of resources
• promoting the exchange of products and services among its members
© enabling services and products to he exchanged without the use of money
© improving the commercial success of its members
© finding new markets and establishing businesses to satisfy them
Q aiding che job marker within the network and enabling long-term working and personal careers within the network
Community action towards social integration and prevention of poverty 157
Iii-;
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' igtthe^SDcial, cultural and political rela-. jfamong^individuals involved in the net-
__inelthej.network more ■ attractive for existing
imre'ibusinesses and organizations.
EfAssqciation for Financial Services serves the sTanbl^organizations within the network by
Cgaruziqgf;Credic and che necessary collateral and ^e^Qticies.
jingjicp^adrninister the earmarked 'Investment iSocial economy' ^services in the areas of insurance! social ^^^Ks^,qaxes, book-keeping and legal matters l^^nKllingjin questions.of product development,
dieting; and production planning.
■'- ■ ^
Institute'for Social Economy is intended to
^^"rm^the, public; about social economy and its ceg rial. d ey dopmen t
tot íf
ic courses on the issues of social eco-
adSance-jthe..professional, economic, political and
Kultural .skills of individuals involved in social ^economy
Ipro^yide. assistance through research and con-^ulting'-.fot the.'Cooperative Network of Social Jiepabmy'i-.and the 'Association of Financial Ser-
.|«6fFer..s,tatements on social economy to the media l^^'jencourage publications dealing with social ^economy,'
^fidgEumenc the course of events surrounding social ||||ieconomy at the local, national and international
levels.
™"Another, somewhat similat, example of what hap-flpensf'when the supporting conditions function well pslf evident in the dynamics of the Italian co-|operatives which are'presented in section 7.3 below.
|^.'1'"ASJ—a joint economic project group in ^Luxembourg
pioneering spirit and a productive mixture of social ^commitment, entrepreneur and youthful energy led Pto!the establishment of a crystalizing point for social
economy in the southern area of Luxembourg along the border with France. ASJ (Action Sociaie Pour Jeunes/Sodal action far youth) is a joint economic model whose strength lies in making astute combinations and in networking.
The 'Action Sociaie Pour Jeunes' (ASJ)
The three founders of ASJ1—a computer specialist, a communications scientist and a social worker—discovered their entrepreneurial talents while still members of the Scouts {Pfadfinder). In order to finance their ftee-time activities they collected horse manure, packed it in bags and sold it to hobby gardeners..The growing demand led them to operate a stand outside a speciality shop for gardening needs. When they could no longer meet the ever higher demand, they had to give up theit lucrative trade to a stranger competitor in the market—a clear case of failure through success. The young entrepreneurs did not give up altogether; instead they looked for new market opportunities—a compost centre, a leather shop and a computer agency. They founded cooperatives to co-ordinate their market strategies. Since 1986 ASJ has developed an array of businesses and projects, based an the market needs in the local area, with the aim of fighting unemployment among young people. The projects are oriented towards the potential talents of young people and are model cases of planning, labour organization, business activity, and quality training.
By ics own definition ASJ is an enterprise of economic Solidaire and is an exemplary combination of profitable and socio-ecologically viable concerns. By immediately reinvesting its revenues and subsidies, it has been possible to carry out social, cuitutal and ecological functions. At presenr ASJ has subcontracts with 115 underprivileged teenagers and young adults (Action Sociaie Pour Jeunes 1996). The overall self-contributions for the funding of the businesses—including the social, ecological and cultural areas—amounts to 75 per cent; only 8 per cent comes from national and 17 per cent from European funding agencies. A boarding-house- for young people was built with self-raised funds and is operated by che ASJ without public funding. Social services have been established to accompany the work-
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156   Susanne Bisen and Isidor Waltlmsnn
training and employment: programs. Along with bilateral or multilateral projects Df limited duration sponsored by EU agencies there ate also permanent training and employment sectors. Such training is available in three future-oriented fields of work for which professional profiles have been developed-— rraditianal job-training in manual trades and newly developed professions dealing with the environment and computer specialization. An interactive multimedia project for career orientation developed by ASJ was recently commended by rhe EU.
ASJ is linked with unions, administrative agencies, schools and private businesses as well as with government  agencies  and  citizen  social action groups. Thmugh rhe co-aperation with local businesses, and in continual co-operation with them, it has been possible to design job areas as well as training programs. In 1993 ASJ was approved as a rrain-ing institution by the chamber of commerce. ASJ has built up a network of enterprises in its social surroundings; it co-operates with these enterprises ro help its graduates to become integrated in the job market and it handles -job-training functions for these businesses. Furthermore, the ASJ has contracts wich 12 municipalities to provide public services. Its own consulting agency provides market assessment studies for the area of solidary based economy, advises smaller businesses, develops alternative job market strategies and ecologically beneficial methods of production. The 'research unit' prepared studies on relevant. social, political, and environmental issues. In co-operation with the independent Luxembourg labour union federation, it published a study with recommendations for fighting unemployment and set in motion an intensive consultation process for n 'territorial labour pact'. This territorial pact was given high commendation and was subsidized by the EU Commission in 1997. The 'Centre d'iniriative seccoriel' and the 'Centre d'iniriative locale' are coordinating centres for a wide range of local activities, which range from developing and' maintaining a 'biotope', including its use by local groups for didactic purposes; offering courses in handicrafts and artistic crafcwark; caking over the duties of the highway   maintenance  agency,  and  providing bookkeeping and secretarial services. Last but not least,
ASJ has testored a charming old mill, which now houses a restaurant and an attractive conference centre. This infrastructure offers an ideal communication centre for future developments in the.enterprise and for the local region.
This example shows what is possible when labour and training qualification programs are able to conduct their own process of developmenr and are not misused for people being moved around in circles in an imaginary labour market. Perhaps such a situation is only possible in a country as small as Luxembourg, where co-operation and political will can be effected at all levels-of-society. This would seem to justify autonomous, politically tenable, regional- solutions by their releasing new quality and important innovative farces. The independent status of ASJ, made possible by an unusually high level of self-funding, is the best guarantee of a consistent adherence co a philosophy of action and a beneficial position when negotiating forms of co-operation with all other participants. This independence is based on co-operative economic forms of investment and development and on the combination of profitable activities and public welfare tasks.
More than all other factors of success,■ this is a cose of individual actors as the focal point. The new economy needs new managers who do not see their goal as ensuring shareholder values, but as taking responsibility for the public good. It needs new business people who can think and act within a network and in hew constellations. All these factors speak for the need of economic actors to form co-operatives which can react creatively and continually adjust to changing situations.
The example of ASJ helps to identify new and different combinations which to a great extent can be attributed to the entrepreneurial- potential of its actors. The business group combines economic, social, cultural and ecological goals. Through their simultaneous activities, a wealth of synergies is being created. With its activities at rhe local level connected to the regional, national and European levels, the ASJ has helped to facilitate the flow between different levels and the communication of developmental needs from 'below' to 'above'. The cooperation and partnerships between industry, polit-
Community action towards social Integration and prevention of poverty 159
etjucacign^and' social services, as well as with act^n|gtpups and movements, makes ic pos-■^ompletely-'new combinations of solutions Hjj!efoped.-l6cally. The combination of perman-agcJM^esiand'project-centred tasks.will, in tetms ^otl^qrganizatiori' and activities, enable both ^^ah^i'qffithe-existing structures and innova-jiUso^noteworthy is the combination of high-*antjSp.w-tech areas of activity, albeit the use of hnbfbg^setves "exclusively ecological, social and jur^goalsV^'-;'"  : ■ ■ •
ufiejn^ddi'character of systematic planning, exe-i^dnftaridrdocumen ration ensures that the effects controlled'and-knowledge is transferred. An our-'tahdinglfeature is" the consistent commitment to jpJjdaricjiMbased economy and the combinacion of prdfin&Ie;'and?non-profit oriented areas. The profit-.■oaent^diTareas-of "work are not done away with; lSfead^theiJprofits are used to advance additional iOTJaeSpWithiri a wider scope of goals.
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■2^^;:'Cooperative Am Beutelweg' as a ^^eforjfinental nucleus in an underprivileged city jtfelgbSourtiood
pw^'if^'-i '
iW£arc builders of communities, not builders within tfaonrmumty.' (Rubin 1994, p. 407)
^^Cooperative Am Beutelweg' is the product of ^g^.term:;Community acdon work in a socially |d^priv'ed^'part of the city of Trier. This community
egral parr
neigh-
bourhood groups, self-help organizations and institu-ciönsy^This-is a-decisive factor, since the founding of jja^business'''of its size, at the instigation of those ilnyolveddn social community work, was not a part Ipfitheir mandate but rather the logical outcome of plrhe'^problems in this part of the city. There is much ||tf($be5-'said -for the claim that only a self-governed ^neighbourhood ' citizen centre such as the ^Bürgerhaus' can lead tD a consistently communal pand grass-roots sryle of democracy in a business held Mini che hands of the residents, because the interests plofithe initiators do not prevent such a form, and ^hierarchical structures do not inhibit the consider-
able over-extension of its mandate. This special case is even more significant because such examples within the socio-political landscape in Germany are rare. The housing co-operative formed in 1991, in which the residents ate the propeccy owners, could be a pioneer case of a socially-oriented employment model for residential areas in which there is a risk of unchecked privatiiation of real estace.
The 'Cooperative Am Beutelweg'
The 'Cooperative Am Beutelweg', holding about 140 housing units, and a subsidiary business, HVS (Reality and Renovation pic) which was founded in 1995, function as a relatively stable core within a largely autonomously developing community economy in a disadvantaged residential area in the northern section of Trier. Since their founding, the employment situation in this already weakened border region has become even worse, especially for the residents of this quarter of the city, who have low-level qualifi car ions and have become marginalized over a longer period of time.
In view of such cumulative problems in this area, the founding of rhe co-operative was the only reasonable solution. A large percenrage of the residenrs was without jobs and/or in very precarious positions. Many families had already been living on social welfare for generations. The residential buildings and their surroundings, primarily publicly owned real estate, were in a state of decay and were ac least partly uninhabitable due to a decade-long pattern of disinvestment. For years the residents, assisted by the sraff members of the Bürgerhaus, had been campaigning for improvements in rheir living conditions.
In 1989 a rumour that these buildings were about to be transferred to private ownership was substantiated. The residents and the buildings were becoming an increasing burden for the owner's association, based in Bonn. When the residents demanded clarification of rhe rumour, it was finally admitted that sale of che housing units required government approval. In co-operation with che sraff of the Bürgerhaus and a group of political and community acrivitisrs, academics and church members as well as infiuenriai citizens in the user groups within the
in and Isidor Walilmann
d a citizens' action group with the i a socially acceptable solution foe :a. The decision to establish a co-^^^..^ lj^j the houses, to renovate them by employing the residents themselves in wage-scale jobs, and to administer them was finally taken after none of the potential buyers was willing to agree to take over the administration of these houses in a manner suited to the residents' needs and conducive to job creation. Using a well-developed concept for a permanently guaranteed, affordable residential project and renovation based on socially acceptable priorities, and through tough negotiations and intensive efforts to convince any opponents, it was finally passible to realize a seemingly Utopian plan. The residents of the 'social hot-spot' wete to take over their own living units in the fotm of cooperative praperry, securing for themselves and their children life-long rights of residency at affordable rates, and also creating the option for their own employment within the framework of the renovation and later servicing of the buildings and their surroundings. Naturally this would nor have been possible without the active support of both the federal government, which was willing to negotiate over the price of the real estate with the newly formed cooperative, and the state of Rhmeland-Palatinate, which subsidizes the renovation plans within the legal framewotk of public housing assistance, and finally the city of Trier, which acted as guarantor for the purchase price and bote the costs of advisor)', counsel for the ptoject and social service assistance for the residents during the difficult period of renovation.
The sale and transfer of the teal estate into cooperative propetty has been only the first step in a highly complex process of establishing and conducting a new business enterprise. Especially demanding, difficult, and lengthy are the incumbent needs for co-ordination during the process of renovation. Yet without such a thorough renovation there would have been little justification for taking over the buildings, as nothing would have been changed in the living or working situation. It was a particularly fortunate "coincidence' that at the same time that the co-operative was founded, an extensive sub-
sidy from the European Social Fund was approved. This enabled a first group of social-welfare recipients to be given temporary, wage-scale jobs within the project and work within their own neighbourhood, an additional value-creation effect. Hoping to create permanent jobs and strengthen the community-oriented economic cycle, as well as achieving profit outside the local area, a subsidiary business named HVS (Reality and Renovation pic) was established in 1995. With this it was possible to cteate 30 permanent jobs and training positions in key areas of the construction and related trade branches within this area of town. The relationship between the cooperative and its business subsidiary has led to the founding of further appropriate businesses. Still mote ate now in various stages of planning. These include enterprises in the area of co-opetative (participatory) management of municipal real estate in the neighbouring districts or of construction materials recycling, the sale of used building materials, a neighbourhood public workshop, etc. Such plans tequite rime and also the right people. As the cooperative itself continues to develop, there are plans for the creation of a day-care centre and a business for services and support in which mainly women from the residential area would be involved. The kinds of services offered would be tailored to the needs of the businesses and institutions in the community network and to the needs of certain target groups in this area of the city. It will include, among other things, family assistance services, housekeeping and home health care, and catering for the local daycare centre and senior citizen groups.
The 'Cooperative Am Beurelweg' is purely a social co-operative but it must survive on the competitive market since no correspooding allowances are being made for it. The biggest problem has proved to be that real estate co-operatives in Germany need to have a certain minimal size in order to survive. The mandatory membership in one of rhe monopolistic inspecrion associations and the legally mandated annual inspections devout a considerable portion of the proceeds needed merely for the basic upkeep. A lack of capital can only be compensated for through work, and a small organization which works with long-term disqualified persons is soon aware of Jrs
Commun/ry acf/on toivards soaa/ integration and prevention of poverty 1G1
iftauotis^-The very slender, shoe-string-like ^^^qfttWeJcD-Dperacive and the resulting lean per-annk^sTnjation' (one salaried staff member) for the SgmnEhaitiiri--'of highly active business operations, |Molc|kMpirigi planning and control of housing iaincenance/is.correspondingly difficult for everyone ^^|he:'CDnsiderable complexity of the busi-^^^ffiQiires; the uneven development in the dif-fe^«branches of the co-opetative, che numbet and sfraj'.of-.the participating partners, the kinds of 3usmesses,trCDmmittees and matters of concern all ^ttftmtensive verbal arrangements and agree-^^^pbqut:Tche responsibilities to be shared. The ^c^^k|^6fi;the former military barracks will take ^^^^U^ie)'iind is a demanding task, as well as quite e^pens^e^T^.'guarantee that the financial support of g^subsidy programs is forthcoming, it is neces-^^^□|k.eep;.up the requisite self-investment.
's^np\endto the list of ensuing difficulties, jjh^^thaiyresult from the enormous changes in the :peja®|tuaciDn' also need to be dealt with. By ^ingifin'a district known for social problems, ^^ic^aricej' "a new social gap is arising between the sTaencsilofjthe renovated and those of the not-yet £noyated; apartments as well as other real estate and ^neighbourhoods in the area. Furthermore, it is neces-
m
transition to
sarylrbnfsame residents to make the tta ^■K^rj^wviqle as members of a co-operative. Among _ ^^^hings'it'is especially important to give full recognition'to what has already been accomplished, Snc^the-:memory of failures, a permanent character-
^fc^ffpieaple from disadvantaged residential areas, ''S^bV'reversed in only a few years. IhepGooperative Am Beutelweg and other com-
imuhi'ty/'businesses in this area of the city were .^^^opéd tn the face of very real problems, of con-féretelneedsand of-specific options available to the jMmmunity. The paiticipants in the project had to fj^^olved in the initial developmental work at ail y^íp^ls. Unlike other projects in Hesse or in North íf^ine^Westphalia, where there is a well-established f^geíof-subsidy programs and a political platform l^ptiisadvantaged residential areas, this project is iunique:'and 1 thus open to attack by socio-political iactorsi'.who would rightly demand large-scale polit-lickl;" solutions instead of single-case ones. The com-
W- ■
plex tasks of initiating and co-otdinating the infraction between people, organizations, resources and funding are extremely time-consuming and demanding. As a result, the participants are likely to become self-exploited and overtaxed. The amount of volunteer work needed and the level of qualification required are so high that it appears questionable whether, under the citcumstances, the responsibilities could be shared with others. This would be a quite difTerenr matter in the supportive framework of self-committed social co-operatives in an autonomous sector. In this specific case, the project was able to create che requirements for its existence through its co-operative process of development. Hence it can be said, as a generalization, that precise knowledge of the community and its potential, the readiness of the residents, and a horizontal and vertical support network ate imperative conditions for che development of community economies.
7.3 Co-Dperatlve movement in Italy2
In their search for strategies for dealing with unemployment, poverty, and social distribution problems; countries in southern Europe, in particular, have taken up social co-opetacives as a suitable kind of organizational structure. The expansion of social cooperatives in Italy has taken place within the framework of a strong co-operative . movement. Self-administration is highly valued within Italy's business culcute. In comparison to Germany, Italian co-operatives are small and locally oriented. There has been a steady growth since che 1970s; in the period between 1980 and 1990 Italy showed an increase in production co-operatives of 109 per cent (from 17.88Q to 37,339) (Haensch 1997a, p. 153). In 1988 there were approximately 150,000 primary co-operarives, or nearly 20 times as many as in the Federal Republic of Germany (Beywl and FHeger 1993, p. 143) The largest concentration of cooperative production in the world can be found in the area of Emilia Romagna. In the mid-1980s man; than half of the work force was engaged in cooperatives. In fact, the entire spectrum of economic activity is organized through co-operatives (Von Randow 1994). The jump in growth can also be
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162   Susanne Elsen and Isidor Walllmann
explained by the face that new economic actors are creating co-operatives, discovering new fields of activity and serving new needs. This leads to cooperative practices foe freelance professions, new service-oriented agencies, software agencies, and also leisure-time, education and culrural organizations. The structures for funding, supporting and networking co-operatives at the.national, regional, and local level are exemplary. Since the end of the nineteenth century, governmental regulation has continually adapted to the developmental needs in society.
The readiness of the stare to give active support to co-operative projects is also due to that fact that it can dispose of costly support systems by leaving these casks to smaller organizations as a form of subsidy. The ability and willingness co work in co-operatives is not least a question of an aggressively democratic mentality and a popular culture of quarrelling (Concraste 1997). Italian society Is quite evidently sceptical of official governmental powers and has had to build up durable informal structures and the' concomitant mentalities and competencies.
The growth of co-operatives in Italy, 1886-1997
Since rhe beginning of the twentieth century, the feudal structures found in the agriculrural secror up until the 1940s had generated strong organized counter movements of dependent agricultural workers (braccianri). The handicrafts production had long since been organized in the shops of craftsmen and in smaller co-operative enterprises. Already by 1886 the 'red LEGA', the national association of cooperatives and supporting agencies, had been created, and the Christian confederation of Italian co-operative memhers followed in 1919. The first co-opera rive-friendly legislacion appeared at the beginning of this century under the moderate leftist government. In the constitution of 1947 the state was obliged to suppott co-operative Forms af economic activity. In Article 45 it states: 'The repuhlic recognizes the social functions of the co-opetacive with its self-help character and without the goal of private profit-seeking. The law supports this and favours its
growth through appropriate means and guarantees its character and goals through suitable control measures' (Von Randow 1994, p. 83). This constitutional article was given further specification in 1971 in Law no. 127: It is incumbent upon the Ministry for Labour and Social Welfare to 'take initiative to ensure that co-operative structures are developed, CD-operative principles propagated and professional, qualification af leaders within co-operatives facilitated; fVon Randow 1994, p. 87). The Civil Code names the fostering principle as a specific quality of co-operatives. According co this, co-operatives are to supply their members with goods, services, or work opportunities under favourable conditions. Since 1997 a special law for the promotion of co-operatives involving youth has been used as a means for fighting youth unemployment (Beywl and Fiieger 1993, p. 145). In 1991 a law for the regulation of social co-operatives was passed and recognized 'cooperative social!' as being an autonomous form of enterprise. Two further changes in legal measures that help to foster the founding of co-operacives were passed in 1995. First, it is now possible co found a co-operative with only five, instead of nine, people; and, second, permission to use collective leadership (without the selection of a chairperson) has been given. These legal measures are solid proof of the social acceptance of co-operarives and the political will to promote them. In Iraly the co-operative sector is sustained by a widespread acceptance among social forces that has come about as the result of the historical co-opetation between the union movement and co-operative associations and because of the coherence of interests between the labour movement and the liberal state. This acceptance and active governmental supporr have brought about the development of a political culture of co-operative solutions. The socio-political integration of the co-operative sector and basic economic attitudes differ significantly from those of the German tradition and course of development. Since the law regularing social co-operatives was introduced in 1993 (Insrituto Italiano . . ., 1992, pp. 13f.), many co-operacives have,been established which have taken an a pate of the social services within the local area. These have been given over by
Community action towards social integration and prevention of poverty 163
^rm^|l|'agendes to subsidiary agencies and ylwithtnew.* needs of the community, which have senSp^ough-...changes in the soao-demograpnic jcessessinithe rides and in rural areas. They can mivided^-.accocding to their goals, into type A «|eSin;|the' 'areas of education and health) and ^professional integration of people with ■Uf5^^p|Jsee;aiso Leader, 2 1995-96). The social ^^^ran|es/.q&,type B are involved in agriculture, '"^^^|[h^tlustry and commerce. Within the pto^u^Qfi people with difficulties can be found lti^m7rriinority groups, handicapped and men-|i^eQpJe,.children from problem families, drug .-iers^fBiivicted criminals in alternative programs ifimpr-isbnmenr, and so forth. Nearly 65. per cent of ^e^^operatlve' membetship are younger than 30 fef|age.^,They form primarily small enterprises. ^c^r|toibenent from tax shelters, tax reductions, ^subsidies, at least 30 per cent of the employees iust|ber.handicapped or disadvantaged. These are Ipsofjexempted from obligatory social insurance con-^^^tJo^pJ^Parailel to social co-operatives, there are .sj^fe|gperauves which pursue ecological goals, ^ot^ra'^operatives are members in one of the two abtella^prganizations of the Italian co-operative SyKetn%At. the tegional level the autonomous cooperatives are united in a close-knit networking
Ibs^Cl-      •   .        •     i , • ■ ■ system^nese regional consortia and their intensive
scnnonik^policical activities form the contacts, the netw^l^,the infrastructure and the lobby for cooperatives; Their central task is to acquire contracts mcjlcp?ordinate their completion through one or mote&of. the autonomous member co-operatives. faence,^.for example, the 12 social co-operatives wKiSifwock in. landscaping in the province of Bres-Giaiihttve formed a network with one another called ^iGp.:-Yerde.' A steady flow of contracts is guaran-ceed|byi;having a high proportion of the official con-tractsfgiyen to the consortium. The regional consor-dafareUn turn members of rhe Consortia Nazianak ifella':CoQperazione di Solidarieta Socials 'Gino MatSar-eWpiwhich takes care of the advanced training and continuing education of co-operative members, con-sulung,:research and publications as well as 'general
It-
contracting', such as making contracts with the social insurance agencies.
8. Conclusion
Given the dramatic social and' economic changes today, it is necessary to find answers to the following issues:
• guarantees for a basic subsistence and a life per-specdve for more and more people in a society which continues to be oriented around wage labour;
• the social integration of people who have no life perspective; the maintenance of human capital and social capital and, ultimately, of the civilizing activity of the community;
• ways to meet the needs of the community, which are already at stake in spite of its affluence as a result of the processes of de-industrialization and the concentration of capital;
• maintaining responsible management and use of natural resources far the sake of both the next generations and the biosphere by means of an 'economy for the whole house'.
These are some of the issues and problems for which social economy is seeking to supply future-oriented answers. Social economy is primarily concerned with guaranteeing subsistence and meeting the needs of the people in a specific community; it engenders social integration through participation instead of marginalization and takes into account the limits, of our natural resources. Social economy is founded upon the active involvement of community members. As has been shown here. in several examples, communiry-based social work can be instrumental in creating, reinstating or redesigning social, political and economic bonds within the community.
.Translated from German by Martha Baker
Notes
1     Action Sociale Pourjeunu, ASBL, P.O. Box 5027, L-105D Luxembourg.
WBw^-rfr Vf/ -BIB
1
mm
164   Susanne Elsen and Isidor Wallimann
2 In addition to the resources deed here, the information given below is bused on conversations with Italian representatives nF the CECOP (Cornice des Cooperatives de Production ec de Travail Assacie), visits with ca-aperacives in northern Italy and, last but not least, on my own experiences while living in Emilia (5. Els en).
References
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Authors' addresses
Susanne Elsen, Weiterbildungsnetzwerk Eurosozial (ESO), Universität' Trier, DM-Gebäude, D-55286 Trier, Germany
Isidor" Watlimann, Höhere Fachschule Im Sazialbe-reich, Thiersteinerallee 57, CH-4053 Basel, Switzerland