ELSEN, S., WALLIMANN, I.: Social economy: community action towards social inegration and the prevention of unymployment and povertv EJSW, Vol. 1, 1998
European Journal of Social Work Vol 1, No. 2, pp. 151-1641998
Social economy: community action towards social integration and the prevention of unemployment-and poverty
by Susanne Elsen and I'sidor Wallimann
In these times, when unemployment, marginallzatlon 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 on 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 die end of the twentieth century—in the aftermath oi world-wide economic, technological, and social changes and the endangetment or destruction of the natural basis of life—the industrialized nations ere faced with probiems never known before. Now that die market economy no ionger 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 cheir ability to be socially productive, and .the active development of a carnmunicy-orienced basis for this purpose are the central tasks of society.
The changing and broadening meaning of community as a place for mastering the challenges of life and as a framework for developing large-scale, fucure-oriented solutions to social, ecological, and economic probiems corresponds to the broadening meaning of community-based social work as a comprehensive effort to shape social life and effect social change.
This interpretation of community-based social
work is a reflection of its original cooes in the 'community work' which was first developed in the USA to cope with the economic, cultural, and social consequences of utban industrialization and the influx of settlers in the rural areas of che Middle West. Now, just as at the beginning of che Industrial Age, social gaps are becoming acutely evident and, hence, che cohesiveness of individual lives within the com-municy needs to be thoroughly reorganized.
Community work is a comprehensive approach to creacing, 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 wotk of Jane Addams and other coworkers at Hull House in Chicago cowards the end □f the nineteenth century. Hull House was an impetus for socially-oriented urban development and social work. It focused on public surveys on poverty and public health, assisting the policical participation of che unempowered and forcing the implementation of social reforms. It was a centre for inter-cukural learning and SDcio-cultural development, and lasc buc noc least, it created community enterprises as a basis for economic self-help.
The keys to understanding community work in
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152   Susanne Eisen and Isidor Walllmann
its original sense are the comprehensiveness of its involvement in regard to rhe needs within its own. rerrirory, rhe concept of radical democracy, independence from govemmenr and economy, rhe acceptance of people as compecenr individuals and, consequently, rhe belief in their powers of self-organization. The autonomy of this position can also be explained by the Face that the^ American brand of capitalism was not, or only to a lesser degree, flanked by social policies and that self-help was always an essential requisite within society.
2. Social economy
It is to be expected that the world industrialization process will continue, capital will be drained off, and jobs exported. It is more likely that the poverry of the rest of the world will come to us, rather than our affluence spread to ic. Unemployment, underemployment, and poverty are more likely to spread and deepen, borh here and elsewhere in the world, chan to be overcome by means of current world capitalism, in spite of its expansion and periodic phases of growth. Moreover ir is clear that neither world industrialization nor the current 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 will run out and industrialized output will no longer be colerable for man or nature; meanwhile, the human population will grow at a tremendous pace. ("Wallimann 1994; Wallimann and Dobkowski 1997).
We need to find new approaches now Far 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 security fot existence through susrained, work-intensive, regional
self-maintenance. Social economy offers this kind of approach (Wallimann 1994;; Älinský 1994;Reiczes and Reitzes 1987)."■. ';"
Social economy does.not strive to keep seep with the multi-national corporations, but instead tries to avoid their dutches in an attempt to secure a basic .existence. Social economy is relatively work-intensive and its salaries are relatively 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 the victims of the labour market or the financially weak—or any other part of the population—bur rather for resources. Ic is not-seeking to divide a community, but rather to expand it through the integration and interconnection of resources. It is not striving for short-term, but for long-term synergy effects and success. It is endeavouring not to establish short-term, but rather tD establish long-term guarantees for subsistence for an ever larger number of people. IF i t is to achieve these goals,, ic muse ensure chat the men and women working in its organizations are participating rhe 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 controls. The 'profits' that have been created by these joint efforts need to remain -within the communicy.
Social economy ' can therefore be considered a 'grass-roots' based, regionally oriented federation of decentralized, autonomous enterprises run on the principles of basic democracy. At the regional level there may be further links between federations. Organized either as co-operatives, associations, foundations, ot stock corporations, it is important only that the statutes of the organization guarantee that the members have control over rhe capital resources and the profits via grass-roots democracy.
But how can a federation of self-managed business operations, alternative banks, alternative retirement funds, and organizations that deal with the reintegration of the unemployed provide mutual sup-
Community action towards social Integration and prevention of poverty 153
andjassistance? How can social economy be con-
"dSand,:Sbuilt:..up? This leads to four basic 'ionjjnjwhich' can be answered with examples actuaifpractice:
jHow- can the flaw of resources from a grass-coots
federation, into  the privately  owned and
-authoritarian business sector be prevented?
SHbw'.canthe input of resource! from outside the
, r- 4 '^deration be increased?
low-can' the credit volume within the federation
be^maxiraized?
'flHaw^can business and ima-cultural integration '4be4jencaiiraged and the federation opened to ^outsiders?
|c^each':of these questions there are several SJp^atid possible courses of action. They differ acearding;to the starting situation and the economic, ?Uucai}iand'social setting, and need to be adapted Jnefevet-changing state of affairs. Several potencial ai^ajready proven answers and strategies will be presented'in section 7.
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Preventing the flow of resources a^l'fr.orn social economy
usinesses within a social economy can be encour-a^e'dlto aigreacer or lesser extent co purchase goods ondjserviccs within the federation. Marketing newspapers that provide information about the main purchases.of .husiness enterprises can facilitate this. At ' 'jjsame'time, such information forms the basis for 'deciding whether and in what field it would be strategically feasible co establish new businesses within \djej;federation which could meet these purchasing needs, iThe. mutual business relations can also be .jao'Uitated-'and guaranteed with agreements on dis-jcount rates for members, an internal payment system such.os a 'federation check', or—where appropriate— wjjthi'lpurchasing quotas'.
|j§At 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 ^information 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 co spend their income within the federation. Of particular interesr is the equity formation potential of real estate. On average about 25-40 per cent of salary income is .likely to flow out of the fedetation for living expenses. It would be quite simple, if these funds were amassed, to 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 cd know which of the markets outside the federation production could be geared to. At the outset it is vital to ascettain where, for instance, sup-porrers of social economy can be found, which services and which products are required and are being purchased by these people, and how they could be encouraged to consider buying from enterprises within the federation? Also,, how can the genera! public be persuaded to select their products and services from the social economy rather than from businesses that are under the control of privately held international capital (Movenpick, McDonald's, and others).
Supporters 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 exisr here, whether in the atea of printing, banking, bookselling, health care, counselling and therapy, leisure-rime, etc., making it 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 tD
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154   Susanne Eisen and Isidor Wafflmann
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could, an behalf of the welfare state, cake on tasks of education and training in order to use the chance to provide educacion beneficial to social economy. And furthermore, businesses within the federation could use the unemployed to produce public gDods 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 grass-coots democratic structure ■ and co increase the number of workers within the federation. In reaching these goals the social economy direcdy 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 scace funding can be rescinded at any time.
The situation can best be dealt with when marketable goods (products, services, real 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 numbers of the unemployed by creacing 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 state contracts where the clients are able to fill a permanent posicion, assuming this is the consensus among both parties. On the one hand, this would limit the levels of dependency and potential- fot 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 progtams of integration, these
efforts should lead co permanent integration and employment fot the unemployed and impoverished, at lease to the extent that that is what both parties want.
5. Credit creation in social economy using internal and external resources
The greater the amount of temporary or long-term surplus and liquidity chat can be merged, the greater the chance of creating credit* and subsequently providing the federation with funds for expansion. Surpluses can be brought together in a more-or-less individualized manner, depending upon whether che federation has Its own banking and credit institution. If it has none, the individual businesses can decide for themselves whechet to give one another credit. If they decide co do so, it is also possible chat a system Df consultation and 'patronage' could be used to limit the danger of losses, By providing collateral and other securities fbr each other, businesses may also be able to have banks provide them with more flexible and higher sums of credit. As a more general possibility of creating credit, both businesses and the members of che federation could use only certain banks for their banking needs and for their surplus funds. In return,- it would be incumhent upon these banks to provide credit which, in accordance with common banking practice, is available in telation to che value of funds on deposit. If this cannot be negotiated, the federation will lose valuable opportunities for financing and1 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 cd draw credic from ideologically like-minded banks or from one's own credit insricutions.
But funds can also flow into che social economy from outside. Ic is possible, for instance, that ideologically compatible retirement funds, banks or other organizations and individuals (especially from che new social movement groups) could provide rhe social economy with credit, or in 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
^^mihesstenterprises',' Hence credits may be paid dir-
l^d.f businesses,' or through their own or other teediSinstitutions and banks. In the case of outside
||Eank^ic|.W0uld' be 'advisable to develop funds tied ktdifhUladvancernent of social economy.
^advancement and expansion of business and socio-cultural llntegration in social economy
pL|rederation. of decentralized businesses is p'articu-
farlyMependenc.upan the maintenance or unity and
. !uL   . . . ! ,
jpwty/ampng irs business enterprises. In particular,
liyf^ecessary to counteract the danger of enterprises
pe^Stually leaving the federarion once they have
flttchieved'a'certain affluence because of their parti-
Wmm* .'•..■',, ' c ..... r |||ipjy^n, in.it, i.e. the danger of privatization of
S^profits".without the federation teceiving compensa-
^pnUbr its contributions. A basic democratic control
Cbfluieir own capital resources and profits within the
BS companies and the federation provides a certain
IMeEree' oFsecurity, but in addition certain explicit
pSSfcy- '••" • .' •     , ,    .     .   r ,    . , grules'tor entering and leaving the federation need to
Mbe-lestablished. This might involve, for example, a
iSfederation'tax, fees for joining and leaving, or direcr py»s»!i it, .     , .
3tpaymenrs tor any services drawn upon via or from pAfej--•:..'•'   _/ , .        *V- ,
^Ma'iederation. Furthermore, integration and synergy
gTatithe-federal level can also be achieved through joint
iaservices in the area of insurance, tax and financial
SfcounsellinE, legal services, office and communication
^    Jj services, market research and management consulta-
sStiori, 'and the organization of leisure time and cul-
S^V^tunil events.
,yiSv'p^f^De socio-cultural bonds among .the individuals Inactive in a federation can be promoted in various ||'f,w1ays'and at the same time be accessible to outsidets. MSince people active in social economy—as the experi-|sierice-j.of• self-managed firms has.shown—are often Ipcjuke involved in social action programs, socio-f^tcultuxal integration for the federation may be linked j^rpipbe cultural events of such organizations. At the ■ijijsame time this provides a way of opening up rhe ^federation to those outside.
£5 fJ-Another concrete method is the use of a local, a- money-less form of exchange (which is incorrectly
1
seen by many as a means of guaranteed subsistence). The output of this (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 ttad-ing 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 rwo-way exchange relationship are made easier and more general for a particular community in which all possible services can be offered, tequested, and traded. A central coordinating agency manages the membership contributions and trading accounts, which are granted intetesc-ftee 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 socieral 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 core areas of development as a means of focusing individual efforts an the internal and external possibilities for development and an the possibilities of walking in combination with others and as a network in a local community. The knowledge of societal needs fot development can expand the perspectives in current practice. Traditional measures of empioymenr can, for instance, be established as preparatory phases for setting up co-opetative organizations. This does not mean, however, the removal of individual enterprises from the market, but rather theit integration in a common economic network. This principle is also related to the creation of common economic models Df subsidy and invesrmenc as a resulr of the servicing functions of capital based on the model efforts of the 'Equitable Pioneets of
156   Susanne Elsen and Isidor Wallimsnn
Rochdale' (Founded in 1844 and considered to be che Fathers of che madern co-operative movemenc). In this kind of model, profitable activities are combined wich community-oriented casks, A concrete example of a case to be found in Luxembourg, in which success is based on such a combination, will be presented below.
The second step involves systematic anchoring in the community as conscious integration and reintegration of economic efforts in the social and cultural structures of che community. The process of setting goals at the grass-roots democratic level, che linkage of learning and co-operadve production, and co-operation of different forces in che 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 communicy that was developed, and which led to further development, is the 'Cooperative am Beutelweg e.G.' in Trier and the communicy enterprises which .work wich ic in an integrated system (Elsen 1997; Elsen 1998),
The third step involves the development of an 'autonomous' grass-roots sector in a regional nec-work. Community economies are diametrically opposed to the system of goals, guiding principles and principles of co-ordination of the dominant economy. They represent a unique economic culture and are dependent upon the netwoclcing of enterprises and other organizations in their surroundings, in order co avoid being eliminated in an environment dominated by competitiveness. They need cheir own consciousness, supportive conditions, and che resilience ra pursue cheir own development. Such an effort to create a supportive network can be seen ac the Verein für Soziale Ökonomie BaseJ (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, goads 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 far governmental spending (even in
Switzerland funds are scarcer). The way to save tbi ■ physical and socioathural bash for human existence is to be 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 Basis and their workers are counting on economic autonomy, social security and the stimulation of the regional market. (Concrasce, 1997)
The Association for Social Economy
In 1996" the Interest Group for Social Economy was escablished with the goal of uniting and strengthening already exiscing social economic organizations and initiating the founding of new organizations and enterprises. In order co pursue ics 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 ic 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 organizations to fill certain gaps or co help maintain the pacterns of growth. For this purpose ic 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 Institute for Social Economy.
The Cooperative Network of Social Economy pursues the following goals: ■
o preventing loss of resources and promoting investment of resources
» promoting the exchange of produces and services among ics members
• enabling services and produces co be exchanged without the use of money
® improving che commercial success of its members
• finding new markets and establishing businesses to satisfy [hem
a aiding che job market within che netwotk and enabling long-term working and personal careers within the network
Community action towards social Integration and prevention of poverty 157
:dm6cin^^he.-.;social, cultural and political rela-[DjonsmpsfarnonEiindividuals involved in che nec-«naamam(&&
lalcinglthe^nenvork more ■ attractive for existing tandtfanire'jbii5inesses and organizations.
fi*e^ssqciation for Financial Services serves the t^p^essWand^organizations within the nerwork by
|^ffianiiing|;t:redit and the necessary collateral and athedlsediricies, „■.; ■■■ ^helping^tp^adrninister the earmarked 'Invesunent ^Sfegdal jEconoray'
^^"ng^seryices in the areas of insurance, social ^^^^^^^si'jfaxes, book-keeping and legal matters l^^^^f^lingiin questions,of product development, rj^ejdng'.arid production planning.
ihtflnstitut'e'fDr Social Economy is intended to
irte'rm^the..public; about social economy and its Mgu^^gte^galideveloprnent *',|^^^^|Fe^'jp.iiblic courses on the issues of social eco-
^^^^^^a%eithe..pcoFe5sionalI economic, political and Icuitural skills of individuals involved in social Seconomy
WK^ffiWprqyide assistance through research and con-ijS^j-^iLiItmg.-fDr the:'Cooperative Network of Social ^^^^SEcpnomy'r.and the 'Association of Financial Ser-
W^^Kwces',;-;
■M^BLofFeriStatements on social economy to the media ^^^p^^'jieiicourage publications dealing with social economy,- .
S\^&Afdocument the course of events surrounding social economy at the local, national and international SMievels. ■
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J^lMAnother, somewhat similar, example of what hao-^pp.ens'when the supporting conditions function well l®is!f'evident in the dynamics of the Italian co-
-|pperarives which are'presented in section 7.3 below.
1 fT^ASJ
a Joint economic project group In Luxembourg
^||Eioneering spirit and a productive mixture of social •kcommitment, entrepreneur and youthful energy led "   irolrhe establishment of a crysralizing point for social
economy in the southern area of Luxembourg along the border with France, ASJ (Action Sociale Pour jeunes/Sorial action for youth) is a joinr economic model whose strength lies in making astute combinations and in networking.
The 'Action Sociale PourJeunes' (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 rheir free-time activities they collected horse manure, packed it in bags and sold it tD 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 their lucrative trade to a stronger comperitot in che 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 computet agency. They founded cooperatives to co-ordinate their market strategies. Since 1986 ASJ has developed an array of businesses and projects, based on the market needs in the local area, with the aim of righting 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, 3nd quality training.
By its own definition ASJ is an enterprise of Economic Solidaire and is an exemplary combination of profirable and sodo-ecologically viable concerns. By immediately reinvesting its revenues and subsidies, it has been possible to carry out social, cultural and ecological functions. Ar present ASJ has subcontracts with 115 underprivileged teenagers and young adults (Action Sociale PourJeunes 1996). The overall self-contributions for the funding af 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 the ASJ without public funding. Social services have been established to accompany che work-
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158   Susanne Elsen and Isidor Walllmann
training and employment programs. Along with bilateral or multilateral projects of limited duration sponsored by EU agencies there are also permanent training and employment sectors. Such training is available in three future-oriented fields of work for which professional profiles have been developed^— traditional job-craining 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 the EU.
ASJ is linked with unions, administrative agencies, schools and private businesses as well as with government  agencies  and  citizen  social action groups. Through the co-operation 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 training institution by the chamber of commerce. ASJ has built up a network of enterprises in its social surroundings; it co-operates with these enterprises to help its graduates to become integrated in the job market and it handles .job-training functions for these businesses. Furthermore, the ASJ has contracts with 12 municipalities co provide public services. Its own consulting agency provides marker 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'initiative seccoriel' and the 'Centre d'initiative 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 craftwork; caking over the dudes of the highway   maintenance  agency, and  providing bookkeeping and secretarial services. Last but not least,
ASJ has restored 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 development 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 forces. The independent status of ASJ, made possible by an unusually high level of self-funding, is the best guarantee of a consistent adherence to a philosophy of action and a beneficial position when negotiating forms of co-operation with all other participants. This independence is based on co-opetative 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 case 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 new 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 greac 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 the local level connected to the regional, national and European levels, the ASJ has helped to facilitate the flow becween different levels and the communication of- developmental needs from 'below' co 'above'. The cooperation and partnerships becween industry, pdit-
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Community action towards social Integration and prevention of poverty 159
^^^DtofitM)lB?äncl;non-profit oriented areas, KEffiSffiQHenCedäfareas • of "work are not done
iuYationMand'sDcial services, as well as with ^MMntggiups and movements, makes ic pos-'^ornpletely-new combinations of solutions S^^Se^elopedhocaLly. The combination of perman-i^s^and^projecc-centred tasks .will, in terms ^organization' and activities, enable both a^tlrMi'cei'ofttlie"- existing structures and inDova-^tftffiPA^Dtndteworchy is che combination of high-f^WaS^Low-xecti areas of activity, albeit che use of gjrahnolbg^seiyes-exclusively ecological, social and
fielmo'ddicharacter of systematic planning, exe-?'documentation ensures that the effects ^^^^n^Uedi and knowledge is transferred. An otit-SStmdinEBfeature is the consistent commitment to gSoUaaricpBbased economy and the combination of
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The profit-away with; used to advance additional wider scope of goals.
^^^j!2^BpCoopBrative Am Beutelweg' as a
'^d^ejoprrjental nucleus in an underprivileged city änslghboürhood "•■
.. —.   ■  m^e,are builders of communities, not builders within
^le^Gpoperative'Am Beutelweg' is che ptoducc of dOTg^reEm"-'communicy action work in a socially Mepjdy'ed^part of the city of Trier. This community ||nti^rprise;evolved from the socio-cultural activities .|theFpBurgerhaus' (community house) in North j^^HKS-Trierliind is an integral part of a netwotk of nelgh-Ts^Sfe'^bourhoo'd groups, self-help organizations and inscitu-pibnsy^rhis-is adecisive factor, since the founding of Sagbusiness"oF'its size, ac che instigation of chose |m^&nYolved:in "social community -worlc, was noc a part I^^SrirXtheir" mandace but rather the logical outcome of l^l^rSrh^problems in this part of the city. There is much p^iySoj'be'-said-for the claim that only a self-governed S|^^meighboiirhobd ' citizen   centre   such   as the I^^^^Burgerhaus' can lead to a consistently communal cc-rnnrc style of democracy in a business held
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□f the residents, because the incerescs form, and be consider-
^p^.%gof-!the initiators do noc prevent such a $§£f^4§0ieratchical structures' do not -inhibit .'the
able over-extension of its mandate. This special case is even more significant because such examples wichin che socio-political landscape in Germany are rare. The housing co-operacive formed in 1991, in which che residents are che property owners, could be a pioneer case of a socially-oriented employment model for residential areas in which there is a risk of unchecked privatization of real estate.
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 cote within a largely autonomously developing community economy in a disadvantaged residential area in the northern section of Trier. Since their founding, rhe employment situarion in chis already weakened border region has become even worse, especially for che residents of this quarcer of che cicy, who have low-level qualificacions and have become marginalized over a longer period of time.
In view of such cumulative problems in chis area, che founding of che co-operacive was che only reasonable solucion. A large percencage of the residents was wichouc 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 at least partly uninhabitable due to a decade-long pattern of disinvescmenc. Pot yeats che residents, assisted by the scaff members of che Bürgerhaus, had been campaigning for improvements in cheir living conditions.
In 1989 a rumour that chese buildings were abouc co be cransferred co private ownership was substantiated. The residents and che buildings were becoming an increasing burden for che owner's association, based in Bonn. When che residents demanded clarification of the tumour, it was finally admitted chac sale of che housing unics required government apptoval. In co-operation with the staff of che ' Bürgerhaus and a group of political and community accivitists, academics and church members as well as influenriai citizens in che user groups wichin che
160   Susanne Elsen and Isidor Walilmann
Bürgerhaus formed a citizens' action group with the purpose of finding a socially acceptable solution fot ehe Beutelweg area. The decision to esrablish a cooperative, to buy 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 weil-developed concept fot a permanently guaranteed, affordable residential pto-jecc and renovation based on socially acceptable priorities, and through tough negotiations and intensive efforts to convince any opponents, it was finally possible to realize a seemingly Utopian plan. The residents of the 'social hot-spot' were to take over their own living units in the form of cooperative property, securing for themselves and their children life-long rights of residency at affordable rates, and also creating the option fot their own employment within the frame work of rhe 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 Rhineland-Palatinate, which subsidizes the renovation plans within the legal framework of public housing assistance, and finally the city of Trier, which acted as guarantor for the purchase price and bore the costs of advisory, counsel fot the ptoject and social service assistance far the residents during the difficult period of renovation.
The sale and transfer of the real estate into co-opetative ptaperty 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 fot co-ordination during the process of renovation. Yer without such a thorough renovation there would have been little justification fot 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 tempotary, 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 comrnunity-oriented economic cycle, as well as achieving prone outside the local area, a subsidiary business named HVS (Reality and Renovation pic) was established in 1995. With this it was possible to create 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 more are now in various stages of planning. These include enterprises in the area of co-operative (participatory) raanagemenr 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 require time and also the right people. As the CD-operative 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 gtoups.
The 'Cooperative Am Beutelweg' is purely a social co-operative but it must survive on the competitive market since no corresponding allowances are being made for ic. The biggest problem has proved to be that real esrate CD-operatives in Germany need to have a cerrain minimal size in order to survive. The mandatory membership in one of the monopolistic inspection associations and the legally mandated annual inspections devour 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 its
Community action
JBffe
very   slender, shoe-string-like "^get^fj^hejco-operative and the resulting lean per-"onnd^sTtmcion'(one salaried staff member) for the ^^r^nidon-'-'of■ highly active business operations, 'boolSjceepine:''-planning and control of housing aintenance^s.correspondingly dxrncult for everyone fe^'ej-'cpnsiderable complexity of the busi-fMJpedutes; the uneven development in the dif-'^^teranches of the co-opetative, the number and □Belie participating parcners, the kinds of usmlsses.lfcorrimitcees and macters of concern all |mtehsive -verbal arrangements and agree-abijut'fche responsibilities to be shared. The K88^$n![o&the former military barraclcs will take g^ft^efand is a demanding task, as well as quite ""' 'fep.-guarancee that the financial support of ^subsidy programs is forthcoming, it is neces-lal^^^keep.-.up the requisite self-investment, Mffl^l^pg|na-end • co the list of ensuing difficulties, ^^h^^th^tjresult from the enormous changes in the i^eidlssituacion' also need to be dealt with. By i^nVgingifin' a district known for social problems, l^fefSristancel'-fl new social gap is arising between the ■.Kesidehcsilorche renovated and those of the not-yet |^wated;apartments as well as other real estate and ugneTgEbourhoads in the area. Furthermore, it is neces-
make the transition to
flS^ts^^E|^sonie • residents to n 3^^cfai^[efyHole as members of a co-operative. Among J^. ^^phingsvitis especially important to give full jg^rKgg^tion 'to what has already been accomplished, Siric%che-:memory of failures, a permanent character-Jstic^f'people from disadvantaged residential areas, S^^^gno^beireversed in only a few years,
^^h^?Gooperative Am Beutelweg and other com-"]»Kunity(-'businesses in this area of the city were ^^^oped' in the face of very real problems, of con-Ipreces'heeds :and of-specific options available co the coinijmnity,' The participants in the project had to ^t^^in^olved in the initial developmental work at all f|j||iepis. Unlike other projects in Hesse ot in Notth ^^^^IWestpHalia, whete there is a well-established ' lfrEnge!.of'subsidy programs and a political platform jrapdisadvantaged residential areas, this projecc is '^ij'iunique'-and' thus open to attack by socio-policical fccdrsf.who would rightly demand large-scale poiit-.    lcal?SQlutions inscead of single-case ones. The com-
towards social integration and prevention of poverty ISi.
plex casks of initiating and co-ordinating the interaction between people, organizations, resources and funding are extremely time-consuming and demanding. As a result, che 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 circumstances, che responsibilities could be shared with others. This would be a quite different 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 the requirements for its existence through its co-apecacive process of development. Hence it can be said, as a generalization, that precise knowledge of che community and its potential, che readiness of che residents, and a horizontal and vertical support network are imperative conditions for che development of community economies.
7.3 Co-operative movement in Italy2
In their search for strategies for dealing with unemployment, poverty, and social distribution problems; councties in southern Europe, in particular, have taken up social co-opetatives as a suitable kind Df organizational structure. The expansion of social cooperatives in Italy has taken place within che framework of a strong co-operative . movement. Self-administration is highly valued within Icaly's business culture. In comparison to Germany, Italian co-operatives are small and locally oriented. There has been a steady growch since the 1970s; in the period between 1980 and 1990 Italy showed an increase in production cd-operatives of 109 per cent (from 17,880 to 37,339) (Haensch 1997a, p. 153). In 1988 there were apptoximacely 150,000 primary co-operatives, or nearly 20 cimes as many as in che Federal Republic of Germany (Beywl and Flieger 1993, p. 143) The largest concencrarion of cooperative production in che world can be found in che area of Emilia E-Dmagna. In che mid-1980s mare than half of che work force was engaged in cooperatives. In face, che encire speccrum of economic activity is organized chrough co-operacives (Von Randow 1994). The jump in growch can also be
162   Susanns Elsen and Isidor Walllmann
explained by che face thac 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 cultural organizations. The structures for funding, supporting and networking co-operatives at che,national, regional, and local level are exemplary. Since the end of che nineteenth century, governmental tegulation has continually adapted co che developmental needs in sod-ecy.
The teadiness of the state to give active support to co-operative projects is also due co that fact chat ic can dispose of costly support systems by leaving these tasks co smaller organisations as a form of subsidy. The ability and willingness co work in co-operacives is noc lease a question of an aggressively demacracic mencality and a popular culture of quarrelling (Contrasce 1997). Italian sociecy is quite evidently sceptical of official gov-etnmental powers and has had to build up durable informal structures and che' concomitant mentalities and competencies.
The growth of co-operatives in Italy, 1886-1997
Since the beginning of the twentieth century, che feudal structures found in che agriculcucal seccor up until che 1940s had generaced scrong orgaruaed counter movemencs of dependenc agricultural workers (bracriantij. The handicrafts production had long since been organized in che shops of craftsmen and in smaller co-operacive enceeprises. Already by 1886 the 'red LEGA', the national association of cooperatives and supporting agencies, had been created, and che Christian confederation of Italian co-operacive members followed in 1919. The first cooperative-friendly legislation appeared at the beginning of this cencury under the moderate leftist government. In the constitution of 1947 the state was obliged to suppott co-operative forms of economic activity. In Article 45 it states: 'The republic recognizes the social functions of the co-operative with its self-help characcec and wichouc the goal of private profic-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 constitu-rional article was given further specification in 1971 in Law no. 127: Ic is incumbent upon che Ministry for Labour and Social Welfare to 'cake initiative to ensure that co-operative scruccures are developed, cooperative principles propagated and professional, qualification of leaders within co-operacives facilitated! CVon Randow 1994, p. 87). The Civil Code names the fostering principle as a specific qualicy of co-operatives. According co chis, co-operatives are to supply cheir members with goods, services, or work opportunities under favourable conditions. Since 1997 a special Jaw for the promotion of co-operatives involving youth has been used as a means for fighting youth unemploymenc (Beywl and Flieger 1993, p. 145). In 1991 a law for che regulation of social co-operacives was passed and recognized 'cooperative social!' as being an autonomous form of enterprise. Two further changes in legal measures chac help co foster the founding of co-operacives were passed in 1995. First, it is now passible to found a co-operacive with only five, instead of nine, people; and, second, permission to use collective leadership {wichouc the selection of a chairperson) has been given. These legal measures are solid proof of che social accepcance of co-operatives and the political will to promote them. In Italy the co-operative seccor is suscained by a widespread accepcance among social forces that has come about as che result of rhe historical co-operation between the union movemenc and co-operative associations and because 'of che coherence of interests berween rhe labour rnovemenr and the liberal state. This acceptance and active govern-mencal supporc have brought abouc the development of a political culture of co-operative solutions. The socio-political integration of the co-operative sector and basic economic atcicudes differ significantly from those of the German tradition and course of development. Since the law regulating social co-operatives was introduced in 1993 (Instituto Italiano . . ., 1992, pp. lSf.), many co-operacives have,been established which have taken on a pace of che social services within the local area. These have been given over by
Community action towards soclsl integration and prevention of poverty 163
||^me^il|'flgendes co subsidiary agencies and ^l^^.jneeds of che community, which have throughvihanges in che socio-demographic oaSses'iirii-rhe -cities and in rural areas. They can Piwded,1.jaccording cd cheic goals, into Cype A "fnfcn e! areas' of education and health) and I^Mofessional incegracion of people wich ilcies)i(see;aiso Leader, 2 1995-5*6). The social ^^ferac^Wqfi.cype B are involved in agricuicure, ^^^^ffl|^ndustty and commerce. Within che ^^projj|^ofipeop[e wich difficulties can be found ItsjBSrSJminoricy groups, handicapped and men-^!Mi^eople,.children from problem families, drug |M^c^^^n.yicced criminals in alternative programs ^^mpiisbnmenc, and so forch. Nearly 6*5 per cenc of ^e^^&opera.tiv'e; membership ate youngec than 30 $y|age.^They form primarily small enterprises. ^^r^er^tb|benefit from tax shelters, tax reductions, ^^ubsidies, at least 30 per cent of the employees ■ «    iusr|be|handicapped or disadvanraged. These are p!^^^^^m|3.t.ed from obligatory social insurance con-HbuciOBM||Pacallel to social co-operatives, there are ^^operacives which pursue ecological goals. ISoailfcoSperatives are members in one of che two jajmbrellaiiprganizations d! rhe Italian co-operative
MKm|i!Aj:-the regional level che auconomous co-
nnerafives-'are uniced in a close-knic networking MtemreThese regional consorria and their intensive conomkrpqlitical activities form the contaccs, che
|network;¥the infrastructure and the lobby for co-^^rati^es;. Their central task is co acquire contracts sandjco^'otdinate their completion chcough one or MBte^oJy,the autonomous member co-operacives. |Hence~Mfor example, the 12 social co-operatives ^^dh|work in. landscaping in the province of Bres-^daahave formed a network wich one another called ioUGp.vYcrde.' A sceady flow of concracts is guaran-»edjby^haying a high proportion of che official con-irac|s|gjyen to the consortium. The regional consor-aal'areiin turn members of rhe Consortia Nazionaie 'Jellai.Cooperaziane di Solidarietä Socials 'Gina Mattar-
M^iwhich takes care of the advanced training and :6ndnujng education of co-operacive members, con-jig, research and publications as wdl as 'genecal
VSi
concraccing', such as making contracts with the social insurance agencies.
8. Conclusion
Given the dramatic social and' economic changes today, it is necessary co find answers co che following issues:
• guarancees for a basic subsistence and a life perspective for more and more people in a society which continues to he oriented around wage labour;
• the social incegracion of people who have no life perspective; the maintenance of human capital and social capital and, ultimately, of che civilizing activity of the community;
• ways co meec che needs of the community, which are already ar stake in spite of its affluence as a cesulc of the processes of de-indusrrialization and the concentration of capital;
• maintaining responsible managemenr and use of natural resources for che sake of boch the next generations and the biosphere by means of an 'economy for che whole house'.
These are some of che issues and problems for which social economy is seeking to supply future-oriented answers. Social economy is primarily concerned wich guaranceeing subsiscence and meeting rhe needs of che people in a spedfic cotrimunicy; ic engenders social integration through participation instead of marginalizacion and cakes inco account the limits of our natural resources. Sodal economy is founded upon the active involvement of communicy members. As has been shown here. in several examples, community-based sodal work can be instrumental in creating, reinstating or redesigning sodal, political and economic bonds within the community.
. Translated from German by Martha Baker Notes
l    Action Sociale Pour Jeunes, ASBL, P.O. Box 5D27, L-1050 Luxembourg.
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164   Susanne Elsen and Isidor Waliimann
2 In addition co the resources cited here, the information given below is hosed on conversations with Italian representatives of che CECOP (Cornice des Cooperatives de Production ec de Travail Associe), visits with co-operacives in northern Italy and, lose but nor least, Dn my own experiences while living in Emilia (S. Elsen),
References
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Authors' addresses
Susanne Elsen, Weiterbildungsnetzwerk Eurosozial (ESO), Universität' Trier, DM-Gebäude, D-55286 Trier, Germany
Isidor' Wallimann, Höhere Fachschule im Sozialbereich, Tniersteinerailee 57, CH-4053 Basel, Switzerland