An Alternative and Complementary Model to Capitalism

ESSET Publishes Comparative Research Paper on Solidarity Economies

The Ecumenical Service for Socio-economic Transformation (ESSET) has released a comparative research paper on solidarity economy experiments in Brazil and Venezuela.  The paper also explores how lessons from these contexts might be incorporated into the Southern African experience with informal traders.  The paper can be download below...

From Chapter 2:
Written by Ibrahim Steyn, PhD Candidate in Sociology, University of Johannesburg

The term solidarity economy is often used interchangeably with social economy, and it is also referred to as the "popular economy"‘ (Wilpert, 2007, p.76) or as "an economy of the people‘ (Fisher and Ponniah, 2003, p.95). It is a relatively new concept that first emerged at the inaugural World Social Forum, in 2001. The main defining feature of the solidarity economy is that economic activity is defined by a collective or common good, rather than individual self-interest. The productive activities of those who participate in the solidarity economy are thus aimed primarily at satisfying the social needs of a collective, which could be a specific group or a community.

It could be defined as a:

"socio-economic order and new way of life that deliberately chooses serving the needs of people and ecological sustainability as the goal of economic activity rather than maximization of profits under the unfettered rule of the market. It places economic and technological development at the service of social and human development rather than the pursuit of narrow, individual self-interest"….it as "an alternative economic model to neo-liberal capitalism. This alternative socio-economic order and new way of life inspires attitudes and behaviours with values such as sharing, co-responsibility, reciprocity (give and take), plurality, respect for diversity, freedom, equality, ethics, brotherhood, and sisterhood" (Solecopedia 2009).

Furthermore, ownership of the means of production is central to the solidarity economy. In the words of Arruda (2008):

"Solidarity Economy relates to a system of shared (or co-owner) ownership of goods and resources for producing and reproducing life, whose prime basis is work and not capital, whose managers share equally the power to decide what directions the initiative is to take, the goods and services to be produced or purchased, the techniques to be employed, the education and communication to be promoted, and how any surplus is to be shared" (Arruda, 2008, p.98).

Very simply put, economic activity is not for private profit maximization and competition. Instead, the economic principles of the solidarity economy are:

Collectively, these principles democratize economic relations between those who produce and those who consume, by implication, they challenge dominant economic power relations. Moreover, they foster conscious participation that grows out of popular education about the social injustices of the capitalist economy and the importance of collectivism and solidarity as the seeds of a more humanist alternative economy. In addition, it confronts the patriachical bias towards men inherent in the sexual division of labour, fueling discrimination against women.

It is important, though, not to overstate the potential of the solidarity economy as an alternative to the capitalist market economy, as it still operates within a capitalist framework. Marcos Arruda, for example, proposes that the chief goal of the solidarity economy is to create a new economy within the belly of the capitalist system. It is therefore more sensible to see it as both "an alternative and complementary way" (Wilpert, 2007, p.76) to the capitalist market economy. Its ability to serve as an alternative or complementary way of organizing economic activity is depended on structural factors, such as the political context of a country. For example, in Venezuela, where state power is controlled by a left political administration, who deliberately devolves political and economic power to local communities and workers, the alternative potentiality of the solidarity economy would be more pronounced than in countries where agency in the realm of palace politics is used to advance the principles of capitalism. As a bare minimum, the solidarity economy enables social groups or popular forces that have capitalism as the main source of their social and economic misery to inflict wounds on its social body. Ethan Miller puts it this way:

"What really sustains us when factories shut down, when floodwaters rise, or when the paycheck is not enough? We often survive by self-organized relationships of care, cooperation and community" (Miller, 2006, p.13).

The solidarity economy, amongst other, comprises community-based organizations, NGOs, social movements, different types of cooperatives, such as recycling cooperatives and community services cooperatives, trade union organizations, solidarity-based savings and loan institutions, fair trade organizations, give-away shops, soup kitchens, community supported agriculture and food security and open source development....

Click here to download "Solidarity Economy Experiments in Brazil and Venezuela and the Lessons for A Southern African Debate on Solidarity Finance for Informal Trade".


The Ecumenical Service for Socio-Economic Transformation (ESSET) is an independent ecumenical organisation based in Johannesburg and working for social and economic justice. Working for socio-economic justice is understood as working for the transformation of socio-economic process, systems and structures so that the quality of life of the poor is enhanced in a sustainable manner For more information, visit ESSET's website.

Posted by The Karibu Foundation - Last updated 23.03.2012