Re-Embedding Monsieur Le Capital in Madame La Terre: Revisiting Polanyian Insights for the

Capitalist Crisis (with Penelope Ciancanelli) in Molly Scott Cato and Peter North (eds) Towards Just

and Sustainable Economies: Comparing Social and Solidarity Economy in the North and South.

Bristol: Policy Press

1

Re-Embedding Monsieur Le Capital in Madame La Terre: Revisiting Polanyian Insights for the Capitalist Crisis

Penelope Ciancanelli and David Fasenfest

“In capital‑profit (or still better money capital‑ interest), land‑ground rent, labour‑wages, in this economic trinity…we have the complete mystification of the capitalist mode of production, the reification [Verdinglichung] of social relations...It is an enchanted, perverted, topsy‑turvy world, in which Monsieur le Capital and Madame la Terre do their ghost‑walking as social characters and at the same time directly as things. (Capital III, ch. 48) p830?

Introduction

Land, labour, and capital constitute the holy trinity of the neoliberal faith,

a worldly philosophy that has shaped economic policy and political strategy for

at least thirty years, in both the global north and south. The doctrine demands

unfettered, deregulated markets as the only path to the holy grail of economic

growth. This belief system is not new. Instead, neo-liberalism revives 19th free

trade liberalism, then as now, buttressed by contemporary moral philosophers

and men of affairs (Angeles Villareal and Ferguson 2015, Ohmae 1990). It is the

manifesto of those who defend capitalism, past and present, in spite of its self-

evident (and staggering) human and environmental costs.

Marx, the foremost critic of 19th century liberalism, regarded the holy

trinity as central to the success of free trade manifesto because it treated these

so-called factors of production as functional equivalents, each possessed of the

same juridical and economic rights to the income arising from their property, be

it land, labour or money capital.

2

This equivalence was essential to the defence of capitalism because it

rendered invisible a key mechanism by which the few were able to take the lion’s

share of what the many worked to produce. Marx asked: why did anyone—from

political economists to labourers--go along with the absurd equivalence

proposed? In his response, he argued: because, in part, the many lacked the

power to do otherwise but also because, in part, they believed it to be the natural

order of things. Marx wrote:

…it is natural for the actual agents (e.g. the landlord, the factory owner, the worker) to feel completely at home in these estranged and irrational forms..(since these) appear to them as overwhelming natural laws that irresistibly enforce their will upon them (Capital, vol 3, p831).

A century later, Polanyi foregrounded the self-same economic trinity but

offered an entirely different interpretation of their meaning. In the Great

Transformation and other writings, Polanyi abandoned Marx’s proposal that

exploitation and its ideological disguise were central to capitalism. Instead he

focused on the self-regulating markets which believed set capitalism apart from

previous systems and the need for its regulation.

This decision reflected his immersion not only in the social democratic

and Marxist ferment of post-World War I Central Europe, but in the academic

extensive debates as to the scientific merits of the labour theory of value,

particularly the challenges posed to it Bohm-Bawerk and other academic

economists (Dobb, 1973).

If exploitation and the labour theory of value were best regarded as

metaphysical constructs (as the academic consensus claimed), then it seemed

sensible to Polanyi and many of his generation to ditch both in favour of a

perspective which not only appeared to have greater empirical traction but most

3

certainly had the capacity to enlist support from the many social groups (not just

the so-called proletariat) who might be persuaded to support a more enlightened

capitalism.

The aim of this chapter is to consider the implications of the difference

between Polanyi and Marx (or alternatively, the centrality of market forces

versus production relations) for what each would regard as solidarity

alternatives. Our central argument is that the concept of exploitation and the

associated labour theory of value, encapsulated in Marx’s general law of capital

accumulation are needed in order to understand the meaning and the promise of

different types of SSE’s in the current conjuncture.

Theory is the lens through which we view the empirical world;

differences in what theories enable us to see can arise, at least in part, because

the focal length of interpretive schemes may differ. In the discussion below we

start with Marx’s General Law of capitalist accumulation because its focal length

is the system as a whole; the aim is to use this to construct a bird’s eye view of

the ‘whole’ of present day global capitalism. Of course, the greater the focal

length of a lens, the more detail is lost. To remedy that, the second part of the

discussion looks at the world through the theoretical lens constructed by

Polanyi, especially his emphasis on the need state institutions to mitigate

dystopian effects of market forces. The last part considers the implications of the

contrast for how we understand SSE’s and their emancipatory potential.

Part 1: Economic Growth: the General law of Capital Accumulation

The greater the social wealth…the greater the industrial army...the greater the reserve army, the greater the mass of surplus population…the more extensive the working glass, the greater official pauperisation.” (Capital, Vol. 1, p603)

4

The general law of capital accumulation is the conclusion Marx drew

regarding the effects of economic growth on the labouring classes. His

conclusion was based on his highly detailed analysis of documents describing

factory work, and on available economic statistics along with contemporary

opinions from such government officials as regional medical offers of health

regarding the effects of factory work and urbanization. He regarded capitalism

as a qualitatively different system from the ones preceding it historically,

governed by new types of social relations in which domination was more covert

and in which system imperatives were cloaked in slogans of thinly disguised self-

interest.

According to Marx’s vision, economic growth (capital accumulation)

creates surplus population by which he meant people who were surplus to the

requirements of capital accumulation. By implication, the greater the growth

rate, the greater the numbers of people rendered ‘surplus’ to the system’s

requirements. Moreover, as we now see once the geographical pathways of

accumulation are globalized, the populations rendered surplus to requirements

could be found everywhere. Far from being the solution to poverty, economic

growth is its engine.

The central mechanism by which capital accumulation creates surplus

populations is through the substitution of ‘machines’ for direct labour in order to

lower production costs relative to those of competitors. In so doing, capitalists

are in a position to capture a better profit margin (e.g. the difference between

their costs and a given market price).

As more and more companies in a sector follow suit, the average cost in

the sector falls and inevitably puts downward pressure on market price for the

5

output. To forestall erosion of profit margins that such a fall in price would

entail, financial solutions would present themselves, including mergers and

takeovers to reduce the number of competitors. The results would be some sort

of oligopoly structure, such that fewer, larger firms compete on grounds other

than price. Where legally allowed, cartels would be formed enabling their

members to fix the market price.

Of course someone has to make the machines that replace direct labour.

Moreover, as demand for machines increases, demand for the labour to make

them increases. This cannot, in itself, resolve the problem of surplus labour for

several reasons. Firstly, the capitalists making the machines are under the same

pressure to substitute machines for direct labour. Second, those made

redundant in one sector are not necessarily the owners of the type of labour

power required in another sector that is hiring workers. Third, the sector that is

shedding labour is unlikely to be in the same geographical location as the

growing sector; indeed with globalization of supply chains, there is even less

chance of such a happy coincidence. Seen through this lens, a big picture

emerges of capital accumulation on the one side and a growing surplus of

labourers on the other.

The data incorporated in the discussion that follows are mainly from

official sources. 1 They did not collect these data in order to reveal what is of

interest to us (i.e., the connection between capital accumulation and surplus

population). Instead, they were collected in various efforts to measure the size

of the capitalist economy. Nonetheless, by drawing comparisons between

changes in the reported size of capitalism and reported population movements,

6

some insight is gained into the scale and scope of capital accumulation—that is

of wealth accumulation at one pole and redundant labourers at the other.2

We begin with what is known about global income and its distribution.

We then move to a discussion of the food supply on the simple premise that

whether employed or not, people must eat. If, as we will suggest, at least 2bn

people in the world today have no apparent means of subsistence, the question

that presents itself its this: where does the food come from that feeds them?

People and Income

In 1950, the global population was about 2.5bn, with an estimated 70%

living in rural areas, including many who were peasants often subsisting at the

margins of capitalism. The long pulse of accumulation from 1950 to 2015

increased global output about 20 fold (from US$4 to US$78 trillion) and the

overall world population increased about three-fold. During the same decades,

the overall average for the rural population fell by 50% but with important

regional differences. In Asia and Africa, the rural population decreased from

about 85% to about 60%; in Latin America and the Caribbean it decreased from

about 60% to 20%.

Today, in 2015, there are about 7.3bn of us, roughly 4.3bn people living in

Asia, 1.1bn in Africa, 742 million in Europe, 565 million, in N America, 407

million, in S America and about 38 million Oceania. About 50% of us now live in

cities (or 3.6bn people) and are largely reliant on money wages to buy the

necessities of life. The other 50% (3.6bn) live in rural areas, comprised mainly of

villages, small towns and dispersed settlements of less than 2000 persons—the

latter being the urban classification threshold.

7

The 3.6bn who are classified as living in rural areas includes a fair

proportion of what we might still call peasant households (estimated at about

1bn people or 30% of the rural population). These individuals and households

continue to have access to land which they cultivate to feed themselves, and

which enables them to make handicrafts for their own use or to bring such goods

to local markets along with whatever surpluses they might have from their

agricultural production. These households are threatened by the continued

efforts of large agro-business multinationals to expand its control of arable land.

Official sources expect rural household to decline further in future, predicting

that in twenty years, 70% of the global population will live in urban areas.

Of today’s global population of 7.3bn, an official labour force is estimated

at about 3.3bn people (of which about 300 million are registered as

unemployed). The remainder constitute an unregistered number who are likely

to be doing something to survive. There is no comprehensive data set that would

allow us to estimate its size directly. However, drawing inferences from the

meagre information on aging populations and making some heroic assumptions

about the number of people too young to be economically active, it seems more

than likely that the population available to work 3 consists of between 5-6bn

people (i.e., about 75-80% of the global population) of whom an estimated 1bn

are members of subsistence, peasant households. The remaining 2bn or so

would seem to be surplus to requirements; one source estimated about 1bn in

Africa alone (Standing, 2011).

Those in work (formally and informally) generate an annual money

income, globally, of between US$74 trillion (nominal) and US$ 87 trillion (PPP).

If this income were distributed equally among the global workforce, the average

8

income would be between US$ 20,000 (4bn workers sharing out US$80bn

income). But income is not distributed in this way. Indeed, a global Gini

coefficient estimated by Davies, et al, (2006, p26) is an astonishing 0.892 which

mean a very small percentage of the population claims most of this income.

According to Davies, et al., 45% of the income is taken up by 13% of the global

population. To be in the top half of the income distribution requires $2161 per

year—in other words, half of the global workforce subsists on about 10% of

what might be regarded as their ‘equal’ share of global income.

Industrial Food Chain versus Peasant Food Web

Whether in work or not, people must eat. Some big picture figures about

food, its production and consumption might shed further light on the subject.

At the first World Food Congress (1963), the UN announced “We have the means,

we have the capacity, to wipe hunger and poverty from the face of the earth in our

lifetime – we need only the will” (Cited in ETC, 2013b,p1). In the event, the will

has perhaps been wanting.

One problem, then as now, is the gap in publicly available information

about the actual supply of food and its consumption. We have information about

capitalist food production supplied mainly by agro-industrial sources (what ETC

refers to as the Industrial Food Chain). Indicative information exists about the

number of subsistence producers, though this is not that widely available. ETC

research has come up with following comparative statistics.

Table 1 About Here

This leads us to suppose that the 2-3bn people world-wide who appear to

be surplus to the requirements of accumulation are fed by those who in limited

ways evade the juggernaut of economic growth. Concentrated in urban slums

9

but living also in poor rural settlements, these people survive, living hand to

mouth, whatever the labour requirements of economic growth are proposed to

be. From these data we can surmise that the claims made by Marx have been

born out: The greater the economic growth, the greater the growth of the

population that will be surplus to its requirements.

Part 2: The Force of Markets: Polanyi’s Double Movement

Polanyi argued that the development of the modern state went hand in

hand with the development of modern market economies and in so doing he

directly challenged claims that the emergence of capitalism was due to its

greater efficiency and evolutionary superiority. In recent years, neo-liberals

have renewed these ideas claiming that the freer the market, the greater the

prosperity for growth. However, Polanyi’s work demonstrated empirically that

such claims had no basis in the historical record.

For Polanyi, the force of markets lay in their capacity to subordinate the

substance of society itself unless the state intervened. While accepting the claim

that market economics increased social wealth, the very idea of an economy

independent of government and political institutions constituted a “stark

utopia”—utopian because it is unrealizable and stark because the effort to bring

it into being would inevitably produce dystopian consequences.

Polanyi’s argument runs on three parallel tracks: 1) Markets and their

regulation grew up together and the notion of a self-regulating market is very

recent and a reversal of the historical trend. 2) The idea of self-regulating

markets is dangerous because it forces treatment of land, labour and money as

commodities even though they are not; it splits the economic from the political

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sphere even though no one lives that way. 3) If markets were allowed to be the

sole director of human activity, this would result in the demolition of society and

the environment would be destroyed.

Central to Polanyi’s reasoning was the evidence that because a powerful

state was needed to provoke/compel those changes in social structure that

allowed for capitalist organizations, the states own legitimacy required it to

mitigate the harsher effects of market forces. Mayhew (2000, p3) emphasizes

the importance Polanyi attributed to four institutions as pillars of the emergent

capitalist order: a balance of political power, the international gold standard, a

liberal state and the self-regulating market. Of these, the self-regulating market

(SRM) was the specific innovation that differentiated the capitalist social order

from prior dominant civilizations.

The self-regulating market differed from pre-capitalist markets in that it

was a society wide system of markets, implying “...all inputs into the substantive

processes of production and distribution were for sale and in which output was

distributed solely in exchange for earnings from sales of inputs” (Clough and K

Polanyi, 1944,p. 161).

A distinctive feature of the SRM was its power to disrupt the social order.

Thus, Polanyi argued, the self-regulating market would inevitably give rise to

counter-movements and the government of the day would have to respond to

these demands if only to ensure its legitimacy. 4

Polanyi's story of the tensions in and collapse of the self-regulating

economies that developed in the first half of the nineteenth century is one in

which perception and response to the damages of the SRM varied by class, and

therefore the outcome was decisively influenced by the character of the class

11

interests involved (Clough and Polanyi, 1944). Thus, it was not only members of

the working class who challenged the system but also, land owners and bankers

as well as merchants, whose interests were threatened by fluctuations in trade.

His work and ideas have been important in current debates about the

emergence and meaning of SSE’s in response to the social and environmental

damage attributed to neo-liberal reforms aimed at freeing markets from state

regulation. His work draws attention to the political-economic relay between

the damage done by self-regulating markets in the past and the efforts of

individuals and communities to lobby for government protections and to devise

ways of protecting themselves.

In calling attention to these developments in the past, a political-

economic argument was being made which constituted both a warning to

unthinking free market capitalists to calibrate their efforts at deregulation (or

bear the social and political consequences) while at the same time offering

assurance to social democrats and reformers that when things get bad enough,

people can be relied on to rally in defence of their way of life.

Arguably the state plays a pivotal role in Polanyi’s analysis that it does not

in that of Marx. For Polanyi, the state could (and should) act as a guarantor of

the constrained play of market forces and at the same time, via those constraints

and direct aid, also underwrite, as much as possible, the means to mitigate social

and economic damages arising from its effects. The evidence for the possibility

of such an evolution may be found in developments in the second half of the 20th

Century, which saw the emergence of a state-centred institutional matrix whose

overall remit was to ensure both economic growth and mitigation of market

forces. It is to the mitigation duties of this matrix that we now turn.

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The mitigation industry

A new international order was in its infancy when The Great

Transformation was published (1944). After ratification of both the Bretton

Woods System (a new international monetary system) and the United Nations (a

new global governance body), the number of agencies increased in parallel with

increases in the non-governmental bodies on which member states began to rely

Thus, by the time of the first paperback edition (1957) of The Great

Transformation, one can identify the broad outlines of an institutional matrix

whose overall remit was the regulation of international market forces (trade and

tariffs) to ensure economic growth, on the one hand, and to mitigate through

social policy its worst effects, on the other.

Reisen (2008a; b) is one of the few within the establishment to have made

the effort to document the scale and scope of aid agencies, providing a valuable

overview of their evolution and current configuration. To illustrate his overall

argument about the chaotic expansion of the sector, he indicates that between

1945 and 1994, the number of organizations or agencies concerned with solely

with financing mechanisms increased from about 10 to about 350; between 1994

and 2004, the number increased again, this time from 350 to 1000. The number

of OECD aid projects increased from 10,327 in 1995 to 27,876 in 2003, and by

2007, in the health sector alone, there were 34 agencies with a global remit.

In 2007, the ‘establishment’ of the international aid system consisted of

23 members of the Development Assistance Committee (DAC),5 each with

varying numbers of subordinate agencies, 47 UN agencies, funds and

commissions, 4 EC bodies, 2 IMF trusts, 5 World Bank Group bodies, 12 regional

development banks and funds, 97 other multilateral institutions (incl. GEF

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and GFATM), 32 international nongovernmental organisation and 5 main public-

private partnerships (Reisen, 2008). Of these, however, only CGIAR

(Consultative Group for International Agricultural Research) is described as

providing a truly global public good—a description that others might challenge.6

The setting of Millenium Development Goals by leading aid organizations

offers a good illustration of the alphabet soup that constitutes the mitigation

industry today. Consider Table 3 where one finds a large number of leading

organizations at work on each of the goals, simultaneously.

Table 2 About Here

The question arises as to what connection, if any, there might be between

this donor fragmentation or chaotic fragmentation and the uncoordinated

response of governments to the various debt crises instigated in the 1980’s by

US monetary policy. Certainly it is known that the structural adjustment reforms

imposed by the IMF to ensure repayment created such a severe fiscal crisis that

public service provision collapsed (OECD, 2008; Ciancanelli, 2010).

Non-profit organizations, variously labelled ‘NGOs (non-governmental

organizations) or CSOs (‘civil society organizations’) have attempted to fill the

service void; so much so, there exists the distinct possibility that in many

developing countries today more money for public services is managed by this

‘third sector’ than by governments.

Indeed, some of the large non-profits operating in the developing world

are much larger than is commonly supposed. World Vision, the Gates Foundation

and Oxfam International, for example, each have an annual budget of nearly

US$2bn, exceeding those of entire countries (Koch 2008, p67). Furthermore

only 6% of NGO board members are from developing countries. Which raises an

14

important issue of accountability for however efficiently any one of these

agencies may run local government services, the democratic deficit is stunning.

The macro-social coordination problems arising from delivery of public

services by a shifting set of mainly foreign, narrowly accountable non-profit

organizations has attracted much deserved criticism (OECD 2008). For example,

Koch (2008: 69) notes the Tanzanian government deals with 1000 incoming

donor missions annually and produces 2400 quarterly reports (i.e. 9600

annually). The increase in the number of those missions and the proliferation of

non-profit organizations in country give us an illustration of what the expansion

of the mitigation industry has meant. Reisen (2008a) has described the

resulting alphabet soup of agencies, old and new, as ‘multilateral donor chaos,’

highlighting the fact that in 2005-2006, thirty-eight developing countries each

had 25 or more multilateral and DAC donors working in the country.

The scale of mitigation

It might be assumed that expansion of the mitigation industry has been

costly –whether the cost has been born by private donation or some proportion

of taxes paid to governments. There is no comprehensive disclosure that enables

us to estimate the annual spend on aid by global governance organizations—a

fact, by the way, which has led to the creation of additional various NGO’s

devoted to defining and lobbying for more transparency (see, for example,

interaction.org for a list of their transparency projects or the international aid

transparency initiative at aidtransparency.net). We can, however, compare the

current spend of key actors in the international aid system to Global GDP. Table

3 provides a breakdown of staff size and spending by the top ten public sector

agencies.

15

Table 3 About Here

For example, in 2010, after the global financial crash, Global World

Product (GWP) was estimated by DeLong as at US$62 trillion. The total spend of

the key actors in the international aid system in 2007 was about US$40bn or

about seven tenths of one percent (0.07%); even supposing private foundations,

CSO’s and NGO’s spent the equivalent putting the total aid in the system at

US$80bn, this implies a global mitigation fund of slightly more than 1/10 of 1

percent (0.12%). Following the same sort of reasoning, we could double the

numbers employed to work on the issues from the nearly 50,000 reported by the

core institutions to produce an estimate of a 100,000 people worldwide whose

paid, full-time remit is to find ways and means to mitigate the consequences of

economic growth on the 2bn people rendered surplus to the requirements of

economic growth.

Has the mitigation matrix grown at the same rate as the global economy?

There is no obvious sources for such a calculation nor is there any readily

available estimate. It is likely, giving the underlying problems of transparency,

that it is impossible to do so with any accuracy. However, one indicator comes to

mind. Shah (2014) points out that high income OECD nations agreed in a 1970

UN resolution (e.g. UN resolution number 2626) to give 0.7% of their GDP as aid;

the accumulated shortfall in meeting that pledge since that date is about US$5

trillion in 2012 prices.

None of this aid, official or philanthropic, incorporates the considerable

scale and scope of the mitigation agencies within the sovereign states of the

Global North whose aims are entirely domestic (e.g. unemployment benefits,

state pensions, etc.). Nor does it include similar cross border associations, such

16

as the EU, whose agencies are focussed on member needs (e.g. common

agricultural policy).

At most, we think these agencies of the Global North provide some

protection to perhaps as many as 50 million individuals (e.g. 10% of the

population in high income countries)—possibly more. Even if it turns out, on

closer scrutiny, to be twice that or 100 million people, one has to admit that aid

to this few is a drop in the veritable ocean of those 2bn rendered surplus to

requirements. One also has to point out that the number supported by the

various welfare states of the Global North is not increasing but reducing. Neo-

liberal governments in the US and the UK have been reducing support for

decades; since the financial crisis, quite dramatic reductions in aid are now being

made not only in the US and UK but in the leading nations of the EU as well. We

think it safe to conclude that the mitigation industry has been no match for its

doubles partner—economic growth and the force of markets it provokes.

Of course, some may argue (and have) that the states system of the post

war II /cold war consensus (circa 1945 to the dissolution of the Bretton Woods

Monetary Agreement in 1971) demonstrates the wisdom of Polanyi’s views.

Those years, they would argue, provide ample evidence of the power of states to

mitigate SRM (Block and Somers, 2014). Indeed, the EU itself could be viewed

through the same lens, as having been (at least in its first decade) a successful

effort to secure institutional powers to both encourage economic growth while

mitigating the effects of market forces within the region.

One must admit there may be more than a modicum of truth in such

arguments. However, demonstrating that states once worked that way is not the

same as demonstrating they do so now—or that they can be made to do so in

17

future (Panitch and Gindin, 2013). In registering our scepticism regarding the

effectiveness of the mitigation industry, we are at the same time registering our

objection to treating Polanyi’s inference of a double movement as a constituent

feature of capitalism per se. As we see it, the concept of double movement has

descriptive merit, offering one way to understand a series of past events in a

particular geographical area at a particular historical juncture.

Part 3: Implications for SSE’s

If the conclusions Marx drew regarding the consequences of capitalist

economic growth are taken as empirically more robust than those of Polanyi,

what might this imply for our understanding of SSE’s and the role they play (or

could play) in the current political economic conjuncture?

We look at this question from two angles: First, we consider the exclusion

of the largest single set of SSE’s (the international bodies representing

cooperatives) from participation in the many and varied deliberations

undertaken by the leading mitigation organizations in regards to growing

unemployment, poverty, climate change, urbanization and so forth. The second

angle is historical and is really more in the way of a conjecture: Given the fact

that social enterprises emerged alongside capitalism itself and appears to have

developed along with capitalist enterprises, it is fair to question whether they

function in some kind of as yet unexplored symbiotic relationship. If SSEs and

capitalist firms are in a symbiotic rather than antagonistic relationship, why

should we expect them to advance societies towards more solidaristic

arrangements? Alternatively, if some of the SSE’s that have emerged over time

are indeed antagonistic towards the atomizing effects of capitalism, what

evidence is there (past, present or even theoretical) that it is possible for them to

18

have sufficient autonomy to create spaces that are free from market forces

altogether.

Cooperatives and the Mitigation Industry

The global financial crisis provoked some to argue that SSE’s must go

beyond their position on the fringe of the world economy and accept the

challenge of scaling up in order to make progress toward a solidarity economy

able to take on the twin problems of climate change and destructive

urbanization. Utting (2015), for example, makes this argument, pointing to the

fact that taken as a global aggregate, cooperatives and mutual associations have

US$18.8 trillion in assets, US$24 trillion in combined annual revenue and over

800 million members. If it were possible to engage in integrative scaling up, the

sector would be a large enough social force with sufficient power to serve as a

counterweight to the force of markets (Utting, 2015, pp3-5).

What is interesting about the claim is its evidentiary basis. That is, Utter

includes cooperatives in his measure of the aggregate social power of the SSE

sector. However, not everyone sees cooperatives as SSE’s; indeed, , the leading

agencies of the mitigation industry do not appear to regard cooperatives as the

same as SSE’s. We say that because for some reasons that have not been

disclosed by them, they have chosen to more or less ignore cooperativess when

issuing invitations to SSE’s of varying types to participate in the many and varied

policy forums the industry undertakes.

This exclusion of cooperatives from mitigation discussions bears thinking

about. First, in terms of size, the cooperatives constitute the single most

important type of social enterprise in the Global North. Moreover, cooperatives

have a century-long history during which many have become large, and if not

19

large, are demonstrably successful in managing their various enterprises. As

Olsen (2014) demonstrates, cooperatives long assumed to be economically risky

ventures perform as well, if not better, when comparing survival rates of worker

cooperatives and traditional capitalist firms. Obviously, if their longevity,

experience and scale could be pooled with the new SSE’s that have emerged in

recent decades, an integrated ‘scaled up’ sector would have much greater

presence in society overall and have the potential at least to constitute a

formidable social force.

On the other hand, more than anything else it is important to remember,

that a cooperative is a legal form of economic activity; that is, what all

cooperatives have in common is registration to be the type of organization that

follows certain rules regarding division of surpluses generated by their activities.

Other dimensions of cooperation can be stipulated (e.g. worker participation in

management decisions) but overall the common denominator is no individual

ownership and the proceeds must be divided among the members according to

rules agreed upon beforehand. By implication, this means, some cooperatives

operate almost entirely in what we might call the public interest while others

operate entirely in accordance with the private interests of their members.

In the latter guise, many cooperatives have proven themselves to be

powerful competitors to capitalist firms (Jones and Kalmi, 2009). Some even

argue that the cooperative form is a much more resilient and sustainable

accumulator of capital than the joint stock company. Perhaps it is the latter

possibility that explains the benign neglect of the official agencies of mitigation.

If the cooperatives are left out of the SSE sector, what remains is a much

smaller ‘global’ aggregate, one more financially dependent than might be

20

supposed at first glance; it is not the scale of these enterprises so much as their

financial dependence on the mitigation industry. It should therefore not

surprise anyone to learn that most social enterprises depend directly or

indirectly on funding from one or another of the many agencies discussed in this

chapter that constitute the mitigation industry.

Certainly in the Global North, the disposition of surplus labour has, for

decades, preoccupied domestic mitigation agencies (e.g. various kinds of arms-

length agencies funded by government departments which may in turn fund

even more arms-length projects). Their purpose, not to put too fine a point on it,

has been to occupy the unoccupied (the unemployed, the never employed, the

people surplus to any way, shape or form of economic growth) with whatever

scheme a ministry or civil servant might dream up to provoke these individuals

to become occupied again!

Preoccupation with the ever increasing numbers of those surplus to

capital’s requirements has meant that even the most fiscally austere

governments have felt compelled to fund at least some kind of non governmental

agencies of this type. While Reisen (2008a) has documented the effects of

fragmentation in the international sector, there is no equivalent documentation

of a similar process visible in the public sectors of many countries of the Global

North.

Social enterprises then and now

Social enterprises emerged alongside capitalism itself and the as yet

unexplored question is whether this expresses a symbiotic relationship with

capitalism or an antagonistic relationship that, at least up to now, has not been

able to mount much of a challenge to capitalism as a hegemonic social order.

21

Singer, the father of social and solidarity enterprises (SSE’s) in Brazil and

elsewhere in the Global South, has proposed they be viewed as organizations

operating in the tradition of utopian socialism, one in which individuals are

encouraged to carve out opportunities for making a living within the existing

social order but according to more communal, socialized property and work

relations (Cibele, et. al., 2013). Vieta (2013) agrees with this perspective,

arguing that utopian imagining and the creation of alternatives to the factory

system have grown in parallel with the growth of capitalism itself.

More systematic knowledge is needed both as to the scale and scope of

social enterprises now and as they emerged over time. One has the impression

that just as most people working in the capitalist sector work in quite small units

(fewer than 10 workers), most social enterprises are of a similar scale. By

contrast, SSE’s (unlike capitalist firms) appear to rely heavily on external

funding. Indeed, there is every reason to think most of the SSE’s in the Global

North, at least, are directly or indirectly funded by the mitigation industry.

The overall picture that emerges—at least for enterprises in the Global

North—is that of small, financially dependent operations that must somehow do

what has proved difficult or impossible to do before the financial crisis: find

ways to ‘grow’ solidarity in spite of the obstacles.

ENDNOTES

1 Wikipedia proved a reliable and flexible source of much of the information found in the

discussion. In addition the ETC group (2013) and Hendrickson, et. al., (2008) were particularly useful. 2 None of the numbers reported should be taken literally, of course; there are too many

disagreements and problems in collecting and collating even official government data on both

22

economic growth and population growth. The data can, however, be used to create a consensus

birds eye view of developments from 1950 to today.

3 The term workforce as used here is inclusive; it includes those whose work is essential to the reproduction of the population, including those working for wages. For extensive discussion of gender bias in statistical compilations used in policy analyses, see Gottfried (2013). For a highly detailed demographic assessment of gendered work, see Zannelli (2015).

4 This contrasts sharply with the logic underpinning an analogous impossibility theorem in

Marx’s discussion of capital accumulation. According to Marx, that instability was a consequence of barriers to profit growth (the tendency of the rate of profit to fall as more of production costs were fixed costs).

5 Development Assistance Committee (DAC) is a forum sponsored by OECD to discuss issues surrounding aid, development and poverty reduction the Global South. Set up in 1960, its main function has been to collect and publish statistics on aid flow. There are 29 members of the DAC including the European Union, which is itself a full member of the committee. The other members are (separately) the member states of the EU, plus Iceland, Japan, New Zealand, Switzerland, UK and US, So Korea. The World Bank, the IMF, UNDP, The African Development Bank, The Asian Development Bank and the Inter-American Development Bank participate as observers

6 CGIAR is a public-private partnership of research centres, academia, other development organization and the private sector. Some organizations express concern about public research assisting the development of patentable seed stock.

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Table 1: Food Supplied by the Industrial Food Chain and Peasant Food Webs Percentage of the Total Industrial Food Chain Peasant Food Webs Food consumed 30% *70% Arable land used 70% 20-30% International Trade 99% ?

* Inclusive of urban allotments (15-20%), hunting and gathering (15%), fishing (5-10%) and non-industrial farming establishments (35-50%). Source: ETC group, 2013b

Table 3: Staff Size and Budgets in core international aid system, 2007 Agency Number of Staff Budget (US$ Bn 2007) World Bank (IDA/IBRD) 10,000 26.8 IMF 2,500 0.9 WFP 10,600 3.0 FAO 3,600 0.8 IFAD 430 0.1 UNDP 5,300 4.9 UNCTAD 450 0.1 UNIDO 650 0.2 UNESCO 2,100 0.7 WHO/ GFATM

8,000 450

1.6 0.2

AFDB 1,500 0.2 Total = 10 45,580 39.5bn

Source: Reisen, 2008a.

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Table 2: Selected multilaterals working on the Millennium Development Goals

MDG / Thematic area Main multilaterals Other multilaterals with a role

MDG1: Eradicate extreme poverty and hunger UNDP, World Bank, AfDB, AsDB, IFAD, EC, FAO, WFP CGIAR, IADB

MDG 2: Achieve universal primary education World Bank, UNICEF, UNESCO UNFPA, UNRWA

MDG 3: Promote gender equality and empower women UNDP, World Bank, UNIFEM, UNICEF UNFPA

MDG 4: Reduce child mortality WHO, UNFPA, UNICEF World Bank, WFP, UNRWA

MDG 5: Improve maternal health WHO, UNFPA World Bank, WFP

MDG 6: Combat HIV/AIDS, malaria, and other diseases UNAIDS, World Bank, WHO, UNDP, UNFPA, UNICEF UNIFEM

MDG 7: Ensure environmental sustainability UN Habitat, World Bank, AsDB, UNDP CGIAR, UNIDO

MDG 8: Develop a global partnership for development World Bank, EU, UNDP, UNIDO, ILO, UNCTAD UNDP

Human rights OHCHR UNIFEM

Conflicts and humanitarian emergencies UNCHR, OCHA, ECHO, WFP, UNICEF, WHO UNDP

Source: Reisen, (2008b)

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