Socioeconomics and Solidarity Economy


After writing an earlier and rather angry article about the way poverty is perceived in the West, I’d like to look at some of the actual remedies that are being used in India…this is more about concepts that about examples. Anyone who is interested in knowing more can have a look at Wolfgang Bergthalers (and formerly Stefan Meys) Website which deals with startups in India as well as a broad analysis of Indian versus Austrian mentalities and ways of making business.

Solidarity Economy is a concept that anyone on this world should have a look at. We can no longer work entirely growth-oriented and entirely profit-oriented. Sustainability is an overused and eroded word today, but I think its original meaning conveyed something like creating a system which is capable of taking care of itself. A system which is flexible and which can be adapted to situations because situations do neither conform to a system nor are they solved by trying to make them conform to a system.

Usually the distribution of a product begins like this: you have to create the need for it. Manufacture it. Out of thin air (and hot air). Now that in itself is a deeply perverse thing in a global society with so many needs. We simply create more needs, distracting needs, unnecessary and ultimately harmful needs instead of focusing on the basic necessities and attempting to fulfill them.

We have to create structures that do not create new markets, but allow those markets to adapt to circumstances. We have to understand people not in order to manipulate them more efficiently, but to actually fulfill their needs. For this you have to understand a few things:

You can run a business that has a primarily social objective.

You can run a business that balances social, economic and environmental responsibilities.

You can offer products for people who have barely any disposable income – those products, however, need to be tailor-made to fulfill those people’s needs.

Those are all generalities. Let’s take the story of SELCO, the Solar Electric Light Company of India. SELCO provides rural communities with easily affordable solar panels. Their main focus is not on a nicely designed, state of the art product that can be sold for the best possible price (the best possible price meaning the maximum possible profit for the vendor). It is on integrating their product with the part of society that it is made for. It is on listening to the needs and possibilities of people and to make their life easier.

Disposable income equals trash money, money spent on valueless, glossy products. We buy because we have a low self-esteem and we are encouraged to buy to increase our status and self-esteem or to escape from our self-imposed and limiting self-image.

There are similar trends in India, among the middle-class, and of course nobody is completely free from spending their money on impulses – alcohol, sweets, cigarettes, magazines etc. But India has another market – low income families, rural communities, people living very near the poverty line and in many cases below it. How much money is necessary to live a humane and satisfying life is a hard question to answer. Is it enough to have a roof above your head, three meals a day and a bed to sleep in? Or do we need to choose from seven different kinds of insulations, the cuisines of seven continents and seven silken pillows for our weary heads? Low income is an arbitrary and temporal value, but for our purposes it is enough to say that those are people without savings who live from their daily work.

This is important because many Indians have no concept of saving money. What is there needs to be spent, today if not tomorrow. It is easier to calculate with short-term budgets – a woman-shopkeeper investing in solar panels could not afford to repay 300 rupees a month but she decided she could manage with a repayment of 10 rupees a day. She calculates in daily expenses and was paying 15 rupees a day for gasoline cans. 300 rupees were never available in one big pile, but 15 rupees were. In this way she managed to afford something which was – or so reason would argue – way above her price class without disappearing in a black hole of debts.

Debts have become currency in our economy and are – literally – a form of ownership. People barter debts, speculate on debts, find ways to increase debts in order to increase their value to them. We experience the feeling of being owned by someone if we owe them something. The control, however, should not be exclusively with the person giving the money but should be shared with the person receiving the money. A bank or a money lender should also be aware of his own responsibility in not giving out credits he knows are impossible to repay. There is a social responsibility that comes before any responsibility to business and this social responsibility creates – ideally – a socially responsible economy.