Degrowth and Local Economic Alternatives in the Czech Republic
Authors: Eva Fraňková*, Nadia Johanisová*, Eva Malířová**
Editing, graphics: Nikola Fousková*** & the GROWL team
* Department of Environmental Studies, Faculty of Social Studies, Masaryk University, Brno, Czech Republic, http://humenv.fss.muni.cz/english, emails: eva.slunicko@centrum.cz (Eva Fraňková), johaniso@fss.muni.cz (Nadia Johanisová)
** NaZemi (OnEarth), Kounicova 42, Brno, Czech Republic, www.nazemi.cz/contacts, email: eva.malirova@nazemi.cz
*** Society and Economy Trust, Údolní 33, Brno, Czech Republic, www.thinktank.cz, email: info@thinktank.cz
Introduction
The course „Degrowth and Local Economic Alternatives in the Czech Republic” took place in Valeč, Czech Republic from 18th till 22th of June 2014. Its aims were to provide both deeper understanding and practical experience of degrowth, to experience and reflect on participatory teaching methods applicable to degrowth, to create inspiring environment and facilitate meeting, sharing of ideas and discussion between people who seek an open-minded debate within a beautiful environment of the baroque village, castle and park of Valeč.
The course comprised of 4 main parts:
- Basics of degrowth (theory)
- Local economics alternatives (examples of practice) in the degrowth context
- Direct degrowth practice (work therapy)
- Train-The-Trainer (TTT) module for future trainers of degrowth
Most of the learning part made use of the so called Reading and Writing for Critical Thinking (RWCT) approach. RWCT provides concrete, practical methods, techniques and strategies integrated into an open but compact system which aims at developing critical thinking and supporting active learning processes. It is based on constructivist pedagogy and builds on the principles of physiological functioning of the human brain which is reflected in the three-stage learning model of E-R-R: Evocation – Realization of meaning – Reflection.1
This chapter focuses on the specific topic of the course, i.e. local economic alternatives in the context of degrowth.2 It brings the theoretical introduction to the topic (section 2) and povides examples of activities with students/participants following the RWCT approach (section 3). The materials should be useful both for the participants of the GROWL courses and for anybody else who wants to learn more, and possibly also discuss and teach about degrowth. It is a work in progress, and thus any feedback, comments and suggestions for improvements are very welcomed (please contact the authors).
Alternative economic systems in context
text by Nadia Johanisová3
We are living in times of swift, unsettling changes, of multiple crises (ecological, energy, and economic) and, as some would say, of a collapse of civilization as we know it. The impact of human production and consumption on nature and its "resources" is the key element of our predicament. There is the issue of ecosystem destruction wrought by human agency (WRI 2005), and the depletion of non-renewable resources (minerals, fossil fuels) with a vast range of consequences (TES 2007; HEINBERG 2011). This chapter deals with some alternatives and possible pathways to a regeneration of our economic system. In getting a thorough grasp of the context and meaning of these alternatives it is nevertheless imperative to first briefly delve into some of the basic critiques of contemporary economic thought (and of its practical impacts) and to briefly introduce current approaches to money creation and circulation, both of which significantly influence the workings of other economic phenomena.
Economic growth
Mainstream economics faces a growing wave of criticism (JOHANISOVÁ, 1998). One of the basic critiques concerns its application of mathematical methodology to relationships within the vastly complicated system of society and nature, which leads to many oversimplifications and serious omissions. Economics is also criticised for posing as an objective (i.e. positive) science, which describes reality as it truly exists, devoid of any values or assumptions of its own.
However, there are fundamental unacknowledged and therefore un-reflected values of mainstream economics which influence the assumptions economic models are based on as well as the content of economic textbooks. Such assumptions are transformed into axioms that cannot be rebutted within the thought system of mainstream economics because they are not critically reflected. (GOČEV 2006). According to critics (e.g. DALY&COBB 1990, BINKA 2008), contemporary mainstream economics is thus in some respects not a science even in the positivist sense. On the contrary, some of its aspects resemble a belief or a religion. If we concentrate on these "religious" aspects of mainstream economics, there are at least three such unacknowledged values.
These three neoclassical values or axioms are the beliefs in economic growth, free trade and in the perfect competition model. In the following text we will focus on the first one – economic growth.4
Economic growth is mostly defined as growth of the monetary value of the goods and services produced within a certain time period (generally one year) in a given country. It is most often measured as the yearly increase of an indicator of this aggregate production, called the gross domestic product" (GDP).5 As economic growth is usually given as a percentage, its absolute values (i.e. the absolute numerical/financial value of yearly increase of the GDP) are not discussed. In contrast to classical economists who believed that economic growth would one day come to an end, current mainstream economics does not explicitly deal with the issue. The implicit assumption is that growth will continue ad infinitum. At the same time, mainstream economics does not question whether this is good or bad, or more precisely, it assumes that it is good.
Although mainstream economics does not criticise economic growth and on the contrary seeks to promote it, economic growth as an existing phenomenon (within the economy) as well as a phenomenon seen as desirable from the mainstream economic (and also political) standpoint has faced criticism over the past decades by a number of authors (i.e. MISHAN 1967/1994, SCHUMACHER 1973/2000, DALY&FARLEY 2004).
Main objections to the contemporary concept of growth include the following:
- Growth in GDP indicates growth in production, which implies a growth in non-renewable resource and energy consumption and growing pressure on ecosystems.6
- The GDP indicator does not measure the non-monetized/informal economy, e.g. caring for family members, mutual neighbourly help or subsistence farming. Economic growth thus may be accompanied by erosion of social networks and bonds and diminish possibilities for non-monetary means of satisfying human needs.
- Economic growth is not indicative of the carving-up of the economic pie, i.e. of fairness in distributing income, including the increased income gained from the extra products and services produced as part of growth. It may thus be accompanied by growing inequality of income within a given society.
- Data on GDP growth do not show what is actually being produced (e.g. Is it useful? What is its lifespan?), for whom it is produced (e.g. How long will the product travel to its final recipient?), and how it is produced (e.g. Will the producer get a just price? How does the production impact the environment?). Furthermore, opponents of economic growth argue that its continuation at the present rate is mathematically impossible: growth of the national product in percentages masks the exponential growth of its absolute value (any number growing at a certain percentage doubles at regular intervals). Permanent exponential growth is unsustainable by its very nature.
Creation of money, instability, and the growth imperative7
Today, most money is created in banks through a process known as multiplied expansion of deposits or fractional banking. A detailed description can be found in most mainstream economic textbooks which, however, do not discuss its implications.
Some Consequences of the Creation of Money via Debt:
- instability of the whole system — the money supply can grow quickly, but it can decrease quickly as well (if people, companies, or governments take out fewer loans)
- easy means of profit for the banks — seigniorage
- widening gap between rich and poor (those who lend money profit via interest × those who borrow grow poor via interest payments)
- systemic pressure on increased indebtedness of families, companies, governments etc.
- pressure on development and economic growth.
The issue of money, debt, and interest is complex and we can only touch upon it here. We leave aside the issue of speculation and of deregulation of the banking sector; we will only concentrate on the point of pressure on development and economic growth. How does the creation of money as debt promote economic growth? Richard DOUTHWAITE (2000) and Willem HOOGENDIJK (1991) discuss the issue of the growth imperative: In a debt-based economy, in which the mechanism of money creation and investment leads to ever-growing indebtedness, there are creditors (banks, savers, shareholders, pension funds, some governments) who require their debtors (consumers, companies, governments, municipalities…) to pay interest (or dividends). This has the following implications:
Factors of the growth imperative:
- Money must make a profit: it has to be lent out/invested in a manner leading to as much interest/dividend as possible, making possible its later repayment, including interest or dividends, for the investor. Hence the pressure on companies to become larger, on ever-more production and innovation, on new investments and "development" in the form of new golf courses, incineration plants and other profitable projects which may or may not be in the public interest. "Money must grow", as HOOGENDIJK (1991) puts it; in other words: repaid loans must be re-invested or lent out again as soon as possible. One reason is also in the fact that the stability of the money supply (the amount of money in circulation) depends on this loan/repayment/loan treadmill. According to DOUTHWAITE (2000), economic growth has changed from choice to necessity due to the way money is created.
- Another factor of the growth imperative is the hope that economic growth will create new jobs. Unfortunately, under free market conditions economic growth may create new jobs, but at the same time it eliminates other jobs as companies strive to cut costs, especially the greatest cost: staff salaries. Douthwaite estimates that the continuing automation of production shuts down about 3% of all job positions each year (DOUTHWAITE 2000).
- A third factor of the growth imperative is the structure of public limited companies. It is an advantage for shareholders for their companies to grow, since increase in the scale of such a company's production and assets causes its share value to rise as well.
We may thus conclude that the way in which money is created and passed into circulation, and, more generally, an economy based on debt (and on profit-oriented investment), are some of the driving forces behind the growth imperative and therefore also behind economic growth. Since "money must grow", economic growth simultaneously becomes the driver behind the increase of the money in circulation (HOOGEDIJK 1991). In the case of a steep and long-term decline in production (that is, if the opposite of economic growth occurs) there is the danger of a concurrent swift decrease of money in circulation. That may lead to another decline of production etc.
Does this mean we are trapped? We will address the topic further on in the text.
Other economic theories, other economies
As mentioned in the introduction to this section, there are other schools of economic thought outside mainstream economics, often referred to as heterodox economics as a whole. Here we will briefly mention several authors who might be classified as heterodox/ecological economists.8 We will not however focus on such diverse schools of thought, but rather on topics that shed a different light on the economy, and on authors, not necessarily coming from an economic background, who base their work on values different from the economic mainstream.9 We will also mention some movements linked to the topic of "other economies".
Steady state economy
One of the first economists to attempt a different look at the issue of economic growth is the American author Herman Daly. His pioneering textbook of ecological economics (DALY&FARLEY, 2004) is premised on the economy as part of the Earth's ecosystem. Ecological economics for him has certain basic values and goals, which it should express explicitly. In addition to the traditional economic goal — efficiency of resource allocation — he explicitly postulates two other main goals of ecological economic research and policy:
- equity: achieving a distribution of wealth in a way ensuring that every individual can make a decent living, a aim that DALY&FARLEY (2004) rather unusually extend to future generations.
- optimal scale of the economy: In the case of production, this means to strive (for example, via ecological taxation) for a material and energy throughput through the economic system which would not focus on maximisation and growth, but on stability, and which would not endanger the planet and future generations' right to decent livelihoods.
Rather than perpetual growth, Daly thus suggests, as a goal for both the economy and for economics, a steady-state economy, in which the aggregate flows of materials and of energy through the system (that is, the consumption of natural resources and energy) would not grow in time, but would remain stable. Like Hines, Daly sees economic globalization and the race to the bottom as a great barrier to such efforts (DALY&FARLEY 2004:392): ecological tax reform, for example, which would help stop resource wastage, is paralyzed by the imperative for competitiveness on a global playing field.10
The non-monetized economy, commodification and convivial activities
One of the topics discussed widely across heterodox economic literature is the non-monetized or informal economy. The non-monetized economy includes all transactions outside the realm of monetary exchange. It involves caring for family members, neighbourly help, volunteering, do-it-yourself and a number of other activities including subsistence farming, in which people consume food grown by themselves. We have already mentioned the critique pointing out that the economic growth indicator – the GDP - does not measure these activities and may even mask their decline.
Ivan Illich (1973), an influential and radical thinker, goes further and interprets the whole process of modernization as a process of commodification, in which the activities that people used to be able to provide for themselves gradually change into goods — commodities. He sees this process as a loss of freedom and as production of scarcity: When economists speak of scarce goods which need to be allocated efficiently, ILLICH (1973) suggests that it is the process of commodification, reducing life to a process of production and consumption, which artificially creates (produces) such scarcity. An individual who is no longer able or cannot create a thing on his own and at the same time has insufficient means to buy one loses his or her autonomy and becomes poor (modernization of poverty). Wherever commodification has set in, people are no longer able to grow, produce and mutually provide the necessities of life via self-help. Instead, they have to buy their industrially manufactured substitutes. They are liable to lose their autonomy: while no longer able to provide what they need themselves, they often lack the money to buy it
Illich urges people to strive for independence from the economic system and to build convivial institutions, use convivial technologies and engage in convivial activities, with the word “convivial” meaning "autonomous, creative, and liberating." For Illich, the word “convivial” designates such activities, institutions, or tools that enable and strengthen human co-operation, initiative, and communication. "Convivial" activities, institutions, and technologies thrive where economic mentality, reducing life to simple production and consumption, has not yet taken over, or where people actively resist such reduction. Thus convivial technologies are technologies that enable and strengthen human co-operation, initiative and communication. According to Illich, modern convivial tools include e.g. public libraries, telephones, post offices, municipal public transport and markets for small producers.
In his book No More Throw-Away People, the American lawyer and activist Edgar Cahn, one of the founders of time banking (see below), discusses issues around the non-monetized economy and emphasizes both its importance for society and the fact that it is often invisible, and goes unappreciated. He introduces the term co-production to define activities within this invisible economy, and looks for ways to appreciate and promote activities which we tend to overlook simply because they are done for free. Through her model of a three-layer cake, ecological economist Hazel HENDERSON (2001) adds another dimension to this discussion by pointing out that besides the non-monetized economy of human society there is also a non-monetized economy of nature. Nature provides us with its "goods and services" free of charge and we are not able to survive without them. Therefore the bottom layer of her "cake diagram" consists of goods and services of nature, the middle layer comprises the non-monetized human economy and only the third, topmost layer designates the monetized economy. Through her cake model, Henderson emphasises the ecosystem of the Earth as a foundation on which humans depend: it is bottom-most in her diagram. The next layer, encompassing the sphere of the non-monetized economy (mutual aid and social relationships) is dependent on the layer below it. Last of all comes the monetized economy, the very topmost layer dependent on both the economy of nature and of non-monetised human relationships.
PHOTO_CAKE_HANDERSON
Figure 6: Hazel Henderson´s three)-layer cake model of the economy (source: http://www.communitypartnering.info/resources3.html)
Economic democracy
As mentioned above, ecological economics as conceptualised by Herman DALY (DALY&FARLEY 2004) clearly states its basic values and goals: an optimal scale of economic activities, equitable distribution of assets and economic efficiency. Another explicit value that contemporary economic politics should be based on, or which it ought to aim for, is, according to JOHANISOVÁ&WOLF (2012), economic democracy. The authors view economic democracy as a parallel to political democracy, applied in the sphere of economics. They define it as a system of checks and balances on economic power and as support for the right of citizens to actively participate in the economy.
Specifically, economic democracy includes (JOHANISOVÁ&WOLF, 2012) the following elements:
- Regulation of market mechanisms and corporate activities: As already mentioned in the section on free trade, the process of neoliberal economic deregulation has increased the economic power of multinational companies and this has a number of implications. The strengthening of regulations that limit the economic power of large investment and multinational corporations promotes economic democracy.
- Moral, political and practical support for social enterprises: Social enterprises (and co-operatives, see below for more on both) are a manifestation of economic democracy as their members or stakeholders (those involved in and impacted by an organization's activities), have the right to participate in the governance of their social enterprise (or co-operative).
- Creation of money by the local community and money as a public good: The privatization and centralization of money creation processes leads to concentration of economic power. Examples of economically democratic alternatives include community currencies (see below) or currencies created via institutions that are democratically governed and accountable to the public (see also NORTH, 2007, MELLOR, 2010).
- Right to use or reclaim the commons: the commons as a form of land stewardship are often managed on the basis of custom, function in a non-monetized economy and do not aim at maximization of production. This is why they are absent from mainstream textbooks. However, they may be understood as a democratic form of ecosystem management, which promotes just redistribution and environmental sustainability. The commons are constantly endangered by encroachment or enclosure by the private or public sector.
- Equitable distribution: To actively participate in the economy as consumers, investors and producers (both in the monetized and non-monetized economy), citizens need access not only to a source of income, but also to capitals (e.g. community land, available premises for entrepreneurial purposes and warehouses, accessible financial services and business credits, community seed banks, professional counselling services etc.). The widest possible distribution of such capitals is a feature of economic democracy.
- Economic freedom: Economic democracy requires economic freedom. Not in the sense of unregulated free trade which favours big corporations and commodified economies, but as support for the variety of production forms: small-scale businesses, craft industry, non-monetized economic networks and subsistence. According to Vandana Shiva we have the right to choose not only what we produce and consume, but also how we produce and consume a given product (JOHANISOVÁ, 1994).
Economic localization
A counterweight to the concept of free trade and the related idea of economic globalization is the recent concept of economic localization or one of its synonyms (bioregional economy, re-localization, etc.). It is both a normative ideal (like economic democracy or the three goals of ecological economics according to Daly, below) and an effort to provide a theoretical base to projects which have been emerging spontaneously, from the bottom-up, or which have existed for some time, and whose important feature is local production for local consumption. Box schemes, farmers' markets, local currencies, allotments, and communal wood-fired heating plants all provide examples of economic localization (see below).
The topic of economic localization (or just localization) is summarized by Eva FRAŇKOVÁ (2012), who suggests the following definition (p. 107): "[Economic localization is] both the process and the result of moral, political and practical support for as great a scale of production and consumption as possible [...] more specifically, a preference for locally owned businesses (including co-operatives, community enterprises etc.), locally based monetary and capital flows, and a primary focus on satisfying local peoples' needs. Localisation emphasises sustainability of production and consumption, development of local communities, democratic decision-making, support for local subsistence and self-reliance, and relationship to place." Localization does not mean cutting off ties with the surrounding world. What exactly is meant by "local" is always a matter of discussion and differs from case to case. The following are often seen as the advantages of localization: the possibility to form a deeper connection with a particular place, protection against the instability of global economic systems, higher employment, efficiency in terms of material and energy use, less negative externalities and resource conflicts in distant places, limiting economic power/strengthening economic democracy (JOHANISOVÁ, 2007: p 48—58).
Discussions of localization may involve the local multiplier, an indicator that measures the circulation of money in a given place: the more people spend locally, the more time it takes before money that had come into the area leaves it again. A local multiplier can be calculated for a household, a business, or another type of organization. The methodology for its calculation was developed by the British alternative economic think tank, the New Economics Foundation, and has been adapted to Czech conditions (KUTÁČEK, 2007, see SACKS 2002 for the original version in English). From a mainstream economics perspective, it might be argued that while localization may be efficient in in the long-term as regards sustainable resource use, in proves inefficient from a short- term perspective, as it cannot produce goods cheap enough for mass consumption and export, and is therefore economically unviable. Contemporary economic trends, it would seem, are aiming towards the very opposite: goods are manufactured within global chains of production, while small, local manufacturers, producing for local markets, tend to vanish. Some localization proponents counter that in reality the current economic trends are the ones that are economically unviable, since they waste scarce resources and depend on expensive infrastructures, which makes them very vulnerable in case such infrastructures fail. This, they argue, is increasingly likely with growing resource depletion (KOROWICZ 2010). In this view, localization is one of the ways to impede or mitigate impending collapse. Richard DOUTHWAITE, who has written extensively on economic localization, (DOUTHWAITE 1996: Chapter 2; see also JOHANISOVÁ, 1999), proposes three ways to support localization within individual regions from the bottom-up:
- Looking at resources in each particular region and how these may be used to satisfy basic needs of its inhabitants directly. We ought to stop thinking in terms of comparative advantage and refrain from further specialization and support for production of goods and services intended for export, working on the assumption that this will provide us with sufficient means to buy whatever we need in other regions. At a time of increasing complexity and instability of world economy, and with the race to the bottom, this path has more and more drawbacks and risks.
- Refusing global prices as a standard determining what is to be produced in a given region. First, global prices may not reflect the true value a given product has for us. E.g. food may be cheap on world markets. But as food is necessary for our survival, its real value is much higher for us than its market value. We should therefore preserve its local production. Second, the value of local businesses is much higher for us than for outside investors. A local business is a source of local employment, strengthens the local multiplier and provides a long-term source of income for the municipality/region. In term of the benefits for the local community/municipality, as opposed to benefits for an outside investor, the long-term stability of a local investment is substantially more important that a fast return on such an investment.
- Strengthening the competitiveness of local products vis à vis products from outside the region, but using other than mainstream paths to achieve this alternative ways to lower product prices include the following: a) short circuiting: if producers can sell their products locally, and to local customers, they save on advertising, transportation, packaging costs etc.; b) obtaining some inputs (factors of production) at cheaper-than-market rates, which again leads to savings on costs.
DOUTHWAITE (1996) suggests some ways to save costs by obtaining inputs at lower-than-market rates:
- lower wages — people are willing to accept lower wages when their work is meaningful for them and brings other-than-monetary benefits. However, this is to be implemented only in the case that the producer sells all his products locally. Only then does the desired local multiplier effect happen, and the race to the bottom is avoided.
- access to cheap credit. If a local producer is granted credit at a lower interest rate than credit offered by regular commercial banks, e.g. from an ethical bank or a local credit cooperative (see below), it will again lower his costs and thus price of the goods.
My own research has shown (JOHANISOVÁ, 2005) that a number of social enterprises employ such lower-cost inputs as part of their survival strategies. Apart from cheaper labour (e.g. volunteers) and advantageous credit from ethical financial institutions, cheap inputs often include lower rent on premises or land. JOHANISOVA et al. (2013) use the term non-market capitals to describe such inputs gained at lower-than-market-rates. There is a link here to the fifth form of economic democracy, which demands as great a distribution of assets throughout the society as possible, as well as to the sixth: it is a wide distribution of assets/capitals and accessibility of non-market capitals (together with the "short circuit" approach) that may contribute to the survival of craft workshops, small producers etc. and thus also contribute to a variety of production forms and to economic freedom in the sense of Vandana Shiva (for her work see also e.g. http://www.navdanya.org/).
Transition towns, the degrowth movement and alternatives to capitalism
Although the discussion on economic localization has only gained momentum over the past few years, its different variations were being suggested as a potential goal of the economy from the 1950s onwards (BOOKCHIN in BIEHL 1997, SCHUMACHER 1973/2000). However, social movements critical of the current economic system (from both social and ecological perspectives), and with a concurrent and strong focus on economic localization, have appeared only recently.
One of them is the Transition Network or Transition Towns movement. Initiated in Great Britain in 2005 by Rob Hopkins, the movement currently (2013) has around a thousand local groups in a number of countries all over the world.11 Transition Town activists are deeply concerned about the fact that burning fossil fuels leads to climate change and at the same time accessible sources of such fuels are getting more scarce (they especially emphasise the issue of peak oil). According to the movement, in order to prevent collapse, industrial societies must move to lower energy consumption levels, to different patterns of production and consumption, and must espouse economic localization. Many Transition Town activists in addition believe that working on these issues can be fun, provided they start in time and work together. Local groups (see map: http://www.transitionnetwork.org/) meet up, often in co-operation with municipalities, create working groups, and organize practical transition activities. For example, they start local currencies, joint building insulation projects, community gardens or community-supported agriculture projects in co-operation with local farmers (see below). The movement has also published several manuals focusing on practical areas of transition to a local economy, resilient to possible sudden changes in the future.12
Another movement focused on alternatives to the present economic and social mainstream is the Décroissance or Degrowth movement, translated into Czech (with inevitable inaccuracy)13 as Non-Growth. The movement is strongest in the South of Europe, namely in France, Spain and Italy. The Degrowth movement is rooted in a more pluralistic and sophisticated intellectual breeding-ground than Transition Towns and pursues broader goals (it puts more emphasis on equitable distribution and solidarity, organizes public events, and sometimes strives for change of policies such as shorter working hours or a basic/citizens' income).14 Similarly to Transition Towns activists, many Degrowth proponents believe that activities aimed at restoration of local cycles, limiting consumption and slowing the pace of life can bring enjoyment rather than deprivation. While Transition Towns stress the energy aspects of the current crisis, Degrowth proponents focus on the broader issue of material and energy throughput in the system (see the section on the steady-state economy) and on related environmental issues. Another strong source of degrowth thinking is criticism of mainstream development models. The Degrowth movement has a strong academic wing which has so far organized several international conferences.15 Its proponents stress that the movement, above all, strives to decrease consumption of resources and energy in society, and although this is closely connected with the reduction of the national aggregate economic product (i.e. reduction of the GDP and thus a - temporary reversal - of economic growth), such an outcome is not their primary goal.
One of these proponents, Giorgos Kallis, defines degrowth thus: "a socially sustainable and equitable reduction (and eventually stabilization) of society´s throughput” (KALLIS 2011:874). If we think back to the conclusion of the section on money creation, the academics within the Degrowth movement actually attempt to answer the key question of the present: How do we degrow without crashing?
Transition Towns and Degrowth are not the only "bottom-up" movements looking for a socially and environmentally more sustainable alternative to the economic mainstream, although they are probably the most visible and organized ones. A number of new studies has emerged recently mapping the alternative or "post-capitalist" economic practices of households or other entities (JEHLIČKA et al. 2013, NORTH 2007, CASTELLS et al. 2012). These studies provide another perspective on the non-monetized economy of Hazel Henderson or the convivial activities of Ivan Illich. The last section summarizes some (mostly organizationally more structured) forms of economic alternatives and touches upon their links to the theory outlined above.
Other economies
The following overview first briefly summarises the fundamentals of the legal form of co-operatives. Co-operatives had been discredited during the Communist era and many people in both the Czech Republic and Slovakia continue to link them to this specific historical period. The following text demonstrates that co-operatives are far from being a predominantly Communist project. Another concept briefly explained below is "social enterprise". The term has emerged in the Czech Republic largely thanks to the European Union and can refer to co-operatives as well as to groups and organisations with other institutional structures. Similarly, community currencies, ethical finance and economic localisation projects may adopt either cooperative or other legal forms. The latter may include associations, limited companies owned by a municipality or by a non-profit organisation, and other legal forms depending on the country in question). They may also operate informally, i.e. not be officially registered in any legal form.
Co-operatives
The first co-operatives began to emerge in Europe in the mid-19th century, and were preceded by worker mutual aid organisations as early as the 18th century. An example of the latter might be the British building societies (a group of workers saving money together for twenty years and gradually helping to build each other´s houses, with those already housed continuing their regular contributions until all members of the group owned their own homes.) Another example would be the mutual-aid societies (pokladny or bratrstva) which served as insurance companies in cases of illness or death of workers in Prague calico factories (MATOUŠEK 1947). The first co-operative in Slovakia was founded in the town of Sobotiště in 1845.16 Only several months before, in 1844, the well-known cooperative Rochdale Equitable Pioneers, inspired by the texts of Robert Owen and William King, was founded in Rochdale (now a suburb of Manchester). Its members (poor local artisans) bought food and other items wholesale and sold them to each other in their own shop for wholesale prices. The Rochdale co-operative grew and was a great success. After its basic principles were published, it inspired the founding of many other co-operatives all over the world. While Great Britain is often referred to as the cradle of consumer co-operatives, other types of co-operatives emerged in other countries around the same period and spread rapidly: credit co- operatives (usually called credit unions) in Germany, producer co-operatives in France and agricultural co-operatives in Denmark (BIRCHALL 1997). In Czechoslovakia, the co-operative tradition was strong since the closing decades of the Austro-Hungarian Empire and flowered between the world wars with a diverse, numerous and well-networked co-operative movement.17
The co-operative boom of the second half of 19th century led in 1895 to the foundation of the International Co-operative Alliance18 which adapted the Rochdale principles as its own set of principles and has revised them several times (the last revision dates from 1996). These principles, available on the association's website, are generally accepted as constituting the fundamental principles of co-operative functioning, at the same time summarizing some key differences between authentic co-operatives and mainstream business enterprises.
Seven Cooperative Principles (see also HOYT 1996, GLOPOLIS 2012):
- Voluntary and Open Membership
- Democratic Member Control
- Member Economic Participation
- Autonomy and Independence
- Member Training and Education
- Cooperation among Co-operatives
- Concern for Community
The above principles demonstrate the specific character of co-operatives as compared to producer/commercial enterprises. The main goal of a co-operative´s activities is not profit, but rather the provision of services to their members (or another defined stakeholder group). As profit is not their primary goal, co-operatives may decide to utilise any profits e.g. to support the local community, rather than distributing them to members as dividends. The members of a co-operative tend to a large extent to be identical with the investors, with the staff (the latter especially in producer co-operatives) and often with the clients as well (especially in consumer and credit co-operatives). Co-operatives, in addition, are controlled democratically by their members, whose financial share value is usually limited, to prevent order of magnitude discrepancies and to ensure that the balance of power within a co-operative is maintained. We have already mentioned the connection of this particular feature of co-operatives to the principle of economic democracy.
If we are aiming for a steady-state economy and economic localization, co-operatives are better for the following reasons:
- As goal of cooperatives is not profit but providing a service to a target group, there is a better chance that co-operatives will satisfy real and urgent needs. Where real needs are met, the call for economic growth is less.
- Member shares in authentic co-operatives usually maintain their original value even when a co-operative expands, and are not freely tradable (a member cannot sell his/her share directly to somebody else). This means that speculation with shares is not possible and members are not motivated to expand the size of their co-operative solely for the purpose of increasing the value of their financial shares.
- Due to the one member-one vote principle, the impossibility of direct sale of member shares, the basic goal of a co-operative (serving its members) and the fact that a member is often also a co-operative employee and/or client, there is often a stronger and more long-term bond existing between a co-operative and its members when compared with the usual business enterprise. Co-operatives thus also tend to have a deeper bond to a particular place or community.
According to the International Co-operative Alliance, co-operatives today have a total of around one billion members worldwide. Of course we do not know how many of these are members of authentic cooperatives. On the other hand, it is true that many new alternative initiatives often espouse a co-operative organisational structure. In the Czech Republic, one example would be Kulturní noviny, this co-operative publishes an on-line political and cultural weekly and its members hope to graduate to printed form once they find more members and readers (http://www.kulturni-noviny.cz). Another is the car-sharing co-operative Autonapůl. It owns cars that its members (and non-members) can hire as needed (http://www.autonapul.org).
(Eco-)social enterprises
The term social enterprise has come to the Czech Republic from Western and Southern Europe via the EU. In the Czech Republic and Slovakia, its meaning is currently often narrowly conceived as referring to what in the United Kingdom has been called "social firm" and is now commonly designated as work-integration social enterprises (WISE). These social enterprises are distinguished by employing people who are disadvantaged in the normal job market.19 This situation is further complicated with the introduction of another term — social economy — which is often perceived as identical to social enterprise. In fact, it is a broader term which, besides social enterprises, encompasses also non-profit organizations which do not have a business dimension.
Although the definition of social enterprise is not rigid, it usually includes the following principles:20
- It explicitly states a social, cultural or environmental goal in its founding documents. This can be employment, community services, education, biodiversity preservation, support for local food links, etc.
- At a least a part of its income comes from its own business activities.
- It is an autonomous organization where major decisions are made by staff, members and other stakeholders.
- At least part of its potential profits are recycled into the social enterprise itself and/or are used for public benefit.
- A social enterprise has a bond to a given region and primarily strives to meet the needs of the local community and to use local resources.
Differences between a social enterprise and a co-operative
First, it is important to note that according to one well-known European definition of the social economy,21 which is based on the legal/organisational structure of the organizations discussed, all co-operatives fall into the category of "social economy" ( and as most also function within the market, they would also implicitly fall into the category of "social enterprise"). Besides, co-operative principles and the principles of social enterprise are clearly similar. On the other hand, it may be argued that not every co-operative functions for the public benefit, and that there is nothing to stop a co-operative from distributing any profits to its members only. If a co-operative is not in reality an authentic co-operative, its ethos and functioning can be very close to that of a normal business enterprise. Alternatively, it can be co-opted by the state, losing its autonomy and bottom-up governance process. We can thus see that a co-operative is arguably not always a social enterprise as the latter is usually defined.
Another difference is that "social enterprise" is a higher category than "co-operative": social enterprises may adopt different legal structures (co-operative, association, company limited by guarantee, public benefit company, etc.): The possibilities are many and depend on the respective legislation of each country. A social enterprise according to some authors may even be an informal group without legal incorporation. Therefore, estimating the number of existing social enterprises and their activities on a European scale is difficult. In 2011, there were around 50 social enterprises registered on the Czech website http://www.ceske-socialni-podnikani.cz. As of 2015, there are over 200 registered in this directory. The majority of these enterprises focus on employing disadvantaged persons (the WISE type of social enterprise mentioned above). There are likely to be many more projects in the Czech Republic that can be seen as a social enterprise, including many with an environmental remit. From the perspective of economic goals and values presented in this text, social (or better: eco-social) enterprise has a great potential. The reasons are similar to those discussed in the passage on co-operatives above.
Community currencies
The beginnings of community (also local, social, green, complementary, alternative) currencies can be traced back to the 1830s in Great Britain where the first co-operative societies started local exchange markets (so-called "labour exchanges") with prices of goods set according to the costs and time demanded for their production.22 Another surge in local currencies came during the economic crisis in the 1930s (for more details see DOUTHWAITE 1996, JOHANISOVÁ 1999), inspired by the work of Silvio Gesell who criticized the institution of interest and suggested that, on the contrary, negative interest should be imposed on money in order to increase its circulation (JOHANISOVÁ 2014). The most recent boom in community currencies dates from the 1970s (time banks in Japan, MILLER 2008) and especially from the mid-1980s, when Michael Linton, a Canadian, created the Local Exchange Trading Systems (LETS), which spread quickly, particularly in English-speaking countries. Community currencies reached a mass scale (millions of users) in Argentina at the turn of the millennium after its official currency had failed (NORTH 2007: Chapter 8). Community currencies remain widespread in South America to this day.
There are many types of community currencies and a number of transitions between them exist. However, all of them are issued by a local community which they tend to serve exclusively (although exchange systems between individual community currencies can also be found).
Three ideal types of community currencies:
- LETS systems23 mostly operate as virtual currencies (i.e. coins and banknotes are seldom involved), and although today they are usually run by computer programmes, a LETS system may also operate on the basis of cheque-books, with the cheques sent by post to a volunteer co-ordinator/book-keeper. Their advantage lies in their simplicity. A group of people meet, come up with a name for the new currency (e.g. "raisins") and make a list of activities (or products) that each of them is able to supply the others with within the system. These products and services (typically bike repair, garden products, English lessons) are then assigned a price in the new currency by their supplier (this price is often based on what the person would charge for the service/product in the official currency) and a list of the products/services ("supply list)"is created and circulated. The list is then regularly updated and extended. If a computer programme is used, new offers of products/services may continuously be added to the supply list and usually a "demand" section is included together with the "supply" section. A co-ordinator is then appointed who collects the cheques and keeps records on the members´ accounts. A computer programme, however, manages these tasks automatically. At the beginning, all participant accounts are on "zero". When A buys a service or a product from B, he/she gives B a cheque which B then sends by post to the co-ordinator who then credits income to B's account and charges A's account with the expense. In the case of a computer programme, B sends e.g. an electronic invoice which A accepts by clicking on it. The "raisins" are then moved from the account of A to the account of B. If A is in debit, it does not matter, as the system is interest-free. Thus, a member has in fact an unlimited amount of "raisins" at her/his disposal. The only limits for the member are her/his time and possibilities for meaningful spending. The system usually has some form of social control to safeguard it from possible abuse by members. For this reason (easier social control), it has been recommended to limit the number of members to 500 (Douthwaite 1996). An example of a LETS system in the Czech Republic is RozLEŤSe in Brno (http://www.rozletse.cz, researched by Kala et al. (2013).
- German regional currencies have their roots in the thinking of Silvio Gesell and in the Wära currency, which circulated in Germany in 1920s and at the beginning of the 1930s and was inspired by his work (Douthwaite 1996: 94-96, Johanisova 1999). This type of currency (we will describe specifically the "Chiemgauer", which is the most successful German regional currency, operating in the Bavarian Chiemgau region) is not virtual, but printed, and people can buy it at one of the places of issue for Euros at a 1:1 ratio. When buying the Chiemgauers, a buyer is entitled to choose a public interest non-profit organization which will receive 3 percent of the total amount paid by the buyer in Euros. This money (the 3 percent for the non-profit) is then physically paid into the system by a person opting for a transaction in the opposite direction: exchanging the Chiemgauers back to Euros. The Chiemgauers can be exchanged for Euros at any time, but with a 5 percent deduction. The remaining 2 percent of the deducted amount is used to partly cover the costs of running the whole system. A buyer may spend his/her Chiemgauers in one of the shops accepting the currency (in 2009, there were more than 600 such shops in the Chiemgau region). Shopkeepers can try to draw their (local) suppliers into the system. In accord with the teachings of Silvio Gesell on negative interest, the person who has a given banknote at the end of each trimester must buy a stamp priced at 2 percent value of the given banknote and stick it on. Otherwise, the banknote is no longer valid. This measure aims at speeding up circulation of the currency which is thus rendered worthless as a store of value, and functions solely as a medium of exchange (FRAŇKOVÁ 2010).
- Time banks are a community currency in many ways similar to LETS systems. As with LETS, participants register services they demand and offer, and then help each other. One difference is that both supply and demand are limited to services, most often along the lines of shopping, cutting grass, or house cleaning. Another difference lies in the evaluation (price) of the work provided within the time banks system: the currency unit is equal to one hour of work. Thus for one hour of his/her work (any kind of work), a member receives as compensation one "hour" (as material currency/banknote or paid into their time bank account)24. A third difference is in greater centralization: the time banks system has its own co-ordinator linking potential suppliers with those who need the service, e.g. with regard to proximity of place of residence. The reasons for these differences stem from the origin and purpose of time banks. They are most often created as a form of support for the elderly, disabled and ill, and one of their sources of inspiration was the idea of Edgar CAHN (2000) that nobody likes to receive without being able to give back.25 In a time bank system, a person can both receive and provide care, often despite being old or disabled. According to Cahn, everybody is able to do something and has something to give, even though she/he is already retired or her/his skill is not tradable within the often merciless system of paid labour. Time banks, which originated in Japan and later in the USA from where they spread to Europe, have another advantage: If, for example, within an integrated time bank system, a son regularly helps a senior citizen in one part of a region, he earns "hours" which he may use to obtain assistance for his own parents who live in a different part of the given region, and whom he cannot visit so often. In Japan, time banks are widely spread and offer also, among other things, courses for senior citizens etc. Some of them are even a part of the state health insurance system (MILLER 2008).
The above examples indicate that the goals of different community currencies tend to vary. The reasons members give for participating in such a system are even more varied (NORTH 2007). We have mentioned the goals of time banks above. As mentioned by FRAŇKOVÁ (2010), the goals of the Chiemgauer currency include: support for the local economy, for employment and for local non-profit organizations. NORTH (2007:80-100) describes a detailed study on motives for participating in the Manchester LETS system, which functioned from 1992 to 2005. While some members saw LETS as a neutral instrument of exchange and as a way to improve their financial situation, others neared the stance of E. Cahn stating that the LETS system decommodifies labour and sees "people as more important than profit, and satisfying needs as more important than efficiency". Other members emphasized the environmental and local dimension or said that LETS helped them to at least partially free themselves from the power of a system with which they disagreed. Considering the perspective of economic values and goals mentioned in this chapter, community currencies may contribute to reducing the pressure on economic growth, both because they are not formed through debt and are interest-free, and because they (like co-operatives) satisfy real needs. Since they mostly circulate in a small area, community currencies have a localization potential, and, as already mentioned in the chapter on economic democracy, they may be understood as a manifestation of economic democracy (on this see also NORTH 2007). Local currency systems are quite varied when it comes to their form of organization — they may be a co-operative, an association, or remain as an informal group. Considering the principles of social enterprise stated above, community currencies can probably be described as social enterprises.
Economic localization projects
Economic localization projects are as many as they are diverse. As we can mention only a small part here, I have selected those projects which already function in the Czech Republic today. Economic localization projects may, in a number of cases, be understood as a special type of social enterprise.
- Self-provisioning and gardening allotments are a good example of economic localization, even though they are often overlooked, as we tend to take them for granted. Moreover, growing one's own vegetables and fruits, or keeping farm animals, are all activities that take place within the non-monetized economy, and are thus not registered by the GDP. This is in spite of the fact that they satisfy human needs and provide additional benefits in the form of positive externalities (they benefit the environment: they do not require transportation, packaging and often involve organic approaches — see JEHLIČKA 2013). Some gardening allotments even provide social benefits by strengthening social and community bonds. While in the Czech Republic the importance of self-provisioning as an activity tends to be under-rated, Degrowth movement and Transition Towns activists often see local self-provisioning as a keystone of community resilience and food security. Sometimes, they grow their food in community gardens, which are similar to gardening allotments but are owned communally.
- Community supported agriculture (CSA) and box schemes in the Czech Republic have emerged together with other local food projects in the past several years (DVOŘÁKOVÁ, 2013). CSA is a system where a group of people contact a farmer at the beginning of the growing season and pay in advance for a (usually) weekly delivery of agricultural products (often vegetables) for the whole duration of the season. The client/member usually picks up the produce at a pre-arranged distribution place, sometimes he/she picks it up directly at the farm. He/she receives whatever the harvest was during the given week. In a box scheme, the client/member pays for their weekly produce, which they also receive from a farm, each week. They may often also choose its contents in advance via a farm's ordering system. In many cases, the client is not obliged to subscribe to regular deliveries for the whole season. While in the Czech Republic box schemes and CSA are perceived as separate, in the USA, the place where the concept (though not the practice) of CSA originated26, the two are seen more as part of a continuum. On one end of the spectrum we find farms owned by CSA members who hire the farmers, are responsible for the farm, and pack and distribute the produce. On the other end of the spectrum are farmer-owned (or rented) farms where the farmer does all the work and clients/members only buy the produce. There are many transitional stages where members help with farm work (sometimes earning their produce this way), harvest, packaging, and produce distribution, or organize public events at a given farm etc. The CSA systems have a number of advantages from both the perspective of economic localization and the degrowth ethos (such as meeting actual needs, reduction of material and energy flows), but in cases when the clients/members do not actively participate, the CSA system can become too much of a burden for the farmer. (JOHANISOVA 2005, HENDERSON & VAN EN 2007).
- Food banks resemble historical consumer co-operatives (such as the Rochdale Pioneers or some early Slovakian consumer co-operatives called potravní spolky, see e.g. PETRÁŠ et al. 1992), or the contemporary American associations known as food coops. Essentially, a group of people (with or without formal legal structure) procures storage premises and begins buying durable organic foodstuffs in bulk from either farmers or (more often) from larger-scale suppliers. This is then distributed to members at lower-than- regular retail prices. In some cases the main reason for starting a food bank is not so much savings on costs as inadequate access to organic food in the area (JOHANISOVÁ 2005). For more on the Czech terminology, see Suchá 2010: 29-32). In 2001, a food bank was started in the Slovakian town of Revúca, consciously following in the footsteps of the first Slovakian consumer co-operative founded there in 1869. The statute of this historical social enterprise (in Slovak) can be found on the website of the civic association Alter Nativa.
- Farmers' markets have emerged only recently in the Czech Republic, and their numbers have so far (as of 2013) been going up steeply.27 They are most often organized by municipalities and by non-government organisations (DVOŘÁKOVÁ 2013). They differ from traditional food and farm produce markets, which have survived in some areas (but often also sell goods not produced locally) by their explicit localization ethos, expressed e.g. in the Farmers' Markets Statute (Kodex farmářských trhů) issued by the Ministry of Agriculture of the Czech Republic in 2011. This statute defines the goals of the farmers' markets as "support for small and medium producers, breeders, processors and manufacturers of food; providing citizens with a supply of fresh produce of prevailingly Czech and regional origin; creation of new public spaces that will (...) serve as meeting places; bringing the city population closer to the growing season and natural seasonal cycles." (DVOŘÁKOVÁ 2013). Disadvantages of farmers' markets lie in often high prices of the produce sold, and, in some cases (e.g. some Prague farmers' markets), also in the relatively far distance that the sellers are coming from.
- Local energy production is a way in which communities (and in the Czech Republic small and medium municipalities figure prominently here) can to some extent free themselves from dependency on fossil fuels by utilising local/renewable sources of energy. It can also bring social benefits in the form of lower/more stable prices of energy, cleaner air, local multiplier effect and employment. Communal energy production in the Czech Republic mostly involves biomass-fired heating plants (sing wood chips and straw), of which in 2010 19 were in municipal ownership. As shown by a study conducted by the Economy and Society Trust (NĚMCOVÁ 2010), the social benefits mentioned above really did materialise in surveyed municipalities. At the same time, several were faced by thorny economic issues. For example, the citizens of some towns or villages demanded a price for the heating services that was lower than the municipality could comply with, especially in cases where the municipality did not have its own forests and depended on an outside supply of biomass whose costs were high. Problems also arose in some cases where the municipality had to repay loans taken out to cover the high initial investment. The study shows that municipalities often lack business expertise and know-how needed for the successful start-up and operation of community-owned heating systems. This indicates the need for counselling and other enabling services in this sphere. The citizen's association Priatelia Zeme-CEPA is an example of such an enabling organization, which focuses on building energy autonomy in the Poľana region (41 municipalities, 60 000 inhabitants), in central Slovakia.28
Ethical finance
The category of ethical finance includes a number of formal and informal institutional types, of which we can here mention only a few. An example of the informal type would be ROSCAs (Rotating savings and credit associations), found in many non-Western cultures and communities. Members of a ROSCA meet socially regularly, perhaps once a month. At each meeting, each member contributes an agreed sum of money to a common pool (all members give the same amount). One selected member (often chosen on the basis of drawing lots) then gets the whole sum. Each time (each month) a different member is chosen to receive that month´s sum of money.29 We will also skip mutual insurance companies (mutuals) that exist e.g. in the Netherlands (DOUTHWAITE 1996: 169), American non-profit reinvestment trusts (JOHANISOVÁ 2008), Islamic banking, and new forms of virtual (internet) community financing (crowdsourcing).30 Where ethical finance institutions provide loans to authentic co-operatives, social enterprises or economic localization projects, we may see them as enabling organisations, providing non-market capitals (see the last paragraph in the section on economic localization) and helping the projects mentioned above to survive. On the other hand, the majority of these institutions provide loans with interest and thus contribute to the growth imperative (see above). For contact information of ethical banks, see: http://www.inaise.org/.
Lecturing on economic alternatives with the RWCT methodology
As mentioned already in the introduction, within the whole Czech course the methods of Reading and Writing for Critical Thinking (RWCT) were used. The lessons followed the structure of E-R-R (Evocation – Realization of meaning – Reflection) phases which provides a model for understanding teaching processes and serves as a mechanism for organizing the lessons. A brief description of these phases of the learning process may provide a sense of the structure and its impact on the teaching process.
1. Evocation
Every learning process starts when students are able to realize and express verbally the things they already know about the chosen topic or what they think about it; at the same time they should also be able to formulate their questions and those areas of the topic they feel ambiguous about and which they would like to find answers to in the course of the following stage.
This initial stage helps students to:
- evoke prior knowledge, sentiment, or impressions;
- generate individual and/or collective understandings about the tasks to be studied
- create a context for new learning
- speculate, make predictions, and set purposes for exploring newly introduced topics or themes.
2. Realization of meaning
Students are exposed to new information or ideas, to new content, or to new deliberations. Their original concept of the topic is confronted with the source of new information: a discussion, guided lecture, textbook reading, videotape, artistic performance, or other event.
The task of the student during this phase is to remain engaged with the content, actively managing the information:
- make decisions about the relative importance of the information and ideas being presented by filtering out the incidental from the essential
- integrating new knowledge with existing knowledge
- considering the utility and applicability of the information to new settings and opportunities
3. Reflection
Students re-formulate their understanding of the topic with regard to the newly acquired information and the discussions with their colleagues, they begin to express new knowledge and understandings in their own words. This phase provides students the time, structure, and means to actively integrate information with previously held beliefs and ideas so that their learning will be contextualized and, consequently, real and more lasting. It is the time when learning becomes personal. The learner takes ownership of new knowledge.
This phase is characterized by:
- robust discussions, practical applications of knowledge
- the generation of new ideas and concepts
- open speculation about implications, or a call for further investigations
Example of a workshop on economic alternatives
Aims of the lesson
- to get to know some concrete practices of economic alternatives;
- to understand them through the perspective of degrowth.
1. Evocation (15min): criteria of a good degrowth project
- Think about concrete local projects you know which are consonant with degrowth principles and which you consider interesting and working well
- Form groups of 3-4 people, each person introduces shortly to the group one concrete degrowth/local project s/he knows
- In the groups (3-4 people) formulate at least 4 criteria why you consider the projects as examples of a good degrowth practice
- Two joined groups share together their criteria and formulate one common list
- Do one common list of criteria in plenary
- Individually: choose from the list the criteria you consider important and fill them in your own table in the following structure:
CRITERIA OF A GOOD DEGROWTH PROJECT | Examples in local projects (specification of how the criteria are fulfilled in the organisation’s practice) |
e.g. democratic decision-making |
|
e.g. preference of local resources |
|
… |
|
2. Realization of meaning (90min): examples of local degrowth projects in the Czech Republic
- During the course in Valeč, three projects were presented by its practitioners: WWOOF (World Wide Opportunities on Organic Farms) by Vojta Veselý (Valeč), and two projects of CSA (Community Supported Agriculture) by Jan Valeška (Praha)31
- If practitioners are not available in person to present their projects, e.g. the descriptions of alternatives in chapters 2.3.5 – 2.3.10 can be used as learning examples for the students/participants
- For each presented project, fill in the table of criteria with information on how the criteria are fulfilled in practice in particular project
- After the presentations, compare in pairs the citeria and related practices in your tables, discuss the differences. Discuss in pairs what was the most interesting example/practice for you.
3. Reflection (20min)
- Plenary or group discussion based on presentations: Why would you consider these projects/practices as examples of degrowth? Which aspects/criteria of degrowth do you see in these concrete projects as most important?
Conclusions
The Czech course was focused on local economic alternatives in the context of degrowth. Its aims were to provide both deeper understanding of the degrowth theory, and living examples of its practical applications. This chapter provides theoretical introduction to the topic of local economic alternatives (section 2) summarizing the critique of mainstream economics and its obsession with growth, introducing some alternative thinkers who inspired the degrowth movement, and giving many examples of concrete local economic initiatives. Section 3 then explains shortly the method of Reading and Writing for Critical Thinking and gives an exaple of its application in the lesson focused on local economic alternatives which was part of the Czech GROWL course.
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1 See more about the RWCT methods at http://www.criticalthinkinginternational.org/programs?id=13 (2015-06-19).
2 For the full programme, content and methods used within the Czech course please see the organizer’s website http://www.thinktank.cz/growl/kurzy/18-22-june-2014-local-economic-alternatives-valec-czech-republic/ or the project website ???
3 This text was originally published in the chapter “Ekonomické systémy v souvislostech”, p. 35-63, in the textbook: Gallayová, Z. et al., 2013: Súčasná spoločnost: Výzvy a vízie (Contemporary Society — Challenges and Visions), published by the Technical University in Zvolen, Faculty of Ecology and Environmentalism, Centre of Environmental and Ethical Education (CEEV) Živica, Slovakia. It was translated into English and shortened for the purposes of the course “Degrowth and Local Economic Alternatives in the Czech Republic”, organised by the Economy and Society Trust within the GROWL project. Translated by Barbora Palatová, with inputs by Eva Fraňková and Nadia Johanisová, 2014.
4 For the other two beliefs (free trade and the perfect competition model) please see the unshortened version of the chapter available at http://www.thinktank.cz/growl/uzitecne-materialy-a-odkazy/.
5 As opposed to the GNP (gross national product) indicator, which measures the monetary value of the goods and services of all producers whose enterprises are legally resident in the given country, GDP expresses the monetary value of all goods and services produced within the country's territory, regardless of the legal residential status of the producers.
6 Mainstream economists often oppose this objection citing increased effectiveness of production and so-called resource substitutability. For a critical discussion on this, see JOHANISOVÁ&FRAŇKOVÁ (2012).
7 The text of this chapter is partly taken from JOHANISOVÁ (2011). For criticism of the monetary system see also DOUTHWAITE (2002), MELLOR (2010), and VOTRUBA (2013).
8 It is necessary to distinguish between ecological economics on the one hand, which rejects some basic assumptions held by mainstream economics, and which is based on the idea of the economy being a subsystem of the Earth's ecosystem, and environmental economics on the other. The latter forms part of mainstream economics and focuses e.g. on attempts to assign a monetary value to natural systems. Ecological economics is a heterodox economic field.
9 The names of both contemporary and historical authors critical of the mainstream are highlighted in bold when first mentioned in this chapter.
10 Ecological tax reform is a policy aimed at increasing the taxation of resource consumption and waste production and at lowering the taxation of labour, with the total amount of tax payments in a given country remaining constant (ecological tax reform is therefore "fiscally neutral"). For more on Daly, Illich and other heterodox economic thinkers see also JOHANISOVÁ 2014.
12 On Transition Towns see also KLENOVSKÁ (2012).
13 Translation of the word "degrowth" in some languages uses the prefix de- which implies a decrease in or refraining from growth. In Czech this would require the usage of prefix "od-" as in "odrůst" which, however, does not sound good. The word "non-growth", on the other hand, does not render the essence of the whole concept in its complexity.
14 Obligation of a state to provide a certain basic income to all its citizens (whether working or not).
15 See http://www.degrowth.org/conferences. Degrowth movement conferences are characterized by many volunteers employed in their preparation, modest and transparent financing and, wherever possible, an effort to substitute monetary economy with networks of mutual solidarity. The organisers of the degrowth conference in Venice (2012) offered participants free accommodation in flats owned by the movement's supporters.
16 It was a credit co-operative known as Gazdovský spolek (Farmer's Association) and founded by Samuel Jurkovič. The cooperative functioned from 1845 to 1851 and served as a model for a number of similar co-operatives in the region. Slovakia is therefore one of the cradles of the cooperative movement. (See also HOUDEK, 1935; for a less detailed account see the website of Sobotiště, section "Osobnosti").
17 An account of the pre-war (not only agricultural) cooperative system and its violent suppression after 1948 is to be found in the book "Zemědělské družstevnictví v Československu do r. 1952" (Agricultural Cooperative in Czechoslovakia until 1952) written by Ladislav Feierabend, a cooperative functionary and member of the Czechoslovakian exile government in London who in 1948 emigrated to USA. The book he had written in 1952 while in exile was translated into Czech in 2008. Feierabend states that in 1938 there were over 16 thousand cooperatives in Czechoslovakia who together had around 3 million members (FEIERABEND 2007).
18 International Co-operative Alliance, http://ica.coop/en
19 See BEDNÁRIKOVÁ & FRANCOVÁ (2011) and the Czech People Planet Profit website (http://p-p-p.cz) for a discussion of social enterprise and for current news on the topic, respectively, in the Czech Republic. In the United States, the term "social entrepreneur" refers to any type of innovative and publicly beneficial activity (PARKANOVÁ 2011:25). The term "third sector" is sometimes used as a synonym to "social economy".
20 Based on JOHANISOVÁ (2005) and BEDNÁRIKOVÁ & FRANCOVÁ (2011).
21 This is the "institutional definition" of EMES (Emerging Social Enterprise in Europe, a European research network on social enterprise). According to this definition, the "social economy" includes all organizations with the following legal structure: association, co-operative, foundation and mutual (PARKANOVÁ 2011:20).
22 The best-known of these was founded by Robert Owen in 1832 (JOHANISOVÁ 2014). A detailed analysis of the causes of failure of these exchange projects can be found in NORTH (2007:45-50).
23 Local Exchange Trading Systems.
24 Some LETS systems, however, also work this way (put value on a service according to the amount of time it takes to provide it).
25 Cahn became aware of this when, after having lived a very active life, he found himself bound to a hospital bed after a heart attack with others catering to his needs. The unpleasant feelings of helplessness he experienced inspired him to found the American version of time banks ("time dollars") later on (DOUTHWAITE 1996).
26 The roots of CSA can be found in Japan, where the teikei system has been operating since the 1960s. (SUCHÁ 2010). The American (and the fledgling Czech) CSA movement were inspired by French CSA projects (Henderson and Van En 2007:29)
27 The first farmers' market in Brno (Czech Republic) opened in 2010. In 2012, there were already ten farmers´ markets in the city (DVOŘÁKOVÁ 2013).
28 See ZAMKOVSKÝ (2010), also http://www.priateliazeme.sk/cepa/sk/aktivity/k-udr-rozvoju-reg-polana/inteligentna-a-sebestana-regionalna-energetika
29 A similar approach was used by British building societies, mentioned in the chapter on co-operatives. Another example of traditional ethical finance organisations are funeral associations in Ethiopia, where each citizen regularly contributes a small sum to a fund that the municipality in due time uses to pay for and organise that same person´s funeral. All informal financial systems have a significant social dimension (e.g. the ROSCA savings meetings are also social gatherings).
30 In the Czech Republic, one such website facilitates financing of culture-focused projects: https://www.hithit.com/cs/search/category/1. Share issue to raise funds for e.g. purchasing land is another interesting option we will refrain from exploring. A successful example of the latter some years ago was the initiative of the British Fordhall Community Farm, which escaped closure and was able to buy its land thanks to 8000 contributors who bought a share in the farm. See also Brdársky spolok podielnický, a project of the Slovak non-government organisation Alter Nativa (http://www.alter-nativa.sk)
31 Their ppt presentations are available at http://www.thinktank.cz/growl/kurzy/18-22-june-2014-local-economic-alternatives-valec-czech-republic/ or https://co-munity.net/growl/courses/local-economic-alternatives
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