The Economics of SOlidarity-Practical Socialism of the Local : IMC Print

Solidarity Economics

Focusing Priority on a Future for All

R. Guevera,

Contact: Ecosolidarity@yahoo.com

Abstract

This booklet on Solidarity Economics informs researchers about the trends in thinking and applied policies in Latin America concerning a post-neoliberal world order.

Part I considers the problems of the world: The dominance of US-EU corporations and the growing power of these capitalist entities in international trade, public opinion formation and politics; the problems of poverty and urban slums, environmental destruction and how the underdevelopment of the opposition to the capitalist-corporate Empire-building is threatening change. Working definitions of concepts used in economics (Import Substitution, Public Goods and Bads, Basic Needs Goods and Community-Labor Managed Market Socialism) are presented before the solutions of Solidarity Economics are examined in

Part II. An outline of Solidarity Economics is set forth and compared to similar social and economic policies of the past and present (in Venezuela and Brazil). A section is devoted to ideas on extending Solidarity Economics and where it leads.(1)

Part I: Solidarity Economics: Against the US-Led Economics of the Suicidal

I. The Political Economy of the “Resistance is Carnival” Movement

Questions of the Broader Context of the Global Struggle Against Capitalism and Empire:

Are we trying to change the whole world so that a greener and truly compassionate new lifestyle for Earth is possible - The Long Run Goal?

Are we trying to organize politically, spiritually and through regional rebellions (Venezuela, Cuba, Brazil, Bolivia, Colombia, Chiapas, Iraq...India) against the US-EU Empire so that we can fight their dead-end violent mindset - The Short Run Strategy?

Are these goals and strategies the same thing? Can global civil society grasp the appropriate balance of these struggles in time to stop the momentum of the rich countries?

Is there a meeting of the minds between the three tendencies of the Global Resistance Struggle:
Third World Revolutionaries (FARC-EP/ELN-Colombia; Peruvian Revolutionary Movements; Nepalese Maoists); Radical Restructurists: (Walden Bello; Cuba; Via Campesina; MST-Brazil; Movimiento Quinta Republica (MVR) and Autonomia Integracion-Venezuela; Bolivian Miners and Highland Rebels) and the mixture of moderate reformers and Resistance as Carnival types who imagine that one can “Change the World without-Taking-the-Power (2)” (Zapatistas, Green-Block, US-Anarchists; Eco-Villages; Argentine Autonomists).

Representative of the latter group is a German Green Communist of the Zapatismo persuasion who spoke at an Ecosolidarity workshop in Cancun, Mexico, September 2003:

“We don’t need to define the Carnival or its economics - it will all be different in each country, explaining it destroys it and people won’t accept that.”

Walden Bello: “We must not only know what we are against, but also what we are for… When legitimacy or consensus goes, it may only be a matter of time before the structures themselves [Capitalism] begin to unravel... this crisis does not necessarily result in a more benign system of international relations... the outcome may be “barbarism.” Which is why the articulation of an alternative order is critical,,, a vision centered on a participatory process to build the institutions that would again subordinate the market to society, promote genuine equity between genders and color lines and within and among countries and establish a benign relationship between human community and the biosphere. [This] remains the great challenge... our future.”(3)

Too many people believe that moderate reforms – tinkering with the system – can change the system in time to avoid a meltdown. And too many people have given up on change or believe that only extreme or violent change will succeed. These views play into the hands of the system. Many fear that radical restructuring is not enough or is not possible. Moderate reformers have tried their way for 30 years and achieved nothing positive or tangible. The revolutionaries and Carnival of Resistance people need to understand that the plan of the Radical Restructurists is both wise (what will end up happening – even after a revolution) and clever (recruits more people than revolutionary propaganda alone).

In San Cristobal, Chiapas an Ecosolidarity workshop concluded that the Carnival of the New World Resistance can identify the key policy areas that a new system or economic order naturally embraces: A Comprehensive National Education Program for A Solidarity Society that Prioritizes Women and Children; Dignity for the Indigenous and All Workers; Health for All Including the Environment; and a Participatory Economics of the Local: Land and Liberty.

II. Problems of the World: Capitalism and Materialism

The capitalist system is based on a competitive struggle to exploit people and nature for private profits and growth. We reject this system because it creates a dynamic of endless growth that is ecologically suicidal and breeds greed and domination in society. (GPUSA National Green Program; http://www.greenparty.org/program/econdemoc.html)

People are dying in Mexico, Venezuela, Bolivia...Afghanistan…Colombia…Palestine

They are dying because of Savage Capitalism and the battles to overthrow corrupt governments. But some of the chaos around the world stems from the problems of the vision-conflict and the leadership vacuum that are rampant among the left and the green alternative. This new kind of autonomist-environmentally sustainable-market socialism has not been able or willing to define itself. The failure to endorse a practical program threatens to weaken the radical coalitions in the anti-US and anti-WTO Globalization movements. Revolutionary projects in Latin American countries are also held back by the lack of clarity over economic programs, goals and the sacrifices required to achieve these goals. In Bolivia’s case the lack of leadership or plan keeps the civil war simmering and unresolved.(4)

Something is wrong with global civil society. The US-EU Empire machine is humming along conquering, killing or intimidating vast areas of the globe. The main weakness of the US is that it cannot sustain itself economically without global control. The hidden hand of US power - the hand that compliments its Imperialist armed forces is the WTO and other trade agreements. If civil society would agree on a new economics and hold strikes and protests similar to those done before the US invasion of Iraq, then a new world would be born. In mid September in Cancun, Mexico the US and its supporters in Europe (UK and Spain) failed to consolidate their neo-colonial economic plan: the WTO. At the Miami FTAA the US tried to consolidate the “free trade” economic structure it needs for the Western Hemisphere, but resistance from Brazil resulted in a watered-down agreement to keep negotiations open.(5)

The euphoria over marginally successful protests does nothing to alter the current program of globalization and corporate business as usual.

Temporary defeats do not threaten the momentum of the US economic juggernaut.

People are dying because the alternative to the system is too vague - the Carnival Lacks a Theme and a Program. Despite the heroic struggle of the MST landless workers movement, the World Social Forums and the work of numerous localization and agro-ecological proponents, there is still no global plan for an alternative to US domination. Without the unity of social movements and a vision that ties them together corporate globalization will proceed unchecked.

Military technology failed to protect us on 911 and politicians, corporate officers and investors did not acknowledge that the prosperity [of globalization] was limited to a tiny percent of the world’s people, that it was founded upon the oppressive labor of poor people all over the world; and that its ecological costs increasingly threatened all life, including the lives of the supposedly prosperous… An economy based on waste is inherently and hopelessly violent, and war is its inevitable by-product. We need a peaceable economy.” - Wendell Berry.(6)

III. Economics of the System

“If the craze for machinery methods continues, it is highly likely that a time will come when we shall be so incapacitated and weak that we shall begin to curse ourselves for having forgotten the use of the living machines given to us by God… A certain degree of physical comfort is necessary but above a certain level it becomes a hindrance instead of help; therefore the ideal of creating an unlimited number of wants and satisfying them, seems to be a delusion and a trap… Europeans will have to remodel their outlook if they are not to perish under the weight of the comforts to which they are becoming slaves.” Gandhi (http://www.squat.net/caravan/ICC-en/Krrs-en/ghandi-econ-en.htm).

Gandhi felt that economic violence – poverty – was the worst form of violence. He abhorred passivism (and typewriters!) and felt that if one cannot do non-violence correctly or fully then it is better to do violence than to do nothing (passivism).

There are only two paths for the world at this time: a high-tech savage capitalism of mega-cities, starvation and pollution (7) or a transition to an agrarian-based localization through Solidarity Economics. Policy makers want to keep economics a secret so they never allow discussion of the real questions of what kind of country people want to have and what it costs to accomplish this goal. The rich want a world designed to keep them and their viewpoints in control of everything. Politicians refuse to challenge these assumptions and so policies of growth and inequality are built into the system.

The purpose of economic growth is not to make the rich wealthier, it is to fool the poor into thinking that the economic system makes sense and that with hard work and good government they can one day live like people in the US. The truth about the US needs to be told to the people of the world: half the people live in prisons (criminal or retirement home); are wanted by the police or Homeland Security; are criminals or mentally ill; or addicted to a wide range of legal or illegal drugs.(8) The US has convinced its people to work harder and longer than people in other industrialized nations and to accept fewer benefits such as health care and unemployment. This rushed existence creates social problems and leads to the disintegration of families, high rates of violence and a poorly educated populace. Most US citizens are ignorant about politics, economics and geography.

The structures of US democracy and its citizens' participation are a pitiful joke. Pitiful if they weren't killing so many and threatening the planet… US politicians talk image-polity and within the state-corporate media and entertainment nexus real debate, analysis or even thinking are rare.

US-styled materialism, the sanctity of the (rigged) market system and free trade worship are spreading outward from the US where even many of the people fighting the system believe that capitalism is acceptable and that the US Empire can change without falling into chaos.(9)

The invisible hand of the market is not the price mechanism where supply and demand intersect, it’s composed of the laws, subsidies and regulations that are created by self-serving politicians at the behest of the elite, the rich and the corporations. At the global level, the WTO, like NAFTA and the FTAA, restricts a nation’s or a community’s ability to pass laws relating to the kind of economy they wish to have. Few people understand the dangers of the WTO: its destruction of local democracy and how it threatens environmental and social protections.

Theoretical models of democracy (including the deformed US-style Democratic Republics) and the models of economic market theory are based on the ideas that voters or consumers have perfect information about their choices and the associated prices. However, most people have almost no information and the complexity of the world (and its markets) makes a mockery of notions of citizen participation and democratic decision-making. This is part of the reason why people all over the world and especially in Latin America are rejecting the entire concept of liberal democracy.(10)

Cardinal Oscar Rodriguez, the Archbishop of Tegucigalpa, Honduras called for a “globalisation of solidarity” to counter the excesses of “savage” market liberalisation that has benefited the rich over the poor. The Cardinal argued that the welfare state had been dismantled, and replaced by an “absolutism of capitalism...The world is becoming globalised to the rhythm of the major economic powers. Economic globalisation without the globalisation of solidarity is suicide for the poor and thus for the majority of humanity.” http://www.cafod.org.uk/events/popepaullecture2003report.shtml

IV. Killing the Teachers
Royalty, advertisements, business people, academic experts, corporate media newscasters and the crudely elected elite have been shaping the meaning of economics and keeping people from believing in alternatives for decades. From Nicaragua to Brazil and Korea, the US intervenes as it chooses. It’s not the military or the marginal economic threats that the US fears, it’s these countries’ pursuit of alternative economic programs controlled by the people or their vanguards. Experiments and new ideas scare the elite more than weapons of mass destruction.

The US flexes its military muscles - to kill the teachers - to keep the world safe for corporate capitalism and to keep debate or any living examples of alternative structures from taking root. The US military apparatus has a market value far beyond its annual $500 billion budget, a sum greater than the annual incomes of the poorest two billion people in the world.(11) The US is a business organization like the worst Mafia or drug cartel. Their business slogan is crafted for its persuasive bluntness: Pay tribute, give us the keys to your economy, your investments and ideas or else we kill you.

The US and UK have created a global casino (or Enron) economy - what David Korten terms The Suicide Economy(12) - where the US trades financial services like the privilege of using our banks and stock markets for 100s of billions of dollars in imported coffee, cars, computers, sugar, cut flowers and steel. The US doesn’t have to produce much except weapons in order to create a safe haven for investors and thus earn billions of dollars from bank transfers and stockbroker’s fees. Another global subsidy to the US is the US dollar that enjoys unusual strength due to its widespread use as the benchmark currency for petroleum and other goods. An artificially strong dollar allows the US to get away with huge trade deficits that would normally result in high interest rates and economic problems..

To justify the privileged position of the US and show its generosity, foreign aid programs pretend to help the poor while primarily benefiting the foreign elite and US corporations like Monsanto, John Deer, Bechtel, Haliburton, ADM and Cargil.(13) The US gives the least foreign aid of any wealthy country. The US-led OECD nations spend five times more on their farm subsidies than their overseas aid programs. They spend twice as much on these corporate subsidies than the entire value of all poor country farm exports.(14)

The Conundrum: When the Dead-End is the Only Way

The worst problem in the world is that since Ronald Reagan and Margaret Thatcher the global economic system has been designed so that it cannot be altered without severe repercussions. Since 1980, the US (and to a slightly lesser degree the EU) has become dependent on internal and global growth - fueled by cheap petroleum.(15) No change of any significance is now possible in the US and its people will fight terrible wars to maintain their control of oil and markets. Outside of the US the situation is equally dire as few countries alone or in small groupings dare withdraw from the global trading system (delink) for fear of military or economic retaliation and the resultant backlash of their own people to economic collapse.(16)

Grand schemes for improving the sustainability of the planet and the plight of the poor have little chance of ever being implemented. The excellent proposals of the IFG, Walden Bello, George Monbiot and Ecosolidarity’s IAPE(17) -- like the proposals presented below -- are only useful once translated into the simple language of a pot-banging clarion call. A revolutionary anti-capitalist uprising against the “suicide economics” of the global elite is breaking out across the globe. It requires a tighter vision.

Part I Conclusions
The world economy has entered a monopoly capitalist phase dominated by a US-EU empire and US militarism.(18) Change in the empire is unlikely and the annihilation of alternative experiments by the US coupled with the confusion on the left makes organizing opposition difficult. A crisis of overproduction threatens the capitalist plan and so wars, economic growth and creating consumer markets in China and India are pursued.(19) The continued destruction of the environment is guaranteed. Trade, the WTO, stock market speculation and technologies such as genetically modified plants and animals are the foundations of the empire’s plan. Efforts to change the global economy from the top down through the UN or a Fair Trade WTO are unlikely. The only chance for countering these trends is for the three tendencies of the global resistance movement to unify behind a program of radical restructuring based on putting people and communities at the center of a new economics of agrarian-based localization:
Solidarity Economics.

Definitions for an Economy of Solidarity

1. Regional means a political or bioregional area within a nation. Community means a region within a region.

2. Social equity means a gradual and reasonable equal distribution of income, land and resources including education, health care and respect.(20)

3. Self-reliance means that a community has a goal to produce most of its basic goods, capital and services from within its boundaries. And that it’s not dependent for these items from trade. To protect the environment and maintain good neighbor relations, a community should trade when necessary with its nearest neighbors first. This applies to nations and regions too.(21)

4. Externalities can be positive or negative and are also called external costs and benefits. When some people bear costs that they are not compensated for, these costs are said to be external costs. An example is water pollution that travels downstream or underground and then future users have to pay (filter or treat) to make the water clean again. Other examples are garbage, toxics, global warming, the noise from airplanes, nuclear power (and most complex technologies) and the spread of GMOs across property lines or national borders. One pays for gasoline but not directly for the costs of pollution (bad air, respiratory problems for others, dead birds), disposal of abandoned junk cars or oil wars in the Middle East. Negative externalities must be regulated or taxed to reduce their occurrence as the market does not take care of them.

Positive externalities are things like the benefits of less disease for everyone and fewer sick workers for businesses from universal healthcare; smarter workers and better voters from universal education; the benefits to most people from less urbanization and more employment opportunities from thriving rural communities (localization); less crime and less government spending on prisons and police from programs that increase social equity; and the many benefits to all from government provision and protection of many public and quasi-public goods. Positive externalities should be subsidized to increase their availability and usefulness.(22)

5. Public and Quasi-Public Goods are things like air, parks, beaches, information, libraries, roadways, national defense, a clean environment, a lighthouse, radio broadcasts, the airwaves or a fireworks display where it’s hard to stop non-payers from consuming. And the use by one person does not limit the use by others. Businesses do not provide enough of these goods and so it is best for government to provide them as their benefits accrue to all and to the future. Instead of profit, the mentality necessary for the provision of these goods is one of safety, fairness, access and sustainability.(23)

6. Capitalism is a system of market exchanges where government’s role is only as a referee that regulates the excesses and prevents fraud. Taxes are used to pay for the expense of government. A legal framework and many laws and lawyers are necessary to fine tune legislation and argue contract provisions. Profits are maximized and this along with loans and stock sales is where capital comes from. The capitalists (business owners) invest this capital to seek greater returns (profits).(24) Today’s capitalism has little resemblance to Adam Smith’s original conception.

7. Socialism and Labor Managed Market Socialism (LMMS). In classic socialism the government owns the means of production (nationalized steel mills, power plants, mines). There are no capitalists and no profits, though many socialist experiments allow some markets to function (restaurants, food vendors, small farmers in remote areas). The Soviet Union is an example of socialism with limited markets where central planners in government ministries coordinated most production. Hungary (until 1986), Cuba and Nicaragua (1980-1989) are examples of market socialism with limited government planning.

Yugoslavia is the only example of LMMS. In this system the government owns the factories and farms, but the workers make all of the decisions and operate within a market system of competition. Many economists consider LMMS to be a system as efficient as capitalism if soft-budget problems can be overcome. In the Solidarity Economic model soft budget constraints are not an issue as firms are small, small-holder private property (with social property restrictions) is allowed and rather than a distant or central government owning the means of production, most of the land and factories are owned (controlled) by the locality or the region through popular assemblies, cooperatives and public ownership.(25)

8. Basic Needs Goods: pure food and water; health for all people and the Environment; programs for women and children; housing; sanitation; defense; dignity for indigenous people and all workers; education for a Solidarity Economy and programs of social equity; transport for the processing and distribution of basic needs goods; inputs required for the production of basic needs goods.

9. Trade and Problems With Trade: Who, What, Where, How? And Why to Ask Why.
Trade (travel) is always bad from a localization viewpoint. Trade indicates a shortage of something you would pay more for than a local substitute. Trade means that some other person, town or country produces something that you can't or won't; something better or more cleverly (cheap) made. Trade is always bad because it creates pollution, waste, complexity (like war) and hidden or long-term costs. The waste results when resources (labor, land, capital, sustainability) are diverted to the trade (transport) sector. This includes ports, harbors, airports, trains, highways, trucks, cars, boats, ships, planes, jets, warehouses, bridges, horses, customs bureaucracy and even bicycles. Trade hides pollution in oceans or in other countries. It also introduces non-native pests and diseases which in many areas are responsible for endangering more species than habitat destruction.(26)

10. Import Substitution Economics (ISE). This economic development strategy is aimed at reducing economic dependency through government support to infant industries. Tariffs and quotas are used to limit the imports of certain goods and subsidies are used to establish domestic industries to supply these imports. Most countries have used this strategy in their early stages of development (industrialization). ISE can be carried out in a variety of ways, from tax incentives for local entrepreneurs to paying foreign companies to relocate. Often ISE is used to increase a nation’s exports in order to pay for the program. Imports are considered leakage from a country – money that is flowing out. When locally produced products replace imports there is a multiplier effect: an auto manufacturer is established that buys inputs from local suppliers and both companies are now paying wages to employees who previously were not employed in this business because the products or inputs were imported. Less imports allows a country to export less because it no longer needs to earn foreign currency for the now replaced imports.(27)

The momentum of the World Social Forum process depends upon our collective ability to produce acute analyses, as well as concrete alternatives and action proposals during the meetings. http://www.fse-esf.org.

PART II: Solidarity Economics: What Kind of Economy Do We Want ?
What Kind of Economy Can We Have?

“In Venezuela, we are developing a model of struggle against neoliberalism and imperialism. For this reason, we find that we have millions of friends in this world, although we also have enemies.”
- Alo Presidente Chavez (He says that the achievements he is most proud of are the drop in infant mortality, the better nutrition offered in the free breakfast program and not giving in to the rightwing’s violent provocation… keeping the “proceso” peaceful.)

We observe that capitalist-oriented market systems are inefficient from moral, social, environmental and sustainability perspectives. Rather than maximize output and then support government bureaucracies and complex legal systems in order to compensate for all the externalities and problems of a growth oriented market system, we propose a new orientation called Solidarity Economics.(28)

In the Solidarity Economics model the neoliberal fixation on growth and maximizing output are a low priority. Those capitalist goals are replaced with a priority to invent economic policies that provide for the sustainable production of the basics of life: food, housing, education, health and dignity. In the Solidarity model social equity, community self-reliance and sustainability are maximized first. This is accomplished through import substitution at the national then the regional and finally the community level. A nation gradually replaces its imports starting with the easiest first and through education and investment moves up to other goods and services. Simultaneously this program prepares for regional and community import substitution.(29)

Understanding the policies that give direction to a new kind of economics is necessary if the world is to move away from a war on the poor and the ecology. The goal of Solidarity Economics is to increase the availability of basic needs goods and to accomplish this with a declining impact on the environment. This is the world’s best hope for security and peace. The real choice that people have is: Do they want a sustainable and just economy that is kind to people and neighbors or do they want to destroy the planet and lose their humanity fighting ugly resource wars? An economic system is only as complex as a people allow it to be. People can have the sustainable economy that they want. It will be different and poorer in many ways than the late 20th Century US economic model. But it will be understandable because it is local, open (transparent) and decided by the people themselves.

Except for the myth of the invisible hand, economics is simple. People will buy a certain amount of a product at a particular price. The invisible hand is supposed to be the price signal that purchasers send to producers through the market. This price signal works for eggs and labor (wages) as well as the purity of water and the experience of art. The problem with markets is that corrupt governments write the laws to benefit the wealthy, the big companies and growth. These are corporate subsidies and state socialism for the rich.(30) The invisible hand of government policies shapes the production costs and the prices that consumers are willing to pay. If people want a country with many small farms producing organic products then they will be able to employ many people in a labor-intensive program. But people will pay more for food in the short run than they would if they continued to let rich people gobble up farmland and poison it with chemicals, pesticides, herbicides and GMOs. Prices are only lower in the corporate farm system because so many of the externalized costs are not paid by the corporation. These costs include slave labor, child labor, cheap loans, social suffering from the displacement of small farmers, repression of farm workers and impacts on the environment.(31)

Markets and democracy are good things when they work together. A democratic society keeps markets functional and serving human and community needs and security. A democratic government regulates problems caused by imperfect markets. The safest way to do this is to keep all the market players of similar size, knowledge and security. Complex markets or complicated choices for a democracy make it likely that prudence is lost among poor information and the rush of events. The experiments with participatory budgeting in Rio Grande do Sul, Brazil (a state of 12 million people) suggest that average people can solve these problems simultaneously. The problems encountered in Brazil also show how difficult any program is when the government has to pay half its budget to foreign bankers for debts caused by previous corrupt governments.(32)

Instead of a profit maximizing and export-based decision-making criteria Solidarity Economics would create a long-run soil conserving and biologically diverse system of farming where inputs - especially imported inputs - were not needed and expensive machinery would be replaced with labor, local resources and ingenuity.

Agrarian-Based Localization: The Four Directions of Priority
Ecosolidarity Andes has conducted investigations and workshops on the political Economy of Change throughout Latin America in 2003. They have concluded that prioritizing four or five key basic needs of any society, results in an eventual transformation of a society. A new type of economic structure is then born along the lines of a green local-socialist decentralization program.

People should organize and reprioritize state and local policies for: women and children; education for a Solidarity Society of pure food, dignity for indigenous people and all workers; and health for all including the environment. Any country or region that seeks to provide these basic needs in a sustainable way will have little additional funds to waste on militaries and corporate subsidies. In parts of Latin American one can see a new world being born. It’s a world where people create the space and freedom to be themselves and care for themselves and their families. New economic structures can accomplish this in ways that build thriving, sustainable communities.

The sciences of Agro-Ecology and Watershed Management can guide localization planning with prioritization for sustainability and equity. With common sense, lessons learned from the past and citizen empowerment through participation, all aspects of this world will evolve differently than the chaotic and cruel dictates experienced when international capital and the powerful elite forced rapid change and modernization on every corner of the planet.

A Structure for Solidarity, Local Power and Sustainable Economics
Solidarity Economics argues for a bias toward rural areas and a policy structure of localization where local resources are used sustainably to produce most of the basic needs goods and a surplus for trade with its nearest neighbors first This structure solves the problems of bureaucracies, political conflict and concentration of wealth. Markets are used locally, but trade is regulated beyond regions through toll roads and high fuel taxes. Toxic chemicals, genetically altered organisms (GMOs) and the weapons trade would be banned. Combined with ecological guidelines and additional restrictions on trade and land ownership, the market would create economic conditions that support small, medium and cooperative-based farms and rural enterprises.(33)

The importance of political democracy beyond a locality will eventually decline because most of the decisions over public policy are set in a well-biased (science-based) constitution or made locally.

Agrarian Reform: The Unfinished Revolution

6o percent of the processed foods in US supermarkets have GMOs in their ingredients.

Agriculture and photosynthesis are important renewable resource of most countries. Even poorly endowed places must take advantage of whatever will grow. Trees and riparian areas protect the water and biological resources (biodiversity). Some food, fish or export crops are necessary output from all places. Protecting renewable resources like the soils, forests, estuaries and fisheries is a duty and the basis of natural wealth.

The “Who owns the good farmlands” determines the wealth distribution of a region. The “What is farmed” determines the food dependency/food sovereignty of a place. The “Where” of farming determines the impacts on the ecology and the longrun productivity of the country. Overproduction near rivers or steep hills has a potentially large impact. Light grazing rotations and tree crops would be chosen by a community if it exercised control over the use of its resources. The “Why of farming” determines the importance of culture, respect, sustainability and the connections of the people to the land and the ecology that they live in and depend on. The “How” of farming is connected to and grows out of all of these factors. Investments and trade polices accelerate or control trends in production and growth and thus affect all aspects of rural life and the well-being of the whole country. For decades investments in Latin America have been capital intensive thus creating greater unemployment and a rural exodus to mega-city slums.(34)

Government commissions and scientific research panels (drawn from local and regional experts, students and faculty) will draw up detailed lists of each region’s resources: grazing lands, farmlands (in several categories of richness and environmental sensitivity), damaged lands, forests, special wildlands or habit zones, erosion zones, fishing zones and tourist or recreation areas. After these studies are completed lands would be redistributed for free to competent farmers and ranchers. Compensation for seized lands will not be possible in most places because of a lack of funds and the revolutionary perceptions that will accompany these drastic changes. Current owners of land could retain twice the standard limit that is set locally for a particular land type (typically 5 to 10 hectares for the highest quality lands and 20-40 hectares for marginal or grazing lands). Adults over 21 can only own the land that they live on and their vehicle license plate must be from that parcel’s address.(35)

Initially land is redistributed to three sectors: small holders, coops and locally owned lands held for distribution to newcomers and population growth. Next the government would analyze imports and exports at national and regional levels. A plan or recommendation is drawn up that considers priority for basic needs goods and the national and regional production advantages: resources, skills, interests and existing complimentary infrastructure. From this point in the process the popular assemblies and research panels devise the final plans for land use, investments and subsidies.

Ideas for Local Solidarity Projects and Import Substitution with Value Adding
Millions of people in Brazil have poor housing and tens of millions more throughout Latin America are without roofs – Sin Techos. In Buenos Aires, Argentina the piqueteros and asembleas have formed voluntary roofing collectives to repair old houses. They have also set up thrift stores to clothe the poor and the penniless; bakeries to feed the hungry and schools for children and adults where people can also learn about imperialism and the socialist solutions to capitalism’s crimes. Market gardens; sewer and water repair cooperatives; community-based TV and radio facilities; clothing manufacture and repairs; barter networks; and food processing are examples of local enterprises that governments and communities should subsidize. In remote areas or in nations lacking petroleum, a program for bio-diesel derived from African Palm plantations could be a beneficial enterprise for collectives and communities.

In a livestock industry keep as much as possible of the leather industry, the by-products (bonemeal, bloodmeal, manure, tallow), fencing material production, dairy, feedstocks, agricultural extension, veterinary services and training and livestock breeding in the community and certainly in the region. This builds local links to a variety of businesses, small and large, and guides education programs (University and Secondary) to create diverse skills in the region. Other examples are micro-credit small business development lending and advice for import substitution enterprises (Grameen Banks); soya farming with seed production, storage, experiments, exports, processing (tofu-feed-soy milk) or direct conversion to animal products (meat and egg industries). And all of these activities would be kept in the hands of local or regional businesses.

As an economy shifts from one based on mega-city pollution, trade and travel to one based on making the best use of local resources and ingenuity, many factories will close and new employment strategies must be devised. Improved rural development schemes will eventually draw workers out of the cities. In the transition period the government and entrepreneurs should focus on policies and businesses that recycle and reuse existing buildings and machinery in urban areas. Recycling and modification of existing equipment for export or use in rural areas requires low investment capital and compliments the overall localization program. Food processing, light manufacturing (farm and building material supplies) and value-added export enterprises are also possible employment and income-generating activities.

If countries fail to institute currency (capital) controls on foreign currency exchange, then debt defaults and capital flight will bankrupt or gut many enterprises. Abandoned or defunct enterprises should be turned over to the workers. Argentina has shown the ability of workers to self-manage production with volunteer assistance from academics and professionals. In Venezuela the government is introducing legislation to allow worker cooperatives to operate businesses that were abandoned by the leaders of the 2002 coup attempt or that went bankrupt from the boss’s strike that shut down the oil industry and caused a severe economic contraction. Many urban areas around the world may eventually become giant open-air bazaars (mercados) of reusable and remanufactured goods and materials.(36)

BANKS: OWNED AND MANAGED BY LOCAL COMMUNITIES
All pension funds, insurance policies, credit and banking would be done through public institutions and audited by an elected regional Board of Supervisors.(37) Only local lending would be allowed and it must meet community prioritization guidelines. Banks are to serve long-term needs and emergencies not to make money at the highest return. With currency controls in place that limit the amount of withdrawals and how much cash can be taken out of the country, the rich would be forced to invest or put their money in the local banks. Forcing businesses to apply for foreign currency use has been effective in Venezuela at identifying businesses and individuals that have not paid taxes which is a huge problem throughout Latin America and most poor countries.(38) Tax avoidance and illegal businesses would have a difficult time if banks were small, local, public and well-audited. To combat inflation and avoid some corruption possibilities banks will maintain a 90 percent reserve requirement on most deposits. Audits will be open to the public and independent audits will be done every other year before the elections of the Board of Supervisors. When a crisis deepens or a new government comes to power, banks should be nationalized with strict currency controls. Reserves and deposit withdrawals are prioritized for key imports and the lower classes. Gradually the banks would be turned over to the communities.

The Examples of the MST: The Landless Rural Workers of Brazil

The following proposals and on-going projects of the MST are remarkable in their breadth and vision. They have accomplished these feats with little money or skills and in the face of open hostility from the government and the rural elite. When a Brazilian government gets behind the program of the MST then truly - miracles will happen all over Brazil from its soils and its 180 million people.

The MST offers the rural poor an alternative, ensuring their welfare and participation in economic development and democracy. The MST is providing healthcare and education to a 100,000 landless families. The MST’s National Confederation of Brazilian Land Reform Cooperatives is providing agricultural extension services. They assist in organizing production and facilitate marketing the surplus produce of the MST’s settlements. This has transformed land occupations into productive agricultural cooperatives providing ample food, cash income and basic services for many thousands of member families. Moreover, this social movement has created small industries among the most advanced cooperatives, including a clothing factory in Rio Grande do Sul, a tea processing plant in Parana, and a diary processing operation in Santa Catarina.

Much of the following is extracted from the US MST website at: http://www.mstbrazil.org (for the official Portuguese site see: http://www.mst.org.br)

The Model We Propose:
The implementation of the elite’s agrarian model will bear enormous consequences, with the marginalisation of small farmers, the impracticality of agrarian reform, and the increased rural exodus. There will also be grave social consequences for the urban population. Let us, then, present some alternatives… a popular project for agriculture: one that resolves the grave social problems that exist in the countryside and equally affect the cities.

1. Agrarian reform - the democratisation of landed property under the disappropriation of all unproductive estates and the massive and hasty distribution to the five million or so, landless families. Organising agrarian reform settlements in such a way to guarantee income and a permanent improvement in living standards.
2. Food Security — the development of agriculture aimed towards the internal market, aiming to guarantee the provision of high quality food to all Brazilians.
3. Strengthening of Family Agriculture- the implementation of agricultural policies especially those concerning of prices, subsidised rural credits and agricultural security which are capable of ensuring the increased income and productivity of the one million family farms.
4. Cooperatives and agro-industries - promote agro-industrial co-operatives in order to democratise access to the market and create conditions to improve farmers’ income.
5. Living Standards - valuing the rural milieu and its way of life and culture, guaranteeing all inhabitants an improved standard of living, better housing, transport, leisure and communication.
6. Employment - stimulate the rural employment, both in agricultural and non-agricultural activities. In addition, to guarantee the fundamental socio-economic rights of all those who wish to work as wageworkers.
7. Education — to guarantee access to primary education to all rural dwellers, improving the curriculum and the necessary conditions in schools, valuing, equally, the teachers and all educational activities. Create opportunities so that children, young people and adults, are all able to study.
8. Environment — develop policies to protect the environment and our natural resources, in such a manner that is conducive with farm production, promoting the rational use of both solar and hydroelectric power.
9. Semi-arid Areas — implementation of a special development plan for the semi-arid Northeast, by combating drought and seeking a permanent improvement in living standards in that region.
10. The Agricultural Public Sector — restore and reorganise the organs that make up the agricultural public sector (INATER, INBRAPA, CONAB, INCRA amongst others) rendering them at the service of the small-scale producers, and of the aforementioned agricultural development plan.
11. A New Technological Model — implement research and stimulate agricultural technology which is compatible with our soil conditions, climate and national resources; seeking an equilibrium between increased productivity and the preservation of the our natural resources and environment.
12. Industrialization of ‘the Interior’ - stimulate the labour-intensive industry, in particular the agro-industries in the provincial municipalities of the hinterland, in order to stimulate socio-economic progress equally in all regions of the nation, whilst creating employment opportunities, above all for the rural youth.

The viability of this model - According to the Federal Government’s own statistics, small- and medium-sized properties under 100 hectares are responsible for 80.8% of rural employment, and for the production of over 50% of the nation’s total production: 54% of coffee, 79% of beans, 44% of corn, 45% of wheat, 64% of potatoes, 67% of tomatoes, 75% of bananas and 60% of cocoa.

Production - We have now in the settlements around 400 associations for production, trading and services. There are also 49 cooperatives for meat, dairy products and agricultural products (CPA), which provide work for 20 thousand associated families; 32 servicing cooperatives, with 11,174 direct associates; two regional cooperatives for trading; and two credit cooperatives, with 6,113 associates. We keep 96 small and medium-sized agroindustries, which process fruits and vegetables, dairy, grains, coffee, meat and sweets.

In order to better develop the production areas, MST created SCA – The Settlers Cooperative System, which coordinates the demands coming from the production sector. The SCA is active in the formation of technicians and also in the management of the cooperatives, analyzing the market and looking into the economic viability of the investments that are made. Schools: Technical Courses at ITERRA-Institute taught in partnership with the Universities of Brasília (UnB) and Campinas (UNICAMP); 150 thousand children attend elementary level classes at 1,200 public schools, where 3,800 teachers work; 1,200 MST educators are teaching literacy classes to 25 thousand adults and youths; MST built and equipped 250 day care centers, called Cirandas Infantis; Training Courses for Educators: Teacher training (magistério): Course at the Instituto Técnico de Capacitação e Pesquisa da Reforma Agrária (ITERRA, in partnership with the State University of Mato Grosso do Sul and partnership with the Federal University of Espírito Santo.

Women and the Gender Issues: The Brazilian countryside is male-centered as a reflection of society as a whole. Today we have 10 women at our highest leadership level, among a total of 22. In the State of Pernambuco, 5 women preside over cooperatives. In São Paulo, a woman presides on the State Central of Cooperatives of the Settled. Small investments agreed upon in the cooperatives and in the associations, go to the betterment of life conditions ("inside the house"), where the woman decides: electricity, laundries, dining commons, day care centers.

Communication: MST produces the newspaper: Jornal Sem Terra and 5 radio shows in the encampments and settlements. They broadcast news and announcements from the point of view of the struggle of our people for justice and peace for all. Websites: the MST's main website is found at http://www.mst.org.br. (In the USA, Friends of the MST can be found at http://www.mstbrazil.org.)

Culture: We have hundreds of poets, musicians, singers, entertainers, and popular composers. Music, dance, songs and a poetic outlook on life follow us in our demonstrations, our long marches, our peaceful land occupations. Our songs keep famine away and courage alive. Sebastião Salgado's Terra exhibit has toured the world. Many Brazilian folk and popular singers contributed to an MST music CD. The songs bring our happy and also our sorrowful moments to life – and they are contagious! … various well-known Brazilian singers lend their prestige and their enthusiasm.

Human Rights: Motivated by the growing number of murders, beatings, unlawful arrests and even sentencing of landless militants, the movement created its Human Rights Sector… 40 volunteer lawyers are part of it.

International Relations: Through CLOC (Latin-American Co-ordination of Peasant Organizations) MST articulates itself among the Campesino Movement, establishing exchanges of experiences, formation and empowerment courses. On the world scenario, the MST participates in Via Campesina, which articulates 90 peasant organizations in 60 countries in the non-violent fight for land, agrarian reform and agrarian policies that are adequate to small family farming and production (as opposed to large cash crops)… we must articulate more and more within the South-South network of relationships, especially with those popular movements who fight for a transformation of the neoliberal system actually engulfing us.

The Environment: We created EMA (Equipe do Meio Ambiente), which is our National Collective on the Environment . It deals with MST policies regarding sustainable organic agriculture; and The Environmental Education Program. Production of BIONATUR agroecological seeds began in September 1999. Various kinds of vegetables, among them onions and carrots, were produced without pesticides or chemical substances of any kind, in a natural and healthy process of agriculture. The seeds are being produced by the COOPERAL Cooperative, in the MST settlement of the municipality of Hulha Negra, in Santa Catarina. In the region known as Pontal do Paranapanema, there is a study going on to preserve the remainder of the local Atlantic Forest, to reforest a large area with native species and generally to practice agriculture respecting the existing ecosystem.

MST is also active in: The ecological production of coffee in the State of Espírito Santo. The ecological production of rice in the State of Rio Grande do Sul. The preservation of the Forest in the Pontal do Paranapanema (São Paulo) and reforestation. The production of medicinal herbs (in various Brazilian States).

Health care: The training of health agents; a program for the prevention of AIDS and sexually transmitted diseases, supported by the Secretary for Health; and a program called Land and Health, dealing with medicinal plants

Venezuela: Examples of Solidarity and Transitional Programs in Action

In 1999, President of Venezuela, Hugo Chavez promised homes, health care and education for the poor. Prodded by US interests, the Venezuelan elite responded with treason, sabotage and propaganda. Chavez in the Spirit of the Brazilian MST encouraged the people to respond with their own Power because the struggle for land reform and the rights of the people will only be real when the people assert them. From a desire for modest reforms, Chavez has followed the people into a new world of Local Power, Solidarity Economics and Revolutionary Education.(39)

The first program Chavez launched was Plan Bolivar 2000 where all branches of the military devised programs that would benefit the poor. These efforts involved transportation services and projects; repairing refrigerators; organizing cooperatives and giving development and technical courses. Plan Avispa, organized by the National Guard, built homes for the poor. Plan Reviba was similar, except instead of building new homes from scratch, involved rebuilding old homes. Other aspects of Plan Bolivar 2000 involved distributing food to remote areas of the country. Plan Bolivar 2000 repaired thousands of schools, hospitals, clinics, homes, churches, and parks. Over two million people received medical treatment. Nearly a thousand inexpensive markets were opened, two million children were vaccinated, and thousands of tons of trash were collected, to name just a few of the program’s results.

Long-term anti-poverty policies started in 2001 with integrated macroeconomic policies for alleviating poverty: reducing inflation, diversifying the economy, and increasing non-oil revenues. 2002 saw the expansion of the urban and the rural land reform programs, the micro-credit programs, increased spending on primary education, and the efforts to promote cooperatives throughout the country.(39)

Rural Land Reform
Because Venezuela has high unemployment and imports much of its food, agriculture is a key import substitution target. Venezuela’s rural land reform was introduced in November 2001, as one of the package of 49 laws, which were passed at the same time concerning the state oil industry and other reforms. The law states that all adult Venezuelans have a right to apply for a piece of land for their family. This land is to be taken from state-owned land holdings, which are enormous and make up the largest part of Venezuela’s agriculturally viable land. The law opens up the possibility for the state to redistribute privately held land, if it is part of an estate of more than 100 hectares of high quality agricultural land or 5,000 hectares of low quality land. The land would be expropriated at market rates, making Venezuela’s land reform a relatively non-radical program.

The government distributed little land in 2002 due to the coup attempts. The next year it turned over 1.5 million hectares to about 130,000 families. This comes to an average of 11.5 hectares per family and a total beneficiary population of 650,000 (based on 5 persons per household). So far no land has been expropriated. There has been conflict over land which the government considers state land, but which large land owners claim to be theirs, even though they lack the documents to prove it.

The land reform is a comprehensive program that aims to avoid the typical problems by making sure that the new farmers have the skills, credit, technology, and marketing channels to actually make a living off of their newly acquired land. In addition to the national land institute (INTI), there is an institution that provides credit and skills training and an organization for marketing agricultural products that are produced by beneficiaries of the land reform. In the long-term, the reforms contribute to the diversification of the economy and to assure food sovereignty. In the medium term, the program is aimed at reducing rural poverty and also urban poverty, to the extent that people move out of urban slums and into the countryside. (40)

Urban Land Reform
Another important anti-poverty measure is the urban land reform, which will redistribute the land of the barrios (urban slums) to its inhabitants. Similar to the one Hernando de Soto has promoted in Peru, it incorporates elements that make this program an example for other countries. When people acquire title to their own self-built home in the barrio, they have security for the first time that they will not be expelled. They can use the home as collateral for a small loan, to improve their home, to buy a better home, or to invest in a small business. The process of acquiring urban land titles is a collective process, which brings the neighborhood together in the interest of improving the neighborhood’s infrastructure, such as roads, access to utilities, security, comfort, etc. (41)

The collective nature of the process is perhaps the most innovative aspect of the government’s urban land program. To acquire titles, 100 to 200 families in a neighborhood have to get together and form a land committee, which then acts as a liaison with the government on regularizing the land ownership of the families that the committee represents. A positive consequence in many cases is that the land committees have begun working on many more issues besides the negotiation and acquisition of land titles. They have also formed sub-committees that deal with public utility companies, such as the water and the electric company.

About a third of the barrio land is on government property (another third is on private property and one third on land where ownership is as yet undetermined). The process is slow because it involves many technical and legal steps. By November 2003, throughout Venezuela, about 45,000 families (befitting 225,000 individuals) had received titles to their homes, with another 65,000 families (or 330,000 individuals) to receive them soon.

In February, 2003 Agriculture and Lands (MAT) Minister Efren Andrades announced a series of food production projects for urban areas across the country. A pilot project for two slums in southern Caracas is supported by a UN FAO grant that will also finance near-urban poultry farms.

Micro-Finance and Social Economy
The social economy project of the Chavez government promotes cooperatives and micro-finance. The micro-finance program has several different institutional bases. Banco de la Mujer (Women’s Bank), Bandes (Bank for Economic and Social Development, Banfoandes (Bank for the Promotion of the Andean Region), and the Banco del Pueblo (People’s Bank) are involved in micro-finance as are institutions such as the Fund for the Development of Micro-Finance and the Ministry of Development of the Social Economy. A banking law requires all conventional banks to dedicate a certain percentage of their loans to micro-finance.

Between 2001 and 2003 about $50 million worth of micro-credits have been lent out by the banks named above. The Women’s Bank and the People’s Bank have given 70,000 micro-credits between them. In 2004, the government intends to expand the micro-credits program, according to the Minister for the Social Economy, Nelson Merentes.(43) Private and public banks also gave out micro-credits for a total of $75 million during the month of September 2003.(44)

Among the important beneficiaries of the micro-credit program are cooperatives. Venezuela had only 800 cooperatives when Chavez came to power, it is now estimated that there are over 40,000. The promotion of cooperatives boosts the small business sector, which is generally known to be the first place new jobs are created in an economy.

For a discourse on social economy and solidarity in Venezuela and cooperatives see the interview of Felipe Perez-Marti at http://venezuelanalysis.com/articles.php/articles.php?artno=1019

Bolivarian Schools and Daycare Programs
By 1996 public spending for education had dropped to 2.1% of GDP. When the Chavez came to power he increased public spending on education to 4.3% of GDP, twice the level of 1996. Much of the investment went to the building of new schools and the transformation of old ones into "Bolivarian Schools." Bolivarian schools address Venezuela’s poverty in a variety of ways: they are day-long schools, thus freeing up both parents from daytime childcare duties; schools provide breakfast, lunch, and an afternoon snack, regular meals that many poor children often did not receive before. As of 2003, 2,800 Bolivarian schools have been opened (half are newly constructed). These schools serve 600,000 children, or 12% of all school-age children.(45) Complementing the Bolivarian schools program is the "Plan Simoncito," which provides free daycare and pre-school education to children from ages 0 to 6. Many households are single parents who have a hard time finding ways to balance parenthood with a job. In 1989, 19,000 infants were in state-supported daycare, they now serve over 300,000.

In 1984, 70% of students from poor backgrounds who applied for entrance to the university were admitted, by 1998 only 19% were admitted.(46) For working class students the admission rate dropped from 67% to 27%. As a result, it is estimated that there are over 400,000 Venezuelans who formally fulfill the requirements and would like to attend the university. The Bolivarian University of Venezuela (UBV) is thus supposed to fill the gap. 2,400 students are enrolled in the university, which opened in October 2003. Another 20,000 are pre-registered.(47)

Short-Term Anti-Poverty Measures – The Missions

October 2003 President Chavez announced seven different "Missions" for fighting poverty. The first mission was Mission Robinson, named after Simon "Robinson" Rodriguez, who was Simon Bolivar’s teacher. Mission Robinson addresses illiteracy. Venezuela invited hundreds of Cuban literacy experts to come to Venezuela and to train teachers. Over 1 million Venezuelans are benefiting from the program, with the help of over 100,000 literacy teachers, who work throughout the country. Mission Robinson II will teach participants everything they need to reach 6th grade. It will incorporate over 629,000 students for 2003.

Mission Ribas is named after independence hero José Felix Ribas, and serves individuals who dropped out of high school. Over 5 million Venezuelans have dropped out of high school. The Minister of Energy and Mines, who is one of the main coordinators of the program, announced in early November that slightly over 700,000 Venezuelans indicated an interest in the program. The program is free. Once students complete their studies, the state-owned oil company PDVSA and the electric company CADAFE will offer to place students in the mining, oil, and energy sector. The whole program is being primarily coordinated by PDVSA and CADAFE, which are also providing most of the funding for the program. For the poor, one of the greatest hindrances to a university education is their lack of financing. Mission Sucre is a scholarship program through which 100,000 poor Venezuelans will receive $100 per month for their university education.

Mission "Barrio Adentro" (Inside the Neighborhood) – Community Health Care
To address health problems in the "Barrios," the Chavez government launched a community health program called, "Barrio Adentro." This program, with the help of just over 1,000 Cuban doctors, places small community health clinics in the Barrios, in areas that previously never had doctors nearby. The program was first launched in Caracas and is now being expanded to the rest of the country. After six months of existence, the program had served three million Venezuelans, primarily in the greater Caracas metropolitan area. Maria Urbaneja, the health minister at the time, said that even though there were plenty of unemployed doctors in Venezuela, not enough could be found who were willing to work in the barrios. There is a plan to gradually replace the Cuban doctors with Venezuelan ones.

Mission Miranda – Military Reservists
Venezuela’s military has long been a place where people from poor backgrounds can find an education and a place to work. Chavez launched Mission Miranda, named after independence hero, General Francisco de Miranda, to create a military reserve out of people who once served in the military. Participants receive the minimum wage, training in forming cooperatives, and the opportunity to apply for micro-credits. When the program was announced in October 50,000 soldiers had already signed up, with another 50,000 to be added before the end of the year. All of the reservists who signed up are currently unemployed. The opposition questioned the intentions behind Mission Miranda, saying that Chavez is creating a parallel army that would be directly under his personal command. The suspicion is that Chavez would use this armed force to keep himself in power, even if he loses the recall referendum.

Mission Mercal – Food Distribution
Mission Mercal is a network for distributing food throughout the country at slightly below market rates at government supported supermarkets. This program emerged as a result of the December 2002 employer sponsored general strike, which shut down food distribution. As of November 2003 there were 100 government markets around the country. The government is accelerating the building of these supermarkets, so that the number will double to 200 in December. The opposition criticizes this program saying that the Mercal markets undermine the private sector. Mercal markets primarily serve areas that are neglect