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Economic model social and solidary economy

and several popular Economy: From Bill and surrounding

Mideros Andrés Mora

On 17 March 2011, President Rafael Correa sent on an "urgent economic matters" draft "Law of the People's Economy and Solidarity" (the Act) to the National Assembly. This project is the development orientation of the regime towards the goal of living well. Moreover, the Constitution (Art. 283) states that the economic system is "social and solidarity." Thus I consider important to reflect on the social economy as an introduction to the draft law

From social economy

These are thoughts for the formulation policy, and not looking deeper in concepts and theories. For those wishing to do some authors to look for are: Karl Polanyi, Jean-Louis Laville, Alain Caillé, Anibal Quijano, Paul Singer, Boaventura de Sousa Santos, Manfred Max-Neef, José Luis Coraggio and Franz Hinkelammert. Additionally, you can visit the website of the Latin American Research Network of Social Solidarity Economy ( http://www.riless.org/index.shtml ). However, it is important to start with the need to break the formalization of the economy, and that since she can not understand the social economy.

In formal vision once established the "end" seek "rational" means to achieve the most efficient way. The resources are scarce and therefore the widespread use of "markets" said achieving efficiency. However, it is necessary to put a price (monetary or commercial) to "all" if it is to be considered as factor analysis. In this view the self-regulating market is utopia. Why change this conception?. Because the "end" money endangers the reproduction of life. Because it "justifies" the uncontrolled use of nature and human beings becomes a factor of production. Why not raise the reproduction of natural and social resources for a sustainable economic process. Because it creates "wins" disproportionate and many / as "losers / as", not only by structural inequality of income, but inequality of opportunity.

The alternative is to go look substantive. From this view of dependency and relationship between people, nature and society in the search for their survival. Then, the economic process occurs in the relationship between people and their environment to the satisfaction of material and immaterial needs. There arose a choice, and if any is not determined by scarcity. The institutional framework can be raised from five principles: reciprocity (between equals), redistribution, trade, autarky and plan (based on the recognition of historical processes). Two points arise which are completely different: i) going from the pursuit of capital accumulation to the satisfaction of needs and reproduction of life, and ii) to understand the market as an institution to do so as an option for the mobilization of goods and services to the satisfaction of needs.

José Luis Coraggio

defined the social economy, during a seminar at FLACSO-Ecuador in September 2008 as: "the system of institutions, values \u200b\u200band practices that take place in a society for its members and society as a whole, are located in the global division of labor, organizing production, distribution, circulation and consumption of goods and services useful, by socio-natural metabolism in order to satisfy the best possible way the needs and legitimate desires of all its members, including future generations. " This definition provides several intentions. Franz Hinkelammert raises some of them: i) the particular and general interest, ii) atomistic and associative action, iii) a utilitarian calculation and usefulness of solidarity; iv) market ethics and the ethics of responsibility and good live, and v) human subject and institutions. To address these intentions requires institutions (from the five principles set) as well as joint training and economic system.

The approach of the economic system recognize, as does the Constitution, as forms of organization to the public savings, private and popular. The first is aimed at finding common good governance and political power play. The private economy, capitalist, is based on the company and it is required to deepen social responsibility. The popular economy is given from the household and is intended to expanded reproduction of life. While there is much that can broaden, deepen and discuss, the intention is to have a framework to analyze the Bill

Project Law

To consider a bill, first, you need to know. This section summarizes briefly (and without comment) the bill to the next section to reflect on it.

The preamble refers to Articles 275, 283, 309, 311 and 319 of the Constitution. These articles provide for the development model to the good life, the economic system, financial system, financial sector, popular and supportive, and forms of economic organization (CBOs, cooperatives, public or private companies, associations, family, domestic, autonomous and mixed).

An important recognition is the fact that the forms of popular organization of the economy and several have been spontaneously throughout history, but have been marginalized in public policy and hidden under the concept of "informal" about the idea of \u200b\u200bcapitalist enterprise. While the lack of statistics is significant, it suggests that nationally, 50% of jobs are generated by micro-enterprises, which represent 25.7% of GDP. Popular finance have 3 million members and its members, UPAS less than 1 ha Provide 65% of basic consumer foods, while unpaid domestic work accounts for around 25% of GDP.

The Act aims to "recognize, encourage, strengthen and protect the people's economy and solidarity", and conceived as "a first step towards a new model." The Act applies to popular organization and solidarity economy, whose main purpose is the production of goods and / or services, and includes (Art. 6) to the sectors: community, association, cooperative, and popular economic units. To this must register with the Public Registry (Art. 4). Organizations will have legal personality (Art. 7). Organizations are guided by the following principles (Art. 3.): I) seeking the common good; ii) prevalence of work over capital and collective interests over individual ones, iii) social responsibility, solidarity and accountability; and iv) equitable distribution of surplus and solidarity.

organizations

Community organizations are those that are linked by spatial relations, family, ethnic or cultural identities, that by working together produce goods or services (Art. 11), it will have a background comprising social contributions in cash, labor or property (Art. 13). Associative organizations are constituted by individuals to obtain raw materials, supplies, tools, equipment or to market in solidarity (Art. 14). These will have a structure of government (Art. 15), and have social capital consists of quotas and economic surplus (Art. 16).

cooperatives are organizations formed by people to satisfy basic economic, social and cultural rights, jointly owned by and democratic management (Art. 17). These may be (Art. 19) of production, consumption (supply, sale of crafts, vendors, freelancers and home), savings and credit services (including associated work). Cooperatives have property (Art. 43), which includes the social capital (Art. 44). At least 50% of the surplus should be spent to increase distributable legal reserve fund (Art. 49). Cooperatives may issue bonds free trading on the stock market (Art. 50). Cooperatives may be intercepted by the Superintendencia de Economía Solidaria People (Art. 59).

popular economic units are one-person enterprises, family, home, retailers and craft workshops (Art. 66) . The first are economic production activities or services developed by workers self-employed persons and small households, organized "made" to meet the needs of employment and income (Art. 67).

The popular and supportive financial sector is composed of credit unions, associated entities or joint boxes and community banks and savings banks (Art. 70). Besides establishing central banks, whose formation is given by at least twenty credit unions (Art. 93). As associated entities or joint, community banks and savings banks and savings banks are understood to organizations formed by contributions (savings) for the granting of credit (Art. 95). To achieve a certain level of assets, associates, transactions and / or cover these organizations should be transformed into cooperatives (Art. 97). In addition, states that organizations can channel public resources for social and productive projects (Art. 98). Finally, credit unions also considering the use of methodologies "participatory" (solidarity groups, wheels, productive funds, burial funds, insurance product or any other funds or mobilize capital work) (Art. 99).

The Act creates the "Liquidity Fund Financial Sector People and Solidarity" as a lender of last resort (Art . 100). This fund will operate through a trust controlled by the Superintendency of Popular Economy and Solidarity (Art. 102). The Fund will have a board composed of one representative of the executive, a representative of the Interinstitutional Committee for Popular Economics and Development and a representative of the popular and supportive financial sector. In addition, A technical secretariat will have exercised by the People's National Finance Corporation (Art. 103). The fund will provide loans of liquids, to a maximum of 120 days notice, and shall ensure that investments and / or portfolio rated "A" (Art. 105). It also creates the "Deposit Insurance and Financial Sector Outreach People" as part of the Deposit Insurance Corporation (COSEDE) (Art. 106).

incentives

The Act provides that the State shall encourage, promote and give incentives to individuals and organizations covered by this Act A first survey is the benefit of all the incentives created by the Production Code. Also provides that in no case may have less privileged than other organizations with similar objectives from the standpoint of social or economic (Art. 114).

building Measures (Art. 117) provides for: programs and projects, lines of credit, training and education on issues relating to the Act, a priority for government procurement and technical assistance. It also establishes that the autonomous governments (GAD) develop programs and projects for socio-economic development sector (Art 118).

For promotion (Art. 199) provides that the State: promote the association will remove "obstacles" administrative, facilitate access to technological and managerial innovation, promote fair trade and responsible consumption, provide training and technical assistance, promote consumption, and incorporate the Financial Sector People and Solidarity in the National Payments System.

State policies designed to promote the sector (Art. 120), and will incentives for environmental liability (Art. 123). On taxation, the acts to be made between organizations and their members, as part of its social purpose does not generate taxes, while those made with third parties are subject to ordinary tax regime (Art. 121).

The relationship with the State

Interagency Committee established the People's Economy and Solidarity as an entity of stewardship of this economic subsystem. This committee shall be composed of ministers of states as determined by the Chairperson of the Republic. The Committee shall adopt and coordinate sector development policy (Art. 124). It also establishes an Advisory Council which allows participation, non-binding, organizations in the Committee (Art. 125). The regulation of Popular Economy and Solidarity is in charge of the executive branch through the ministries of the State (Art. 126).

The control is the responsibility of the Superintendencia de Economía Solidaria People (Art. 128), which has the following functions: control of economic activities, providing legal, authorized financial activities, up statistics and penalize, among others (Art. 129). The Superintendent / to be appointed / a by the Council of Citizen Participation and Social Control in a list prepared by the Chairperson / a de la República.

National Institute established the People's Economy and Development, as an entity under the ministry responsible for the inclusion economic and social, to implement public policies related to the sector (Art. 135). It also creates the National People's Finance and Solidarity (Art. 140), whose mission is to provide second-tier financial services organizations (Art. 141).

Obligations

organizations have the obligation (Article 149), among others: keep the background or minimum authorized share capital and accounting date. You can not (Section 150) grant preferences or privileges to members of the organization, among others. Organizations should report on the social balance of their management, which proves the level of compliance with its principles and social objectives (preservation of identity, influence social and community development, environmental, educational and cultural) (Provisions general, second).

reflection

The bill serves the purpose of recognizing the People's Economy Development. It does so based on the recognition of organizations that exist in Ecuador, and seeks to formalize (through registration) of these organizations. To foster, strengthen and protect the People and Solidarity Economy will be promoted through regulations and policies. The other three objectives of the Act are also met. These are: regulating organizations, instituting the system of rights and duties, and establish public institutions for stewardship, regulation, control and guidance.

In general

The preamble reflects the need to recognize this sector, not create it, and for the formulation of policies for strengthening and protection. In this way the law is urgent and important. However, we must not lose sight, a "first step" to develop the social and economic model of solidarity. In this regard the Law of Popular Economy and Solidarity must be related systemic relations between the People's Economy Development, Public Economics and the Private Economy. Similarly, to think the institutional framework must be achieved to articulate the principles of reciprocity, redistribution, trade, autarky and plan.

An economic model is not created because it is defined in the Constitution. Neither Christian Socialists and Christian Democrats Social and managed to promote "social market economy." In Ecuador there is no free market, or established a welfare state. Social protection is minimal, and the economy is full of monopolistic practices, power groups, national and international financial mafia, is exclusive and has made a structural inequality. Changing objectives, but learning from the past, the challenge is from socialism (Ecuador XXI century) to promote "social economy."

For this, since the plan should define what role does each of the sub-economic development of the country, and therefore in the good life. You need to know that economic sectors, activities, objectives, and that perform under each of them, and likewise how they relate. To change the economic model to the social and solidarity must make structural changes. You have to define the role of the private economy, and must be given a new frame. One option that has been raised is that of "radical responsibility" so that private enterprise fulfills a social function. We must change the structures, but we should not "demonize" a private enterprise. You have to give place. Similarly, the public economy, responsible for the common good, should have a framework that allows you to achieve your goals. Space for interaction, too, is important from something that could be called public-private-popular, where two or three sectors work together. At the end of the three economies should aim toward the good life.

Another principle necessary for the institutionalization of the social economy is redistribution, where the state is legitimate center. This means that public policy and in particular (in this respect) social policy must be linked to the economic model. Social policy and social protection in particular (not just social security) must be revolutionized. It is from the economy where wealth is generated (not to mention money) and think this model should be established redistribution through policies that guarantee universal, based on which to build and define the good life. The change in the social economic model is bound, and in this space should be thoroughly radicalize the political process for a new structure and a sustainable and equitable development.

addition, it must raise the institutional principles of reciprocity and self-sufficiency of the Social Solidarity Economy. Reciprocity is an institution that must be built economically and socially. There is no talk of solidarity, but an act between equals that recognizes the interdependence of people, organizations, and society among themselves and with the environment. In this sense, the economy must be socially integrated, to ensure a system that protects life and play. Autarky arises from a glance of self-sufficiency at household, community, regional, national and even global. Namely ensuring that the production is sufficient for the satisfaction of needs (in a responsible consumer, legitimate needs and sustainability), including future generations.
Finally a practical issue. When you start the transformation to a model of social solidarity economy, and recognize and encourage the People's Solidarity Economy should bring this transformation to the system of national accounts, in order to calculate and track the value creation added and wealth (now if I talk about money, but also include new statistics).

As organizations

recognition is essential that the bill makes the organizations of the Popular Economy and Development. However, greater clarity is required to define the role these play within the model of social solidarity economy. A key factor is the "local development". Raised community organizations, associations and cooperatives, and popular economic units. In recognition, strengthening and protection this sector can not ignore its connection to a territory, and therefore should be in a local development framework. That does not mean the joint regional and national level through networking. The latter also should take into consideration the context of institutionalization.

can understand the requirement of registration in a single catalog of accounts in the case of community organizations, associations and cooperatives, retail and craft workshops. But it is something that requires further reflection in the case of economic units of one-person enterprises, family or household, organized to meet the needs of employment and income. At this point it is important differentiating criteria in the Act (it will also secure in the Regulation) to determine the instance and method of recording and reporting, where the initiative should come from the state and not from home. Should be a right not an obligation.

Similarly it is important to differentiate this entity segment and control mechanisms, obligations, violations and penalties, and the promotion and protection policies. Particular flexibility or differentiation is required since, as recognized by the Act, these organizations are made of "fact" and prioritize the "adequacy on the efficiency." It is also important to return to institutional principle, the Social Solidarity Economy in autarky. This time look from production for consumption either at home or community, and to recognize, promote and protect.

Other points for reflection are the figures of social capital (equity), economic surplus (utility) indivisible legal reserve fund (equity), and free issuance of bonds trading on the stock market. The last two in the case of credit unions. While on the recognition of these organizations, we must take care that the legal framework of the guidelines and adjust to the reproduction of life, and not to the accumulation of capital.

In this respect one should think that some community organizations, associations, cooperatives (especially savings and credit), retail entities and / or craft workshops, which exist today should not be considered as Business organizations People's Solidarity per se. It would leave open the possibility and necessity (for example) large credit unions (which, given its history and development) work "as banks" remain in the private sector. Another example is a retail micro aimed expanded capital accumulation. Here, the raison d'être of the organization (primacy of labor over capital) and the character of local development could bring to the draft law

When thinking about the popular financial sector and solidarity, it is important to emphasize the character of local development, the role of "financial intermediation", to break the restriction of productive credit, housing and consumption (for emergencies, not for luxury spending .) It should expand the role of microinsurance as a social protection mechanisms at community level (urban and rural). One should think that the resources are captured by moving in the same territory, hence the income (through which savings become credit) should encourage the local (that savings are invested in the area). Similarly should prioritize savings flows among territories as measure of redistribution, there a role for the National Popular Finance.

Other issues that should enter the discussion explicitly (for regulation) are the primacy of labor over capital (paid work, not seeking profit), and forms of use and "property "means of production. They can differentiate an organization of Popular Economy and Solidarity in a capitalist economy, to ensure the promotion and guarantee of work and develop the economic process with an objective other than to the accumulation of capital. Finally, domestic work and the economy of care (whose services, unpaid, are provided in the home) must be included in the subsystem popular and supportive, recognizing and protecting these activities, and ensuring social protection.

As for incentives and the relationship with the State

To think incentives are required to think about the institutional principle, the Social Solidarity Economy, exchange . This allows the circulation and ultimately the consumer. Direct exchanges can be established between communities and / or through networks. Market access should be thought of as a mechanism of movement of goods and services, ensuring fair, sustainable and priority. Important is the priority in government procurement, but also should encourage participation in private markets from a different perspective to the capitalist. Again, it is necessary to consider local development when you think the People's Economy and Development, but also food security, or more broadly in meeting security needs.

Beyond the relationship with the State, should mechanisms of economic governance of the People's Economy Development. It is important to involve the State and, in general, adequate as proposed in the Bill, however, broadening the participation of organizations and other stakeholders, directly and through networking. Participation in policy definition should be binding, but properly regulated in the form. It is society and not the government who set economic priorities.

Finally, in stewardship, monitoring and control subsystem, as well as policy implementation, it should include autonomous governments (regional, provincial councils, municipalities, autonomous metropolitan district, parish councils and special regimes). Again, from a logic of local development, and also because the Ecuador "is governed in a decentralized manner."

final reflection

must understand, in depth, the Social Solidarity Economy. In fact, is built in a participatory this economy, and for that we should define institutional principles. We must start from the economic system, identifying and distinguishing subsystems, actors, relationships and roles. The economy must be given for development, for the good life. Social policy and social protection in particular, should be tied to the economic model.

The regulatory framework should establish governance processes of the economy, and its relations with the social, political and environmental. The draft Law of the People's Solidarity Economy is critical, and a first step to building this new model. This discussion seeks to contribute to disseminate the draft Act, and the debate in the Assembly Law, the drafting of regulations and policy development. The transformation of the economic model is urgently required to radicalize the process of public revolution. It must transform the economic structure, promoting the common good from the public economy, the reproduction of life from the popular, and accountability in the private economy.