ELSEN, S., WALLiMANN, L: Social economy: community action towards social inegration and the prevention of unymployment and poverty. EJSW, Vol. 1, 1998

European Journal of Social Work Val. 1, No. 2, pp. 151-164 1998
economy: community action [ration and the prevention
by Susanne Elsen and Isidor Wallimann
In these times, when unemployment, marginalizatlon and poverty are spreading while world capitalism takes its course, new approaches for guaranteeing subsistence at the community level need to be explored. Social economy provides people with an alternative which is work-Intensive, equitable, and integrative. It is based on the principles of grass-roots democracy and can be facilitated through community-based social work. First, this paper outlines how social economy can be constituted and developed. Secondly, it describes successful community-based business enterprises and federations of social co-operatives in Switzerland, Germany and Italy. These profiles provide evidence that community workers can'and must help to create, reinstate, and redesign social, political, and economic bonds within the community.   ,
1. Introduction: The new social
issues
Ac che end of che twencieeh century—in che aftermath of world-wide economic, cechnoiogkal, and social changes and che endangetrnent or destruction of the natural basis of life—the industrialized nations are faced wich problems never known before. Now that the market economy no ionger has any boundaries, the spheres of life within che limics of che local communicy are gaining importance, in terms of, autonomous problem solving and sustained paccerns of development, as central areas of activity and learning. Promocing social and economic self-help within local communicies, enabling people co re-escablish or maincain cheir ability co be socially productive, and .che accive development of a communicy-oriented basis for this purpose are che central casks of society.
The changing and broadening meaning of community as a place for mascering che challenges of life and as a framework for developing large-scale, fucure-orienced solutions co social, ecological, and economic problems corresponds to the broadening meaning of communicy-based social work as a comprehensive effort to shape social life and effect social change.
This   interpretation   of communicy-based   social
work is a reflection of its original cooes in the 'community work' which was first developed in the USA to cope with the economic, cultural, and social consequences of urban induscriaiizacion and che influx of settlers in the rural areas of che Middle Wesc. Now, just as at che beginning of the Industrial Age, social gaps are becoming acutely evident and, hence, the cohesiveness nf individual lives within the community needs to be thoroughly reorganized.
Community work is a comprehensive approach to creating, reinstating or redesigning social, political, and economic bonds wiďiin the community. The most impressive example of chis—and one still highly relevant to the problems being confronted today—was the work of jane Addams and other coworkers ac Hull House in Chicago cowards the end af the nineteench century, Hull House was an impecus for socially-oriented urban developmenc and social work. It focused on public surveys on povercy and public health, assisting the policical participation of the unempowered and forcing the implementation of social reforms. It was a centre for inter-cultural learning and socio-cultural development, and last buc noc lease, it created community enterprises as a basis for economic self-help.
The keys to understanding community work in
© Oxford University Press 1998
~-v *5ŕ.
«"T,"P"=rf'"Tl»-fr»T*ft''''
152    Susanne Elsen and Isidor Wallimann
ics original sense are che comprehensiveness of ics involvement in cegacd co che needs wichin ics own cerricory, che concept of radical democracy, independence from government and economy, che acceptance of people as competent individuals and, consequently, the belief in their powers of self-organization. The autonomy of this position can also be explained by the fact that che American brand of capitalism was not, or only co a lesser degree, flanked by social policies and chat seif-help was always an essential requisite within society.
2. Social economy
Ic is co be expected chat che -world induscriaüzacion process will continue, capital will be drained off, and jobs exported. Ic is mote likely chat the povercy of the resc of che world will come co us, rarher chan our affluence spread to ic. Unemployment, underemployment, and povercy are more likely co spread and deepen, boch here and elsewhere in the world, chan co be overcome by means of current world capitalism, in spite of its expansion and periodic phases of growth. Moreover ic is clear chat neither world industrialization nor the current form of industrial society will be followed through in the next generations. The problems of guaranteeing subsistence will become increasingly critical once it becomes necessary co call a halt to world industrialization. Even existing industrial production may have co be re-organized and downscaled because industrially usable energy w'ili run ouc and industrialized output will no longer be tolerable for man or nacuce; meanwhile, the human population will grow at a cre-mendous pace. (Wailimann 1994; Wailimann and Dobliowsid 1997).
We need ro find new approaches now for ensuring our subsiscence. Currently, chese are needed co provide people, deserted by incernacionally mobile cap-ical, with securicy within cheir locally dependent scruccures; and lacer, during che contraction ptocess, new approaches will be needed in order to maximize solidarity, to minimize the mass destruction of human capital, and co give sociecy a new security for existence through suscained, work-incensive, regional
self-maincenance. Sociál economy offers' chis kind of approach (Wallimánn 1994;'Alinšký 1994;\R.eiczes and Reitzes 1987)."-. . .   V' , *..'.
Social economy does.noc strive to keep step wich che multi-national corporations, but inscead tries co avoid their clutches in an attempt čo secuta a basic .existence. Social economy is relatively work-intensive and its salaries are relatively low. It is primarily concerned not with high remuneration of labour, but with establishing equity and economic independence for everyone involved. It does not attempt co abolish che market, economy, but rather to offer 'a degree of protection ftom its methods of blackmail. Ic is not looking far deficits among the victims of the labour market or the financially-weak—or any other part of the population—but rather for resources. Ic is not-seeking to divide a community, but rather to expand it chrough the integration and interconnection of resources. It is noc striving for shore-term, but for long-rerun synergy effeccs and success. Ic is endeavouring noc co establish shorc-cerm, but rather to establish long-term guarantees for subsistence for an ever larger number of people. If it is to achieve these goals,.- it must ensure that the men and women working in its organizations are participating in: the capital base that they are building up. And finally, democrncic structures must prevent this newly created equity from being unconditionally 'privatized' and extracted from che network as a result of lack of social conrrols. The 'profits' that have been created by chese joint efforts need to remain within the community.
Social economy 'can therefore be considered a 'grass-roocs' based, regionally orienced federation of decencralized, auconomous encerprises run on che principles of basic democracy. Ac che regional level chere may be further links between federations. Organized either as co-operatives, associations, foundations, or stock corporations, it is important only-chat the scacuces of the organization guarantee chat the members have control over rhe capital resources and the profits via grass-roocs democracy.
But how can a federation of self-managed business operations, alternative banks, alternative retirement funds, and organizations chat deal with che re-incegracion of che unemployed provide mucual sup-
Community action towards social integration and prevention of poverty   153
«Vi"
0;:
anäfessistance? How can social economy be con-^dj&'n^built;.<up? This leads to four basic 'bnjfSwhichý can be answered with examples actual í practice;
ä)ÜHow- can the flow of resources from a erass-roots "'deration into the privately owned and authoritarian business sector be prevented? Hbwlcanthe input of resources from outside the federation be increased? "law!can" che credit volume within the federation bei maximized?
ilHqw.-can business and sacio-cultural integration yje^encouraged and the federation opened to Outsiders?
\r|-ea£;h~:of these  questions   there  are  several
/ers'-'arid possible courses of action. They differ
according;«] the starting situation and the economic,
ajjtjca^an'd'social'setring, and need to be adapted
thelever-changing state of affairs. Several potential
ändfalréadý proven answers and strategies will be
31 ^Breventíng the flow of resources ajwáý'from social economy
usinesses within ä social economy can be encour-
edjto ai'greater or lesser extent to purchase goods and&ervices within the federation. Markering newspapers'that provide information about the main pur-chases.of ^business enterprises can facilitate this. At Enäsame'time, such information forms the basis for deciding whether and in what field it would be strategically feasible to establish new businesses within Áthes-federation which could meet these purchasing needs..The.mutual business relations can also be jaeiiitated-'and guaranteed with agreements on dls-'count rates for members, an internal payment system such .-as a 'federation check', or—where appropriate— wjthj''purchasing quotas'.
ilffAt mE Ieve-l of. individuals working within the
^federation, it is feasible to ask whete and on what the
|i[salaries are being spent? Such details would provide
'^information about whether it could be practicable to
'establish businesses dealing with renovation, grocer-
ies, clothing, entertainment, travel services, or other services such as child-care or health care. It is also possible to provide incentives and different ways to motivate members to spend their income within the federation. Of particular interest is the equity formation potential of real estate. On average about 25-40 per cent of salary income is-likely to flow out of the federation for living expenses. It would be quite simple, if these funds were amassed, to assist in federation-owned, co-operative ownership of housing, and ro even become actively involved in the renovation or building of new housing.
4. Increasing the input of resources in social economy
It is necessary to know which of the markets outside the federation production could be geared to. At the outset it is vital to ascertain where, for instance, supporters of social economy can be found, which services and which products are required and are being purchased by these people, and how they could be encouraged to consider buying from enterprises within the federation? Also,, how can che general public be persuaded to select their products and services from the social economy rather than from businesses that are under the control of privately held international capital (MövenpicJc, McDonald's, and others).
Supporters of social economy are most likely to be found among members of new social movements and possibly among the labour unions and small-scale industry and trades. Greater market opportunities for organizations and members may exist here, whether in the atea of printing, banking, bookselling, health care, counselling and therapy, leisure-time, etc., making it essential to look for market openings. Federation working groups or Specialist staff-members could be set to this task and prepare new business activities and enterprises.
It is considerably more difficult to find ways to use welfare state funds designed for stop-gap telief and for the te-integtation of the unemployed, underemployed and poor people. Businesses organized around grass-roots democracy within the federation
154    Susanne Elsen and Isidor Walllmann
could, an behalf of che welfare scate, cake on tasks of education and training in order to use the chance to ptovide education beneficial to social economy. And furthermore, businesses within the federation could use che unemployed to produce public goods and services. The greatest disadvantage in getting involved in this market opening—although considerable funding is available—is the fact that social economy would make use of compulsory work in order to raise the number of companies with a grassroots democratic structure" and to increase the number of workers within the federarion. In reaching these goals the social economy directly contributes to the maintenance of welfare scare clients as dependent consumers. Hence.this continues to help lead welfare state clients into capitalistic wage labour, a goal from which social economy, in reality, wants to refrain from. Furthermore, the federation would leave itself open co blackmail and dependency in- as much as welfare scate funding can be rescinded at any time.
The situation can best be dealc with when marketable goods (products, services, real estate) can be produced and built with the input of unemployed and impoverished people. Although capital (usually the petty capital of small trade) is subject to competition, there are more and more opportunities for cooperative enterprises. Currently chere is considerable pressure co deal with the growing numbers of the unemployed by creating produccive, meaningful activity. Hence it is conceivable that welfare state clients could build housing for rhemselves and others wichin a co-operative, and chus be participants in the products of their own labour. Nevertheless, the danger of dependency and extortion temains real. One possible way of dealing with these contradictions and disadvantages is to cake on only chose welfare scare concracts whete the clients are able co fill a permanent posicion, assuming this is the consensus among both parties. On the one hand, this would limit che levels of dependency and potential- for blackmail and expand the work force of rhe federation, on rhe other, this would offer, a guarantee of sorts chat the federation, as a land of 'co-operative elite', would not distance itself ftom the rest of the populace. In short, if social economy participates in the welfare  state  progcams of inregration,  these
effbrcs should lead co permanent incegcation and employment for the unemployed and impoverished, at least to the extent that that is what both parries want.
5. Credit creation in social economy using Internal and external resources
The greater rhe amount of temporary or long-term surplus and liquidity chat can be merged, the greater the chance of creating credit'and subsequently providing the federation with funds for expansion. Surpluses can' be brought together in a more-or-less individualized manner, depending upon whether the federation has ics own banking and credit institution. If ic has none, the individual businesses can decide for chemselves wbecher to give one another credir. If they decide co do so, it is also possible that a system of consultation and 'patronage' could be used to limit che danger of losses. By providing collateral and other securities for each other, businesses may also be able to have banks provide them with more flexible and higher sums of credit. As a more general possibility of creating credit, both businesses and che members of the federation could use-only certain banks for their banking needs and for their surplus funds. In return,- it would be incumbent upon these banks to provide credit which, in accordance with common banking practice, is available in relation co the value of funds on deposit. If this cannot be negotiated, the federation will lose valuable opportunities for .financing and* expansion. But businesses must be warned against becoming dependent upon banks, especially if these are active not only tegionaliy and • nationally buc also at the international level. Thus, it* is advisable to draw credit from ideologically like-minded banks or from one's own credit institutions.
But funds can also flow into che social economy from outside. Ic is passible, for insrance, that ideologically compatible retirement funds, banks or other organizations and individuals (especially from the new social movement groups) could provide rhe social economy with credic, orin ocher words, invest in che social economy, and, more specifically, in its

Community action towards social Integration and prevention of poverty   155
■ í
s
u • i .essjenterprises'. Hence credits may be paid dir-"' Ltöitjusinesses,' or through their awn or other !redit|inscitutions andbanks. In the case of outside íánlísSité-wouid be advisable to develop funds tied .tíŕtHätádvancemenc of social economy. ^fefe"\icÁ". .■■"'.-MiGií;.^' ■;.'•■ ■
6i|'Advancement and expansion of business and socio-cultural Integration In social economy
i|feďeratÍDn of decentralized businesses is p'articu-mm$iim^. '■■-.■,        .                 c    .        ,
anygdependent-.upon che maintenance or unity and
mmm*\* . i.£ .           . .    _      .  ,
öyalty/among its business enterprises. In particular,
t|is|nécessary to counteract che danger of enterprises
jyennially "leaving the federation once they have
tchíeved Vcercain affluence because of their parti-SUJäUiir» .' ■.."',,           ',...,-
:ipation, m it, i.e. the danger or  privatization   or
uronts'.wicnout che federation receiving compensa-
riori'tfor its contributions. A basic democratic control
jfícnéiř own capital resources and profits -within the
ifteiiv^-  ■ j   ',     r j     .              .,
rompames and  the federation provides  a certain
**ijj;Vf£iirl ■■■:..:            .                  .
jegre'e' or'security, but in addition certain explicit
rules' 'for' entering and leaving the federation need co
b.e.iestablished. This might involve, for example, a
federation'tax, fees for joining and leaving, or direct BIWěsíI n      '             !       ,                     .        r
Daymeats for any services drawn upon via or from
rheSfederation. Furthermore, integration and synergy itithe-federal level can also be achieved through joint ieryjces in the area or insurance, tax and financial iľounšetlint;, legal services, office and communication services, market research and management consultation,.and'the organization of leisure time and cultural events.
.fa/The socio-culcural bonds among'the individuals ictiye in a federation can be promoted in various ^ays'and at the same time be accessible to outsiders. Since people active in social economy—as the experience'.of self-managed firms has:shown—are often quite involved in social action programs, socio-culťural integration for the federation may be linked tpithe cultural events of such organizations. At the same rime this provides a way of opening up the federation to chose outside.
^Another concrete method is the use of a local, money-less fotm of exchange (which is incorrectly
seen by many as a means of guaranteed subsistence). The output of this (shadow-economy) production is, however, so minimal chat it can be regarded rather as pocket money. Much more significant is the effect that ensues from contact between people. With very few resources, the federation can implement a trading centre for its members and for oucsiders with the help of a market newspaper and notes of exchange. This enables everyone, both children and adults, to provide services for one another. This way, the reciprocal conditions for a two-way exchange relationship ate made easier and more general for a particular community in which all possible services can be offered, requested, and traded. A central coordinating agency manages the membership contributions and trading accounts, which are granted intetest-free start-up credit.
7, Steps towards developing social economy
With such modest efforts, how will ic be possible to help establish an economic culture with a future and to follow new perspectives in everyday practice? In view of the requirements for societal development, three principles of action can be defined whose realization will provide the steps towards such a transformation.
The first step involves thought and action in the core areas of development as a means of focusing individual efforts on the internal and external possibilities for development and on the possibilities of wotking in combination with others and as a network in a local community. The knowledge of societal needs for development can expand the perspectives in current practice. Traditional measures of employment can, for inscance, be established as preparatory phases for setting up co-operative organizations. This does not mean, however, the removal of individual enterprises from the market, but rather cheir integration in a common economic network. This principle is also relaced co the creation of common economic models of subsidy and investment as a result of the servicing functions of capital based on the model efforts of the 'Equitable Pioneers of
&&Í
tor-*
t« ■":
jF7
t,"
writ.:.
•»i*-
15G    Susanne Elsen and Isidor Wallimann
Rochdale' (founded in 1S44 and considered cd be che fachers of che modern co-operacive iriDvernenc). In this kind of model, profitable activities are combined with community-oriented tasks. A concrete example of a case to be found in Luxembourg, in which success is based on such a combination, will be presented below.
The second step involves systematic anchoring in the community as conscious integration and reintegration of economic efforts in the social and cultural structures of the community. The process of setting goals at che grass-roots democratic level, che linkage of learning and co-operative produccion, and co-operation of different forces in the surrounding territory are forms of restoring damaged economic, social, and cultural connections which are the determinants of human life spheres. A real-life example of anchoring in the community that was developed, and which led to futcher development, is the 'Cooperative am Beucelweg e.G.' in Trier and che community encerprises which .work wich íc in an integraced syscem (Elsen 1997; Elsen 1998).
The chird step involves the developmenr of an 'auronomous' grass-roots sector in a regional network. Community economies are diametrically opposed to the system of goals, guiding principles and principles of co-ordination of the dominant economy. They tepcesent a unique economic culcure and are dependenc upon the networking of encerprises and other organizations in their surroundings, in order to avoid being eliminated in an environment dominated by competitiveness. They need their own consciousness, supportive conditions, and the resilience to pursue their own development. Such an efforr ro create a supportive network can be seen at the Verein für Soziale Ökonomie Basel (Basle Association fot Social Economy).
The Basle social economy project
Units together to .guarantee an existence at the ground kvsl. Create local circuits of money, goods and services. Prevent resources from being drawn away from a region by creating models for participation and grass-roots control of the use of profits. Don't- wait for governmental spending (even in
Switzerland funds are scarcer). Xbe way to save the ■ physical and socioatllural basis for human existence is to be found in the construction of a social economy. Its participants need capital resources that come from tuith'm the region and can be used for. the region. The businesses and organizations of social economy in Basle and their workers are counting on economic autonomy, social security and the stimulation of the . regional market. (Contraste, 1997)                 . ;   ,.
The Association for Social Economy
Xn 1996 the Interest Group for Social Economy was established with the goal of uniting and strengthening already existing social economic organizations and initiating the founding of new organizations and enterprises. In order to pursue irs goals in a more comprehensive way, its members founded the Association for Social Economy on August 20, 1996.
The association 'builds' the foundation on which social economy is being formed and it is developing, in a spiral-like partem, into an ever larger network of organizations and individuals. From time to time che association itself, establishes companies and organizations to fill certain gaps ot to help maintain the patterns of growth. For this purpose it has the support of an advisory council and a group of sus-raining members.
The association has established the Cooperative Network of Social Economy, the Association of Financial Services and rhe Institute for Social Economy.
The Cooperative Network of Social Economy pursues the following goals:    ■
o preventing loss of tesources and promoring investment of resources
o promoting che exchange of products and services among its members
® enabling services and products to be exchanged withour the use of money
© improving the commercial success of its membets
e finding new markets and establishing businesses to satisfy chem
o aiding che job market within the network and enabling long-term working and personal careers within the network
Community action towards social integration and prevention of poverty   157
HMffi
■1 !*
gjnii^ing^the social, cultural and political rela-řamon^, individuals involved in che net-pfi i     '■*■' ngálthe network more ■ attractive for existing businesses and organizations.
"Association for Financial Services serves the iessesfand organizations within the network by
cgaruzingi credit and che necessary collateral and ^S^ecuricies    :
lelpmg^co adminiscer che earmarked 'Invescmenr |Eom]|Social JEconomy'
1 $pjfering^ services in che areas of insurance, social femfeesj'i.caxes, book-keeping and legal matters caunsellingiin quesdons.of product development, cradngiand production planning.
„tó)}'/.-',-,.. i BhÉglnsri tute 'for Social Economy is intended co
inŕbrm^the,. public; about social economy and its |poten ciali d eyelopmen t
• foffejrápublic courses on the issues of social eco-|ggmýŔV|.v; ,.,■■-;
• jadütänce-.:the, professional, economic, political and íčulcural .skills of individuals involved in social
pneew ■
^economy
■ «provide, assistance through research and con-|rah^g-for the.'Cooperative Network of Social ÍEčonomy!<and che "Association of Financial Ser-
B&* ■ - ■
• lófFer^statemencs on social economy co the media sks,*""'" " '                                       ,                    , |and.r'iencourage publications dealing with social
([economy, ■.
■ ^document the course of events surrounding social ^economy at the local, national and international Revels.
"Another, 'somewhat similar, example of what hap-
ins'when the supporting conditions function well
if.evident   in   the   dynamics   of the   Italian   co-
jératives which are'presented in section 7.3 below. ### '-             ,    ;
!1?ASJ—a joint economic project group in jxembourg
ioneering spirit and a productive mixture of social immitment, entrepreneur and youthful energy led i !the establishment of a crystalizing point for social
economy in the southern area of Luxembourg along the border with France. ASJ {Action Sociale Pour jeunes/Sodal action for youth) is a joint economic model whose strength lies in making astute combinations and in networking.
The 'Action Sociale PourJeunes' (ASJ)
The three founders of ASJ1—a computer specialist, a communications scientist and a social worker—discovered their entrepreneurial talents while sail members of the Scouts (Pfadfinder). In order to finance their free-time activities they collected horse manure, packed it in bags and sold it to hobby gardeners.. The growing demand led them co operate a stand outside a spedality shop for gardening needs. When they could no longer meet che ever higher demand, they had to give up their lucrative trade to a stronger competitor in the market—a dear case of failure through success. The young entrepreneurs did not give up altogether; instead they looked for new market opportunities—a compost centre, a leacher shop and a computer agency. They founded cooperatives to co-ordinate their market strategies. Since 1986 ASJ has developed an array of businesses and projects, based an the market needs in the local area, with che aim of fjghdng unemployment among young people. The projeccs are oriented towards che potential calencs of young people and are model cases of planning, labour organization, business activity, and quality training.
By its own definition ASJ is an enterprise of Economic Solidaire and is an exemplary combination of profitable and sodo-ecologically viable concerns. By immediately reinvesting its revenues and subsidies, it has been possible co carry out social, cultural and ecological functions. At present ASJ has subcontracts with 115 underprivileged teenagers and young adults (Action Sociale PourJeunes 1996). The overall sdf-concributions for the funding of the businesses—including the sodai, ecological and cultural areas—amounts co 75 per cent; only 8 per cent comes from national and 17 per cent from European funding agencies. A boarding-house- for young people was built with self-raised funds and is operated by che ASJ without public funding. Social services have been established to accompany the work-


v-.. *
-*; '
l'   •= -ľ        "
ívÄ.
I ...
..U
■»■ -iL
[j-    *l íl •   -1/ ■'".""
*r-
- ■».'


■■>■>■
158    Susanne Elsen and läldar Walllmsnn
training and employment programs. Along with bilateral or multilateral projects of limited duration sponsored by EU agencies thete are also permanent training and employment sectors. Such training is available in three future-oriented fields of work for which professional profiles have been developed-— traditional job-eraining in manual trades and newly developed professions dealing with the environment and computer specialization. An intetactive multimedia project for career orientation developed by ASJ was recently commended by the £U.
ASJ is linked with unions, administrative agencies, schools and private businesses as well as with government   agencies   and   citizen   social   action groups. Through the co-operation with local businesses, and in continual co-operation with them, it has been possible to design j'ob areas as well as training programs. In 1993 ASJ was approved as a training institution by the chamber of commerce. ASJ has built up a necwotk of enterprises in its social surroundings; it co-operares with these enterprises to help its graduates to become integrated in the job market and it handles job-training functions for these businesses, furthermore, the ASJ has contracts wich 12 municipalities to provide public services. Its own consulting agency provides market assessment studies for  the area  of solidary based  economy, advises smaller businesses, develops alternative job market strategies and ecologically beneficial methods of production. The 'research unit' prepared studies on   relevant - social,  political,  and   environmental issues. In co-operation with the independent Luxembourg labour union federation, it published a study with recommendations for fighting unemployment and set in motion an intensive consulcarion process fora 'territorial labour pact'. This territorial pact was given high commendation and was subsidized by che EU Commission in 1997. The 'Centre d'iniriao've seccorieľ and the 'Centre d'initiative locale' are coordinating centres for a wide range of local activities, which range from developing and' maintaining a 'biotope',  including  its  use  by iocal  groups for didactic purposes; offering courses in handicrafts and artistic craftwork; taking over the duties of the highway   maintenance   agency,   and   providing   bookkeeping and secretarial services. Lasc but not least,
ASJ has testored a charming old mill, which now houses a restaurant and an attractive conference centre. This infrastructure offers an ideal communication centre for future developments in the.enterprise and for the local region.
This example shows what is possible when labour and training qualification programs are able to conduct their own process of development and are noc misused for people being moved around in circles in an imaginary labour market. Perhaps such a situation is only possible in a country as small as Luxembourg, where co-operation and political will can be effected at all levels-of-society. This would seem to justify autonomous, politically tenable, regional" solutions by their releasing new quality and important innovative fotces. The independent status of ASJ, made possible by an unusually high level of self-funding, is the best guarantee of a consistent adherence to a philosophy of action and a beneficial position when . negotiating forms of co-operarion with all other participants. This independence is based on co-operative economic forms of investment and development and on the combination of profitable activities and public welfare tasks.
More than all other factors of success,- this is a case of individual actors as the focal point. The new economy needs new managers who do not see their goal as ensuring shareholder values, bur as taking responsibility for the public good. It needs new business people who can think and act within a necwork and in new constellations. All these factors speak for the need of economic actors to form co-operarives which can react creatively and continually adjust to changing situations.
The example of ASJ helps to identify new and differenr combinations which w a great extent can be attributed to the entrepreneurial- potential of its actots. The business group combines economic, social, cultural and ecological goals. Through their simultaneous activities, a wealth of synergies is being created. With its activities at the local level connected to the regional, national and European levels, the ASJ has helped to facilitate the flow between different levels and the communication of developmental needs ftom 'below' to 'above'. The cooperation and partnerships between industry, polit-
Community action towards social Integration and prevention of poverty   159
s
"Wd'SDcial services, as well as wich
|aouoní groups and movements, makes ic pos-
"Igampleceljrnew" combinacions of solutions
sloped locally. The combination of perman-
ifcies and project-centred tasks .will, in terms
sórgariižatiori' and -activities,  enable  both
írenaJnčeĚofšthe- existing structures and innova-
.Älsôfnbteworchy is che combinacion of high-
indilp.^cech areas of activity, albeic che use of
Ohnbľóg^seŕyes"exclusively ecological, social and
"ígôals'.#--;;'   '■■   •
Bríejmtfdeli'character of systematic planning, exe-
(Hitian^ndrdocumen cation ensures that the effects
iHpControllediand -knowledge is transferred. An out-
Standingl'feature is" the cansistenc commicmenc to
^pE§7íí"--.. ,   ..
soUosričý/i based economy and  che combination of
profitabIe;änd?non-proŕit oriented areas. The profit-
vSm?® ■         r        ,                   ,                    - ,
araentedSfareas • or "work are  not done away with;
tnstead|thegprorits are used to advance additional
Í" '"'uueš&withirfa wider scope of goals, pfe   ■■■=    -gb>!Cooperative Am Beutelweg' as a vriíôpaiéntal nucleus in an underprivileged city nelghbpWhood ■"*■■
'iW£~arc builders of communities, not builders loiihin
fakommumty.' (Rubin 1994, p. 407)
-—4'&" "''•"'■   '
íně^GpoperatíveAm Beucelweg' is che product of
Ifs^iřT'"''' ...              ■ .              .                .    .                 ...
long^term v community action   work   in   a  socially
déprív'eď^part of the city of Trier. This community
en'térprisé'-evolved from the socio-cultural activities
ofeche^'Bürgerhaus' (community house) in Norch
ĹErieríand isan integral part of a network of neigh-
b'oúrhoo'd groups, self-help organizations and institu-
Ěiónšy^This -is adecisive factor, since the founding of
a|fiusiness"'of'ics size, at the instigation of chose
iijyolved -in social community work, was not a part
pfü'their" mandate but rather the logical outcome of
thrproblems in this part of the city. There-is much
tojbe'-said -for the claim that only a self-governed
neighbourhood   ' citizen     cencre     such     as     the
[Bürgerhaus1 can lead to a consistently communal
and grass-roots sryle of democracy in a business held
in'i-the hands of the residents, because the incerescs
qfithe Initiators do not ptevent such a form, and
hierarchical structures do not inhibit che consider-
able over-extension of ics mandate. This special case is even more significant because such examples within the socio-political landscape in Germany are tare. The housing co-operative formed in 1991, in which the residents are the property owners, could be a pioneer case of a socially-oriented employment model for residential areas in which thete is a risk of unchecked privadzation of real estate.
The 'Cooperative Am Beutelweg'
The 'Cooperative Am Beutelweg', holding about 140 housing units, and a subsidiary business, HVS (Reality and Renovation pic) which was founded in 1995, function as.a relatively stable cote within a largely autonomously developing community economy in a disadvantaged residential area in the northern section of Trier. Since their founding, the employment situation in this already weakened border region has become even worse, especially for the residents of this quarter of the cicy, who have low-level qualificarions and have become marginalized over a longer period of cime.
in view of such cumulative problems in this area, the founding of the co-operative was the only reasonable solution. A large percencage of the residents was without jobs and/or in very precarious positions. Many families had already been living on social welfare for generations. The residential buildings and their surroundings, primarily publicly owned real estate, were in a state of decay and were at least partly uninhabitable due co a decade-long pattern of disinvestment. Fot years che residents, assisted by the staff members of che Bürgerhaus, had been campaigning far improvements in theit living conditions.
In 1989 a rumour chat these buildings were about to be transferred to private ownership was substantiated. The residents and the buildings were becoming an increasing burden for the owner's association, based in Bonn. When the residents demanded clarification of the rumour, ic was finally admitted chat sale of the housing units required government approval. In co-operation with the scarf of che ' Bürgerhaus and a group of political and community accivitists, academics and church members as well as influential citizens in the user groups within the
UP"
mt J - aw
v:
•    ■                       ■
ItíŘt-
* n   *  Í»
r   •
*\ v
"i     "■"  *
* ir
r- f ■ -r   ř    °-
■ -
I
160    Susanne Elsen and Isidor Wallfmann
Bürgerhaus formed a citizens' action gtoup with the purpose of finding a socially acceptable solution for the Beuceiweg area. The decision to establish a cooperative, to buy the houses, ta renovate rhem by employing the residents themselves in wage-scale jobs, and to administer them was finally taken after none of the potential buyers was willing to agree to take over the administration of these houses in a manner suited ro the residents' needs and conducive to job creation. Using a well-developed concept for a permanently guaranteed, affordable residential project and renovation based on socially acceptable priorities, and thtough tough negotiations and intensive efforts to convince any opponents, it was finally possible to realize a seemingly utopiHn plan. The residents of the 'social hot-spot' were to take over their own living units in the fotm of cooperative property, securing for themselves and their children life-long rights of residency at affordable rates, and also creating the option fat their own employment within the framework of the renovation and later servicing of rhe buildings and their surroundings. Naturally this would nor have been possible without the active support of both the federal government, which was willing to negotiate over the price of the real estate with the newly fbtmed cooperative, and the state of Rhineland-Palatinate, which subsidizes the renovation plans within the legal framework of public housing assistance, and finally the city of Trier, which acted as guarantor for the purchase price and bote the costs of advisory, counsel for the project and social service assistance fat the residents during the difficult period of renovarion.
The sale and transfer of the real estate into co-operative propetty has been only the first step in a highly complex process of establishing and conducting a new business enterprise. Especially demanding, difficult, and lengthy are the incumbent needs fot co-ordination during the process of renovation. Yet without such a thorough renovation there would have been little justification for taking over the buildings, as nothing would have been changed in che living or working situation. It was a particu-larly fortunate 'coincidence' that at the same rime chat the co-operative was founded, an extensive sub-
sidy from the European Social Fund was approved. This enabled a first group of social-welfare recipients to be given temporary, wage-scale jobs within the project and work within their own neighbourhood, an additional value-creation effect. Hoping to create permanent, jobs and strengthen the community-oriented economic cycle, as well as achieving profit outside the local area, a subsidiary business named HVS (Reality and Renovarion pic) was established in I995. With this it was possible to create 30 permanent jobs and training positions in key areas of the construction and related trade branches wirhin this area of town. The telationship 'between the cooperative and its business subsidiary has led to the founding of further appropriate businesses. Still more are now in various stages of planning, These include enterprises in the area of co-opetative (participatory) management of municipal real estate in the neighbouring districts or of construction materials recycling, the sale of used building materials, a neighbourhood public workshop, etc. Such plans require time and also the right people. As the cooperative itself continues to develop, there are plans for the creation of a day-care centre and a business for services and support in which mainly women from the residential area would be involved. The kinds of services offered would be tailored to the needs of the businesses and institutions in the community network and to the needs of certain target groups in chis area of the city. It will include, among other things, family assistance services, housekeeping and home health care, and catering for the Jtical daycare centre and senior citizen groups.
The 'Cooperative Am Beurelweg' is purely a social co-operative but it must survive on the competitive market since no corresponding allowances are being made for it. The biggest problem has proved to be that real esrate co-operatives in Germany need to have a certain minimal size in order to survive. The mandatory membership in one of the monopolistic inspection associations and the legally mandated annual inspections devout a considerable portion of the proceeds needed merely for the basic upkeep. A lack of capital can only be compensated for thtough work, and a small organization which works with long-term disqualiBed persons is soon aware of its
lib
i?  I
Communlty action towards social integration and prevention of poverty   161
I
&':
istf
r m
jns
.»N
pfc*«
fy1
Xr
The   very   sleader,    shoe-string-like
'ffrhe/co operative and the resulting lean per-
ituation (one salaried staff member) for the
tatiori of highly acdve business operations,
eping   planning   and   conrrol   of housing
ääSncenance is correspondingly difBcuic for everyone
|The considerable complexity of che busi-
SScedures the uneven development in che dif-
»branches of the co-operative, che number and
ityjof the participating patcners, the kinds of
smesses^committees and matters of concern all
»intensive' verbal  arrangements and  agree-
jíabouťthe responsibiUdes co be shared. The
itign^of the former military barracks will take
ftimefnnd is a demanding cask, as well as quice
re* To guarantee chat the financial support of
^subsidy programs is forthcoming, it is neces-
jíkeepyUp the requisite self-investment.
^heřélísjíno/enďto che list of ensuing difficulties.
íthatí)result from rhe enormous changes in the
situation' also  need   to  be dealt with.  By
^tirigifin'a district known for social problems,
i íínst'án'ce,'á new social gap is arising between the
Fdencsilofthe renovated and those of the not-yet
mm*----.--                m      ,       ,            .
i   lovateď apartments as well as other real estate and i^ighboúrhaods in the area. Furthermore, it is neces-
f'íbri'fšome residents to make the transition co " _ irirtéwfToie as members of a co-operative. Among
J ilife^5^ 's KPet:^iy important co give fiiii ógnitíon to what has already been accomplished, cetfthe^memory of failures, a permanent character-r&fípeopíe from disadvantaged residendal areas, inoHbeíreversed in only a few years. Bhe«.Cooperative Am Beutelweg and other com-inity,-'businesses in this area of the city were jejdpěďin the face of very real problems, of con-tefineedsand of specific options available to the nmunity. The pardcipancs in the project had to Involved in che initial developmental work at all
ftíít/.VV     ■
jleyěís. Unlike other projects in Hesse or in North
liné^Westphalia, where there is a well-established
igeltof- subsidy programs and a poli deal platform
fjdisadvantaged residential areas, this project is
iq'iie:'and'thus open co attack by socio-political
:qrs:'.who would righdy demand large-scale polituj'..1 lrsoiucions instead of single-case ones. The com-
plex tasks of initiating and co-ordinating the intetac-tion between people, organizations, resources and funding are exrremely time-consuming and demanding. As a result, the participants are likely to become self-exploited and overtaxed. The amount of volunteer work needed and the level of qualification required are so high thar it appears questionable whether, under che circumstances, the responsibilities could be shared with orhers. This would be a quite different matter in the suppordve framework of self-committed social co-operatives in an auro-nomous sector. In this specific case, the project was able ro create the requirements for irs exisrence through its co-operative process of development. Hence it can be said, as a generalization, that precise knowledge of the community and ks potential, the readiness of the residents, and a horizontal and vertical support network are imperative conditions for the development of community economies.
7.3 Co-operative movement In Italy2
In their search for strategies far dealing with unemployment, poverty, and social distribution problems; countries in southern Europe, in particular, have taken up social co-opetatives as a suitable kind of organizational structure. The expansion of social cooperatives in Italy has taken place within the framework of a strong co-operative . movement. Self-administration is highly valued within Italy's business culture. In comparison to Germany, Italian co-operatives are small and locally oriented. There has been a steady growth since the 1970s; in the period between 1980 and 1990 Italy showed an increase in production co-operatives of 109 per cent (from 17,880 to 37,339) (Haensch 1997a, p. 153). In 1988 there were approximately 150,000 primary co-operadves, or nearly 20 times as many as in the Federal Republic of Germany (Beywl and Flieger 1993, p. 143) The largest concentradon of cooperative producdon in the world can be found in the area of Emilia Romagna. In the mid-1980s more than half of the work force was engaged in cooperatives. In fact, the entite spectrum of economic activity is organized through co-operatives (Von Randow 1994). The jump in growth can also be

i ^
I
162    Susanne Elsen and Isidor Walllmann
explained by che race that new economic actors are creating co-operatives, discovering new fields of activity and serving new needs. This leads to cooperative practices for freelance professions, new service-oriented agencies, software agencies, and also leisure-time, education and cultural organizations. The structures for funding, supporting and networking co-operatives at the.national, regional, and local level are exemplary. Since the end of the nineteenth century, governmental regulation has continually adapted to the developmental needs in society.
The readiness of the state to give active support to co-operative projects is also due to that fact that it can dispose of costly support systems by leaving these casks to smaller organizations as a form of subsidy. The ability and willingness co work in co-operatives is not least a question of an aggressively democratic mentality and a popular culture of quarrelling (Concraste 1997). Italian society is quite evidently sceptical of official governmental powers and has had to build up durable informal structures and che' concomitant mentalities and competencies.
The growth of co-operatives in Italy, 1886-1997
Since the beginning of the twentieth century, the feudal structures found in the agricultural sector up until che 1940s had generated strong organized counter movements of dependent agricultural workers (braccianti). The handicrafts production had long since been organized in che shops of craftsmen and in smaller co-operative enterprises. Already by 1SS6 the 'red LEGA', the national association of cooperatives and supporting agencies, had been created, and the Christian confederation of Italian co-operative members followed in 1919. The first cooperative-friendly legislation appeared ac the beginning of this century under the moderate leftist government. In the constitution of 1947 the state was obliged to support co-operative forms of economic activity. In Article 45 it states: 'The republic recognizes the social functions of the co-operative wich its self-help character and without the goal of ptivate profit-seeking. The law supports this and favours ics
growth through appropriate means and guarantees its. character and  goals  through  suitable control measures' (Von Randow 1994, p. 83). This constitutional article was given runrher specification in 1971 in Law no. 127: Ic is incumbent upon che Ministry for Labour and Social Welfare to 'take initiative to ensure that co-operative structures are developed, cooperative principles propagated  and  professional, qualification of leaders within co-operatives facilitated; CVon Randow 1994, p. 87). The Civil Code names che fostering principle as a specific quality of co-operatives. According to this, co-operatives are co supply their members with goods, services, or work opportunities  under favourable  conditions.  Since 1997 a special Jaw for the promotion of co-operatives involving    youth has been used as a means for fighting youth unemployment fßeywl and Flieger 1993, p. 145). In 1991 a law for the regulation of social   co-operatives   was   passed   and   recognized 'cooperative sociali' as being an autonomous form of enterprise. Two further changes in legal measures that help co foster the founding of co-operatives were passed in 1995. First, it is now possible to found a co-operative with only five, instead of nine, people; and, second, permission to use collective leadership (without the selection of a chairperson) has been given. These legal measures are solid proof of the social acceptance of co-operatives and the political will to promote them. In Italy the co-operative sector is sustained by a widespread acceptance among social forces that has come about as the result of the historical co-operation between the union movement and co-operative associations and because "of the coherence of interests between the labour movement and che liberal scate. This acceptance and active governmental support have brought about che development of a political culcure of co-operative solutions. The socio-political integration of che co-operative sector and basic economic attitudes differ significantly from those of the German tradition and course of development. Since the law regulating social co-operatives was introduced in 1993 (Instituco Italiano . . ., 1992, pp. lSf), many co-operatives have, been established which have taken on a pate of the social services within the local area. These have been given over by
Community action towards social Integration and prevention of poverty   163
BT-.
! agencies  to subsidiary agencies and
ychtnew needs of the community, which have
senSrhrgugh changes   in   the  socio-demographic
KesseSiin the cities and in rural areas. They can
fdrwded   according to their goals, intD  type A
ijicBJjfin^the areas' of education and health) and
^professional integration   of people  with
ltgfisee:also Leader, 2 1995-96). The social
^^StiKesrqfi.týpe B are involved in agriculture,
ŕ   jfahWindustry and  commerce.  Within  the
graup^pfipeople with difficulties can be round
lts|OTm|rninority groups, handicapped and men-
|iUípépple,.children from problem families, drug
letsíicanvičted criminals in alternative programs
^'Tiposonrnent, and so forth. Nearly 65 per cent or
frfeOpěnitivď membership are younger than 30
^^^e.^Th'ey form primarily small enterprises.
ffP'Ii 1 rdeŕŽtblbenefit from tax shelters, tax reductions,
«subsidies, ar least 30 per cent of the employees
fŕ*     .! ||j?ef,handicapped or disadvantaged. These are
g",, - \   '   (exempted from obligatory social insurance con-
Ifef*.*    1 utíonšSPáraílel to social co-operatives, thete are
^^l-ltolgperatives which  pursue  ecological  goals.
prf ;    álfcoíbperatives ate members in one of the two
|j* ,   _i ^rella^organjzations or the Italian co-operative íl f     ''"""^
J V    eml!Át-che regional level the autonomous co-
1   rativesvare united in a close-knit networking
ém%These regional consortia and their intensive
idmicrpolitical activities fotm the contacts, the '   JS9WPÍS--     .  ,                      ,    ,     . . ,        '
rád^uie infrastructure and the lobby lor co-
ratiyes; .Their central task is to acquire contracts
gco^qrdinace their completion through one or
1   je^nr..-the  autonomous  member  co-operatives.
1 ice^fbr example, the 12 social co-operatives chjiwork in. landscaping in the ptovince of Bres-
1   shave formed a network with one another called
- 'iCp^Verde.' A steady flow of contracts is guaran-l|byi;having a high proportion of the official con-
r Jšigiyen to the consortium. The regional consor-are^in turn members of the Consortia Nationals uCoopsraziane di Solidarieta Sociale 'Gino Mattar-jflwhich takes care of the advanced training and L* "       tipping education of co-operative members, con-
1   -iiig, research and publications as well as 'general
"*       'if"' :

Jŕ1
contracting', such as making contracts with the social insurance agencies.
8. Conclusion
Given the dramatic social and' economic changes today, it is necessary to find answers to the following issues:
•  guatantees for a basic subsistence and a life perspective for more and more people in a society which continues to be oriented around wage labour;
•   the social integration of people who have no life perspective; the maintenance of human capital and social capital and, ultimately, of the civilizing activity of the community;
» ways to meet the needs of the community, which are already at stake in spíte of its affluence as a result of the processes of de-industrialization and the concentration of capital;
« maintaining tesponsible management and use of natural resources for the sake of both che next generations and the biosphere by means of an 'economy fot the whole house'.
These are some of the issues and problems for which social economy is seeking to supply future-oriented answets. Social economy is primarily concerned with guaranteeing subsistence and meeting the needs of the people in a specific community; it engenders social integration thtough participation instead of marginalization and cakes into account the limits, of our natural resources. Social economy is founded upon the active involvement of community members. As has been shown here. in several examples, community-based social work can be instrumental in creating, reinstating or redesigning social, political and economic bonds within the community.
. Translated from German by Martha Baker
Notes
1      Action Sociale Pour Jeunes, ASBL, P.O. Box 5027, L-1050 Luxembourg,
164    Susanne Elsen and Isidor Wallimann
2 In addition cd the resources cited here, the information given below is based on conversations wirh Italian representatives cf the CECOP (Comiré des Cooperatives de Production er de Travail Assocjé), visits with co-operatives in northern Italy and, insu but noc least, on my own experiences while living in Emilia (S. Elsen).
References
Alinsky, S.D. (1994) Die Stunde der Radikalen: Einpraktischer Leitfaden für realistische Radikale, Geinhausen/Berlin, Butckhardt-haus.
Beywl, W. and Flieger, B. (1993) Genossenschaften ah- moderne Arbeitsorganisation, Hagen, Fernuni versi rät.
Conrrasre (1997) 13, January, p. 1,
Elsen, S. (1997) Gemeinwesen als Ort der Ejcistemsicherung, in Ries, H,A et at. (eds.) Hoffnung Gemeimmen, Neuwied, Luchrerriand.
Elsen, S. (1998) Gemeintiiesenükonomie—eine Antwort auf Arbeitslosigkeit, Armut and soziale Ausgrenzung? Neuwied, Luchhter-htind.
Haensch, D. (1997a) Soziale und Dienst! eistungs-lcooperaci ven in Italien, in Hecicmann, F. and Spoo, E. (eds.) Wirtschaft van unten. Heilbronn, Distel.
Haensdh, D. (1997b) Piu oecupazione con la cooperazione, Contraste, 13, July/August, pp. 154-155.
Hecicmann, F. and Spoo, E. (eds.) (1997) Wirtschaft vim unten, Heilbronn, Distel.
Instituto Itaüano deglí Studi Coopenitivi "Luigi Luziarci'
(1992) Legge 8 November 1991,-no. 581—Disciplina delta .inoperative lociatt. Rome.                                  •■
Jäger, W. and Beywl, W. (eds.) (1994) Wirtschaftskutuiren und Genossenschaften im vereinten Europa, Wiesbaden, Deutscher Universirätsverkg.
Leader 2 (1995/96) 10, Winter;
Reines, D.C. and Keitzes, D.C. (1987) The Alimky Legacy: Alive and Kicking, Greenwich, CT, JAJ Press.
Rubín, HJ. (1994) There aren't going co be any bakeries here if there is nD money to afford jellyrolls: The organic theory of co ram unity-based development, Social Problems, 41:3 (August).
Von Randow, M. (1994) Genossénschaftsfijrderung in Italien, in Jäger, W. and Beywl, W. (eds.) Wirtschaftskulturen und Genossenschaften im vereinten Europa. Wiesbaden, Deutscher Univer-sitfits veriag.
Waüunann, I. (ed.) (1966) Selbstverwaltung: Soziale Ökonomie in schwierigen Zeiten, Geneva/Basle, Hcuwinkei.
Wallimann, I. (1994) Can the world industrialization project be sustained? Monthly Review, 45, Ivfarch, pp. 41—51.
Walli'mann, I. and Dobkowslci, M.N. (eds.) (1997) The Coming Age of Scarcity: Preventing Mass Death and Genocide in the 21st Century, Syracuse, University Press.
Authors' addresses
Susanne Elsen, Weiterbildungsnetzwerk Eurosozial [ESO), Universität' Trier, DM-Gebäude, Ö-552S6 Trier, Germany
Isidor" Wallímann, Höhere Fachschule Im Sozialbe-reich, Thiersteinerallee 57, CH-4053 Basel, Switzerland