Rolf Schwendter

The 'alternative economy'
An antidote to creeping globalisation

Globalisation is nothing new. The earliest theorising about capitalism clearly demonstrated its global intentions. Globalisation brings few opportunities and has very many harmful ramifications. It brutalises social environments; it is neither sustainable nor gender-neutral. If the aim of a world-wide sustainable economy were to be actively pursued, and not only paid lip-service to (as it is in the 'Agenda 21' process), a proper examination would reveal that a kind of world-embracing 'eco-Keynesianism' is really the only possible model; one that is beyond the realms of deregulation and 'shareholder values'. Since the big companies - the main players in globalisation - can't be expected to take any further responsibility, sustainability (which totally goes against the grain for profit-orientated business) is not going to happen very soon.

However, the 'alternative economy' represents a logical antidote to the globalisation trend. We should not get hung-up on the term's precise meaning: the general concept has been described using a variety of terms, such as 'independent economy', 'self-help organisations', social economy', 'sustainable economy', 'co-operative economy', and 'regional economic development', and even more recently, the old term 'the Third Sector'.1 It's not the names which are important, however, but the things they describe.

An 'alternative economy' is, first and foremost, an economy which serves as a foil to the dominant economy in a particular region. An alternative economy attends to the survival of the individual, as well as institutions. It is orientated towards the practical value of things, and organises the division of labour in an alternative way. Valuing things according to their practical use has always been a subversion of the dominant paradigm whereby money is only put into something if it will make a profit.

Historical attempts to abolish the division of labour within the alternative economy have been paralleled by attempts at its gradual resurrection. Oppenheimer's 'theory of transformation'2 addressed the 'division of labour' issue early on; then came Roth's 'discussion on the management of businesses'3 in the late seventies, asserting that the principle of 'everyone taking their turn to do each task' should be replaced by 'everyone doing what he/she is best at'. The latter is nowadays exemplified in the sub-contracting of cleaning jobs, and the gradual privatisation occurring within companies of their accountancy departments (thus giving these departments a position of quasi-monopoly). Indeed, the reinforcement of hierarchies in all spheres, and the rampant practice of cut-throat hiring and firing, have both come to the fore, whilst business management, differentiation, and even the new 'management collectives' are neglected. Hence it is a particularly pleasant surprise that many conventional companies still incorporate a level of participation and, like alternative companies, maintain a forum for workers' involvement in decision-making, and accept that temporary suspension of the division of labour can sometimes be helpful.4

The breadth and variety of the network
Although the breadth and variety of institutions within the alternative economy are great signs of hope for new social development, they also cause problems: owing to their diversity, there is a lack of will to co-operate and network. There are nine types of co-operative and co-operatively-run companies,5 plus there are small-scale commercial projects active in at least thirty economic sectors. These projects are in contact with each other through organisations within each sector and through an association called 'the Network for Co-operative Management' (Netz für Selbstverwaltung e.V.),6 but locally and regionally, co-operation between all of these projects is dwindling. Further, there are thousands of social projects, mostly belonging to an umbrella-organisation called the Paritätischer Wohlfahrtsverband,7 which are often dependent on governmental or quasi-governmental funds, or else stuck with relying on unpaid workers. There is at least the same number again of cultural projects: socio-cultural centres, literary magazines, alternative archives, rock groups, theatres, small galleries, fanzines, etc. On top of these there are self-help groups of varying shapes and sizes (the numbers of these alone reaching six figures); citizens' initiatives and women's groups (and more rarely, men's groups), political ad-hoc organisations, socio-political workshops, info-shops, newspapers run by the homeless, aid organisations, exchange markets, etc; not to mention all the alternative housing organisations, from shared households to housing co-operatives (giving rise to some regional networks). It is not surprising that a full inventory is practically impossible: the Bunte Seiten listings magazine,8 an important source of information on the alternative movement in Germany, is always out-of-date by the time it is published. The problems facing any attempt to give an international overview are obvious.

Motivations for founding and maintaining alternative economic units can be contradictory. They can be anything from the desire for change, to the need to survive. As early as 1977 there was a debate about whether support should be given to profit-orientated companies with co-operative management, or to ideologically-motivated institutions in which all necessary work is carried out by unpaid volunteers (the so-called 'secondary economy', or 'small network'). Ideologically-motivated institutions would have become a historical phenomenon if its workers could have gained sufficient income from the primary sector (whether in the business or state sector), to enable them to donate their spare time to unpaid work for the establishment and necessary maintenance of 'alternative' organisations. However, the reality of increasing unemployment led to the definite prioritisation, within these 'alternative' institutions, of securing (through payment) the survival of their co-workers.

Ultimately, the alternative economy has three financial sources: the market, the government (re-distribution of local authority and national taxes), and the other usual income sources (membership fees, donations, fundraising, sponsoring, charitable foundations and benefit events, inheritances, and unpaid work). The accessibility of these sources differs widely according to groups, sectors and regions.

Market orientation and the alternative economy
Because the market now functions as a dominant world power, the whole of society has been transformed: people are only out for themselves, these days, and the world market serves to keep people down. However, it would be wrong to simply see the 'alternative economy' as an unequivocal opponent to the market economy (even if this is true for some projects). Projects and organisations can be extraordinarily different. Some of these differences are evident in the diversity of terms used by co-operatives, such as 'the neutralising of funds,' 'charity,' and 'sponsorship.' Whilst the alternative economy may be to some degree market-orientated, it is certainly neither 'big corporation'-orientated, nor 'profit-orientated' (in the sense that there is no concern for interest rates). Further, the alternative economy is not orientated around cost-efficiency in the traditional sense since it also takes into consideration non-material worth. The concept of an 'alternative economy' is very close to the 'social market economy' ideal9 which after its inception was never brought to fruition. The big companies have continually worked to demolish any remaining vestiges of this ideal. An 'alternative economy' also relates closely to the concept of 'the production of basic goods,' except that the former requires the establishment of an investment and insurance fund, and includes co-operatively-managed unpaid work.

By the end of the millennium, the state in Germany has managed to excel itself by honouring multi-nationals with lucrative packages to help them 'streamline' (further assisted in this by the introduction of the Euro). The state has always been the Great Hope for a large part of the alternative economy, from the time of Lasalle through to the inauguration of ABM programmes (comparable to the UK's 'New Deal' programme for the unemployed) - and yet 'alternative' institutions have taken over parts of the public sector and are now not being adequately paid. Any further income from either fundraising or bequeathed inheritances is unlikely, considering the increasing poverty of the population.

Ideally, the alternative economy presents itself as an antidote to globalisation. It is a demonstration of an economy to which morality and social norms have been reintroduced on which a successful, sustainable global economy could be based. What might this package of norms, introduced by consensus, look like?

They would include the limiting of hierarchies; opposition to profit; example-setting specialist concerns (to demonstrate alternatives to the traditional economy), and the establishment of civil organisations beyond governmental control, and there would probably be some contradictory details. Key concepts such as 'fair trade' and 'non-governmental organisations' would be included somewhere in among the norms.

In the meantime, through demands such as, for example, the separation of income and work, society as a whole is even now moving closer to the paradigm of an alternative economy.
Anything which at least modifies the global supremacy of the paradigm of 'profit-seeking', even if it doesn't overturn the paradigm, can be described as the 'alternative economy.' This can be said of all alternative ventures in the context of global hierarchies, the division of labour (where workers are being exploited, or where many workers are permanently excluded from the labour market), and brutal monopolies which set out to destroy any potential competitors.

As such, the alternative economy can't be seen as a static phenomenon. It includes the smallest self-help group and the largest co-operative concern; it includes cultural initiatives that are barely more than circles of friends, and highly organised foundations.

When economies become 'global' (defined according to the dominant economic paradigm), the differences between alternative economic units and small and medium-sized conventional businesses begin to blur: see, as examples, the Dutch umbrella-organisation MEMO,10 and the German organisations Arbeitsgemeinschaft Partnerschaft in der Wirtschaft,11 and Unternehmen Gruen.12 My earlier reference to 'social economy' reminds us that the alternative economy is moving towards structures left over from the traditional social market economy.
The essential diversity of the alternative economy has not been all positive. Only a few experts have managed to retain an overview. Where there used to be at least some mutual curiosity, there is now only indifference, which means the separation of projects into groupings of companies, social concerns and cultural projects is almost total.
And globalisation has some unpleasant consequences for the individual. The 'winner-takes-all' game, in a dog-eat-dog society in which people stand on each other's heads and then retreat to lick their wounds, leads to depression, anxiety and poverty. This needs replacing with a sharing, non-elitist, non-hierarchical life-style (entailing the resolution of interpersonal conflicts), in harmony with others and with nature. For this we need to develop a common identity, instead of living hectic individual lives. The Zeitsouveränität (time's sovereignty over us all) described by Bernhard Trite twenty years ago13 is no longer enough: we need Zeitwohlstand (the wealth of 'having time'). This, in its turn, could overtake the dominant lust for Geldwohlstand (economic prosperity).

Networking between the 'little guys' is essential for their empowerment, but this alone is not enough. Each knot in the net needs strengthening. If the network starts leaving out the small projects, it will collapse.

Institutions within the alternative economy exist all over the world, by whatever name, whether subsistence groups, mutual self-help groups, initiatives, or co-operatives. Some names have become famous: the Ulamaa villages in Tanzania; the Ejidos in Mexico, and a number of Indian co-operatives and ashrams. To my knowledge, there is no organisation or institution with an overview of all institutions worldwide. Rather, one has the impression that the many sponsors ( from Caritas to the nationwide 'Congress of Political Groups for Development' (Bundeskongress entwicklungspolitischer Gruppen), have their own favourites, and between these groups there is no networking (there may even be local competition between them). Such information gets passed along on the grapevine.

Hence to re-establish a common theoretical (or ideological) basis for 'alternative economy' worldwide is practically impossible. Besides the traditional theorising of the co-operative movement, other theories that can be drawn on are those of the subsistence economy,14 the Kibbutzim,15 and the self-help movement (of which many studies have been made)16. The alternative economy is rooted in a diversity of ideological paradigms inspired by Christianity, anarchism, Buddhism, Marxism, feminism, anthroposophy, personal existentialism, Islam, Zionism, etc (the list doesn't claim to be complete), without showing any difference in the type and quality of the work.

This universal variety made possible the necessary co-operation for the fight against globalisation. At the same time, the difficulties facing such co-operation are demonstrably immense. The sparse opportunities for globalising the alternative network lie in the new communications technologies which have transformed abstract internationalism into an active co-operative network over the last one hundred and fifty years. Huge efforts are made on all levels. The task in hand is to set in motion, and finance, a new level of co-operation using the new technologies. This is dependent on people working voluntarily, access to very expensive equipment, and a comprehensive knowledge of foreign languages. It needs to happen in the context of constantly varying exchange rates, and with some form of guarantee, across thousands of kilometres, that the money collected in fundraising events is being used for what it was meant to be used. All this needs to be achieved without Europe becoming the dominant continent.

This opportunity for international expansion is one of the few things coming out of globalisation which is to the alternative economy's advantage. A tried and tested recipe for a (very precarious, non-authoritarian) realisation of an alternative economy - the antidote to traditional economics - does not, of course, exist. And probably no-one is even expecting it.

1. The term 'Third Sector' can lead to misunderstandings since it has been used for different things in the twentieth century; for example, it was used to describe the increasing service sector in relation to the production of goods.
2. In 1892 Franz Oppenheimer wrote his so called Transformationsgesetz (law of transformation) which he concluded as follows: 'Only in very rare cases did a production co-operative ever blossom. But where it blossomed, it stopped being a production co-operative' (in: Burghard Flieger, 1984, p.54). Original text in: Franz Oppenheimer, Die Siedlungsgenossenschaft. Versuch einer positiven Überwindung des Kommunismus durch Lösung des Genossenschaftsproblem und der Agrarfrage (Leipzig, 1896). Further reading on the recent debate: Burghard Flieger, Produktionsgenossenschaft als fortschrittsfahige Organisation. Theorie, Fallstudie, Handlungshilfen (Metropolis-Verlag, Marburg, 1996) ISBN 3-89518-056-4
3. Karl-Heinz Roth, 'Die Geschaftsfuhrer der Alternativebewegung,' in: Karl-Heinz Roth/ Fritz Teufel (eds.), Klaut sie! 2nd edition (iva Verlag, Tuebingen, 1980) p.105, ISBN 3-88266-0171
4.  According to Frank Heider's 'Hessen Kontrollstudie' in: Frank Heider, Margreth Mevissen: Selbstverwaltete Betriebe in Hessen. Eine sozio-ökonomische Analyse unter besonderer Berücksichtigung der Situation der Frauen (Focus Verlag, Giessen, 1991) ISBN 3-88349-391-0. Also see the preliminary study of Frank Heider, Magreth Mevissen, Burkhard Bleum: Fast wie im wirklichen Leben. Strukturanalyse selbstverwalteter Betriebe in Hessen (Focus Verlag, Giessen, 1988) ISBN 3-88349-358-9
5  See Burkhard Flieger, 'Sozialgenossenschaften: Neue Ko-operativen zur Loesung gemeindenaher Aufgaben' in Tilo Klock (ed), Solidarische Ökonomie und Empowerment (AG SPAK Buecher, Neu-Ulm, 1998) p 137-160, ISBN 3-930830-07-8
6  The network Netz für Selbstverwaltung is a nationwide organisation for co-operatively-managed companies in Germany. See
7  Paritätischer Wohlfahrtsverband is an umbrella organisation for social institutions and projects in Germany.
8. The Bunte Seiten is published by Contraste, the newspaper for co-operative management, in Heidelberg, Germany. See:
9. From 'Freiburger Schule' to Ota Sik (economic scientist, born 1919; escaped from Czechoslovakia in 1968 and now lives in Switzerland. He is a leading theorist on the 'Third Way'. Most important publication: Ota Sik, Humane Wirtschaftsdemokratie; ein dritter Weg (Knaus, Hamburg, 1979) ISBN 3-8135-0941)
10. See also: Nils Buis, Jaap van Leeuwen, 'Alternative living,' in this book.
11.  AGP is an umbrella organisation of 500 partner-enterprises with the emphasis on employees and participation in capital holdings. See
12. UnternehmensGrün is an ecologically-orientated umbrella organisation for small and medium sized companies. See internet:
13  Bernhard Teriet, Neue Structuren der Arbeitszeitverteilung (Schwarz Verlag, Göttingen, 1976) ISBN 3-509-00852-9
14.  Maria Mies, Claudia von Werlhof, Veronika Bennholdt-Thomsen.
15. Chaim Seeligman.
16.  It's often the case that even the experts will only know the names of theorists from their own countries (and sometimes not even they know them all). Some examples are: Judson Jerome (USA), Marcel Barbu (France), and Vinoba Bhave (India).

Part of Rolf Schwendter's contribution to the 1998 summer school run by the Theoretical Working Group on Alternative Economy (Theoriearbeitskreis Alternative Ökonomie: TAK-AÖ).      First published in: DGB Bundesjugendschule (ed), Kapitalismus ohne Alternativen? (AG SPAK Bücher, Neu-Ulm, 1999).



Rolf Schwendter is Professor für Devianzforschung at the Gesamthochschule Kassel. He has many publications to his name and is co-editor of Gemeinsam mehr erreichen. Ko-operation und Vernetzung alternative-ökonomischer Betriebe und Projekte ( Munich, 1995).

Netz für Selbstverwaltung
Contraste, Zeitung für Selbstverwaltung
AG SPAK Bücher