Economy between the problematics of the current system and alternative models in the Arab region
These papers are the outcome of a conference that was held in Tunis, Tunisia (16-17 September 2016)
Publishers: Arab Forum for Alternatives and Rosa Luxemburg Stiftung North Africa office
One of the main problematics of the capitalist system is the contradiction between its alleged adoption of social justice and its actual implementation of policies that lead to it on the ground. In fact, the main components of capitalism, especially its take on production powers, eventually lead to widening the gaps between different segments of society, hence the absence of social justice. Production powers are comprised of means of production and the people who use these means with their skills and expertise in order to turn their power into a productive power. That is why people alone are not enough and it is the absence of means of productions that leads to rising unemployment rates, a decline in surplus value, and the deterioration of resources.
Means of production are the medium through which labor becomes productive and primitive means of production used to play the role of the mediator between human labor and the source of production, the land. Industrialization constituted a major leap not only because it led to a remarkable progress in the means of production, but also because it led to the emergence of products which never existed before and the land no longer became only a source of food for human beings, but also a source of raw materials to be used in industry. The bourgeoisie was formed through industrialization when industry took precedence over agriculture, the city over the countryside, and developed over developing countries.
Industrialism, which marked the beginning of the capitalist system, led to the formation of a new order in which industrial products were the main source of profit and while industry kept advancing, agriculture remained backward because it was turned into only a source of raw material. And because capitalist power needed markets for their products, it was in their best interest to keep peripheral countries unindustrialized. Several countries, therefore, remained agricultural, which allowed big landowners to become the dominant class and from them emerged traders and the new capitalist class. Different classes within the capitalist system were interconnected in a way that allowed them to protect their interests and together they formed a new economic pattern.
The dominance of industrialism in some countries and agriculture in others led to dividing the world into centers and peripheries where the second is exploited by the first through a local capitalist that takes part in the accumulation of capital, which in turn leads to widening the gaps between classes. Arab countries remained unindustrialized and their economy was dependent on agriculture, yet also became dependent on food imports. Some of them attempted to introduce industrialization, but the dominance of market economy led to the failure of those attempts. Industry is directly linked to the development of means of production, which are in turn the basis of any economy, and this development is not about industrialization as an aim, but more as a step towards a more balanced economic system in which the achievement of social justice becomes possible.
This paper examines the development of alternatives to the capitalist system through examining new means of production, forms of ownership, and developmental patterns that were discussed in this book and their possible role in achieving social justice.
First: Forms of ownership:
The establishment of institutions in the Arab world goes back to the post-independence era. This includes service institutions such as education, healthcare, housing, and municipal administration, production institutions such as the public sector and state-owned projects, and strategic institutions such as the army, security forces, and diplomatic representation. Post-independence institutions attempted to implement an agenda that prioritized social justice and this was also reflected in the way ownership patterns were changed in favor of the poor and the marginalized. This transformation was in line with the demands of pre-independence movements that rose against feudalism and the dominance of landowners. Yet, after the departure of post-independence leaders, the situation changed in favor of the rising capital class and this affected both institutions and ownership patters and was reflected in the gradual decline in social justice as policies became no longer linked to social and economic rights.
This regression led to the emergence of new forms of ownership that aimed at achieving a considerable level of social justice. According to the International Labor Organization (ILO), a cooperative is “an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise”. Cooperatives are as old as humanity as tribes and primitive communities were organized through distribution of resources and division of labor as well as the trade and exchange of goods. Reformist socialist theories that emerged in the 19th century played a major role in the spread of cooperatives across the world. Cooperatives are based on voluntary, unconditional membership and democratic, participatory management. They offer job and training opportunities for their members, focus on the local interests of the community in which they are established, and interact with other cooperatives. Cooperatives are not established for profit, but for serving the community through the efficient utilization of available resources. Members of cooperatives, who contribute to its capital, do not receive top down orders or instructions as is the case with the capitalist entities.
Cooperatives started emerging in different parts of the Arab World as a means of countering social disparities. This is demonstrated in Egypt in the case of the Bread Winning Women Cooperative in Fayoum that encouraged girls and women from different villages to engage in collective working projects that would secure them a regular income and help them battle rising unemployment rates. COPAG in Morocco is an example of an agricultural cooperative that managed to acquire considerable leverage in the market through diversifying its products and expanding its activities. It also helped in combatting unemployment through offering job opportunities and improving the social and economic conditions of members of the community.
The Srifa Atelier in Lebanon is another women’s cooperative in which workers manufactured fabric bags and sold them in different markets. However it was different in many aspects from its counterparts in Egypt and Morocco since it was established by a foreign organization, the Italian GVC, and presented as a ready-made project in whose creation women took no part and where the choice of members was not done through elections. Therefore, the cooperative did not offer a real alternative to conventional economic systems.
Communal lands in Morocco constitute a different ownership pattern since lands are owned by the community and are managed in accordance with the traditions adopted by this community. Communal lands are different in the sense that they cannot be sold, confiscated, or mortgaged, but can be utilized in different activities such grazing, agriculture, or housing projects. Despite the fact that communities living on these lands constitute legal personalities by virtue of owning the lands and are represented through councils, they do not have the final say in decisions related to the lands and those lands are under the guardianship of the state through the Ministry of Interior. This complicated situation created in communal lands a fertile soil for corruption and disputes. Large parts of those lands were looted and many of their residents were rendered homeless to allow the construction of mega-projects.
The Djemna oasis in Tunisia offers an example of the transfer of ownership from the state to farmers and from private capital to civil society. Following a 96-day-long sit-in, the farmers managed to claim the oasis and to start managing it communally for the benefit of the community.
Protest movements played a major role in the establishment of alternative patterns pertaining to ownership forms as well as production resources. The protests staged by environmental movements against the World Trade Organization in Seattle in 1999 and at the World Social Forum in Porto Alegre in 2001 inspired a number of protest movements. For example, a number of activists from the Brazilian Farmers without Land and the French Agriculture Confederation uprooted the crops at a corn field cultivated through the biotechnological model applied by the American agrochemical and agricultural biotechnology corporation Monsanto as part of the battle against genetic modification and its detrimental health effects. Environmental struggle is an integral part of the struggle against the dictatorship of multinationals that give precedence to profit over human health. Environmental activism is seen in Morocco and Tunisia where movements demand the democratic distribution of natural resources, water systems, and food and protest against the usurpation of land.
Attempts at establishing patterns of communal ownership are linked to the desire to achieve independence from market economy and the capitalist system and the struggle against the role private ownership plays in widening social gaps between owners and workers. The role of women in experiences pertaining to alternative ownership patterns is quite prominent, which demonstrated the role of these initiatives in the economic and social empowerment of women, who are also marginalized under the male-oriented capitalist system. Cooperatives, self-administration, and communal ownership are all forms of revolution against the social, political, and economic conditions imposed by the capitalist system and that is why they are constantly resisted by the state and its allies. Also, these initiatives cannot succeed if they are not supported by laws and legislations that rob those entities of their independence and restrict their activities.
Second: Modes of production:
Liberal policies that started in the 1970s were detrimental to local industries and agriculture and transformed the countries in which they are implemented into rentier economies that are dependent on real estate, services, trade, tourism, banking, and stock markets. Meanwhile, state lands and companies are looted by a local capitalist class that operates within a network of nepotism commonly known as crony capitalism and that cooperates with global capitalism in the looting of national resources. The role of the state in providing public services started declining. An unproductive economy that has room for only a small portion of the labor force and that did not offer proper wages was, thus, formed, which led to an increase in poverty and unemployment rates, a large deficit in the balance of trade, and the transfer of wealth to capitalist centers.
It is only through an alternative economy that such crises can be resolved through the shift from a rentier economy to production in a way that achieves a number of changes. These include creating production modes that provide job opportunities, decreasing import rates and the balance of trade deficit through the local production of agricultural and industrial goods, and creating a surplus value that strikes a balance between wages and prices and allows for economic development.
An alternative economy requires the establishment of a system that replaces the rentier economy, utilizes economic surplus in production development, and achieves social justice. This involves first, creating modes of production that allow the establishment of real economy and second, retaining economic surplus within local borders. Since human beings mainly depend on industrial products and industrial technology is now applied in agriculture, industrialization is a priority for every form of alternative economy. Talk about the decline of industry’s share in the gross domestic product is not accurate and so are claims that industry is no longer a solution for unemployment. Such view reflects the crisis of capitalism in which the dominance of financial capital forebodes what is known as “the end of work” or poses the question on the “future of work.”
An economic policy that prioritizes the welfare of the people establishes a productive economy that focuses on industry as the central means of production. This type of economy provides job opportunities as well as an economic surplus that would improve the living conditions of workers and for the society in general, thus reducing dependence on imports. This perspective is, by definition, contradictory to that of imperialist capitalism that has since its inception as a global system worked on subordinating the world in accordance with its needs. Industrialization in peripheral countries is not in the best interest of capitalism because it would not allow the centers to maximize the looting of economic surplus. For this reason, global capitalism does not support the establishment of an economy that would guarantee the creation of a welfare state.
Countering the injustice caused by the capitalist system is seen through self-administration initiatives by workers who agree to run the factories where they work after financial problems cause the owners to shut them or flee without paying the workers’ dues or factory debts. Self-administration offers a different pattern of operating a company since it is not based on the hierarchical structure in which orders come from the top down, but is rather practiced through participatory democracy in which all workers take part in the decision-making process. The factories that the workers decide to run eventually turn into cooperatives.
Such experiences demonstrate that the workers’ need to interact with market economy enabled them to be well-versed in several commercial transactions since they became responsible for selling their own goods and finding new markets for them as well as dealing with suppliers, customers and banks, promoting their products, and handling their accounts. In Argentina, self-managed factories made two innovative additions to management. First, they paid the same salary to all workers and employees in one third of the reclaimed factories regardless of their jobs. Second, they considered the workers’ board, which included all the workers at the factory, the main decision-making body and the podium through which workers can freely express their views. Through the workers board, an executive committee is elected to run the factory on daily basis and is in charge of commercial duties, legal representation, and other executive jobs. The NubaSeed experience in Egypt offers an example of self-administration as workers refused the owner’s decision to shut down the company and decided to manage it together and actually making profits.
Providing an alternative system of management and organization is seen in the creation of the Union Cooperation Committee in Lebanon that remarkably differed from other union established following the end of the Civil War. This is particularly demonstrated in the way the committee reached out to several regions across Lebanon and did not restrict its activities to the capital and the way it adopted a participatory approach both within the committee and in its interaction with the public. Even though the committee was subjected to fierce campaigns by the government and sectarian parties, which led to drastic changes in its administration thus the abortion of its original goals, the committee is still an example of the success of establishing an alternative entity that represents people’s demands and achieves independence.
The Fayoum cooperative in Egypt also offered a different mode of production since the women in the cooperative focused on products that are on demand in their local context to guarantee that they will be able to sell them in local markets. This did not only spare them the need to access larger markets, but also guaranteed that they will have no competition. The fact that they sold their products directly in the market without a mediator or the interference of a business owner increased the profit they made so that even though they sold at cheaper prices, they still got enough money to cover their wages.
In COPAG in Morocco, the cooperative managed to control different stages of the production process up to distribution. After exporting its products to Europe, USA, and Canada, the cooperative established a milk processing unit then further expanded its activities through establishing a fodder manufacturing unit for feeding its cattle then introduced the ultra-high temperature (UHT) processing technology, thus becoming the second producer of this type of milk across Morocco. The cooperative worked on diversifying its products so it established a juice manufacturing unit then in 2005 constructed a village for breeding cattle. The cooperative also established a new dairy products unit and established a unit for manufacturing red meat. This way, COPAG managed to become first cooperative in Morocco and the second producer of milk and dairy products (25% of the market). It is also one of the top five food facilities in Morocco.
In the Djemna oasis in Tunisia, profit was used in development projects from which all members of the community can benefit instead of going to the hands of a few capitalists or owners. In fact, the new management system succeeded in multiplying profit. Under the supervision of the Association for the Protection of the Djemna Oasis, which ran the project, the profit increased from 969,000 dinars in 2011 to 1,800,000 in 2014, compared to 450,000 at the time when the property was leased to two tenants who neglected the property. This did not apply to the Srifa Atelier in Lebanon since the number of workers kept decreasing until they became only four. This is mainly attributed to the fact that the project was more of a company than a cooperative and, consequently, it neither defied the current system nor offered an economic alternative. That is why it was not as productive as other cooperatives and few women were encouraged to join it.
As it becomes obvious from the above-mentioned experience, the impact of new modes of production is linked to the way they introduce an alternative that defies the dominant system. This defiance is done in many ways including the practice of participatory democracy in management, the fair distribution of profit, and the development of the community. The success of such initiatives is also associated with the identification of main challenges such as marketing problems, lack of funding, market monopolies, or resistance on the part of the capitalist system.
Third: Developmental patterns:
The main problem related to development stems from the conflict between the capitalist system and independent economy. The first is based on market economy and the liberalization of capital and is maintained through the accumulation of capital through the exploitation of economic surplus in the peripheries. The second, on the other hand, is based on doing away with the dominance of capital to establish an economy that runs itself independently from the rules imposed by the global market. It is obvious that those two models stand are contradictory since independent economy is, by definition, a threat to capitalism.
Lack of development is the direct result of a number of problems, on top of which are poverty, unemployment, and the deterioration of free public services such as education and healthcare. The adoption of liberal policies undermined the social infrastructure as the public sector disintegrated and privatization was implemented while a small class took control of the economy that adopted a rentier approach based on unproductive economic activities such as services, real estate, banking, tourism, and imports. The alliance between local and global capitalism had a detrimental effect on social justice .
The capitalist system is also the source of a number of environmental problems that affect people whose main source of livelihood is related to nature such as farmers and fishermen whose living conditions have remarkably deteriorated. Several factors contribute to this deterioration, on top of which is the monopoly of resources as well as unequal access to these resources. The latter constitutes a serious problem in the context of the neoliberal production mode, which makes it difficult for owners of small lands, for example, to make use of technology in order to increase the productivity of their land. Capitalist policies also lead large numbers of people to migrate from the countryside to the outskirts of the city, thus increasing the number of informal workers. Capitalism also prioritizes the rise in growth and productivity rates, which led to its dependence on non-renewable sources of energy such as oil and its extracts. This was accompanied by a remarkable negligence and at time conscious destruction of nature as is the case with a number of climate and environmental crisis such as global warming.
Any alternative economic system that aims at changing the economy from rentier to productive will never be in the best interest of capitalism on both the local and global levels. This new system would embark on a number of changes that would undermine the capitalist ideology such as raising wages and changing the status of the balance of payments in favor of decreasing imports. That is why a real change will not be achieved by capitalist classes, but rather by classes that suffer under the brunt of capitalism. In fact, capitalist classes are known to abort all attempts at introducing such kind of alternative, which was clearly demonstrated in the post-independence era.
Independent economies are, however, starting to emerge in different parts of the Arab world. For example, the success of COPAG was mainly attributed to how self-sufficient the cooperative managed to be. For example, whenever the members of the cooperative required additional equipment or the like, the administration made it available through self-funding so that all units received their needs, which contributed to improving the quality of its products and expanding the scope of its markets. The cooperative also supplies farmers with seeds and saplings produced in its nurseries. In order to guarantee the distribution of its raw, manufactured, and half-manufactured products, the cooperative owns 320 trucks. COPAG also funds its own projects from the surplus it makes at the end of each season after all members receive their shares.
The Djemna oasis in Tunisia was not a much different case. In addition to providing jobs for the unemployed and improving working and living conditions, the association that runs the oasis funds a number of developmental projects such as the construction of schools, clinics, sports centers, and a date market for the products of the oasis. The association also funds several organizations that focus on culture, children, and people with special needs. This means that the oasis managed to perform the duty of the absent state that marginalized the area in which the city of Djemna is located and succeeded in achieving actual development. The farmers managed to increase production and to make enough profit for increasing their wages and improving both the quality of production and working conditions in the oasis.
Other experiences highlight the role of alternative economy in ending the exclusion of women in the conventional economy, which is seen in the example of the women-only market in the Kabylie region in Algeria, particularly in the village of Ait Ouabane. In this market, women sell their local products including fruits, vegetables, and traditional handicrafts. The market is organized by members of the Assourif Association for Rural and Environmental Development, which aims at empowering women economically, promoting organic agriculture, encouraging self-administration, and achieving sustainable development.
It is obvious that the developmental patterns promoted by alternative economies are quite different from those adopted in the capitalist system. This is because alternative economy discards the rentier approach for one that depends on production through industry and agriculture, both sectors that are capable of containing a large segment of the labor, and that prioritizes justice whether in terms of wages, distribution of resources, access to services, developmental projects, or living conditions. An alternative economy would also work on empowering all segments of society that are excluded in the capitalist system such as women, children, and people with special needs. This economy treats the environment differently for it does not only consider it a source of raw materials, but also an integral component of any development process and sees its protection as a necessity and not a luxury.
It is obvious from the afore-mentioned cases that compromises are not the solution. It is necessary to do away with capitalist mechanisms through a class that does not only aim at serving its interests regardless of the welfare of the people and whose interests coincide with those of the rest people. That it is why workers and farmers together with the impoverished from the middle class should be in charge of effecting this change and not the capitalist class or even the “petit bourgeoisie” since the first is subordinated to the centers and the second only prioritizes its own interests, which was obvious throughout decades of development attempts that were doomed to failure.
Many questions were posed about the type of alternative economy and the foundations on which it should be based. There were proposals about “independent development” or “self-sufficient economy,” both of which revolve around a strategy of independence, which in itself constitutes an integral economic, social, and political system. This means the elimination of subordination, the establishment of independent development, and the achievement of social justice through controlling national resources, creating a production pattern that can lead this strategy, the centralization of economic surplus, agricultural technology, industrialization directed towards catering to people’s basic needs, popular participation. It is also important to stress that those who propose economic alternatives should be the same who implement them since experiences that offer economic alternatives are more likely to succeed when the people whose interests are at stake are the same who defend those interests.
Economic alternatives will always be met with resistance on the part of the state and its institutions or interest networks that want to keep the status quo. That is why the best way to guarantee the success of such initiatives is through raising awareness, mobilizing efforts, and choosing the adequate means. At the same time, people who embark on such initiatives should be aware that organization is a key factor since projects that offer an alternative system have to be democratically structured so that all members participate in the decision-making process and so does the public.
Through surveying a number of experiences that attempted at offering an alternative economic system, it becomes obvious that each of them was a success in its own way despite the challenges they had faced and attempts at undermining them. This success is not necessarily linked to the work or activities involved, but rather the possibility of coming up with initiatives that aim at changing an oppressive reality and which are expected to be followed by more as the culture changes and the likeliness of a transformation does not seem that far-fetched.
 Salameh Kaileh. “Social Justice and Alternative Economy,” included in this book.
 Mohamed ElAgati and Omar Samir. “The State and Social Justice in the Arab Region: A Crisis of Policies or Structure?” Social Justice in the Arab Region between Street Politics and Political Paths. Arab Forum for Alternatives, 2016
 A cooperative is “an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise” (ILO 2002). ” https://is.gd/Cwo2cQ
 Ayman Abdel Moati. “Towards a collective alternative economy: Self-administration and cooperatives in Egypt,” included in this book
 Raja Kassab. “Solidarity economy and self-administration in Morocco,” included in this book.
 Jana Nakhal. “The Srifa Cooperative and the Union Coordination Committee in Lebanon:Countering sectarianism and NGOs hegemony,” included in this book.
 Raja Kassab.
 Layla Riahi. A new alternative culture in the making in Tunisia
 Mahmoud Abdel Fadil. “Crony Capitalism: A Study in Social Economy [Arabic].” Cairo: Egyptian General Book Association, 2011, pp. 75-92.
 Salameh Kaileh. “Social Justice and Alternative Economy.”
 Jacques Attali. A Brief History of the Future.
 Ramzi Zaki. Self- Dependence between Dreams and Harsh Reality [Arabic]. Kuwait: Dar al-Shabab for Publication, Translation, and Distribution, 1987, 1st edition, p. 27.
 Ayman Abdel Moati.
 Jana Nakhal.
 Ayman Abdel Moati
 Raja Kassab.
 Layla Riahi. “A new alternative culture in the making in Tunisia,” included in this book.
 Jana Nakhal.
Salameh Kaileh. “Social Justice and Alternative Economy.”
 Salameh Kaileh. “Social Movements and the Concept of Social Justice in Arab Revolutions [Arabic].” Social Justice: Concept and Policies after the Arab Uprisings. Arab Forum for Alternatives and Rosa Luxemburg Stiftung, 2014.
 Abdel Mawla Ismail. “Environmental problematics and the role of alternative economy.” Social Disparities in the Arab Region. Arab Forum for Alternatives.
 Salameh Kaileh. “Capitalism and Social Justice: The Adopted Capitalist Approach Denies Social Justice.” Social Justice in the Arab Region between Street Politics and Political Paths, Arab Forum for Alternatives and Rosa Luxemburg Stiftung, 2014.
 Raja Kassab.
 Layla Riahi.
 Nourredine Bessadi. “Women’s market in the Kabylie region in Algeria: Between an alternative economy and a gender-based approach,” included in this book.
 Salameh Kaileh. “Social Justice and Alternative Economy.”
 Ayman Abdel Moati.
 Jana Nakhal.