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Social Innovations for Economic Degrowth

Government Press Office of Israel
Members of the Ein-Harod kibbutz work at a stone quarry in 1941. The kibbutz offers an early example of how cooperative enterprise can shift goals from profit to concrete human needs, which are satiable and do not compel constant growth.

At the beginning of the twenty-first century, we find ourselves in a peculiar situation: although hardly anyone would deny the deep ecological crisis facing humankind, we seem to be caught in a net of assumptions that impede a practical solution. Having acknowledged that we need to reduce consumption of energy and materials drastically,1,2 we still often think that adjustments within the current system of production and consumption will accomplish this formidable task.

At the same time, it is widely recognized that the results of the dominant approaches to solving the ecological crisis are far from satisfying. Thus, a growing community of scientists and social activists, sharing the basic insight that a reduction of energy and material use implies a reduction of gross domestic product (GDP), is gathering under the heading of sustainable degrowth.3 Degrowth obviously entails a fundamental transformation of economic structures. But what precisely are the necessary steps?

A Paradigmatic Shift: Radical Social Innovations from the Bottom Up

In contrast to the illusion that we can do more of the same—that is, new market or state solutions to alleviate a crisis caused by market and state solutions—it is more reasonable to start looking for a new way around this stalemate. Such paths are being explored in solidarity economics and the commons, both discussed below. These allow a shift in the trajectory of our economy from endless growth to degrowth—the voluntary reduction of energy and material use while increasing leisure and well-being.

Yet how can the paradigm of a good life for all replace the growth paradigm? What we clearly need is a great social transformation. And, in fact, we can already find social innovations that might function as the basic units of this transformation. They start from the bottom and flourish in protected spaces where shared perspectives are developed, experiments and learning take place, and links to wider power networks are forged. Two outstanding examples are the solidarity economy in Brazil and the global information commons.

The Solidarity Economy

The solidarity economy appeared in Brazil in the late 1990s as the country was hit by an economic crisis caused by the liberalization of capital markets.4,5 In the ensuing recession, many enterprises went bankrupt and poverty increased. Unemployment rose, while the prospects for reentering the formal economic sector shrank for a broad portion of society.

In this deplorable situation, a small group of socially concerned academics acted as change agents. They were engaged in a national campaign against hunger and had teaching positions at the National School for Public Health. This allowed them to support poor people’s cooperatives by creating solidarity economy incubators where cooperatives could learn to organize their workflow based on relations of equality and reciprocal support. Cooperatives were also supported in resolving the technical challenges they encountered. A considerable part of the learning process in the solidarity economy took place within incubators, in which experiences with cooperative success were assessed, shared, and further developed.

In addition, social networking between trade unions, universities, and cooperative associations strengthened the power links between this niche and the wider society and state. Finally, the solidarity economy even managed to establish a state secretariat that was instituted within the Ministry of Labor. The state secretariat further supported the cooperatives by starting a national mapping project to assess the state of solidarity economics in Brazil and allow for the specific allocation of resources and legal reforms.


Article 25
Like cooperatives, information commons tend to operate outside the conventional market forces of wage labor and profit. The Open Architecture Network, for example, provides free architectural and design information to anyone interested and has helped hundreds of projects worldwide, including the design and construction of these seismic-proof houses in Pakistan.

In the case of the solidarity economy, we see a radical social innovation in the making. Wage labor is replaced by self-management, which is the solidarity economy’s core innovation—and not a small one. Indeed, cooperative self-management is a precondition for ecologically responsible production. There are two reasons for this: First, it is only through self-management that production can become oriented toward concrete needs (which are limited and can be satisfied), instead of shareholder value and profit (which are unlimited, can never be fully satisfied, and thus entail growing consumption of energy and materials). Second, equal cooperation within an enterprise is a starting point for cooperation with other stakeholders and society at large, further reducing the competitive compulsion to grow. For instance, a recent study found that members of cooperative enterprises are more socially and democratically oriented than the average worker. According to the authors of this study, this trend is not the result of selectively employing people who are already socially oriented, but is rather the effect of egalitarian labor relations on individual workers.6

Thus, it is no surprise that in Brazil solidarity economy units often cooperate as networks by, for example, collectively marketing what has been produced independently. Solidarity economy chains that directly link different producers that depend on each other have been developed in some cases. The most prominent example is the textile cooperative Justa Trama.7 There, monetary income that is earned at the end of the chain is shared by all members who contributed to the production process according to their needs and living conditions. Because a solidarity economy is not primarily geared toward profits and often replaces monetary relations with direct cooperation, it does not promote growth but acts as an increasingly important safety net for people excluded from the capitalist sector.

Information Commons

Within enterprises of the solidarity economy, workers share machinery, buildings, raw materials, and products equally. Means of production, then, are commons. One might argue that, worldwide, commons are rare; they are, indeed, subordinated to market economics in most cases. However, on the level of information, they are already an important part of our daily lives. The best-known example of an information commons might be the Internet encyclopedia Wikipedia. Founded in 2001, Wikipedia has become not just a reliable but also the most important source of encyclopedic information in the world. It currently contains 21 million articles read by about 365 million users in 285 different languages.8 Unlike traditional encyclopedias, Wikipedia neither involves wage labor nor is organized by the state. Instead, a global community of voluntary, self-organized writers collectively creates Wikipedia. Its use is not restricted by the market or the state, but is open to anyone with a computer and Internet access. In this sense, Wikipedia is a perfect example of a radical social innovation that overcomes the basic structures of capitalism—markets, wage labor, and state intervention—and does not rely on material growth.

Wikipedia is only one example of a much larger group of goods in the information technology sphere that share a common feature: they are not produced on the basis of wage labor or with the primary aim of deriving profits from their sale, but on the basis of collectively organized, voluntary work. As a result, they create products that anyone can access for free without the constraints of the market. Most prominently, these include software products such as Firefox, Linux, and MeeGo, which have increasingly become serious rivals to commercial counterparts like Microsoft Internet Explorer. Beyond software, examples of information commons include projects such as Ronen Kadushin (, with its open furniture designs; the Open Architecture Network (; Arduino (, with its open electronic hardware designs; and many more. The One Laptop per Child Initiative ( also uses an open design.

Intellectual property law provides the legal possibility of protecting the information commons from commodification through “copyleft” licenses, the most widely used of which are the GNU General Public License for free software and diverse Creative Commons licenses for other information commons. Products that are distributed under one of these licenses are explicitly free for use, copying, and distribution, sometimes under certain conditions, such as noncommercial use and distribution. These patents therefore try to prevent what James Boyle called “enclosing the commons of the mind.”9 The development of copyleft licenses is just one example of the complex learning processes that took place within the open-source movement.


Mondragon Corporation
Mondragon Corporation in the Basque Region of Spain exemplifies how even for-profit companies can function using cooperatives. Mondragon, which has nearly 85,000 employees across many industries, including solar cell manufacturing pictured here, maintains wage ratios between executives and laborers and gives every employee one vote within the company.

The success of information commons, like Wikipedia and others, indicates that, although money remains a necessity for survival in modern societies, it is not necessarily money that motivates people to create; rather, they can also be motivated by the enjoyment of creation itself, in connection with confidence in reciprocity. When someone decides to write or improve an article on Wikipedia, this person relies on compensation through thousands of complementary and additional improvements made by others at the same time. Wikipedia also shows that there is no need for central management—rather, a useful product can result from collectively organized work.

It is only one further step—and that step is not nearly so great as one might imagine—to expand the principle of commons into the realm of material technology and production, as already described in the section about solidarity economies. Recent, open-source software products include 3-D printers, such as RepRap (, Fab@Home (, and MakerBot (, which are able to produce small plastic objects of any form, bringing the factory to the consumer. The 3-D printer RepRap is even able to produce some of its own components, making it a self-replicating machine. It is certainly questionable whether each person should be provided with his or her own small factory. Nonetheless, these are astonishing examples that show how a completely different mode of production that bypasses wage labor and markets is potentially within reach.

Such an economy without money would not be compelled to grow but could do what an economy in the Greek sense of oikonomia was originally meant to do: efficiently satisfy human needs for food, shelter, and cultural development.

How to Get to a Great Transformation

Diffusion of innovations starts when the dominant system comes into crisis. A crisis is an opportunity for a better future, a truth evident in the recent spread of solidarity economics and commons worldwide. Another reason for the acceleration of the debate on the commons is the late Elinor Ostrom’s Nobel Prize-winning work on models of organizing resource use beyond state intervention and market economics.

Cooperation is not restricted to the local, as information commons best illustrate. The Mondragon corporation in the Basque country, which employs more than 85,000 members and comprises 256 companies and bodies, of which approximately half are cooperatives, is another good example. These companies are not coordinated by monetary relations or state regulations but—within clear limitations—by democratic governance.10 Another example is the kibbutzim of the 1960s, which were characterized by complex cooperation both internally and externally within the overarching institutional network of kibbutz settlements.11

Such cooperative networks act like super-commons, linking different systems and smaller communities through collaborative decision making procedures. Insofar as those networks replace monetary relations with a direct focus on concrete human needs, they are not oriented toward profit making and thus enable degrowth. In market economies, livelihoods are bound to wage labor, which depends on profits and growth; in solidarity economies and the commons, production is determined by need only and can be voluntarily reduced. Social safety could be guaranteed by distributing products equally and by developing public infrastructures, from communal gardening and free sports facilities run by neighborhoods to open libraries. If production harms the environment, reducing it will contribute to society’s overall wellbeing, instead of exacerbating the social crisis of the growth economy.

An economy that is able to degrow can also enter a steady state of constant production and consumption with low-level, highly efficient resource use. This could fulfill the very goal that the capitalist economy increasingly fails to serve: a good life for all.


  1. Haberl, H, Fischer-Kowalski, M, Krausmann, F, Martinez-Alier, J & Winiwarter, V. A socio-metabolic transition towards sustainability? Challenges for another Great Transformation. Sustainable Development 19, 1–14 (2011).
  2. Gordon, RB, Bertram, M & Graedel, TE. Metal stocks and sustainability. Proceedings of the National Academy of Sciences 103, 1209-1214 (2006).
  3. Martínez-Alier, J, Pascual, U, Vivien, F-D & Zaccai, E. Sustainable de-growth: Mapping the context, criticisms and future prospects of an emergent paradigm. Ecological Economics 69, 1741–1747 (2010).
  4. Singer, P in Universities and Rio+10: Paths for Sustainability and Interdisciplinary Challenge (Deutscher Akademischer Austauschdienst & Gesamthochschule Kassel, eds) 73-84 (Kassel University Press, Reihe Entwicklungsperspektiven, 2003).
  5. de Faria, MS & Cunha, GC. Self-management and solidarity economy: The challenges for worker-recovered companies in Brasil. Journal für Entwicklungspolitik 3, 22-42 (2009).
  6. Weber, WG, Unterrainer, C & Schmid, BE. The influence of organizational democracy on employees’ socio-moral climate and prosocial behavioral orientations. Journal of Organizational Behavior 30, 1127–1149 (2009).
  7. Justa Trama [online].
  8. Wikipedia [online].
  9. Boyle, J. The Public Domain: Enclosing the Commons of the Mind (Yale University Press, New Haven, 2008).
  10. Mondragon [online].
  11. Dar, Y. Communality, rationalization and distributive justice: Changing evaluation of work in the Israeli kibbutz. International Sociology 17, 91–111 (2002).

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