MICHAL PALGI THE INSTITUTE FOR RESEARCH OF THE KIBBUTZ AND THE COOPERATIVE IDEA THE UNIVERSITY OF HAIFA The Social Economy as a Compromise between "Two

MICHAL PALGITHE INSTITUTE FOR RESEARCH OF THE KIBBUTZ AND THE COOPERATIVE IDEA

THE UNIVERSITY OF HAIFA

The Social Economy as a Compromise between "Two Worlds"

Palgi - Social Economy

What Two Worlds?

a.Ideal socialist type is characterized mainly by: Collective ownershipDemocratic decision makingMotive for producing goods and services is to satisfy

people's needs: "from each according to ability, to each according to needs"

Mutual aid among members and communities


What Two Worlds?

b. Ideal capitalist type is characterized mainly by: Class division –private ownershipDecisions are made by the ownersMotive for producing goods and services is to

maximize profitFree market – laissez faire


The Two Worlds

The majority of the countries concentrate closer to the capitalist pole than to the socialist.

The adoption of capitalist ideas + modernization + globalization = increase in people’s untended social and economic needs.

This gap was the impetus for the growth of the social economy.


What is Social Economy?

"The social economy refers to all initiatives that are not a part of the public economy, nor the traditional private sector, but where capital and the means of production are collective“ Neamtan, (2002).

It concentrates on socially necessary activities where state and market have failed.

Aims to serve its members and the community rather than to accumulate profit


Characteristics of SE

Democratic decision making, therefore,Activities and the use of surplus are determined

by membersCollective ownershipMembers are relatively dominated in their daily

livesIn general, its activities are committed to

empowerment, participation and collective responsibility


The Kibbutz Communities

There are 267 Kibbutzim in Israel. The Kibbutzim constitute 1.8% (102,000)

of Israel’s population, yet their contribution to the national economy amounts to 40% in agriculture, 8.4% in industrial output, and 7.5% in industrial export.

Their basic values: Equality, democracy, social ownership of goods, mutual guarantee for each other and each community.


The Kibbutz Social Economy

Martin Buber (1949) referred to it as “the experiment that did not fail”.

Its basic values are similar to those of the SE. It can boast to be the first type of such democratic,

egalitarian communities.100 years since its inception it knew ups and downs.It introduced many changes – but has it managed to

maintain its SE?Has it put the basis for another type social economy?


Main Reasons for Introducing Changes

1. Changes in the homogeneity of ideology and population.

2. Economic failure of some kibbutzim at the time of the national economic crisis.

3. Aging population4. Changed milieu around the kibbutzim, that

affected also the type of changes they made.In order to survive the Kibbutz introduced changes – many led towards the capitalist pole.


The Direction of the Changes

The Base LineThe Changes

- Equality in rewards

- Direct democracy

- The needs of the individual and community converge

- Equal standard of living- One type of membership- Community ownership

- Equity in rewards

- Representative democracy- The needs of the individual

are prior to community’s- Gaps in standard of living- Two types of membership- Individual ownership


The Chain of Changes

Some of these changes are planned and others are not.

Each such change instigates additional changes in the community and the individual.

In order to cope with the changes additional changes are needed.

But has it managed to maintain its SE, how?


The New SE of the Kibbutz

Equality – in addition to state taxes high community taxes

Distribution of Property – home ownership – how? Production means and other property

Care for the weak: children, old, handicapped via profits from common production means or taxes

Democracy – direct: for long-range decisions; representative for medium and short range

But how long can this SE keep?

Rewards Dilemmas


DilemmaCollective optionIndividualistic option

1. Material Rewards Dilemma

All my rewards are the kibbutz’s rewards.

I want personal rewards from my efforts and success.

2. Social Rewards Dilemma

All types of work should have the same value.

A person should be evaluated by the type of job/position he/she holds.

3. Power Rewards Dilemma

Self-management and direct democracy.

People in power positions should make the decisions.

Rewards Dilemmas


DilemmaCollective optionIndividualistic option

1. Social Security Dilemma

All members should have the same social security.

Social security should be differential, according to one’s contribution.

2. Equality / Equity Dilemma

Each person should get according to his/her needs and contribute according to his/her ability.

My rewards should be according to my input and no less than the rewards given to others whose input is similar.

3. Quality of Life Dilemma

I want every one in the kibbutz to be able to enjoy the same quality of life.

I want to have high quality of life, as high as I can get even if others in the kibbutz have lower.


Conclusions

The Kibbutz is changing its SE principles.Two extreme groups pull in opposite directions:

Individualistic vs. Collectivistic.The decisions are affected by: The value

orientations of members, by the economic situation of the kibbutz, fashion, and by the surrounding society.

Up till now, decisions are reached democratically and equality between members is relatively high.


Some Final Questions

The adaptation to the change is usually good, but there are those who feel that the change was unjust.

Can there be open system democratic and egalitarian communities within a capitalist society?

Will the present SE continue when the founders and their children are no longer there?

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MICHAL PALGI THE INSTITUTE FOR RESEARCH OF THE KIBBUTZ AND THE COOPERATIVE IDEA THE UNIVERSITY OF HAIFA The Social Economy as a Compromise between "Two