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Network employment & collective self-employment 22 February 2011

Posted by cooperatoby in cooperative, EU.
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I went to the European ‘Mutual Learning’ seminar on self-employment last November, and felt a bit like a specimen in a jar, or Banquo’s ghost at the feast. All around me academics and employment service officials, employers and trade unionists were trying to make sense of this strange species of self-employed people. The tools they have to understand us are not up to the job.
The way they look at us is that we are poor failures who can’t hack in the world of being employed. People only become self-employed for short periods between ‘proper jobs’, and they only use the term as a figleaf to disguise the shameful fact that what they are is actually UNemployed. The fact that there are people who have been happily and productively self-employed for decades seems to have escaped their notice entirely.
I spoke up about this, as the token self-employed person in the room. Perhaps naively, I was surprised that my version of reality didn’t appear in the minutes of the meeting.
This is anomalous at a time when the European Commission is trying to stimulate entrepreneurship; indeed immediately after the thematic review on self-employment came the launch of the European Progress Microfinance Facility, which is designed to encourage more self-employment. Yet there still seems to be a terrifyingly corporatist view – that self-employment is somehow abnormal, and even maybe a bit shady.
Grey zone
Theorists seem to want to divide the world of work into two species: employers and workers. They are thought to have different motivations – employers love innovation, create wealth and jobs, and have to be incentivised with tax breaks, while workers are stick-in-the-muds whose wage demands have to be held in check. I don’t feel that I fit into either of these catgories. I have about 30 customers or employers, with whom I have long-term relationships and who use me for jobs from time to time. It’s not an anonymous red-in-tooth-and-claw spot market. By some version of the 80/20 rule, at any one time a handful of these account for most of my time. Both parties treat this relationship as a long-term one, and there is considerable loyalty on both sides, even though there is no contract that enforces it. It is a voluntary collaboration that can be dissolved at any time. It suits both sides because the ‘employer’ can tailor its freelance workfroce to the fluctuating work in hand, and the freelance can gain varied experience by working on different projects, and can pick and choose to fit their ethical beliefs and preferences. I think we need a new concept for this: I would propose ‘network employment’.
Collectives too
There’s another positive aspect of self-employment that seems to be largely off the policy map, too. This is the way that groups of people in search of self-actualisation can gain control over their working lives by setting up worker co-operatives. This sort ofcollective self-employment is longer lasting than the individual type.

Solidarity and conviviality in local development finance 26 October 2009

Posted by cooperatoby in social economy.
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Definition of 'tontine', Ironbridge, Shropshire, UK

On Sunday I went with Simon and Brigitte to a very convivial meeting of the SILO – Soutien aux Initiatives Locales - at the Tchop-Tchop restaurant in Ixelles. SILO was set up 18 months ago and supports local development initiatives in central Africa – Cameroon, Congo, and Rwanda – and its principles are refreshingly different.

- First of all, it only supports associations that already exist and are stable – it doesn’t try to set up new structures. (Research at ULB finds that such associations are relatively stable – around 60% are still in existence after 10 years.)

- It then tries to help these associations on their own terms – it doesn’t propose its own ideas. (So it might support pigs in one village, more land in another, or a health mutual in a third.)

- It doesn’t insist on formality – in a society with high illiteracy, written statutes are an irrelevance. Instead it looks for evidence of a strong social life – it likes to help associations that spend some of their effort just having a meal together.

One particularly interesting type of financial association is the tontine. In a tontine, a group of people each put a fixed amount into the kitty each month. The first month it is all lent to member A, the second month all to member B… and so on until all members have received a loan. This enables each of them to accomplish some major task. European tontines usually pay out to the last surviving member, leading Africans to brag that their tontines are for the living, not the dead.

The strange feature for me is that the clubs are dissolved each year, and this seems a limitation. It would seem to me to be more sustainable to set up permanent structures – credit unions – which could collect savings more broadly and finance investment over several years. But maybe that is over-ambitious and there is a vital place for these small-scale informal financial organisations.

Another initially shocking feature is the sky-high rates of interest that can result – as much as 20% a month. However this is not as usurious as it sounds as it is repaid to members when the ‘caisse ‘is ‘cassée’.

SILO, c/o Michel Romainville – mromainv@ulb.ac.be
Using tontines to run the economy by Alain Henri at http://ecole.org/seminaires/FS3/SEM105/VC190603-ENG.pdf

Microcredit turns to usury 19 May 2009

Posted by cooperatoby in social economy, Uncategorized.
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Yesterday, TV 5 Monde reported worryingly that the microcredit movement has started to devour its own progeny. As the Western consumer economies lock solid, it was heart-warming to see Grameen Bank founder Mohammed Yunus, interviewed on the BBC’s Newsnight, saying airily that microcredit wasn’t at all affected by the global credit crisis, because behind every loan there was a cow, a crop or whatever other productive asset. Well apparently things are no longer so simple. It is quite common for Bangdadeshis to take out microloans to buy furniture or pay a daughter’s dowry – or, worse, to keep up the repayments on a previous loan. Many loan monitoring officers, with caseloads of up to 700 loans, are so busy chasing bad debts that they have no time to monitor the ones that haven’t gone bad yet. As banking multinationals including Citibank pile into this fast-growing market, interest rates are rocketing as high as 30%. People take on one loan on top of another. “Emergency loans” are openly touted for consumption rather than investment.

The idea that availability is the essential thing and usurious interest rates like this are fair game seems to be downright wrong. A study by Mohammed Sikander Khan showed that only 22% of loans were repaid – and the remaining 78% of borrowers fell into over-indebtedness. The shame that non-payment brings has led to a series of suicides. And worse, as debts are passed to surviving spouses, even double suicides.

This article bears this out.

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