Market Based Approaches to Community Development

In my first paper I defined CD as processes that lead to an increase in social capital as well as an increase in equitable access to social capital across a place based community. I would modify this by including the possibility that this same kind of equitable increase in social capital can occur across a community of interest. This is because people from different communities can come into interaction with each other, usually but perhaps not always at a physical place, specifically because of their goals or interests. However I would maintain the condition that in order to count community of interest activity as CD the activity would need to lead both to an overall increase in social capital for the community as well as increase the equitable access to that social capital amongst community actors, i.e. by creating new personal connections with previously marginalized members of that community. This does constitute a significant change from my original hard-line commitment to place-based CD, because I want to recognize that when communities of interest come into interaction their shared values and goals can create a generic openness and a facility towards trust. However this also introduces a new danger for communities, because as the specific goals or shared values help create the baseline trust which facilitates CD, the character of those goals/shared values are in a real sense at the base of that community – the community in some sense rests, or relies on them. Therefore, conflict over the values or goals can put communities of interest into a danger scenario of a possible downward spiral of fracturing – where the decline in social capital can itself be the cause of further decline in social capital.

I would also modify my definition of CD to include the possibility of considering organizations as actors. For instance, 2nd order co-ops, or service organizations, can themselves be thought of as members of a larger community, which can itself come together in a place or around an interest, to solve problems in such a way that there is an overall increase in social capital and also that previously marginalized organizations might specifically gain more access to social capital from other organizations. An example of this would be the Ontario Student Co-op Association, of which I am president. Ideally we would like to see the different Ontario student housing co-ops talking to each other more, sharing more of their knowledge. Unfortunately the challenge is it is extremely difficult to get inward-looking organizations to participate if they don’t see an immediate reward, and the general tendency is only to build connections between the co-ops which were already the most connected anyway. To meet my definition for CD I will need to succeed in reaching out to the more inward looking co-ops and get them involved in the conversations.

I basically disagree with placing the main division between the role of Government in CD, and market-based models of CD. This is because I think that foundations put the same kinds of constraints on CD initiatives as Government funding does. In both cases, the organization engaged in CD must re-orient its primary accountability away from the community it is trying to develop and towards its funders. I see the historical process of local, charity/volunteer based organizations scaling up and professionalizing and coming under control of foundations, or by being adopted into the state’s welfare system, or by being outsourced by the state to non-profits which are primarily accountable to the state or foundations for funding, as all processes which have basically the same kind of effect: creating or facilitating the persistence of disempowered communities. When needs are not met locally, local connections suffer, and social capital tends to fall.

I would prefer to make a distinction between CD initiatives that rely primarily on grant or grant-style funding, i.e. from Government or Foundations, and CD initiatives that rely on the resources that come from the communities that they serve. Market based models allow CD initiatives to escape the pressures put on them by funders. If there is still some reliance on funders, having the majority of an organizations’ funding coming from its own business activities means it can not be pressured as much by funders. Accountability to the market has some advantages over accountability to funders – you have to provide services that people around you actually want. Unlike funders, customers are locals who you have real tangible and ongoing connections with. When organizations rely on and are accountable to the community that they serve and are in, face to face connections between people are built, and connections are constantly created whose value exceeds the monetary value exchanged. For example, it would be a mistake to value a job only in terms of the money it pays, and the surplus it creates for the employer. We should also think of the psychological toll or benefit to the worker of spending so much of their energy doing work they believe in or don’t. When work is carried out in such a way that the worker can see their personal good as in harmony with the collective good, that work contributes to the building of community in the same way that an exploitative labour relation erodes social trust between owners and workers. When an organization is primarily accountable to a funding agency, there is a tendency towards staff professionalization and neoliberal management practices. Organizations which are independent of state and foundation funding may also choose to adopt these practices, but since their primary accountability is to the community they can also choose to organize themselves in a way that values their impact on the community in a holistic manner.

In my view, most social enterprises, and some of what would just generally be referred to as the market economy, can count as CD initiatives. However, the introduction of market accountability creates its own host of pitfalls which can prevent a socially conscious enterprise from contributing to the development of community. Urbane cyclist worker co-op is an exciting example of a successful worker-owned co-op and the fact that it continues to exist is itself something to be celebrated and seen as proof that it is possible even in current market conditions for workers to successfully manage a profitable business while being organized democratically and paying a living wage. However, Urbane cyclist also demonstrates some weaknesses of worker co-ops which hint at why the model has not become more prevalent in Canada: they don’t seem to have a model for growing their (worker) membership, and they are caught in a two-tier worker system which seems common to many worker co-ops. Worker members have access to full time, year round employment, whereas non-member workers are hired seasonally and do not have the same job security. This relation of economic privilege mirrors a power relation between members and non-members that is ultimately reminiscent of the division in an average business between employer and employee. Perhaps this could be overcome if Urbane adopted governance structure which allows the interests of the different groups to be represented – member owners, non-owner members, and perhaps even customers as well.

I don’t see Alterna savings’ micro loans program as a community development initiative because the loans are only big enough to start single owner small businesses. However, they can be seen as contributing to CD because as helping folks who couldn’t normally access loans access to capital with which to start even partial self-employment they might become less reliant on the discriminatory and exploitative labour market, making them potentially able to participate more fully in their community. I would encourage Alterna to continue to push for larger “micro loans”, and to partner with co-op development agencies so they could capitalize and give business support to larger organizations.

The overall criteria for a market based approach to fit my understanding of CD is that the organization’s market involvement should be harmonious with the relations of accountability to the community which it is developing. This means different things in different cases: with the Furniture Bank for example it is not an issue that the client of the bank could not necessarily afford the furniture removal service. But in other cases financial accessibility to the community being developed might be very important. For example if an Urbane Cyclist, or a Planet Bean were to open in a neighbourhood undergoing a process of gentrification, they could contribute to that process depending on their price points. It’s crucial for an organization seeking to develop community not to develop one community at the expense of another.

It’s difficult for me to see community development initiatives in terms of either the technical assistance or the self-help model, because I envision them as forms of community self-organization. However, insofar as they are useful, I think the distinction between the self-help and technical assistance model should be seen as a continuum: if a community has so little social capital that it isn’t already organizing to deal with problems it is facing, then neutral facilitation might be helpful. But, as soon as the problem is identified and the community begins to orient itself towards the problem (mobilizing its own resources), the main thing it needs is technical assistance. For example, Co-operative development work certainly fits more within the technical assistance model than the self-help approach. However, even at this stage it would likely be useful to have people in the community, or a facilitator, to continue to ask whether there are groups in the community who are not being reached out to and who should be. What both of these approaches ignores, however, is the problem of leadership – how do unifying leaders emerge in the context of a community development project? While it is fashionable today to play down the importance of leadership, charismatic characters are often crucial to the carrying through of projects, as well as for the building of consensus around them.


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