Enacting Community Economies Within a Welfare State

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Welfare state and value diffusion

Teppo Eskelinen:

"Next, I will turn to questions of how the conception of value in community economies can resonate with the welfare state ethos.

As noted in the introduction of this book, this implies two separate questions:

1. How could the welfare state protect the abilities of community economies to operate – in this case, to sustain their value form?;


2. To what extent can welfare states assume the value conception of community economies?

The distinction between the welfare state ethos and institutions is crucial. The welfare state as an ideal; and as a practice, should be kept clearly separate.

As for the first, a key concept organising the discussion has been ‘the partner state‘, as, again, mentioned in the introduction of this book. When it comes to the value form, the partner state assumes a new function: that is to say the state apparatus could aim at protecting community economy ideas and practices from capitalist expansion. As capitalism expands, it transforms ever new aspects of social life into commodities, or functions in assisting capitalist value creation.

A further step is to ask: What aspects of the welfare state are in line with the value model of community economies described above? And as an accessory question: Could the existing welfare state further assume this value model as part of its functions to produce and deliver services? It is not fully clear, how the welfare state should be interpreted in this context. To some extent, welfare states, as we know them, lean heavily on a ‘commodified sphere‘, and even push forward new frontiers of hypercommodification in an attempt to finance the welfare institutions. This function necessarily leans on the mainstream economics conception of value in which the welfare state is seen as merely a vehicle of redistribution. On the other hand, welfare states clearly have a role in maintaining commons through the governance over public goods relevant to the well-being and health of a given population, such as health and education, as long as the governance is sufficiently participatory. Further, welfare state institutions are (at least ideally) human-made and democratically planned structures which uphold a strongly egalitarian and social rights-based conception of the distribution of services.

To some extent the community economies’ value conception is an explicit attempt to rival the welfare capitalist model as we know it, so the two value conceptions can be seen as somewhat conflictual. However, as noted, the welfare state in itself is a highly contested terrain. For these reasons it needs to be analysed, what kinds of ideas of values are inherent in welfare state institutions, what are possible, and what are impossible. This will enable analysing how far can welfare states be pushed in the way of the community economies’ value conception.

Yet what needs to be kept in mind as a critical point is, that any activity is potentially vulnerable to commodification. This includes several aspects of the conception of value outlined above. The downside of the fact that ‘the economic‘ and ‘the social‘ are not ontologically separate is, that many social and emotional functions can become commodities. Affects, social relations, and generally ‘the social factor‘ can be turned into new spheres of capitalist accumulation. So ‘value diffusion‘ should be understood as value attached to practices which are distinctly anti-capitalist, and the ideal welfare state as a mechanism protecting diverse value conceptions." (https://jyx.jyu.fi/bitstream/handle/123456789/68219/1/ECEWAWS_The-conception-of-value.pdf)

Conceptions of value within the welfare state

Teppo Eskelinen:

"I will turn next to debating what ideas and practices associated with the welfare state resonate with the conception of value discussed above. In line with the distinction made in the introductory chapter, my focus here is on the welfare state ethos, rather than the current manifesting forms. It is so that this ethos can be seen to entail ideas resembling the community economy approach more than the currently existing systems of governance.

Firstly, the notion of trust is clearly part of the welfare state tradition. Generalised social trust or general trust within a society, which economists prefer to call ‘social capital‘ is often used to explain the success of economies with generous welfare systems (Halpern 2010; Whiteley 2000; World Bank 1998). While such findings as clear correlations between trust towards strangers and the economic conditions can indeed be shown, social capital tends to emerge in economics as a category for everything which cannot be explained by the traditional means of economics. This confirms how such economics is devoid of means to develop a theory on trust.

Sometimes the concept of ‘endogenous growth‘ is used to refer to the totality including ‘investments‘ targeted at the social fabric that reproduces and generates social capital: education being the typical example. Together with low income disparities and the good governance of basic institutions such investments foster a sense of mutual trust and secure social cohesion. It is indeed possible to discern the ‘virtuous circle‘ of the welfare state consisting of an entanglement of strictly economic value and social goods as a single social-economic project (Hagfors et al. 2014).

Secondly, the idea of recognition can be discerned in the welfare state tradition, even if not as an economic quality. It has sometimes appeared in the form of the notion of ‘talent reserve‘, which refers to the necessity of egalitarian education to avoid socio-economic disparities leading to wasted talents in the lack of opportunities to develop them. The tradition has also involved some notions of ‘extended community‘, such as referring to the welfare state as the ‘people’s home‘. Some cash transfer schemes can be seen as mechanisms for recognising everyone’s input and value as human beings. For instance, certain family allowances that allow parents to take care of children at home can be seen to come close to the recognition of the core economy. Future universal recognition might take place through non-conditional transfer schemes in terms of universal basic income. In essence, one argument often made in support for universal basic income is that it would recognise the social contribution of all individuals. Thirdly, the reproductive is seen to depend on the productive. Currently, this hierarchical order of value creation is quite central to welfare state thought; being inscribed in the very notion of the coexistence of the commodified and decommodified spheres. While reproduction is to some extent supported, the commodified sphere is seen as ‘buying‘ the operational space for the decommodified sphere. In order to reflect the community economy conception, there would have to be a recognition of the reproductive sphere as equally or more value-creating. Fortunately, the welfare state tradition, using the notion of ‘the virtuous circle‘, could accommodate this kind of idea.

It appears that co-production (of public services) can be integrated into the welfare state tradition if there is political will to do so. Evidently, such ideas already exist within the current discussion about organising public services, even if the wider trend is towards the commodification of services and to economies of scale. It is an open question, which also invites legitimate scepticism: To what extent will the co-production approach permeate service provision? The answer requires transcending several binary categorisations, such as producer/recipient, producer/product, or professional/nonprofessional – yet there is nothing inherent in the welfare state tradition, which would form an unsurmountable obstacle to this.

Of course, it is a difficult matter to change welfare state organisations, and to attempt to intermingle public functions with community economies. The major obstacles stem from path dependency and the deeply assumed preference for centralisation, which have long permeated welfare state practices. Ideas like the ‘virtuous circle‘ and realising the potential from a talent pool within a community ultimately have leaned on increased production and hierarchical governance, even if this need not necessarily be the case.

Because of these ingrained tendencies, there is a need to find concrete examples of diffusing the alternative economy value conception. One suggestion in this direction was the call to extend the Helsinki timebank’s ‘time tax‘ into allowing municipal tax payments. This initiative was put forward when when the Finnish tax administration declared timebanks to be tax liable (Eskelinen et al. 2017). Taxation on a euro equivalent value was strongly opposed, as timebanks see their time-based currency, materialising the ethos of everyone’s time being worth the same, to be not convertible to capitalist money.

The proposal was to use the timebank’s platform to implement municipal taxation in time currency. Already now, in order to maintain its ‘infrastructure‘, the timebank collects a small levy (in time) on each transaction. This levy could be used to pay the municipality of Helsinki where the timebank is based, if the municipality would open a timebank account to receive such payments. According to the proposition, the municipal account, in which time taxes accumulate, could be used by community-level municipal service providers (community centres, day care centres, parks, etc). While in a timebank no-one is obliged to provide a service, this municipal account would practically be used to reward (in time currency) people for volunteering in communitylevel service provision. A further function of the ‘time tax‘ would be to challenge the category of ‘work‘ through the official semieconomic recognition of the value of community engagement.

This suggestion serves as an example of recognising the virtues of the welfare state while pushing the community economy conception of value within the municipalities. More generally, the ‘municipal tovi tax‘ would imply a) recognising timebanks as contributing to the community; b) diffusing the commons values into the realm of municipal services; and c) recognising the existing internal time tax model as a legitimate system of self-governance.9 A further issue is, if in addition to transforming public service provision this value conception could inform relations in the sphere currently referred as to ‘the market‘. Part of the community economy value conception is to cast the user-producer instead of the consumer as the protagonist, which opens more diverse economic subjectivities. While the matter is contested, some optimistic theorists do argue that there is a general ‘move towards commons format‘ (Bauwens and Ramos 2018) taking place, and that this would eventually define future forms of the economy. An often noted feature of this shift is a move from possession to access, and while the latter does not automatically guarantee community economy virtues to permeate the economy, it would perhaps more easily allow this to take place. Further, some scholars expect to see a turn into ‘ethical values‘ in the broader market, as production tends towards the production of social goods instead of tangibles in the current market (Arvidsson and Peitersen 2016)." (https://jyx.jyu.fi/bitstream/handle/123456789/68219/1/ECEWAWS_The-conception-of-value.pdf)


* Article: Eskelinen, Teppo (2020). The conception of value in community economies. In Eskelinen, Teppo; Hirvilammi, Tuuli; Venäläinen, Juhana (Eds.) Enacting Community Economies Within a Welfare State. MayFly, 23-45.

URL = http://mayflybooks.org/wp-content/uploads/2020/03/ECEWAWS_final_ebook.pdf self-archived copy