Stan Thekaekara, from Just Change, speaks about new economics

Stan Thekaekara has worked extensively with tribal groups in India over the last thirty years. This journey began in the 1970s when Thekaekara joined the students movement and went to live in a tribal village in Bihar. In 1986, Thekaekara and his wife Marie set up an NGO called ACCORD to help tribal people (Adivasis) reclaim their land.

Over the last few years, Thekaekara has been one of the key persons behind the formation of “Just Change”, which is both an idea and a process. The purpose of Just Change is to go beyond just ‘fair trade’ and strive for a system that cuts out the middleman by getting community groups to exchange directly with each other. Thekaekara is also a trustee of OXFAM GB.

Q: You have been identified with the New Economics stream of thinking for many years. Was this always an element of your work as a grass roots activist or did it evolve over the last 5 or 10 years

When one is committed to fighting poverty, it is inevitable that one must think of economics. As early as 1974, when I first started working with the adivasis of Singhbhum district in current Jharkhand, I was struck by the injustice and lopsided nature of trade. Adivasis were forced to sell their produce at a pittance – a tiny fraction of the market price. Two things that we tackled way back then were: one, stopping the flow of paddy out of the village, and two, trying to market linseed directly. This was my first experience of trying to take control of a local economy. But this was not something thought through. It was just a common sense reaction to gross injustice.

It was only in the early 90’s when India started down the path of globalization and liberalization that I started thinking more deeply about the relationship between local and global economies. With the collapse of the Soviet economy, captalism seemed here to stay. In Gudalur,we had launched an Adivasi land rights campaign in 1986, and in order to protect the newly reclaimed lands we had helped the adivasis plant tea on the land. This had a major impact on both the economy of the adivasis as well as the power relationship with dominant non-adivasi communities. However, we had catapulted the adivasis from a local wage economy into a global market economy.

This forced us to take a much larger view of the economy. Our involvement with the Fair Trade movement (we were selling our tea to a German Fair Trade organization) made us realize that, though well intentioned, Fair Trade did not have an understanding of the economy. It was narrowly focused on getting a better price. It did not look at the power relationships between labour and capital.

Trying to analyse and understand the dynamics between labour and capital, between producer and consumer, between a local economy and global economy is what put me in touch with the New Economics school of thought.

So though my identification with New Economic thinking may be over the last few years, I would say that the seeds were sown by my experiences in the early 70s!

Q: How do you define New Economics?

This is a difficult question and I don’t know if anyone has a complete answer. It all depends on our point of contact with the economy. A bit like the six blind men of Hindustan! Those of us who are involved at the grassroots take a political perspective, it is about power and power relationships.

The present market economy has vested power sqaurely and totally with capital. Governments kneel before the power of capital. Political power is superceded by economic power. Just look at the Bill Gateses, Ambanis and Mittals and how governments vie with each other to shamelessly seduce their capital. Increasing the inflow of foreign direct investment into the economy became the mantra, with no one concerned about the outflow of returns on the investment out of the economy. This kind of unfettered power of capital tends to strip local economies especially those that are market dependent. Those not blinded by the glitz of Bangalore and Hyderabad cannot fail to see what is happening to rural economies across the country. Why else are farmers committing suicide? Yet on the other hand ITC and now Reliance of the Ambanis are roaring into the agricultural economy. They would have us believe that they come as saviours, but in reality the powerlessness of the farmers in a market driven economy makes them vulnerable targets for profit hungry capital.

So one aspect of New Economies is about changing these power relationships, attempting to find new ways of striking a balance between the role and power of labour and capital. This is the area of New Economics that I am most concerned with.

But New Economies is more than that. We have to look at different systems that make an economy chug along, at the heart of it lies our currency system. So, another aspect of New Economies is taking a hard look at our monetary and financial systems, looking for alternatives rather than accepting the present system as an unquestionable given. Bernard Lietaer, Richard Douthwaite and Tom Greco are few of the people that have done a lot of work in this regard. They are talking of local currencies, alternative currencies and so on. The New Economics Foundation has also looked at money flows and the nature of money.

Yet another strand of New Economics is the issue of growth. The current capitalist economic model looks at growth with reverential eyes – in fact our economy is measured in growth terms and not in social justice or distributive terms. An 8% growth rate might mean a lot for the banking and insurance sectors but it might mean quite the opposite for a landless dalit or an Adivasi trying to scrape a living off a small piece of homestead land. New Economics challenges these paradigms.

New Economics is rooted in reality and not pipe dreams. It does not hanker after some glorious dream of a totally egalitarian world. It looks at the current economy and seeks to find new economic models that can make the world a better place.

These are some of the strands of New Economics – I am sure there are many more – as concerned people all over the globe struggle to protect the weakest. It is when these strands begin to get woven together that we will actually have a New Economy. We hopefully then won’t have to define it – for it should become a reality and not a concept. We have miles to go…

Q: How do you locate the work of Just Change within the framework of New Economics thinking?

Clearly, in tackling the power relationship between capital and labour especially in the area of trade. Fair Trade, movements against WTO, campaigns for trade justice notwithstanding – at Just Change we feel that unless labour can participate in the economy on par with capital, we will not fundamentally change anything. It is not just about getting a better price for producers, it is about who has the power to decide the price.

In the present accepted economic structure – neither the producer nor the consumer has the power to decide. When the farmer enters the market gate it is not she or he who decides the price. Euphemistically we say the market decides the price. Essentially it is the investors of capital that decide. If many people decide to invest in a particular commodity, say coffee, then the price goes up as investors compete with each other. And vice versa. Either way the power remains with capital. We have to realize that traditional economics of supply and demand no longer operate the way it used to. Demand is created and supply can be manipulated.

Through Just Change we are trying to take that power back. Where consumers and producers can work together in their own interest. Where prices are negotiated not by the “market” (read capital) but by the producers and consumers themselves, for Just Change declares we the producers and we the consumers are the market. Capital for us is just a tool that is necessary to enable us to trade. And over the years we have given that tool way too much power.

Just Change is about local economies becoming more powerful by local communities taking control over their economies. We do this by linking local communities, producer communities and consumer communities. Through this we are redefining what we mean by “local”. We do not see “local” in geographical terms we see local in value terms. Communities, no matter if they are in India, Germany, UK or Antartica – as long as they are willing to work together for the common good of all – this community of shared vision for us becomes local!

Q: Where has Just Change reached in this?

It is still early days as far as Just Change is concerned. In India, things are proceeding quite rapidly. We are being cautious and slowing the pace to ensure that member communities are fully aware and committed to the concept. Early this year we formed the Just Change Producer Company, with 10,000 families from 4 member groups in Kerala, Tamilnadu and Orissa as the initial shareholding members. Trade has started in most household items. We have learnt some key lessons, one of which is that we need robust retail systems and that we need to trade in all products needed by family. As I speak, our first Just Change retail shop has opened in Kerala and a few more are slated to open by the end of this year.

At another level, we are developing tools by which we can measure local economies and the extent of control communities have over them. We are hoping that this will be a simple tool that communities can use to understand their power or lack of it in the economy. Just Change intends to use this tool to track whether we are having an impact or not.

Q: What is the practice that can transform the work of others struggling to make a difference in the political-economy of the poor and the dispossessed?

Those working for the poor tend to understand the economy in terms of access to services - especially education and health. The more politically savvy tend to ignore the economy and focus on political rights. We have to recognize that these are manifestations of a community having lost control over the factors that influence their lives. Those working for the poor have to develop the capacity to understand the economy, capital and capitalist systems – to understand financial systems etc. I feel that there is very little understanding of this – and this is most visible in the way that the NGO or voluntary sector have jumped on the micro-credit bandwagon.

The obvious argument for micro credit is that it increases the cash flow into local economies – by establishing the credit worthiness of the women through regular saving they are able to access more capital through the formal financial sector. While this has very visible immediate impact on the local economy – it terms of cheaper credit, a sudden realization of unfulfilled desires there is very little understanding of the long term impact of plunging communities and entire economies into debt – which is serviced not through new wealth creation but through sustained “savings” by the women. This is what I mean by the need to understand the economy at a more fundamental level. Markets too must be understood not as just as mere channels to sell produce but from the point of view of the role they play in the local economy.

This holistic understanding of the economy is crucial if we are to try and bring about sustained change. We have to also recapture the strengths of the solidarity movement of the 70’s and apply them to the economy. Information and Communication Technologies (ICT) should be used in more creative ways than just browsing the web and sending emails to do this.

Q: You were honored by the New Economics Foundation in UK by being asked to deliver the Alternative Mansion House speech in 2003. What in your view is the nature of the contribution of Indian activism to the global quest for a New Economics?

The biggest contribution of Indian grassroots activism to New Economics thinking, is that we bring to economics a political understanding and more importantly, a culture of direct action. Take the farmers movement of Karnataka who are going organic not just for environmental reasons but primarily for political reasons, so that they are no longer dependent on the likes of Monsanto and other multi-national agri-business corporations for their seed and fertiliser. For people here, New Economics is not a theory or a nice refreshingly radical concept, it is a matter of life and death. Ask any cotton farmer of Madhya Pradesh or Maharashtra. Ask any small tea grower in the Nilgiris.

The other thing is we have a history of mass mobilization. Our ability to get a message across to thousands, often millions, must be the envy of any marketing executive. We have committed members, what the market would call brand loyalty. However, unfortunately, we have not yet tapped the potential that lies in our hands. Ironically, the likes of ITC through their e-chaupals, Unilever’s Shakthi brand marketing through womens Self Help Groups have been quicker at attempting to capitalize on this.

Q: Do you see the New Economics stream of activism flourishing in India? What are some of the challenges and obstacles it is facing?

Our biggest challenge is about mindsets. The NGO sector, the voluntary sector, call it what you will, tend to consider markets “dirty”, businesses as unethical and so tend to shy away from them as far as possible. Operating from a moral high ground, we have completely failed to understand some of the hard realities about how economies operate. So we tinker around the edges without actually engaging. Our strength, in terms of understanding the politics of poverty is also our weakness – we fail to understand the economics of poverty.

But, I think this will shortly change. People from right across social cultural and economic spectrums are beginning to come together. Common cause beyond traditional barriers of class, caste, race and creed is slowly being established. Seeds of a quiet revolution are being sown – and this time round lets hope it is unstoppable.