RSEs as catalysts of good changes
René Mendoza Vidaurre with Fabiola Zeledón and Esmelda Suazo
The drunkard´s curse
-Why are you selling your land?
-I have debts, I have no money…I no longer know what to do.
-Ahh, you have the drunkard´s curse.
-The drunk sells what he has and keeps the craving for alcohol, returns to look for what he can sell or steal, and it increases his urge to drink.
-I am not a drunk! What does this drunkard´s curse have to do with me?
There have been hundreds of innovations that, on the death of the “boss”, have fallen apart like a house of cards. In good measure due to the “drunkard´s curse”. The drunk who wakes up with a hangover, looks to see if he can find even a little bit of alcohol, and there is nothing that can stop him from getting that drink, he will get it by begging, selling what is within his reach or stealing it.
In terms of this article, those “cravings” are the social rules of families that push or pull people to get rid of any initiative with potential for success, on the condition of getting “a drink” (short term earnings). These families, nevertheless, are unaware of these social rules, those “cravings” as in the story: “I am not a drunk! What does this drunkard´s curse have to do with me?” It is like, literally, the initiative “got drunk”, whose owners end up selling “the cow that provides the milk” instead of selling “the milk”; or better still, instead of making cheese, cream and cream cheese with “the milk.”
RSEs analyze these realities. They are not isolated from them. They study them, they study themselves, correct and catalyze transformational actions. In fact, SREs emerged while analyzing these realities, looking at how to chart a different path and at the same time contribute to the community. How do the SREs catalyze good changes in communities? In this booklet we try to respond to this question, while we invite those who read it to reflect on their own responses. Here we describe some of those harmful social rules, we identify other rules with which initiatives can pave the way, we denote the role of these types of initiatives for generating good changes in communities, and we conclude that this path deserves being tested.
1. The strength of social rules
While studying the commercialization of products, the way that families decide on inheritances, production systems, how women become single mothers, how sharecropping relationship work, being a day worker, or how cooperatives work, time and time again structural conditions appear that leave people or organizations like hobbled hens in terms of their growth, obstacles appear to trip the feet of those who are walking. What is this common pattern? Figure 1 shows three rules, individual opportunism, men as the law, and the big payoff culture; it is a triangle that like the “cravings” in the drunkard´s curse makes people end up selling “the cow.”
If a couple puts up a storefront, sew shop or makes rosquillas [corn cookies] to sell, their own relatives and friends trip them up. How? They buy on credit, buy on credit, and continue to buy on credit. It is the drunkard´s curse, they promise to pay, they pay and buy on credit again, and on and on. When the amount that they put on their tab surpasses their financial capacities, they get upset when they are asked to pay, and they are resentful if they are not given more credit on top of what they already owe, it is like they earned the right to buy on credit, or that they end up believing that the store belongs to them- this is what we call the opportunism of drunks. The consequence of these practices is that the initiative, on having more than 15% of their capital in the “on the tab” portfolio, begins to fall apart, and families get stressed on being charged and promising payments, and it is like a wound exposed to the sun, gets swollen and is difficult to heal. The rules that lead to failure are: being a relative gives me the right to buy on credit, not necessarily to pay – it is like “what is yours is mine, and what is mine is mine”; no one from the community, individually, should stand out (be successful). Both rules come from the indigenous-peasant family that emerged in a context of bartering (in kind exchanges) and on communal lands, if you do a favor, the other family at some time will return the favor; now, nevertheless, the context is practically the opposite, in addition to the fact that the element of time in a store is a matter of days, and the fact that a basis of common food does not exist.
There are families that, just as they grow quickly, also fall apart quickly. It could be that they buy and accumulate land, or as lenders, accumulate money. The drunkard´s curse is that, even though they try to improve their work, for example, intensifying the use of the soil, they go back to buying more land, and become extensive again in their use of the soil; in this way they have coffee farms where they get 8 loads per manzana, or grazing land where they have 1 cow on 2 manzanas. Then their children trip them up: Dad divides up the land, one part he sells and the other part he divides up into an inheritance for his children. Once the land is received, most of the children begin to sell their part, or borrow money putting it up as collateral, prisoners of the drunkard´s curse. The rule that pulls them toward failure is: only the man (Father/husband) makes decisions and he is the law for the family. With this rule, the man wants to administer and make decisions about any initiative, decisions are made under the culture of “leave it to me”- “I will work it out, this is a man´s issue.” This rule comes from patriarchy, it is a rule that prevents his daughters and sons from learning, which disempowers women (Mothers/wives) and it is a rule that ruins communities.
Raising coffee or sugar cane as a monocrop has meant that families receive payment only once with the harvest, on which income depends the food and clothing of the family. We call this custom the big payoff culture: wanting to receive payment in one bit hit, not getting smaller amounts throughout the year, nor cultivating food for each month. Correspondingly, when a family administers a new initiative, this initiative tends to naturally be trapped by this big payoff culture; they want to have earnings in a few days and in larger amounts, if they are not able to get that, they shout to the four winds for more product, their frustration traps them. They lose sight of the need to learn to administer the RSEs, build up clientele, study their environment, plan; what is important to them is to “win the lottery”; the big payoff, because they believe that there is nothing to learn, or that they already know it. The rule that pulls them to failure is: earn money right now however possible, that tomorrow may be too late. It is a rule that comes from capitalism – like usury or heartless commercial mediation – and that rule is like the sun during the daytime, it keeps you from seeing the stars.
2. Collective actions that make a difference
A RSE can reduce – and avoid – the risk of following the fate of that ton of initiatives and organizations that tend to fall apart. For that purpose, we introduce a RSE as a new seed that grows between the land of the community and the winds that blow from outside the community. This RSE needs the virtuous triangle of figure 2. It is from this virtuous triangle that RSEs can catalyze small but good changes in the community. We use the word “catalyze” to indicate that SREs can cause unexpected changes, without generating or expanding them directly, allowing people in the community to observe, digest, reflect on their realities in the face of this mirror of the SRE, and be correcting, expanding and generating new practices and rules.
The first element is distinguishing collective assets from individual assets. For that purpose let us read about Blanca Victoria from El Cua, as told by her son, Juan Adams:
Rogelio worked for his aunt, Blanca Victoria. On pay day he would say, “Aunt, don´t pay me now, just give me this much.” His aunt saved his money. One day Blanca Victoria needed some money to buy something, and she went running to her nephew, “Rogelio, lend me some money.” “Sure, aunt, just use it,” responded Rogelio. The aunt returned home and took the money from Rogelio´s savings which she kept for him.
The family that administers a RSE is like Aunt Blanca Victoria, and the resources in the store, roaster or bakery are like the resources of Rogelio, and the two dozen shareholders who own the RSE are like Rogelio. The family has those resources in their hands, as the Aunt did, but they are the resources of others; even though they are in their hands, they cannot use them as if they were theirs. They are a collective asset.
Within this framework, a RSE can navigate better. If a relative or a family friend of the person who administers a RSE comes looking to start a tab, they cannot demand that they be given credit under the rule that “we are part of the family”, because the products or the roaster do not belong to the family, they belong to two dozen shareholders; the administrator will be able to say, “If it were mine I would start a tab for you, but this is not mine.” Not even the administrator herself can start her own tab, she cannot take products and “just write it down”, she has to buy them like any other customer.
The second element is that each RSE must be guided by written rules and the numbers. The rules will emerge based on studying and testing policies, which are later approved by all the shareholders. In the RSEs we tested them, and now we have written rules that we all recognize and must follow, which are in booklet 2. They are rules that can be changed in assemblies.
In terms of the numbers, each administrator records data in a timely and trustworthy manner. The payment of the administrator depends on the quality of this record. The improvement of a RSE depends on the quality of this data, analyzing the data and making improvements based on that analysis. For example, for the case of providing products on credit, the numbers and the rules are very indicative of good practice:
- Products on credit in a story cannot surpass 5% of the working capital of the store. So, the administrator must register and add up each day the data recorded to apply this rule.
- The amount on credit cannot surpass 50% of the monthly income of the person who gets credit. So, before putting it on the tab of the person, that person needs to be studied.
- Only products that are shared in the family can be sold on credit. For example, cigarettes are not shared in the family, so do not make up part of the products that can be taken on credit.
- Products considered “for pleasure” (e.g. chicken, soda pop…) cannot be given on credit. Only basic need products (oil, salt, sugar, rice, beans).
The third element is the culture of small and staggered payoffs. Grain by grain the hen fills her stomach, our grandmothers used to say. Each RSE is designed for families to generate and save income every day of the year. Each day that they sell or provide roasting services generates income; each day they record data and analyze that data; each day they communicate with customers and take the pulse of the community. A RSE is a university in the home and the community.
3. How RSEs catalyze change in the community
If an RSE operates based on the virtuous triangle, in itself it becomes an oil lamp in the community. It catalyzes change. How? The distinction between collective assets and individual assets will have an impact in the community. People will understand that the land is not an individual asset either, only belonging to the man (husband/father), it also belongs to the mother and the children; in other words, it is a family asset; this will help the family to democratize, be more equitable and the land be better used. The same thing will happen in cooperatives, churches…In this framework Dad and Mom will have a guide for raising their children in a different, better way.
Following rules approved by an assembly is, paradoxically, a new practice. This will have an impact in the community, more and more they will question rules that only the patron sets, only the man who believes he is the law, or rules that come from outside. The source of the rules will slowly be left exposed.
The culture of the small payoff will help people to remember the old practices, of first ensuring the food of the family for the year. Of maybe diversifying production. Processing food and saving it. Generating work in so many things that have to be done every day. Saving for lean times. Having patience.
In this way a RSE, in addition to energizing the economy of a community, buying products from one and selling products to others, becomes a lamp. It helps the community to move from moment 1 to moment 2. The figure of the pyramid captures this realistic aspiration, the community does not cease to be vertical, but it is more inclusive, it becomes wider.
We have conceived of a RSE different from conventional businesses like storefronts, cheesemakers, farms, honey producers…that would be managed by families or associative organizations. Now we understand how RSEs, and any associative organization if it proposes and works as we have shown in these booklets, can avoid reproducing the drunkard´s curse, the big payoff, or “leave it to me” culture.
The role of RSEs seems to be getting clearer day by day, as when fog dissipates and allows us to see farms, houses and roads up ahead. A RSE is not just to get income, not limited just to finances or just for making money; nor is it to reproduce the culture of the big payoff nor the drunkard´s curse. RSEs can have a transformational role in rural societies, becoming an antidote to the drunkard´s curse and despotism, to the extent that it draw a distinction with collective assets, develops a written and number culture, and daily works on what is tangible (service of store and roasting), and what is intangible (social relations with customers, new knowledge for innovating).
Each person should work for RSEs to be a means that help us revive our communities, make it possible for a person to discover their drunkard´s curse (“I am not a drunk!”), and get back on track, and together we get the entire community back on track.
 Rural Social Enterprises
 =3.4 acres