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Defining the Social Economy

Theory of the Social Economy

Module BAM450


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Structure of the presentation

Legal EU definition

Brief history of development

Outline of three competing definitions

Moving forward: social enterprise or aneconomy of solidarity?


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The formal EU definition Since 1989 the social economy has

been the responsibility of the

Commissions Employment and SocialAffairs DG which defines it as including:

Cooperatives

MutualsAssociations

Foundations


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Vaguely analagous alternative

terms for the social economy: Non-profit sector: cannot make profits

Not-for-profit sector: can make profits

but not primary motivation Solidarity economy: in support of the

poor, e.g. fair trade

Alternative economy: motivated by, e.g.concern for the environment

Third system [otherwise: third sector]


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History and background of the

term French term economie sociale first

used by Charles Dunoyer in 1830 in his

paper called Nouveau trait dconomiesociale.

This was a paternalistic notion based ina Catholic attempt to counteract classconflict

(Westlund, 2003).


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What was happening in Paris

in 1830?


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Anthropology of human

societies Side by side with family housekeeping, there

have been three principles of production anddistribution:

Reciprocity Redistribution Market Prior to the market revolution, humanitys

economic relations were subordinate to thesocial. Now economic relations are nowgenerally superior to social ones.


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Root of social economy in

workers movements Various traditions--socialist, Christian, liberal (Owen,

Saint-Simon, Fourier, Proudhon). Context was industrialization, proletarianization and

pauperization Multifunctional associations aiming to create a micro-

social space of solidarity and to step in as actors inthe area of economic organization, both at the levelof production and at the level of distribution.

Made some use of traditional types of solidarity(families, corporations), but grounded in principles ofliberty and equality between members.

(Nyssens, 1997: 178-9).


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Social economy as the third

way In the conflict between capitalism and socialism

which characterized twentieth century Europe, thesocial economy became a "third" way. (Westlund,

2003: 1193). State involvement in social services ended the

multifunctionality of the third sector. mutual benefit societies specialized in social

protection

cooperatives confined their activities to consumption trade unions turned to the workers struggle. Dissociation between the economic (the sphere of

the market) and the social (the sphere of the state).(Nyssens, 1997: 179).


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Nyssens definition Essentially seeing the social economy as

filling gaps left by the private and public

sectors Generates three poles of economic

activity


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Evolution of social economy in

three stages1. Network-based associations with various

functions arising to solve specific problems,

with both an economic and a politicalidentity.

2. Integration into a modernization projectthat favoured the market-state synergy:

marginalization.

3. A revitalization following the crisis of themarket-state relationship


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In the South, the popular economy turns outto be not only a means of survival in the faceof economic adversity, but also a means ofpolitical, social and cultural resistance,particularly via a rekindling of the associativeflame. . . In the North, the burgeoning ofnonprofit organizations producing goods andservices at the community levels appears as aparticular response to the crisis inemployment and the welfare state


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Westlunds definition Revolves around the nature of relationships

Reciprocity can be described in terms of

give-and-take in a relationship betweenactors who, to a certain extent are equals. . .Mutuality is often used as a synonym forreciprocity. . . Reciprocity of social relations

creates mutuality of economic relations, butmutuality in economic transactions is noguarantee of reciprocity in social relations.


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Like the family economy the social economy is basedon reciprocity; unlike the family economy kinship isnot involved;

The market economy and public sector are based onmonetary exchange; the social economy is not;

The public sector is based on official legislation,whereas the social economy is based on commonality

of interests and values; The market economy and public sector are based

primarily on material capital whereas the socialeconomy is based primarily on social capital.


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Pearces definition

Complex and based on 'systems

It attempts to include all the different

types of organization that exist in amodern economy, which is a strengthas well as a weakness

Inclusion of the level, from local toglobal, is useful

It does not deal adequately with coops


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WIRC definition

A pragmatic, operational definition

Our defining scalpels are ownership and

control The following dimensions are significant:

Ownership

Control Values

Product

Source of finance


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Ownership Control Product Finance Values

Tower Colliery Workers Workers/management Economic Employees/private Mutualistic

OMSCO

(organic milk

suppliers

cooperative)

Joint/workers ? Economic Private/members Mutualistic(organic)

Local ESOP? Worker/shareholders Managers Economic Employees/private Market

Glas Cymru Trust? Managers Public good Private Mutualistic?No

Community

enterprise Workers Employees?Committee? Social Public MutualisticNewtownCredit Union Members Members Financial Members MutualisticFoundation

hospital State? Members Social Public Market?Ty Hafan

childrens

hospiceNon-profit Managers Social Charitable Philan-

thropic


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The future? Social enterpriseor an economy of solidarity?

Social enterprise originated in the US

A form of mutual activity acceptable

within a market economy?

A useful tool for politicians wishing toreduce the role of the state? E.g. social

housing


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Social enterprise

referring to market-oriented economicactivities serving a social goal. The

social enterprise is then viewed as aninnovative response to the fundingproblems of non-profit organizations,which are finding it increasingly difficult

to solicit private donations andgovernment and foundation grants.(Defourney and Nyssens, 2006).


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Criteria for a social enterprisepace WISE

A continuous activity, producing and selling goods and/orservices

A high degree of autonomy A significant level of economic risk A minimum amount of paid work An explicit aim to benefit the community An initiative launched by a group of citizens Decision-making power not based on capital ownership

A partipatory nature, which involves the various partiesaffected by the activity

Limited profit distribution


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An economy of solidarity?

The projects of an economy of solidarity havea tendency to reunite that which has long

been separated and to question somepresuppositions of the market-state synergy:the separation between the economic and thesocial, the sharp dividing line between paid

work and leisure, the states monopoly onsolidarity, the market-state dichotomy, and soon.


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Characteristics

Bottom-upwhat we might have calledmutualism

Anti-capitalist? At least anti-globalisation

Importance of the locallevel of control

Reduction of consumption and respectfor the planeta partially new concern


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An economy of emancipationand co-operation

Why produce only as a function of an unjust marketthat depletes and exploits, denying us the chance tomanage both the production and the economy for

our own service, for the service of all citizens, and ofall peoples of the planet, as well as for futuregenerations?Our proposal is a socioeconomy ofsolidarity as a way of life that encompasses thetotality of the human being, that announces a new

culture and a new form of producing to fulfill theneeds of each human being and of the entirehumanity.

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