The social economy: a never-ending story

Published on December 30, 2004

Story by

catherine palpant

Translation by:

catherine anne drewett

So is the not-for-profit sector the new face of the economy? It would not seem so. The roots of the social economy can in fact be traced back to the Middle Ages, with its guilds, brotherhoods and aprenticeships, for example. Social Christianity is also a major source of inspiration, particularly from the beginning of the 19th century when, in response to the brutality of the industrial revolution, its first theoreticians appeared. It is in this way that the utopian socialism of Saint Simon sketched out a vision of an industrial system where the working classes united in 'citizens’ associations', in order to provide the best possible welfare. Thus, throughout the history of the labour movement, the social economy forged its own identity based on resistance to the construction of a society founded on profit.

Tools in the fight against social exclusion

In the second half of the 20th century, the first oil shock, the economic recession and a rise in unemployment all played a part in reinforcing the role of the social economy, though in different ways depending on the country. For example, in Spain, and similarly in the United Kingdom, budgetary restrictions drove the authorities to the partial privatisation of various welfare services. Market enterprise then seized hold of the lucrative part of the demand, leaving the insolvent sector to charitable organisations. In France and Italy, however, the state remained financially engaged.

Tools in the fight against social exclusion, such as centres of innovation and socially responsible businesses, increased in number during the crisis in the 1980s. These often represented a reaction to new needs, brought on by the local and regional authorities’ inability to think up and implement effective solutions. And so a new form of social economy was born: a socially responsible economy (l'économie solidaire).

United in solidarity, but not left-wing

This new type of social economy breaks with certain aspects of workers' traditional methods in the struggle against misery. At its heart can be found the most militant, yet also most fragile, organisations: Life Skills organisations; organisations which deal with improving the quality of life and habitat in a neighbourhood; intermediary associations who employ people in difficulty to take on tasks which are not covered by the traditional private sector; small cooperatives who provide local services like catering, meals on wheels, ironing, cleaning, sewing, and home help. These kinds of projects may seem very left-wing, but in fact the relationship between the social economy and left-wing parties and unions is rather complex. In Europe, the influence of right-wing Social Democratic and Christian Democratic parties has traditionally relied on a good relationship with the unions and cooperatives. Yet left-wing political parties have not promoted the social economy as a social and political prioity.

8.8 million jobs

The social economy comes in many forms. In France, Italy, Spain and Germany, it tends to manifest itself as mutual insurance companies, cooperatives, associations and foundations. In Great Britain it is non-profit organisations - such as self-help associations, charities or the voluntary sector - which constitute the social economy. In the pre-enlarged EU, the players in the social economy accounted for an estimated 8.88 million jobs, 71% of which were in charitable organisations, 3% in mutual insurance companies and 26% in cooperatives.

And what about the future? An act allowing for the creation of 'European Cooperative Societies' was passed in June 2003. From 2006, the year in which the statute comes into force, it should be possible to establish transnational cooperatives whilst maintaining their status in existing member countries. Though considered an economic 'heavy-weight' by the European Union, as well as being an extraordinary source of jobs, the social economy remains a sector which is still largely unheard of by citizens or public authorities. A new level of awareness will perhaps be brought about by the dynamism of the EU's new member states. It was they who initiated the second European Social Economy Conference, held last October in Krakow, which brought together major players from across Europe and created a forum for the social economy, the like of which has not been seen for far too long.

Story by

catherine palpant

Translated from L’économie sociale, une histoire au long cours