Social Economy

Definitions

1. Eric Olin Wright

"The term “social economy” has been used to cover a wide range of economic forms. Sometimes it is simply identified with the “non-profit sector”; other times it includes co-operative enterprises even if they produce for markets and compete with capitalist firms. Sometimes the social economy is defined in strictly negative terms as non-state and non-market enterprises.

Some writers, like the Quebec social economy activist Nancy Neamtam, include a specific set of internal organizational properties in the definition.

A social economy enterprise, she writes, is one that:

- aims to serve its members or the community, rather than simply striving for profit; is independent of the State; establishes a democratic decision-making process in its statutes and code of conduct, requiring that users and workers participate; prioritizes people and work over capital in the distribution of revenue and surplus; bases its activities on principles of participation, empowerment, and individual and collective responsibility.

I will define the social economy quite broadly as economic activity that is directly organized and controlled through the exercise of some form of social power. Social power is power rooted in the voluntary association of people in civil society and is based on the capacity to organize people for collective action of various sorts. The social economy involves the production and distribution of goods and services – economic activity – organized through the use of such social power.

This definition does not imply that every organization or enterprise in the “non-profit sector” is fully part of the social economy. Some non-profit organizations are basically arms of capitalist corporations or the state, rather than voluntary associations formed in civil society. Others have large endowments of capital which provide them with the resources needed to engage in their productive activities and are directed in the manner of a hierarchical corporation. Their control over economic activity is therefore based more on their use of economic power derived from their endowments than in their deployment of social power (i.e. power rooted in collective association in civil society.) What this suggests is that many organizations will have a mixed or hybrid character: they are examples of social economy activities to the extent that they are rooted in the associational life of civil society; they are statist or capitalist organizations to the extent that their power to engage in the production and distribution of goods and services is based on state power or economic power." (http://www.ssc.wisc.edu/~wright/ERU_files/ERU-CHAPTER-7-final.pdf)

Source: Chapter 7. Real Utopias II: social empowerment and the economy 137 ; Cited: Nancy Neamtan, “The Social Economy: finding a way between the market and the state”, Policy Options, July/August 2005, pp 71-76.

2. Solidarity Economy related definition:

"It is a term embracing the broad range of economic and social activity including that of community-based groups, cooperatives, small companies, buying groups, credit unions, and others who are engaged in market and economic development activity with the purpose of building sustainable communities and societies not just generating a positive financial return for the owners of the enterprise." (http://swinney.blogspot.com/2005/12/congress-on-solidarity-economy-dakar.html)