Social Enterprise in Latin America

Theory, Models and Practice

Luiz Inácio Gaiger, Marthe Nyssens, Fernanda Wanderley, Luiz Inácio Gaiger, Marthe Nyssens, Fernanda Wanderley

• Publisher: Routledge
• Year: 2019
• eBook ISBN: 9780429619601
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

In the absence of a widely accepted and common definition of social enterprise (SE), a large research project, the "International Comparative Social Enterprise Models" (ICSEM) Project, was carried out over a five-year period; it involved more than 200 researchers from 55 countries and relied on bottom-up approaches to capture the SE phenomenon. This strategy made it possible to take into account and give legitimacy to locally embedded approaches, thus resulting in an analysis encompassing a wide diversity of social enterprises, while simultaneously allowing for the identification of major SE models to delineate the field on common grounds at the international level.

These SE models reveal or confirm an overall trend towards new ways of sharing the responsibility for the common good in today's economies and societies. We tend to consider as good news the fact that social enterprises actually stem from all parts of the economy. Indeed, societies are facing many complex challenges at all levels, from the local to the global level. The diversity and internal variety of SE models are a sign of a broadly shared willingness to develop appropriate although sometimes embryonic—responses to these challenges, on the basis of innovative economic/business models driven by a social mission. In spite of their weaknesses, social enterprises may be seen as advocates for and vehicles of the general interest across the whole economy. Of course, the debate about privatisation, deregulation and globalised market competition—all factors that may hinder efforts in the search for the common good–has to be addressed as well.

The second of a series of four ICSEM books, Social Enterprise in Latin America will serve as a key reference and resource for teachers, researchers, students, experts, policy makers, journalists and other categories of people who want to acquire a broad understanding of the phenomena of social enterprise and social entrepreneurship as they emerge and develop across the world.

Part I
National Overviews of Social Enterprise

1 Social- and Solidarity-Economy Organisations in Argentina

Diversity, Models and Perspectives¹

Gonzalo Vázquez

Introduction

The ICSEM Project aims to carry out a comparative identification and characterisation of the different social-enterprise models in a variety of national contexts. In Argentina, the concept of “social enterprise” (empresa social) is limited to one type of initiatives, namely organisational experiences that focus on the work integration of people with disabilities or mental health problems. Consequently, and in order to cover a greater number and diversity of initiatives existing in the country, we decided to use the more comprehensive concept of “social- and solidarity-economy organisations” (SSEO).

The comprehensive concept of SSEO adopted in this study intends to include a great variety of organisations that can be considered to be part of the field of the social and solidarity economy in Argentina, and which share, to a greater or lesser extent, the following characteristics: they are associative experiences engaged in a given kind of economic activity (productive, financial, commercial or consumer activity), organised according to the principles of self-management, participation and internal democracy, and which pursue social and political objectives directed towards satisfying the needs of their members and communities, through social integration and transformation.

Nevertheless, the concept of SSEO that we are proposing relates without major problems with that of “social enterprise” proposed by the ICSEM Project. For the ICSEM Project, a broad definition has been proposed to delineate what can be called “social enterprises” as “organisations that combine an entrepreneurial dynamic to provide services or goods with the primacy of their social aims”. Moreover, a hypothesis was central to the project: three major dimensions would particularly inform the diversity of SE models: the nature of the social mission or social aims, the type of economic model and the governance structure. This hypothesis is embedded in the EMES approach to social enterprise, which proposes nine indicators: social enterprises (a) develop production activities and/or sell goods or services, (b) on the basis of a minimum amount of paid labour, and (c) they face a significant amount of economic risk (economic dimension); they are (d) collective initiatives fostered by groups of people and organisations, (e) with explicit social objectives, and (f) they limit and direct the distribution of their income and surpluses (social dimension); lastly, the governance of these organisations (g) is based on the autonomy and self-management of their members, through (h) democratic mechanisms of decision-making, based on member equality and on (i) the active participation of the different stakeholders interested in the project (governance dimension) (Defourny and Nyssens 2012).

These nine indicators are focused on the internal governance of social enterprises, but the EMES approach is not restricted to this aspect. Indeed, according to EMES, social enterprises also have a special place in society. They pursue simultaneously economic, social and political goals (Defourny and Nyssens 2006). They are economic actors but they do not rely exclusively on the market. As the EMES indicators state, the financial viability of social enterprises depends on their members’ efforts to secure adequate resources to support the enterprise’s social mission, but these resources can have a hybrid character: they may come from trading activities, but also—to borrow concepts from Polanyi’s substantive approach—from redistribution and reciprocity (Defourny and Nyssens 2006; Gardin 2006). Social enterprises pursue social goals connected to their social mission; their political goals refer to their “political embeddedness”, which sheds light on the fact that SEs have a role in the constitution of a democratic framework for economic activity (Laville et al. 2006).

The main purpose of this chapter is to elaborate a proposal of identification and characterisation of the different types of SSEOs in the Argentinian context by classifying them into five main models. Before that, we present a brief historical framework of the Argentinian economy and an account of the emergence of the concepts and experiences that make up the field of the social and solidarity economy in the country. The chapter ends with some considerations regarding the particularities of Argentinian SSEOs in an international perspective, and their prospects in the current national and Latin American context.

1. Brief Historical Framework

In schematic terms, we can state that three different development models can be distinguished in Argentina throughout the country’s economic history, up to the beginning of the 21st century: the “agro-export model” (from 1880 to 1930), the “industrialisation model” (between 1930 and 1976) and the “neoliberal model” (from 1976 to 2001). So as to gain a better understanding of the experiences and organisations of the SSE in their historical national context, it is useful to provide a brief characterisation of these models and stages of the Argentinian development.

As regards the agro-export model, it was systematically promoted by the dominant sectors of Argentinian capitalism (landowners) since the beginning of the modern organisation of the nation, in the second half of the 19th century. This model was based on the productive specialisation of the agricultural and livestock sector, taking advantage of the temperate climate and fertile soil of the vast humid pampas. The production (mostly cereals and beef) was to be exported to the European markets, and especially to Great Britain—the world’s leading power at the time. At the same time, Argentina was a growing market for the core countries’ industrial goods and to carry out profitable capital investments in sectors related to agro-export activities (railways, ports, cold storage, banks, etc.). This economic model—which constituted a typical form of integration of a periphery-capitalism country in the world market²—generated a significant GDP growth and huge profits. But these benefits were exclusively appropriated by and concentrated in the hands of the dominant local class (large estate owners) and their foreign allies. The government, dominated by this “landowning oligarchy”, directed its policies and resources towards consolidating this model and did not pursue redistribution policies towards the less advantaged sectors. While the native indigenous peoples were either killed or expelled from their lands, the population of the country increased fourfold with a massive arrival of European (especially Spanish and Italian) immigrants, who were welcomed by the Argentinian state with openness, but without any major resources other than a public and free education of relatively good quality.

It was precisely from the knowledge, experiences and cultural traditions of the workers belonging to this immigrant European population that the first experiences of the social economy developed in Argentina: the first unions, mutuals and cooperatives emerged with the purpose of addressing the basic needs of their native communities and of the working class as a whole. Other cooperatives were fostered by small- and medium-scale businessmen, as a way to carry out their activities while confronting big monopolies and a financial sector which did not take them into consideration. Furthermore, many other cooperatives emerged to provide basic public services in small- and medium-sized towns. All these organisations, which can be considered as the “founders” of the social economy in Argentina, were created without the support of the state, which, in general, did not consider them to be within its purview (Plotinsky 2017).

The agro-export model was hit by a crisis in the 1930s, as the international commercial scheme within which it was inserted started to weaken, due to the new protectionist policies that the core countries were adopting in the face of the severe worldwide crisis of capitalism of the time. In this context, in particular during Juan D. Perón’s government (1946–1955), a new development model was launched. It was based on the increase of industrial production for domestic consumption. Due to Keynesian state policies of market regulation and income redistribution, there was an increase and growth in the sector of national capital enterprises, especially of the small- and medium-sized businesses. Fostered by this industrialisation model, full employment was attained and maintained for three decades, and salaries enabled the workers to sustain increasing levels of consumption and welfare. At the same time, universal social policies were introduced. They guaranteed the satisfaction of different needs (education, health care, housing, culture, leisure, etc.) for a big majority of the Argentinian population.

This context of a growing domestic market saw the emergence of many production, consumer and credit cooperatives (Levin and Verbeke 1997). The state also began to promote these initiatives: for example, in its first five-year plan, Perón’s government promoted agricultural cooperatives in rural areas and consumer cooperatives in the cities; its second five-year plan proposed the creation of a “large national cooperative system”, but this plan could not be implemented due to the coup that overthrew the Peronist government in 1955. The national institutions and laws that still regulate cooperatives and mutuals in Argentina were designed at the end of the industrialisation period, at the beginning of the 1970s (Plotinsky 2017).

Despite the social improvements described above, the industrialisation model could not be permanently consolidated in Argentina. This was so, in part, because of structural economic problems (the dependency on foreign goods, technologies and capitals; a national rentier and short-term-oriented bourgeoisie; etc.), and also because of the permanent political opposition exerted by the most powerful economic sectors (landowners who exported agricultural goods, big transnational companies and their representatives in the governments of the core countries and in international institutions), who never accepted the policies of market regulation and resource redistribution from the capital owners towards the workers that were advocated by the industrialisation scheme. This is why, in the context of a major internal political conflict, a change in the economic model was forcibly imposed by another coup on March 24, 1976. Any intention of popular resistance was eliminated by an extremely violent repressive policy, which included kidnapping, torturing and the disappearance and death of thousands of workers, students and political and social activists. This civil-military dictatorship, which lasted from 1976 to 1983, marked a point of inflection in the Argentinian history, and it heralded a period of profound economic, social and cultural degradation for the majority of the population.

The neoliberal model introduced by this dictatorship was subsequently reinforced during the democratically elected governments (mainly in the 1990s), which gave in to the pressures of the International Monetary Fund to adopt the policies of the so-called Washington Consensus, in the context of a new period of capitalist globalisation. The policies carried out during this period promoted the liberalisation and openness of goods and capital markets, the reduction of the role of the state in the economy (deregulation, privatisations and fiscal adjustments), the absence of protection for the national production facing foreign competition, a reduction in the real income of workers, and the deregulation of working conditions. In the Argentinian economy, these policies resulted in a strong deindustrialisation process, the disappearance of a large number of national enterprises (mainly small- and medium-sized businesses) that produced for the domestic market, an unprecedented increase in unemployment and, consequently, the impoverishment and social exclusion of large sectors of the Argentinian population.

The organisations of the social economy were greatly harmed by the neoliberal policies. Due to the fact that they are organisations promoting democratic and participative relations at the community level, the 1976 coup considered them a potential enemy and, for that reason, it left them unprotected and legislated against their interests. For example, an act forced more than 400 cooperative credit unions to turn into commercial banks in order to continue operating, and another act forbid cooperatives to be media licensees (Plotinsky 2017). With the policies of market openness and deregulation, the organisations of the social economy were forced to compete against big corporations in concentrated markets; as a consequence, many credit, farmers’ and consumer cooperatives ceased to exist, lost their members or sacrificed a significant part of their cooperative identity in order to survive (Levin and Verbeke 1997). Only one type of organisation of the social and solidarity economy grew strongly in number: worker cooperatives and entrepreneurial initiatives self-managed by their workers, which became associative alternatives sheltering their members from unemployment and spaces of resistance. A good example hereof are the “recovered enterprises” (empresas recuperadas, i.e. enterprises taken over by their workers, usually after a capitalist company closure) that emerged in the 1990s.

The neoliberal policies plunged Argentina into a long and deep economic crisis, which reached its peak with the social and political outburst of December 2001, which expressed a popular rejection of the model of the time and a demand for a radical change in public policies. So, between 2003 and 2015, during the Peronist governments of Néstor and Cristina Kirchner, the liberal recipes were abandoned, and policies were implemented to reindustrialise the economy and to protect employment and domestic consumption, as well as to support state intervention of a redistributive character oriented towards the expansion of the public welfare system. This happened in the context of a regional trend towards popular and/or left-wing governments in almost all South America (Chávez in Venezuela, Lula in Brazil, Evo Morales in Bolivia, Correa in Ecuador, etc.), which brought about significant processes of expansion of rights and improvements in the majorities’ well-being, after decades of degradation brought about by ...

Table of contents

• Cover
• Half Title
• Series
• Title
• Copyright
• Contents
• List of Tables
• List of Figures
• Preface and Acknowledgements
• List of Editors and Contributors
• Introduction: Social Enterprise in Latin America: Context and Concepts
• PART I National Overviews of Social Enterprise
• PART II Comparative Analysis and Perspectives Across Latin America Countries
• Index