Social and Solidarity Economy

Beyond the Fringe

Peter Utting

• Publisher: Zed Books
• Year: 2015
• Print ISBN: 9781783603459
• eBook ISBN: 9781783603473
• Edition: 1
• Topic: Social Sciences
• Subtopic: Sustainable Development
• Index: Social Sciences

As economic crises, growing inequality and climate change prompt a global debate on the meaning and trajectory of development, increasing attention is focusing on 'social and solidarity economy' as a distinctive approach to sustainable and rights-based development. While we are beginning to understand what social and solidarity economy is, what it promises and how it differs from 'business as usual', we know far less about whether it can really move beyond its fringe status in many countries and regions. Under what conditions can social and solidarity economy scale up and scale out - that is, expand in terms of the growth of social and solidarity economy organizations and enterprises, or spread horizontally within given territories? Bringing together leading researchers, blending theoretical and empirical analysis, and drawing on experiences and case studies from multiple countries and regions, this volume addresses these questions. In so doing, it aims to inform a broad constituency of development actors, including scholars, practitioners, activists and policy makers.

PART I

HISTORY, THEORY AND STRATEGY

1 | SOCIAL AND SOLIDARITY ECONOMY IN HISTORICAL PERSPECTIVE

Jean-Louis Laville

Introduction

To understand the challenges of expanding and consolidating social and solidarity economy (SSE), it is important to examine how such forms of institutions evolved historically. Over two centuries, there have been numerous changes in their character and trajectories, largely accounted for by the relations between state, market and society. This type of analysis is essential if we are to understand both the structural and the institutional determinants of scaling up and the substance of SSE.

As the introduction to this volume explains, the umbrella concept of SSE encompasses very different types of enterprises and associations: cooperatives, mutual associations, social enterprises and non-governmental organisations (NGOs), among others. In this chapter we argue that different historical junctures generate contexts that largely explain the rise and fall of different forms of SSE. Drawing in particular on the experience of Europe and South America, this chapter begins by examining the evolution of democratic solidarity throughout the nineteenth and twentieth centuries, identifying various shifts in orientation. These involved: early forms of associative democracy, the ‘welfare state’, social economy centred on non-profits and cooperatives; and, more recently, solidarity economy, focused on both economic and political empowerment. It then goes on to specify key differences between these forms and their implications for environmental and social justice.

Market and solidarity in nineteenth-century Europe

The invention of modern solidarity emerged in the early nineteenth century, in the wake of democratic revolutions. The notion of a modern solidarity was defined as an integrating force, not anchored on inherited relations (those of family, kinship and lineage) but created in a deliberate way by humans having acquired clear awareness of the societal bonds that connect them. This recognises the importance of a social link that is neither rooted in religious feeling – as, for example, in the case of charity – nor able to be reduced to a contractual relationship. This also underlines the intentional aspect of this modern solidarity, which acknowledges the interdependency of individuals and groups. Consequently, the move into modernity was not simply a move from community to society; rather, it was characterised by the condition of an open political community that overcomes differences and promotes equality through the recognition of public spaces.

In the first part of the nineteenth century – the era of revolutions, to use Hobsbawm’s (1962) expression – modern solidarity was mostly expressed through people organising themselves collectively in associations. Groups that were denied dignity as citizens and suffered exploitation rebelled against their exclusion and poor treatment. The contradiction between alleged equality and the persistence of inequalities placed in sharp relief the incompatibility of political freedom and economic subservience. The solidarity that was being called upon to claim a more open public space was also invoked to organise the economy on an egalitarian basis. In this first stage, a move occurred towards the mushrooming of all types of associations (Dewey 1953). The unfolding of modern solidarity could logically be said to be democratic. It focused on mutual help as much as on protest activities, and had characteristics of collective action through both the self-organisation of workers and producers and contestation via social movements, which implied equal rights among the people involved. On the basis of free access to the public domain for all citizens, it aimed to reinforce political democracy through economic and social democracy. It was thus a moral economy of popular origin (Scott 1976; Thompson 1963) that was undergoing experimentation aimed at maintaining common goods, reinforced by reciprocal obligations and shared conceptions of rights.

In the second part of the nineteenth century, this momentum was cut short. Another definition of solidarity emerged as an alternative to solidarity defined as a principle of democratisation resulting from collective action. The vocabulary of equality was replaced by that of benevolence and paternalism. Philanthropic solidarity corresponded to this second form of modern solidarity, which referred to a vision of an ethical society in which citizens motivated by altruism fulfilled their duties to each other on a voluntary basis. This evolution was inseparable from a pessimistic perspective on liberalism, haunted by pauperism, which recommended both helping the poor and controlling their behaviour. The moral economy of pioneering friendly and mutual societies was therefore replaced by an enterprise of moralisation of the poor, according to Thompson (1963).

Philanthropic solidarity replaced the fight for equality with the fight against poverty, and made solidarity a private affair and an individual responsibility. Supported by advocates of the established order, philanthropic solidarity redrew the associative landscape. By repressing independent associations, by discouraging workers’ associations and by simultaneously encouraging charities and patronising associations, this reinterpretation of the nature of associative activity complemented efforts to reinforce the economy by linking power with shareholding. This second stage corresponded to the advent of the ideology of progress, which prioritised the Industrial Revolution and economic growth in order to increase the wealth of nations and to eliminate poverty and social conflict. However, despite the advantages that derived from philanthropic solidarity, the social question remained. Ongoing threats to civil peace made the philanthropic solution untenable; inequalities in the human condition could not be attributed to the responsibility of the individual, and, by the end of the nineteenth century, the fundamental limits of philanthropic solidarity had become apparent.

Bringing in the twentieth-century state

Democratic solidarity regained the upper hand when sociological inquiry opposed economic liberalism and reaffirmed the concern for social cohesion. The holistic vision of society as more than the sum of the individuals of which it was composed critiqued an approach to solidarity confined to the private sphere; it stressed the public dimension of solidarity, centred on rights. However, this form of democratic solidarity differed from earlier versions. Faith in associations was replaced by control of the market by public authorities. The state promoted a specific social mode of organisation, which made it possible to extend the market economy while making it compatible with the citizenship of workers. The divides caused by the market economy had to be corrected through policy and legal interventions – hence the concept of social rights that combined workers’ rights within the enterprise with social protection aiming to protect workers against specific risks. The social question led to the separation of the economic (specifically, the market economy) and the social (i.e. a legal mode of protection of society). Such a compromise, based on the partition and complementarity of the market and the social state, was reinforced progressively. After the Second World War, when it proved necessary to support national consensus, this complementarity between the state and the market attained its full significance. The development model that was stabilised in twentieth-century Europe was based on the synergy between the market and the state, which had the effect of crowding out various forms of associative activity. The Keynesian state aimed to enhance economic development through the use of new tools of knowledge and intervention. Public investment in sectors deemed particularly viable, and labour market policy aimed at working conditions and wages, made it possible to find stable ways to accommodate the particular interests of enterprises alongside the general interest of society. But the main shift was in income redistribution, through which the social state became the so-called ‘welfare state’: the setting up of the latter aimed to fulfil the promise to protect citizens from illness, accidents, old age and unemployment. The generalisation of social protection had to ensure security for a population that had endured the Depression of the 1930s and the sacrifices of two World Wars. The welfare state extended the previous forms of social state with social security and generalised social protection systems. At the same time, the state framed and supported the market as much as it corrected market inequalities; the synergy between the state and the market was expressed, in particular, through new institutional arrangements, including social security and collective bargaining, as well as by gains in productivity.

Crisis, civil society and social innovation

The socio-economic compromise described above underwent a cultural crisis in the 1970s with the rise of experiments in both self-management and new social movements, which unsettled the culture underlying the synergy between the market and the state. Conflicts in enterprises no longer concerned merely collective negotiation, centred on the distribution of the value-added. Contestation also emerged around modes of organisation and the lack of opportunities for salaried workers to express themselves. The trend towards workers’ self-management reflected these demands, and resembled earlier forms of associative democracy by distancing itself from the representation granted to workers’ movements in industrial society.

More importantly, the nature of contestation could no longer be reduced to the clash between capital and labour; it extended to consumption and ways of life. Although the rallying cries of the new social movements remained disparate, anti-nuclear, environmental and feminist protests articulated and popularised new questions around the social and environmental costs of ‘progress’ and commodification. Standards and aspirations imposed during the post-war growth period were no longer self-evident. Claims for a better quality of life emerged. What was questioned was the very basis of the development model, which hitherto had enjoyed a broad consensus. The ideology of progress was questioned seriously, as was the future of economic society (i.e. a society shaped by the struggle against scarcity and by productivism) more broadly. These questions led to changes in forms of public intervention. Political activism and social innovation combined to question the status quo and the balance of power, and led to experiments with alternative ways of organising production and exchange.

However, the self-management and alternative trends that had fed upon the social effervescence that followed on from the May 1968 protests in France soon lost their momentum. The capacity of new social movements to attract and unite declined. Their participants began to disperse to other civil society initiatives aimed at building new ways of producing, providing services and living. Some occupied the growing space for NGOs, which, from the neoclassical economics perspective, were a response to market failures in the provision of individual services and to state failures in the provision of collective services. According to this viewpoint, not only were the market, state and non-profit sector separated conceptually, but the latter was promoted as a second- or third-rank option, to be adopted only when the solutions provided by the market and the state were deemed inadequate (Evers and Laville 2004). Some proponents of the non-profit sector also adopted an ideological view that this sector could justify the withdrawal of the state.

In numerous other respects the non-profit model proved problematic from the perspective of democratic solidarity and collective action. The key role of the non-distribution constraint as the basis for legitimacy and trust soon weakened. The reputation of NGOs was often tarnished by elite capture – excessively cosy relationships with states, politicians and business, and the obvious connection of NGO activity with the personal material interests of those who controlled them. Furthermore, market activity through, for example, consultancy and local ‘proximity services’ (such as educational training or care for the elderly and infirm) penetrated the ‘non-profit’ field. Other mechanisms for cultivating trust, related to standards and certification, also came to the fore and were adopted by for-profit enterprises that began to compete in the trustworthiness stakes through the discourse and practices of corporate social responsibility.

Under the non-profit model, human decisions often conform to ‘rational choice’. In this model, ‘society’ results from the activity of individuals and their interest-oriented choices, which aim to maximise their advantages (Etzioni 1988). The role of non-profit organisations (NPOs) is restricted to the production of services; other important dimensions, such as social integration and democratic participation, tend to be sidelined.

Beyond the usual NPO and NGO models, some innovations and organisational forms were precursors to ‘another world is possible’, the scenario popularised by the alter-globalisation movement via the World Social Forum. Various forms of social innovation saw workers and producers re-engaging with economic activities, as though the democratisation of society required the democratisation of the economy. Moreover, these experiences concerned not only production but also consumption and ways of life. Social innovations are observed in local proximity services, fair trade, solidarity tourism, organic agriculture, ethical consumption, short supply chains, renewable energies, recycling and waste valorisation, heritage preservation, microfinance and social currencies, for example. These social innovations involve a redefinition of the social contract on the basis of democratic solidarity. Proponents of this trend are concerned about threats (such as climate change) and irreversible damage to ‘natural capital’, which no amount of technical capital can replace and which, consequently, should be protected from the logic of the market. They are also concerned with threats to human and social capital, particularly when inequalities grow, and care, education and health are no longer preserved as public or commons goods (Ostrom 1990). This strong version of solidarity puts economy back into its role as a means to achieve goals of social justice and environmental sustainability, whose content results from political deliberation.

Social and solidarity economy: a new twenty-first-century synergy?

In the nineteenth century, solidarity via associations that combined economic, social and political objectives gave way to a social economy comprising a set of organisations with non-capitalist status (cooperatives, associations, mutual societies). But during most of the twentieth century, while such organisations had some economic weight, they had no real political strength. As described above, the social innovations of the last part of the twentieth century were categorised in Europe and South America under the term ‘solidarity economy’. This shares commonalities with the social economy but it revives a more political dimension, and it can be defined as a set of activities contributing to democratise the economy through citizens’ involvement. According to Lipietz (2001), the solidarity economy adds to the social economy – which focuses on internal functioning – an awareness of the importance of the goals pursued (from environmental to cultural goals) and a necessity to complement formal equality among members with modes of direct participation.

The tradition of social economy and the resurgence of associative democracy in the late twentieth century have generated a new theoretical perspective: the SSE. It critiques the non-profit approach, which tends to dominate international development discourse regarding the role and nature of civil society, and it creates an original framework of analysis by mixing social economy and solidarity economy viewpoints. The core elements of each approach, which are now coming together both conceptually and strategically, include those discussed below.

The social economy The term ‘social economy’, as understood in Europe, defines a set of organisations that is broader than the non-profit sector (Salamon and Anheier 1997). Indeed, ‘non-profit’ excludes cooperatives and mutual societies on the grounds that they can distribute part of their profits to their members. This exclusion cannot be justified in many continental contexts for several reasons. Firstly, some cooperatives, such as building cooperatives in Sweden, have never distributed any profits. Secondly, in all cases the distribution of profits is limited, since cooperatives and mutual societies are akin to associations: the...

Table of contents

• Cover
• About the Author
• Title
• Copyright
• Contents
• Figures and Tables
• Abbreviations and Acronyms
• Preface
• Introduction: The challenge of scaling up social and solidarity economy
• Part I: History, theory and strategy
• Part II: Collective action and solidarity in practice
• Notes
• About the contributors
• Bibliography
• Index