In Solidarity Against the Logic of Profit!

Article published on July 1, 2004
community published
Article published on July 1, 2004

This article has not been vetted by an editor at Paris HQ

It is often ignored or looked upon as outdated or utopian, yet the social economy is the one most adapted to the challenge of fighting unemployment in Europe.

For the majority of European citizens the social economy remains an elusive concept. This is to be expected - it is not taught in schools and most university economics departments merely touch on it in passing, even though it is an actively expanding area, employing more and more people. By analogy, the explosion in the number of higher degree courses in France specialising in social economy reflects a growing interest in this area.

The case remains that whilst an increasing number of Europeans have already heard about the social economy, few would be able to define what it involves. Yet it is a credible alternative to the market economy - and, as it happens, just as old - and which is not external to the system but located within it. It even accounts for around 10% of the jobs in the European economy. The international centre for research and information on the public, social and cooperative economy (CIRIEC) estimates the number of jobs in the social economy in the Old EU 15 (before Enlargement) to be equivalent to 8.88 million full time jobs, of which 71% are provided by associations, 3% by mutual benfit societies and 26% by cooperatives. These three legal entities comprise the large part of the organisations in the social economy, even if the definition of the latter continues to vary depending on whom you are speaking to and what country you are in. In France, we often talk of "a social and solidarity-based economy" including the charitable sector, but the term social economy generally covers the field of solidarity.

Inside the capitalist system

In effect, the social economy is, by its very nature, one governed by solidarity: these are businesses made up of people, not capital, brought together through a collective aim, democratically organised and, in many cases, having a social use. Within it, there are as many associations (carrying out an economic activity, and therefore with salaried employees) and mutuals (businesses where there is a collective sharing of risk) as cooperatives (consumer- or producer-led, which in France are divided between a large number of statutes). The term "third sector" is often used to bring together these three different legal entities, with the meaning that they are neither public nor private but somewhere in between the two. The state often plays an important role by way of subsidies, tax reductions or providing a legislative framework. However, the structures of the social economy are not isolated in their own bubble and often compete on the market with private enterprise, thus demonstrating that they are capable of holding their own even though they do not fight with the same weapons. It is often the most suitable context for young people who want to launch their careers whilst being certain of keeping control over them in the long term. Sometimes it's those associations aimed at social insertion which offer the best environment for those who have been unemployed and who, after a transitional phase, are normally able to reintegrate into the jobs market.

Why the social economy is a future solution

In an organisation that is part of the social economy it is impossible to be fired because the management are looking to raise productivity: The aims of an association or cooperative are not to make profit but to undertake a sustainable economic activity. Let's take for example the employee cooperatives known as "Scop" in France which are anonymous societies where the capital belongs mainly to the employees who elect the management and whose capital cannot be the subject of speculation. These are businesses which are virtuous in more ways than one. In the end, the employees are better paid than elsewhere because a portion of the profit is given back to them on the basis of their participation. The gap between the smallest and the largest salary is much less marked than in the average business which is one of the reasons why they have posted a net growth in numbers of 15% over the last five years in France. Contrary to popular belief, the employees cooperatives are not all small businesses which cannot develop: in Spain and Italy some of them account for tens of thousands of employees whilst in France the groupe Chèque Déjeuner has 800. Cooperatives are to be found in very dynamic sectors and are developing in the service sector, particularly among the highly educated. Employees are not subject to a purely capitalist logic since they control the future of the business through their voting rights, in what is a unique example of how capital and work can be reconciled. Above all, such businesses are sustainable because they cannot be bought and sold at a value superior than their starting capital: so there is no incentive to public purchase offers.

The future of the social economy in Europe

Adapted to the market economy and full of promise for the future, the social economy is present and thriving, above all in Europe where attempts are underway to bring about uniform statutes. A Statute for a European Cooperative Society was adopted in July 2003 but we will have to wait until 2006 for it to enter into force. This should allow transnational projects of a cooperative nature to be launched without replacing the statutes existing in the Member States. The European Union already considers the social economy as a creator of jobs for the future, all that remains is to provide the means to encourage it.