Social economy is the future

Article published on Dec. 20, 2004
community published
Article published on Dec. 20, 2004

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

Young anti-globalisation demonstrators protesting about exploitation by big companies don’t seem to realise that what they are looking for already exists…

During the second European Social Economy Conference held in Krakow this October, I found out that my favourite cosmetics are being produced by a co-operative. I was nicely surprised to see that a company manufacturing attractive and competitive products can be built on the principle ‘human beings before profit’. The exhibition of items produced by co-operatives during the conference was meant to prove that co-operatives in Poland are doing all right. However, although the conference itself could be an important step in fostering the development of social economy enterprises, in Central and Eastern Europe this type of business still has got a long way to go before being considered as a successful one.

The next big thing?

On talking to Thierry Jeantet, general manager of the not-for-profit insurance consortium Euresa, the social economy seems like the only logical way forward: capitalism is an old, unequal system and it needs to be replaced by a model built on solidarity, with ethical and social principles. But observing the situation in Central and Eastern Europe, one may doubt whether the social economy really is the next big thing. During the '90s associations, NGOs and other forms of not-for-profit enterprises were popping up like mushrooms after the rain, but they have settled mostly in big cities, leaving rural areas unconnected. Moreover, the people involved in this ‘third sector’ are usually those with higher education so the percentage of average citizens participating in it is small.

Out of all the forms of the social economy in Central and Eastern Europe, co-operatives* have perhaps fared the worst and have undergone a rapid decline in recent years. There were a great number of co-operatives operating during the communist period, but they existed as quasi-state agencies whereby they were incorporated into national economic policy and their activities were subject to governmental interference. Key positions within the co-operatives were occupied by people appointed by the state and their bureaucratisation, together with their monopolistic position, gave co-operatives a bad reputation that affects the current situation. Seen as a relic of the old regime, this form of the social economy doesn't find too much support among the young. Andrzej Cichon, of the Polish Saddlers' Co-operative, claims that business is going OK but since the majority of its members are now around 50 years-old the co-operative lacks “young blood”, which does not bode well for the future. Another problem for co-operatives is that the education system doesn't even mention them so youngsters don't know what they are or, if they do, they don't believe that this kind of business can be competitive with normal firms. “They tend to believe that everything that is not state-owned or social is good”, admits Cichon. He hopes, however, that membership to the European Union will change the situation as easier access to its market and additional funds may win more support for co-operatives.

Image problems

The negative public perception of the social economy brought about by communism, coupled with the neo-liberal ideology adopted after its fall, has not made life easy for social enterprises. As commercial privatisation is praised, the social economy hasn't gained significant political recognition. Not only has its role and importance been neglected but, as it was pointed out during the conference in Krakow, it experienced discrimination due to its association with the former system. As a result, during the transition period, when so many people were left out and they urgently needed some kind of help in order to find their way in the new, capitalist reality, the social economy was facing a serious crisis and wasn't able to respond to their needs.

Thus, the solidarity, co-operation and self-help that played such an important role in abolishing communist rule in the Central and Eastern European states, somehow faded once full independence was gained. Phillipe Saffray, who represents the mutual insurance company MACIF in Poland, argues that the challenge his company has to face is regaining the confidence and trust of Poles, who have put their faith in commercial insurance companies. When he tells people that the aim of mutual insurance companies isn't to sell products but, above all, to respond to the client's needs, he is considered either as a member of some kind of sect or an extremely canny salesman. These and many other problems that the social economy has to face in the Central and Eastern European region bring me to the conclusion that there is still a lot of work to be done if people are to be given the chance of adjusting to the market economy without losing the values of co-operation and solidarity. However, as I found out at the conference, it is possible.

*A co-operative is an autonomous association of people united voluntarily to meet their common economic, social, and cultural needs through a jointly-owned and democratically-controlled enterprise