Social Enterprises or Solidarity Economy?

As I’ve been trying to link East Asian players of solidarity economy with their counterparts in the rest of the world, recently I’ve come across quite a few people who work for social enterprises and I realised that this term is much more popular here (in Japan, Korea, Taiwan, Hong Kong and recently in China too) than solidarity economy.  These two movements seem to pursue similar goals but I’d like to make clear the fundamental difference between these two concepts.

It’s quite important to remember the fact that the first initiative of social enterprise emerged in United Kingdom and that this spread into other countries, especially other English-speaking ones.   On the other hand, the use of the word “solidarity economy” is quite common in those countries where one of Romance languages is spoken, such as France, Italy, Spain, Canada (especially Québec), Latin America and Senegal.  And this explains why the term “solidarity economy” remains almost unknown in Asia, as nowadays the use of French, Spanish and Portuguese is very rare, if any, in this continent.

The key concept of social entrepreneurship is that you run a business with social and/or eco-friendly goals, such as creating jobs for the handicapped and providing microcredit to financially-excluded poor communities, not necessarily challenging the conventional capitalism.  That is why thousands of private-owned corporations with some social goals are also regarded as social enterprises, which is little plausible in case of solidarity economy.  And I found a conference on social entrepreneurship with HSBC as sponsor, but I can’t imagine this multinational financial institution working together solidarity economy.  Maybe they’re concerned rather about building a sustainable capitalism than about achieving social justice.

Solidarity economy, on the contrary, has been promoted as an alternative to the neoliberal globalisation, especially at World Social Forum, the counterforum for World Economic Forum, and players see any sort of capitalism as exploitative.  So workers’ coops and other sorts of cooperatives are the main players of this economy, although some social enterprises can fit into this category too.

I don’t think it’s a mere coincidence that these two different cultures have promoted different terms as these two are based on different socioeconomic values.  Nobody doubts that capitalism has been developed at best in Anglo-Saxon countries, and social entrepreneurship is much more convenient than solidarity economy for, at least, some people there since this will keep the very structure of capitalism intact while those with Latin passion tend to question it.  And in this sense Asia is so Anglo-Saxonised that the élites find it much easier to deal with social enterprises than solidarity-based cooperatives, also with the aim to preserve the capitalist principles.

Maybe I’m biased, but for me this is one of the biggest challenges I’ve ever faced with as promoter of solidarity economy, as Asians tend to prefer English-speaking world to the Latin world.  What can we do to trigger a paradigm shift here?

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5 responses to “Social Enterprises or Solidarity Economy?

  1. Thank you for this article Miguel. Yes, the concept of social economy goes beyond just an aggregation of enterprises with good intentions. Larger sized firms have guilty feeling funds (out of social responsibility, public and community relations, etc.) that are gradually creeping into the movement. But there are others as well and this makes the movement colourful, dynamics and young.

  2. Well, maybe I was wrong on writing as such, but this is what I’ve hunched so far. We’ve got to spend hours, if not days, to discuss it…

  3. Noel Longhurst

    Hi Miguel.

    I am Noel, who has just started with Gill Seyfang at the UEA in the UK, researching currencies. I saw you added me on Skype – look forward to speaking to you in due course.

    This is an interesting and timely post for me as I have recently been reading more about the ideas of the ‘solidarity economy’. You are right to suggest that there is very little discussion around this idea in the UK, whereas the idea of social enterprises has became quite mainstream.

    In the UK the social economy is usually equated to the third sector / civil society. Therefore it is usually seen as a separate sphere to the market / state. Some proponent do see it as a site of potentially transformative action. E.g. when LETS was really taking off there was the belief a parallel economy could be built.

    A different reading sees it as a site of complementary activity to the state and market which needs to be recognised e.g. co-production.

    A third reading would say that it is in-fact a reflection of neo-liberalism based on ideas of self-help and the idea that social purpose organisations need to engage with the market in order to sustain themselves.

    I guess the first of these meanings is perhaps the closest to the solidarity economy but, like I say, there is more disagreement over its definition in the UK and this is certainly the minority understanding.

    I would add that the general understanding in the UK is that social enterprises have a not-for-private-profit structure. I think that the concept of an ‘ethical’ business is far more difficult to pin down, not to say that there are not ethical businesses. I think this is closer to what you are talking about.

    I am also suspicious of the tendency to assume that co-operatives (or even Non-profits) are automatically ethically benign. It maybe that in some senses (e.g. Marxist) that they are a more ethical structure but that does not guarantee ethical behaviour. Many financial services organisations use limited liability partnerships – effectively a co-operative structure. Julie Nelson has written a thoughtful book on this issue – Economics for Humans.

  4. Thank you, Noel, for your interesting post.

    Actually the word “solidarity economy” evolved from “social economy” and in Latin countries people have replaced “social economy” with “solidarity economy” (except in Canada where the use of “social economy” is still common), so the easiest way for you to understand solidarity economy is the reinterpretation of social economy, dealing not only with non-profits but also workers’ coops and other sorts of non-capitalist economic players. So I’d say you’re right on saying that your first reading is the closest.

    You’re also right in the sense that coops are by nature ethically benign. I remember having visited a non-profit at Paris in 2004 which was working for the “social balance sheet”, i.e. what kind of positive and negative effects a corporation / coop / NGO etc. gives to the society. It would be worth studying and applying it…

    In the English-speaking countries, US has been recently doing good jobs in terms of solidarity economy. Have a look at http://populareconomics.org/ussen/ where you can get more info on solidarity economy…

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