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RIPESS Working Paper on
Differences and Convergences in Social Solidarity Economy Concepts,
Definitions and Frameworks
drafted by Emily Kawano, Sept 10, 2011
Revised 10-20-11 after discussion with sub-group: Eric, Ana, Yvon, David, Sunil, Madani,
Emily
Working group: Ana Leighton, Red de Economía Solidaria de Santiago – Chile; Eric
Lavillunière, Institut Européen pour l’Économie Solidaire (INEES) – Luxembourg; Emily
Kawano, U.S. Solidarity Economy Network; Sunil Chitrakar, Mahaguthi Craft with a
Conscience – Nepal; Madani Koumare, Réseau National de Promotion d’Économie Sociale
et Solidaire – Mali; Francoise Wautiez, Alliance 21
This working paper came out of discussions, held at the RIPESS Board Meeting in Paris,
March 28-31, 2011. Our intent was to explore social solidarity economy concepts, definitions
and frameworks used in different continents and countries. Following a session that included
the whole board plus some guests, a working group met to further clarify and articulate
convergences and differences. Our goal was to deepen our understanding of each other’s
concepts, and the specificities of local contexts, rather than to reach agreement on a single
concept or definition. We did find however, that often what appeared at first glance to be
differences, disappeared or narrowed considerably in the process of deeper exploration.
We agreed on many broad aspects of the social solidarity economy:
1) The Social Solidarity Economy is an alternative to capitalism as well as other
authoritarian, state-dominated economic systems in which ordinary people play an
active role in shaping their economic lives.
2) Social solidarity economy is an ethical and values-based approach to economic
development (as opposed to growth) that prioritizes the welfare of people and planet
over profits and blind growth. We re-affirm the values expressed in the RIPESS
Charter which includes:
a. humanism
b. solidarity/mutualism/cooperation/reciprocity, including globalization of
solidarity (anti-imperialism)
c. social, political and economic democracy
d. equity/justice for all including the dimensions of gender, race, ethnicity, class,
age, sexual orientation, etc.
e. sustainable development
f. pluralism/inclusivity/diversity/creativity
g. territoriality/localism/subsidiarity supports decision-making and management
on as local a level as makes sense.
3) Self-management and collective ownership in the workplace and in the community is
central to the solidarity economy.
a. there are many different expressions of self-management and collective
ownership including: cooperatives (worker, producer, consumer, credit unions,
housing, etc), community-owned enterprises, commons (participatory
governance, for example community management of the forests in Nepal). In
Africa the term cooperatives is avoided due to negative connotations. Instead
they use the term collegial management.
4) The solidarity economy has a focus on the empowerment of women and other
marginalized groups, as well as anti-poverty and social inclusion work.
5) We recognize the importance of linking with social movements because ‘we’ can’t do
it alone.
6) There are many fertile bases that hold great potential to develop as allies. Some of
these bases are partially aligned with, but are not a part of, the solidarity economy
such as the popular economic/informal sector. Others identify with a particular aspect,
such as green, organic, or fair trade, that is aligned with solidarity economy values,
but may be in conflict with other values in important, structural ways. Nonetheless
there is great potential to build alliances and mutually supportive collaborations.
b. Popular economy and informal economy – the popular or informal sector of
the economy is very important given that a many people, particularly in the
global South, depend on it for their livelihoods. For example, ¾ of the
population in Mali are involved in the informal economy. The popular
economy is comprised of economic activities that are not covered by formal
arrangements such as taxation, labor protections, minimum wage regulations,
unemployment benefits, or documentation. Many self-employed workers,
micro-enterprises, traders, and mutual aid practices are part of the popular
economy.
The popular economy is not the same as the solidarity economy, but is aligned
in many ways because the actors often find collective ways to provide for
social and economic needs, such as lending circles, community kitchens
(comedores populares), mutual aid, mutual insurance systems and so forth. In
Venezuela the Ministry of Popular Economy is very close in their orientation
to the solidarity economy.
c. Organic, green, fair trade – There are many trends and movements that
reflect solidarity economy values and yet may or may not be included in the
solidarity economy. An example of the latter would be Wal-mart, which has
its own brand of Rainforest Certified Fair Trade Coffee but at the same time,
engages in union busting and uses its massive market share to depress prices
and wages. Yet there are certainly practitioners in these sectors that are
valuable allies and others that are already part of the social solidarity economy.
Strategy
7) It is important to build micro to macro strategies:
a. Building practice on the ground – this is the core of the social solidarity economy
that the research, policies, advocacy and communication supports and enables.
The concrete practices are often grounded in concepts of autonomous
development and self help, as opposed to ceding responsibility to the local or
national government.
b. Research – we must be able to make the case for the SSE through quantitative and
qualitative data. A wide range of research is called for, including academic,
community-based, action research, data gathering, and systematization of
experiences.
c. Policy work on local, regional, national and international levels – we seek to
create policies that enable, not direct, the SSE.
d. Advocacy – this work includes organizing and pushing for policies, legal statutes,
and various other types of support for the SSE.
e. Raising visibility – since the framework of the SSE is relatively unknown, we
must engage in raising awareness about, and engagement with, the SSE. Our
target includes the general public, potential allies, and practitioners who are part
of the SSE, but who do not identify with the framework. Two central strategies to
raise visibility are:
i. education – education about the SSE and its many aspects can take many
forms, including workshops, forums, trainings, seminars, and classes.
Education is often the first step in the process of SSE mobilization,
organizing or economic development.
ii. communication, media, social media – articles, books, video, media
coverage are all important ways of raising awareness about the SSE. We
need to develop a library of these resources.
FURTHER EXPLORATION OF TERMINOLOGY AND CONCEPTS:
We accept that on each continent, there are different areas of focus, entry points and
specificities that result in the use of different terminology relating to the social solidarity
economy. Terms such as societal transition, movement for transformation, change in
paradigm, alternative model of economic development, may be used in different places and
in different circumstances depending on political, historical or cultural sensitivities. For
example, in some circles in Asia, the term solidarity economy is viewed with suspicion as a
close cousin to socialism. The social solidarity economy does not exclude participatory,
democratic forms of socialism but RIPESS recognizes that each region must decide what
language and framing is most appropriate to their particular circumstances.
Social economy vs Solidarity Economy:
The social economy is commonly understood as the “third pillar” of the economy,
complementing the “first sector” (private/profit-oriented) and the “second sector”
(public/planned). The social economy includes cooperatives, mutuals, associations, and
foundations (CMAFs) as well as other types of enterprises that are collectively organized,
and oriented around social aims that are prioritized above profits, or return to shareholders.
Some consider the social economy to be the third leg of the economy, including capitalism,
along with the public and the private sector. Thus, advocates of the social economy push for
it to be accorded the same legitimacy as the public and private sectors, with a corresponding
level of support in public resources and policy. Others, on the more radical end of the
spectrum, view the social economy as a stepping stone towards a more fundamental
transformation of the economic system.
The solidarity economy seeks to change the whole social and economic system and puts forth
a different paradigm of development that upholds solidarity economy principles. It pursues
the transformation of the neoliberal capitalist economic system from one that gives primacy
to maximizing private profit and blind growth, to one that puts people and planet at its core.
As an alternative economic system, the solidarity economy thus includes all three sectors –
private/for-profit, public and the third sector. The solidarity economy seeks to re-orient and
harness the state, policies, trade, production, distribution, consumption, investment, money
and finance, and ownership structures towards serving the welfare of people and the
environment. What distinguishes the solidarity economy movement from many other social
change and revolutionary movements in the past, is that it is pluralist in its approach eschewing rigid blueprints and the belief in a single, correct path; the solidarity economy also
values and builds on concrete practices, many of which are quite old, rather than seeking to
create utopia out of thin air.
Thus the solidarity economy explicitly has a systemic, transformative, post-capitalist agenda.
The social economy is a sector of the economy that may or may not be part of a
transformative, post-capitalist agenda, depending on whom you’re talking to.
Social solidarity economy and regional contexts
RIPESS uses the term social solidarity economy to embrace both the solidarity economy and
the more radical end of the social economy. We understand that the political, cultural, and
historical realities on each continent, and indeed in different countries, call for a flexible
approach to terminology, approaches and entry points.
For example, in Europe, the social economy is quite strongly rooted, and pre-dates the
framework of the solidarity economy. In general, there is decreasing support for the social
economy on the national or EU level, but more support on the local level. The emerging
RIPESS-Europe network therefore works with both social economy and solidarity economy
organizations and includes sectoral as well as territorial organizations/networks.
Quebec builds on the concept of the social economy and seeks to create a movement for
transformation that is very practical and grounded at the local, territorial level. In the rest of
Canada, the emphasis is on the territorial framework.
RIPESS-LAC (Latin America and Caribbean) uses the solidarity economy framework.
Despite some differences in definition, there is broad agreement about its systemic and
transformative agenda and that it is built around a core of ethical principles.
Brazil’s solidarity economy definition was built by practitioners over many years
through forums, meetings, and consultations. Solidarity economy is articulated in three
dimensions: 1) economic – self management and a broad concept of enlarging democracy 2)
culture – trying to change the paradigm of competition and replace it with cooperation and 3)
political – a concern for human development, not the promotion of a particular sector, eg.
cooperatives, etc. The social movements in Brazil are extremely fragile at present, and the
solidarity economy is involved in integrating resistance with building alternatives in
agriculture, health, global justice, and women’s movements to overcome forms of exclusion.
The U.S. was able to start with a fairly blank slate and the U.S. Solidarity Economy Network
deliberately chose to work within the solidarity economy framework, as an unambiguously
transformative movement.
The Asian Alliance for the Solidarity Economy takes the social enterprise as a starting point
along with the need to build solidarity economy supply chains. See below for more.
Africa works with both the social economy and solidarity economy frameworks. In Mali
there have been efforts to construct a legal and institutional framework to support the SSE
and this process came up against the issue of definition as well.
RIPESS does not seek to constrain these specificities, but rather to find areas in common
between continents, and to work in an organic fashion, towards greater convergence or
harmonization. (Daniel’s diagram?)
Social enterprise/entrepreneurship:
- Ben, the Asian Alliance for the Solidarity Economy (AA4SE) sees the social enterprise at
the heart of economy and is focused on the need to build supply chains (producer, financial,
trade, etc.). They define social enterprise as having these characteristics: sustainability, high
level of autonomy, management of risk, paid workers, explicit community benefit, citizen
initiative, people over capital, participatory, limited distribution of profit to avoid profit
maximizing behavior (by limited returns for investors). In the short run, there’s no
expectation for 100% compliance – but the long term goal is to develop greater alignment
over time. The SSE must to educate the big firms because we want to be the main economy,
not the alternative.
- Carlos – coming from the trade union movement, we have some concerns about these
criteria.. For example, Coca-cola could easily fulfill the criteria. Surely we can find grounds
for agreement, but we aren’t there yet.
- Ana: At the Medellin meeting we felt that it can be easier to find common ground with
small scale social enterprises, than the big cooperatives and networks.
- Madani: There’s a deep interest in social entrepreneurship. A sector of health and social
service cooperatives and mutual societies has developed, which is one of the priorities in
Mali. These social enterprises need to be able to access credit. The focus is shifting towards
the creation of wealth, not eradication of poverty.
- Eric: In Europe there are social enterprise platforms in France, Italy, and the UK. One of
the challenges to be aware of is that the social welfare tradition is being dismantled and
privatized. Sometimes privatization is done through social enterprises. Some see social
enterprises as part of social welfare state, but others see them as a social business that enables
the state to shed its responsibilities.
- Emily: In the U.S., social enterprise is defined as having social aims at the core of their
operation. They are a mix of capitalist and democratic, collective enterprises. SEN sees social
enterprise networks as allies, but we do not have very deep working relationship.
Solidarity economy enterprise
The definition of a solidarity economy enterprise varies and is still in flux. In Brazil it must
be democratically, collectively managed (broader than the family – but this is always a
debate because the family economy is strong), regular ongoing activity and there are
measures to encourage women’s equity, and environmental sustainability. Quebec’s
definition is similar. In the U.S., the definition of a solidarity economy enterprise is still a
matter of debate, though there’s a strong pull towards the democratic, collective management
criteria, with those that fall outside being included in a broad category of allies.
Corporate social responsibility (CSR)
- Daniel: we think that social entrepreneurship is too close to corporate social responsibility
(CSR), so we don’t use this term.
- Madani: It’s not about CSR – Social enterprises bring together different projects and
initiatives so that people can get jobs, etc. based on the values of the SSE.
- Denison: thinking aloud from Malaysian experience, the question has arisen as to whether
there are other models operating with their own strengths and weaknesses. Most CSR
involves businesses engaged in, or donating to support, charitable work. However, some
businesses have moved on towards community support. Social entrepreneurs have emerged
in areas that aren’t being provided by the government or market, for example in education,
childcare, or hospitals. One wealthy man donated 50% of his profits to support the
development of a commercial center that includes a park, and eldercare, provided by small
operators. It also includes a university, because the donor realized that he needs an educated
workforce.
Some Muslim Malay communities have pooled their savings and invested in shares of
large companies. Their equity stake is backed by government guarantees. Many of these
companies are huge, and the profits are plowed back to its members. There might be less
solidarity at the community level, but they employ many people.
The cooperative movement has moved away from being community based to being
publicly listed.
Trade unions
A question was raised about the relationship of the SSE to trade unions.
In Europe, it differs from country to country. EU Commission on Labor (?), trade unions
have a great deal of influence. We have shared interests around quality of work.
In the U.S. there is a growing exploration about the role of the labor movement in job
creation and economic development.
In Latin America, there is participation of trade unions in the solidarity economy movement,
at least UITA (Int’l Union of Food Workers) and Brazil. In Brazil there’s a strong
involvement through CUT which has a commission devoted to establishing linkages with the
solidarity economy. This is an important recognition, but Brazil is the exception. There are
62 trade unions that are part of UITA and we have lots of experience with the solidarity
economy, ranging from micro to macro. For example Argentina trade unions manage their
own health care system for thousands of workers. The problem is awareness of, and selfrecognition and identification with the solidarity economy. There is however, a strong will to
move forward and UITA perceives the solidarity economy as a very close sector.
Investment and SE Business
In the Philippines, the poor can save, but savings are small. The institutions that collect these
savings do not invest in SE. We’re trying to develop a model that mobilizes the savings of
poor for SE initiatives instead of borrowing from World Bank. When you borrow from the
people you call it tax but pay no interest. If we can prove that SE can provide a better return
than mainstream investments, then we can argue that the government should issue bonds and
use the money for SE.
Ben: We need to think of RIPESS as a business, like the World Fair Trade Organization, in
order to have greater legitimacy and generate more support from the government and
investors and also to get free of the constraints imposed by donor dependency. We should
think about doing business with each other – south-south solidarity trade.
Moving forward
We agreed that these discussions are very important and that we need to have them at every
meeting, with perhaps a different focus to clarify points of convergence and differences. Eg.
next time look at ethical or political dimensions. We also need to be clear on the objectives
beyond convergence and differences, to the future of RIPESS as a political actors. The
second objective is to strengthen the ability of RIPESS to take on national and international
level initiatives and make public declarations.
Comment from Eric:
This document debriefs very well our work in Paris and Emily perfectly enriched it with
her thoughts.
Some comments :
- OK for the first 6 points, on the other hand if I also agree on the 7th point, I think
that it is not an element of definition but rather a strategic development point for the
network, which is not exactly the same think.
As for the explorations:
o Social economy vs Solidarity economy
The comments are not 100% true for Europe where we define Solidarity economy
as follows: “Social economy includes co-operatives, mutual societies, associations
and foundations as well as other types of enterprises that share the values defined
in the principles of the Social Economy Charter.” this is a network of enterprises
– source “Social Economy Europe” (see attached)
Solidarity economy covers more inputs: “third sector of social utility (we are
talking about the 3rd pillar of economy in Luxemburg) – insertion through
employment – alternative economics; (see the manifest of RIPESS Europe in
which we can see an “anti-globalization”-tone) and it is an actor of the social
movement.” – Solidarity Economy includes the totality of activities that
contribute to the democratization of the economy based on civic engagement. (see
Jean-Louis Laville) – the orientation for limited profit, the democratic
governance, the sustainability of the activities and autonomy of management are
strong principles of solidarity economy (see Romain Biever, INEES)
Social Solidarity Economy is a political compromise of alliance between social
and solidarity economy (SSE). We can allow ourselves to have the ambition of
arriving to a consensus on the level of the RIPESS. Also, the approach of Ben
Quinones with its 4 dimensions of social development, the respect of the
environment, economic sustainability and democratic governance join the other
studies. We can mention a very interesting process in France in the Conseil
National Supérieur de l’ESS where there is a working group reflecting on the
creation of a “frame of reference of practices” in a “progressive approach”.
A 5th dimension incites the debate on the property. There we find again the 4
performance dimensions of Ben. We can also refer to the work of Marie Bouchard
(UQAM) who defines a sphere of social economy with 4 axes as democratic
governance, limited distribution of profit, economic activity and autonomy of
management. All these studies are useful since they are rallying. They are also
important for the ESSglobal process that raises the question of the perimeter of
identity of the initiatives we can register. They can also be a basis of work for
public policies (legal frame or other) and be recognized (label or other).
- Social Enterprise
There are several definitions of Social Enterprise in Europe – Researchers like
Jacques Defourny from Liège think that this concept is the most uniting.
Social enterprises can be defined as "organisations with an explicit aim to benefit the community,
initiated by a group of citizens and in which the material interest of capital investors is subject to
limits. They place a high value on their independence and on economic risk-taking related to
ongoing socio-economic activity." by EMES
The non-profit sector consists (following the Johns Hopkins University) of organisations with the
following characteristics:
a) they are formal, i.e. they have a certain degree of institutionalisation, which generally
presupposes legal personality;
b) they are private, i.e. distinct from the both state and those organisations issuing directly from
the public authorities;
c) they are independent, in the sense that they must have their own regulations and decision
making bodies;
d) they cannot distribute profits to either their members or their administrators. This "constraint on
the distribution of profits" lies at the heart of all the literature on non-profit organisations;
e) they must involve some level of voluntary participation by volunteers and/or donors, and they
must be founded on the free and voluntary affiliation of their members
The Third sector : definitions as they are often found in the US imply that only
those organisations that do not make a surplus and/or do not distribute it among
their members belong to the third sector; this first approach is at first glance
especially convincing as long as the organisations considered as belonging to this
sector are seen as social, cultural and political bodies, where economic aspects
play no or just a very limited role (voluntary organisations, charities,
foundations).
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In Muhammad Yunus' definition, a social business is a non-loss, non-dividend
company designed to address a social objective within the highly regulated
marketplace of today. It is distinct from a non-profit because the business should
seek to generate a modest profit but this will be used to expand the company’s
reach, improve the product or service or in other ways to subsidise the social
mission.
He distinguishes 7 principles :
Business objective will be to overcome poverty, or one or more problems (such as
education, health, technology access, and environment) which threaten people and
society; not profit maximization
Financial and economic sustainability
Investors get back their investment amount only; no dividend is given beyond
investment money
When investment amount is paid back, company profit stays with the company for
expansion and improvement
Environmentally conscious
Workforce gets market wage with better working conditions
Do it with joy
Comment from Yvon
I find in general very good. I do have a large nuance concening the «social economy concept». For
one, in French speaking countries, the concept is not, by far, similar to the third sector as defined by
some US authors. It is strictly linked to collective ownership, which meant cooperatives until about
30-40 years ago. The non-profit collective enterprise is a new phenomenon. In part because of
weakness in legislation. Instead of third leg of capitalism, I would say third leg of the economy. Part
of the «third secto», sometimes called «forth sector», has no pretense of economic activity, even if
they do have a budget. Such as a social club for retired teachers, the NY fireman vusic band,
churches, etc.
As Mike Lewis explained well in his 2007 paper, parts of the social economy (coops) can adhere to
solidarity economy principles, and others clearly not. I would say the same for small private
businesses. Some can be on the side of solidarity economy.
Personally, I find that the principles (as outlined) are the key point. The legal status can be very
misleading.
But, as mentionned in Mike’s 2007 paper, I still stick to my point by saying that social economy and
other types of collective ownership of economic activities, are more inclined to join the solidarity
economy perspective for a global transformation from a market oriented economy to a «human»
oriented economy. I would say that seeds can grow there better, if properly nourished and coached!
From Ben Quinones:
In the case of Asia, the ASEF core organizers will meet on October 29 to consider a set of
indicators to measure the performance of solidarity economy initiatives along 4 major
dimensions (social development, ecological conservation, economic sustainability, and
governance).