What is the Social Economy?

The Social Economy, sometimes called the ‘social and solidarity economy’ is a way of describing and valuing all the activities that aren’t normally considered, or priced in, but which contribute towards making a fairer, more sustainable world for all.

Traditional ‘economic policy’ generally only considers those things that can be easily ‘priced in’ or counted. That might be things like employment rates and wages, the value of private companies and organisations, and their trading or manufacturing activities. That is often seen as ‘the private economy’.

Public policy in contrast normally focuses on the amount being spent by government, funded through borrowing and taxation, on the services provided by the state. This could be on defence, welfare, education, health services, the police or transport infrastructure and also through regulation. This collectively might be known as ‘the public economy’. 

However these traditional ‘measures’ can leave out important factors that lead to individual wellbeing and happiness, or the long term sustainability of our planet and nature. Kindness, mutual aid, regenerating nature, or restorative justice, to name a few.

Over many years that has led to progressive economists, politicians and campaigners thinking about a ‘third’ way… a ‘social economy’, and about the organisations that make it up. Of course, there are many overlaps between the social, public and private economy. 

As the OECD describes: “Social economy organisations traditionally refer to the set of associations, cooperatives, mutual organisations, and foundations whose activity is driven by values of solidarity, the primacy of people over capital, and democratic and participative governance.”

Glasgow Caledonian University, in its research on the Social Economy identifies that : 

“Social economy is conceptualised in two ways: as a term to mean the ‘third sector’ comprising value-led organisations such as social enterprises, voluntary organisations, co-operatives and mutuals; and as a term that reframes and disrupts notions of the economy as a web of relationships designed to serve the needs of society”.

Supporting a more social economy takes effort

Recognising the unique characteristics of the social economy, and the organisations that support and make it, some public bodies, such as the West Midlands Combined Authority, have developed programmes of work that focus on growing their social economy. That means it aims to support community based and not for private profit organisations, which it believes are an under-recognised sector of the wider economy. This sees our economics more as an ecosystem. One that requires a diversity of individuals and organisations to be fruitful, busy and strong enough to support everyone.

Organisations such as cooperatives, social enterprises and not for profits also organise themselves, and many are campaigning for better recognition. At a European level, they group together under the banner of Social Economy Europe. Within the UK they are also represented by a range of bodies, such as Coops UK, Social Enterprise UK (SEUK) or the National Council for Voluntary Organisations (NCVO). Sometimes they work together, but sometimes they feel they need to protect their own unique character. And this can lead to conflicts or misunderstanding between them. 

Why Shared Future focuses on the Social Economy

Shared Future sees itself as a part of the social economy. That is why we have set ourselves up as a Community Interest Company. But we also recognise that to play our part we must also seek to ‘reframe’ the economy, and we see positive disruption to ‘business as usual’ as essential. We believe our society can’t simply grow its way out of poverty, or fix the climate emergency through the mechanisms that have created the current global climate crisis. 

We need to think through how to do things differently. That includes how we consider our democracy, who represents our interests and how individuals and communities can work collectively, in solidarity with each other. 

That’s why we continue to think through and deliver ways to improve our society by elevating the role of the social economy. That could be through our work on Participatory Budgeting, which has been shown to grow the social economy when it has become used over time. Or our deliberative democracy work, which looks to influence the public sector and its policies to be fairer and more environmentally conscious. Examples such as our home owner retrofit, air pollution and energy related citizens juries, panels and assemblies. Or our work with the Manchester Social Economy Alliance. Or how we use ideas such as the ‘social economy iceberg’ in our own internal strategies, to better consider the real value of the things we can’t count.

See: The Diverse Economies Iceberg by Community Economies Collective (licensed under a Creative Commons Attribution-ShareAlike 4.0 International License).

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