What is the Social Economy?

The social economy (SE) exists at the nexus between civil society, the economy, and the state.  It is comprised of a variety of public, private and non-profit entities that provide goods, services, and information to the public with the aim of generating both economic productivity and social solidarity (ILO, 2009).

While the concept of the social economy is widely used throughout Europe, Canada, and Latin America, in the United States it is less common, and therefore not as well understood.  As a rejection of both free market capitalism and state driven social engineering, the social economy encompasses a model of development based on social inclusion and sustainability and a community oriented focus that directs its concerns towards environmental and social topics (Laville et al, 2007).  Organizations and individuals working in the social economy seek to employ their human capital, creativity, and productive capacity to develop innovative responses to contemporary socio-economic problems while recognizing that their efforts are conditioned by the broader political economy in which they are embedded.

The SE combines civic engagement, social justice, and ecological balance to oppose corporatization and plutocracy of the economic market while creating and retaining social surplus, providing new community infrastructure, and generating quality jobs at a living wage (Gunn, 2004).  Two organizational forms which epitomize the social economy are social enterprises and cooperatives.

Dr. Vanna Gonzales and MA/Doctoral Student Carrie Bauer discuss the intricacies of what exactly a social economy signifies.


Social Enterprises

Social enterprises are commonly identified as not-for profit businesses with primarily social objectives and/or for-profit businesses striving to solve social problems.  While frequently seen in the United States as a byproduct of commerce and philanthropy (Dees, 2001), the emphasis on business productivity and private revenue fails to capture social enterprises’ normative relevance to society as well as their empirical connection to community.  Social enterprises supply services and goods to communities through autonomous institutions, innovative and diversified services or processes of supply, limited profit distribution and democracy and participation in management while having an explicit social purpose (The Okapi Project, 2000).  Additionally, they serve a public benefit as change agents; social enterprises collaborate with public and private partners to advance the needs of local communities struggling with both market and government failures.

A short animation made by Social Enterprise Coalition (www.socialenterprise.org.uk) explaining the basics of social enterprise as well as potential benefits for members and the community.


Social Economy vs Social Enterprise?

Dr. Vanna Gonzales and MA/Doctoral Student Carrie Bauer explain the differences between a social economy and social enterprise.

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