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Discover http://www.cooplife.org/ the Online Social Enterprise Magazine created by Halandri Parents Social Cooperative Enterprise

What is social economy

Ardelaine, Suma, Blagoev, Trafilcoop, Ceralep, Almarina, Usis, M - ry, CNS, Modragon. Unknown words in Greece, making one think of drugs. But they are not.

These names are part of a self-management and cooperation practices chain of people throughout Europe who formed cooperatives in an attempt to save their businesses, their land and their children. They are part of the 50,000 cooperatives now active in Europe; part of the 1.4 million people working on such endeavours.

Cooperatives have systematically been formed since World War II and particularly in the post-war years, in countries that found themselves in a state of chaos. In most cases, they were attempts made by workers to manage factories that were shutting down for various reasons. In some cases, due to local and social reasons, they grew so much that now CNS in Italy, for example, has 93,000 employees with 58% of them being cooperative members, while in Spain, Modragon has 83,000 employees with 80% of them being cooperative members and with a 2009 turnover of €16 billion.

This reality, namely the cooperative practice and the development of networks to coordinate these endeavours, imposed the development of the institutional framework that determined their existence in Europe. An example of what this may mean is evident in England, where cooperatives and their respective funds created mutual funds and cooperative non-commercial banks which cannot be transferred, be sold to or merge with other banks. Thus, their cooperatives can ensure credit in non-commercial terms, even if the banking system of the country comes tumbling down. Respectively, cooperative federations in the rest of Europe have created funding tools for their members from own funds, providing credit in non-commercial terms exceeding €500 million in total. Does this even relate to the Greek reality, where fund reserves were turned into toxic bonds, gambled in the stock market or given away in bad loans?

Taking these into account, and according to cooperative practice and experience in Europe, the three most important features of social economy activity are the following:

Every one participates voluntarily and consciously and assumes a moral obligation vis-à-vis the other participants with regard to achieving cooperative objectives. Furthermore, the activity does not depend on the market or the State.

There is equality among partners. The parameters that determine relationships between partners and employees (working relations, salaries, voluntary contributions, administrative participation) outside the market are stipulated and they operate based on democratic organizational structure and decision-making.

Solidarity breeds among between cooperative participants and groups receiving cooperative services. This is the great advantage of social economy, namely acting as a group and participating in common activities: social economy systematically leads to collective action.

Respectively, the main difference between social economy and standard commercial economic activity regulated by market rules has to do with the fact that this is done by people and not funds.

The same distinction also applies in relation to the State economy, which until recently had mostly been the sum of activities relating to its redistributing role, mainly through taxation and less through production (state-owned plants, monopolies, etc.).

In practice, social economy is the economic activity that develops to meet needs that neither the market nor the State can cover or partially cover. Their point of reference has nothing to do with individual or family business and how they can make profit, but with social objectives, such as creating employment positions, containing salaries, people helping each other, etc.

It is clear that this description reflects a peculiar balance between two worlds, which is confirmed in practice, as there are respective examples of cooperatives in a number of possibilities between market and state economy. On the one hand, the market always complains, as part of the wealth produced is detached from its turnover, while on the other hand, the State complains about developing collectivities that question its central planning and the social interrelations it has to manage.

In the Victorian world of the absolutely deterministic Newtonian Mechanics, the apple inevitably falls under the apple tree. However, this ceases to be a certainty once we see things from a quantum mechanics or relativistic perspective. Thus, to the question “Which direction will light choose to go from one point to another,” science gives a rather peculiar answer: all possible directions…

Similarly to quantum mechanics, the definition of social economy depends on how you approach it and where you want to go. It is determined by the actions of people who get involved in such activities, and the balance between State and market pressure. And as is most often the case, when you are not looking where you are going, you go where you are looking.

 

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What social economy is NOT

Although it is relatively difficult to specify in absolute terms which initiatives form part of what we call “social economy”, it is relatively easy to provide a series of examples of what social economy is not.

This issue is particularly relevant to Greece, as the term is repeatedly accompanied in the media by references to business or charity practices that have nothing to do with social economy.

With this in mind, we could say that the following are NOT examples of social economy:

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