Social Economy and Employment-The Case of Sweden

By Westlund, Hans | Review of Social Economy, June 2003 | Go to article overview

Social Economy and Employment-The Case of Sweden


Westlund, Hans, Review of Social Economy


Abstract Recent research has shown growing shares of employment in the social economy (or non-profit sector) both in the European Union and in the United States. In the EU, there seems to be growing hopes that the social economy will be capable of contributing to local progress on the unemployment issue in crisis regions. This paper analyses employment in certain entrepreneurial forms, usually considered belonging to the social economy, in Sweden during the 1990s. The results show considerable regional differences of employment in the social economy, but also that its share of the labor market is very limited.

The effect of social-economic organizations on employment, therefore, is probably mainly indirect in as much as they function as platforms for cooperation between firms or else as embryos for enterprises by strengthening local entrepreneurship and helping to nurture a deposit of social capital which has visible effects on private business and jobs. However, these effects need more detailed examinations.

Keywords: social economy, third sector, social capital, employment

INTRODUCTION

"Social economy" has been an official term in the European Union since 1989, a special unit of the European Commission's General Directorate Employment and Social Affairs being responsible for social economy-related issues. A number of statements from the EU indicate that the social economy is given increased attention as a means to create new employment. One example is that the meeting of the European Council in Luxembourg, 1997, declared that the member states would examine the opportunities to create employment supplied by the social economy. The definition of social economy selected by the EU confines it to four types of entrepreneurial and organizational forms, viz Cooperatives, Mutuals, Associations and Foundations (CMAF). On Sweden's applying for membership of the EU it was natural for the term to be introduced in Sweden as well. Jan Olsson's book Den Sociala Ekonomin (1994) was for many Swedes the first encounter with the new concept. Towards the end of 1997 the Swedish government appointed a working party of officials one of whose tasks was to define the expression "social economy".

The description of the term's content arrived at by the working party was as follows: "Social economy means organized bodies which have primarily social purposes, are based on democratic values and are organizationally independent of the public sector. Their social and economic activities are conducted mainly in associations, cooperatives, foundations and similar bodies. Activities in the social economy have the public good or the good of their members, not private interests, as their principal driving force" (Kulturdepartmentet, 1999a).

However, the social economy concept is no novelty in Sweden. For a long time the social economy was the same thing as the national economy. In 1934 for example, Gustav Cassel, a leading economist of the day, published a book under the title Teoretisk Socialekonomi (Theoretical Social Economics). But early on in the twentieth century, according to the Swedish encyclopedia Nordisk Familjebok (Uggleupplagan), there was also an alternative definition, viz the branch of scholarship concerned with "society's organization of production and distribution for achieving the greatest possible sum of public good" (see Tradgardh 2000).

This definition of the concept was well in line with what was meant by social economy in the concept's "native country," France, in the early nineteenth century. It seems to have been used there for the first time in 1830, by Charles Dunoyer in his paper Nouveau traite d economie sociale (Bartilsson et al. 2000). Eighteenth century France was marked by violent class conflicts. The free market seemed to be creating the forces which would lead to its own collapse, as Marx had predicted. Economic thought in France became focused on "finding a compromise, on restraining the market and crass individualism by launching the pedagogical and political programme which came to be known as l'economie sociale" (Tradgardh 2000: 6).

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