The Social Economy: Growing from the Margins or Growth for the Marginalized?

By Fotan, Jean-Marc; Shragge, Eric | Canadian Dimension, November-December 1997 | Go to article overview

The Social Economy: Growing from the Margins or Growth for the Marginalized?


Fotan, Jean-Marc, Shragge, Eric, Canadian Dimension


As the progressive retreat of the state continues apace, the debate on the social economy in Quebec is increasingly topical. Articles have filled the pages of both scholarly and popular journals and the press. It is an important question for community activists because it raises issues about the links between that sector, the formal economy and the state. Here we briefly examine two aspects oF the debate revolving around the respective relationships between the social economy and the formal private sector and the social economy and the state.

Benoit Levesque and Yves Vaillancourt define the social economy as "that sphere constituted by businesses and organizations which is distinguished by the goal of bringing together an association of individuals rather than shareholders ... producing goods and services to satisfy the needs of members of that association." This definition encompasses community organizations, cooperatives and non-profits, organizations that contest competition as the exclusive form of market regulation. The authors draw a distinction between older forms of the social economy, such as banks, credit unions (caisses populaires), agricultural co-ops, and the new forms that have developed in the past 25 years. The newer generation comprises three types of organization: 1) co-operatives and non-profit groups that provide services; 2) support structures such as community economic development corporations that work to develop social economy enterprises in local communities; and 3) community organizations that work in the field of social integration through business development, such as community restaurants and businesses that train those outside the labour market. In this view, organizations located in the social economy promote local democracy and participation. Defining features of the culture of the social economy are solidarity between staff and clients and the ability to respond quickly and directly to particular situations.

The problems with this broad description occur at two levels. The first is finding the common characteristics uniting the disparate organizations captured in the definitional net. The social economy is seen as virtually everything that belongs neither to the state sector nor the traditional private sector. Parts of the social economy produce revenue, like production co-operatives, while other forms like community social and health services depend on funding from either the state or private sources. And then there are those organizations that both generate income and receive outside support. Furthermore, the traditional older social economy - such as co-operatives - is member-oriented, while the newer organizations, such as community restaurants, tend to concentrate on providing services for particular groups and developing new forms of social solidarity with the poor and unemployed. The economic aspects are so diverse as to render a common definition problematic. Perhaps the broader concept of the "third sector" is more appropriate, as it includes by definition several sub-sectors, each with a different relation to revenue-generating activity and to the state. Within this more inclusive third sector, it is primarily community organizations, which work in the areas of economic and social development and/or service provision, that are understood as playing a social role and opening up democratic possibilities.

The problem with definitions that counterpose the social to the rest of the economy is that they let the dominant economic sector off the hook, as it were; the corporate sector becomes, by default, the "anti-social" economy. This is indeed currently the case: in the name of profitability, and in the context of economic deregulation, corporations face few constraints. …

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