A new economy?

After 2008’s financial crisis, many have talked even with a stronger voice about new propositions for our economy in offer to live different –and maybe better. What can social enterprises can do for it?

 

From new proposals to eliminate the market economy and competition, ideas to focalize in local economies beyond global economy, or simply to motivate more social value through business such as social enterprises do –or at least intend to do. All in all, different proposals that with any doubt merge in one same objective: to generate good to society.

 

De-growth is a movement as an answer to the current economic problems and discussions in a heterogeneous society (Sekulova et al., 2013: 5). Overall, it is an opposition to the market-based society and proposes a more democratic and equal redistribution of the wealth (Demaria et al., 2013: 209). Those who advocate for growth defends it as the cause for fair distribution and quality of life improvement, whilst de-growth stresses that growth is provoking the social and economic problems of last decades (Muraca, 2012: 535). Then, de-growth defends a downscaling of production and consumption as well as the limitation of markets and commercial exchanges (Sekulova et al., 2013: 1). Therefore, de-growth proposes the replacement of market and growth (Demaria et al., 2013; Trainer, 2012; Fotopoulos, 2007).

 

The role of social enterprises supporting or not the de-growth movement is debatable. On one side, it might not be clear the way social enterprises can work in an economy without trading since it is one of the characteristics of such business (Bridge et al., 2009). Moreover, the social investment or impact investment, applauded by Bugg-Levine and Emerson (2011), does not have space within de-growth since investment and development is attacked to work for the wealthy and for the capital (Trainer, 2010), especially for the wealthy countries within the neoliberal perspective (Peet, 2007). Also, another of the major counterpoints will be the discussion around the privatisation of public services.

 

On the other side, social enterprises can be seen as part of the de-growth movement. First, since de-growth seeks a more local and community economy (Fotopoulos, 2007; Trainer, 2012), social enterprises can fit in this local business for community necessities. Another possibility would be social enterprises working as a first step towards a major change in economy (Johanisova et al., 2012; Driver, 2012). Since some social enterprises encourage democratic decision-making and community development, these can be useful towards a nonmarket capital with democratic control.

 

Some advocates of de-growth will accept that some range of market economy can exist. Nevertheless, some will urge for a more radical change where it is only produced and consumed what is needed (Trainer, 2012; Nørgård, 2013). Either way, a new economy is being discussed ‘in the heart of capitalism’ whilst consumption, production as well as human wealth is being reinterpreted within different perspectives (Gorz, 2008). Whether it is as a first step for a radical change or as a new option for business to actually meet social interests and the deficits the economy has created, social enterprises have an important weight in this new stage.

 

Nonetheless, social enterprises might be prove there is no need of a radical change. These are a different way of doing businesses to create wealth and employment while meeting social and environmental needs (Bridge et al., 2009: 251). Social enterprises are a way of bringing in the community and citizens, in a more democratic way, to engage the solution. So, it is not only working for the planet and resources, as some ecological philosophies might look like. Nor it is a way to work for markets and wealthy sectors only. But a way to get actively involved in the solution and in new ways to attend economy, its crisis and the issues that past and current ideologies such as neoliberalism might have provoked. Thus, it is not protecting something external for the sake of ecology, but working in something that is ours. More in the way that Pope Francis explains in his Laudato sí Encyclical. Working ‘on care for our common home’ (Pope Francis, 2015).

 

Now, de-growth and the world itself is not all about economy. It is in great detail about environmental sustainability, but also about democracy. Truth is that environmental and economic approaches are needed, still the aspirations of a better life, especially for the disadvantaged, is not all about financial wealth (Guha, 2006). De-growth notices that among other consequences of the ‘competitive, individualistic and acquisitive market economies’ is the decreasing social capital (Trainer, 2012: 592). Therefore, de-growth also seeks for more political participation and cooperation in both local and global scales (Nørgård, 2013: 70).

 

That is to say that social enterprises, as well as other similar institutions, are organisations that create social capital mainly through community involvement or participation in decision-making. Social enterprises enhance local community and generates ‘community empowerment’ developing some economic activities whilst increasing social capital with social inclusion and cohesion. (Bridge et al., 2009: 252-253).

 

All in all, to this point social enterprises might look like the ‘business solution to the social problems’ (Thompson et Scott, 2014: 15). However, as Driver (2012: 422) highlights from an interview to Michael Porter, social enterprises are not the end towards the pursued social and economic change, yet the beginning of a deeper transformation of capitalism. Therefore, although social enterprises can fit in the de-growth movement it is just seen as part of a first step towards the big change.

 

Hence, social enterprises are a way to attend the economy and environmental issues taking advantage of what is happening, instead of erasing everything. Indeed, there is need for regulation and changes. But social enterprises still is a possible way of getting together the expected changes and the current tools of doing things. Therefore, we can dare to say that for now social enterprises are ‘‘business solutions to social problems’ and one that is ‘good at doing good’’ (Thompson et Scott, 2014: 15).

 

Any ideas?

 

References

BRIDGE, S. et al. (2009). Understanding the Social Economy and The Third Sector. UK: Palgrave Macmilla

BUGG-LEVINE, A. et EMERSON, J. (2011). Impact Investing. Transforming How We Make Money With Making a Difference. San Francisco: Jossey-Bass.

DEMARIA, F. et al. (2013). “What is degrowth: from an activist slogan to a social movement”. Environmental Values. Vol. 22 (2). pp. 191–215. Available at http://www.degrowth.org/wp-content/uploads/2014/08/What-is-degrowth.pdf. [Last accessed on December 25, 215]

DRIVER, M. (2012). “An interview with Michael Porter: Social entrepreneurship and the transformation of capitalism”. Academy of Management Learning & Education. Vol 11. (3). pp. 421-431. Available at https://www.sharedvalue.org/sites/default/files/resource-files/Interview%20with%20Porter_AMLE%20Social%20Entrepreneurship%20and%20the%20Transformation%20of%20Capitalism.pdf.  [Last accessed December 26, 2015

FOTOPOULOS, T. (2007). “Is degrowth compatible with a market economy?”. The International Journal of Inclusive Democracy. Vol.3 (1). Available at http://www.inclusivedemocracy.org/journal/vol3/vol3_no1_Takis_degrowth.html. [Last accessed on December 25, 2010]

FOTOPOULOS, T. (2014). “The new “growth” economy of the New World Order”. The International Journal of Inclusive Democracy. Vol. 10 (1/2). Available at http://www.inclusivedemocracy.org/journal/vol10/vol10_no1-2_The_new_growth_economy_Fotopoulos.html. [Last accessed on December 25, 2015]

GORZ, A. (2008). Ecologica. Translated by Chris Turner. India: Seagull Books.

GUHA, R. (2006). How Much Should a Person Consume? Environmentalism in India and the United States. USA: University of California Press.

JOHANISOVA, N. et al. (2012). “Social enterprises and non-market capitals: A path to degrowth?”. Journal of Cleaner Production. Vol. 38 (1). Pp. 7-16. Available at https://www.researchgate.net/publication/256294245_Social_enterprises_and_non-market_capitals_A_path_to_degrowth [Last accessed January 7, 2016]

MURACA, B. (2012). “Towards a fair degrwoth-society: Justice and the right to a ‘good life’ beyond growth”. Futures. Vol. 44 (6). pp. 535–545.

Nørgård, J. (2013). “Happy degrowth through more amateur economy”. Journal of Cleaner Production. Vol. 38. pp. 61–70

PEET, R. (2007). Geography of Power. The Making of Global Economic Policy. London: Zed Books.

POPE FRANCIS. (2015). “Laudato Si’. Available at http://w2.vatican.va/content/dam/francesco/pdf/encyclicals/documents/papa-francesco_20150524_enciclica-laudato-si_en.pdf. [Last accessed January 6th, 2016]

SEKULOVA, F. et al. (2013). “Degrowth: from theory to practice”. Journal of Cleaner Production. Vol. 38. pp. 1-6 

THOMPSON, J. et SCOTT, J. (2014). “Social Enterprise or Social Entrepreneurship. Which matters and why?”. In DENNY, S. et SEDDON, F. (Eds.). Social Enterprise. Accountability and Evaluation around the World. Oxdon: Routledge. pp. 13-27.

TRAINER, T. (2010). “De-growth – is not enough”. The International Journal of Inclusive Democracy. Vol. 6 (4). Available at http://www.inclusivedemocracy.org/journal/vol6/vol6_no4_trainer_degrowth_not_enough.htm. [Last accessed on December 25, 2015]

TRAINER, T. (2012). “De-growth: Do you realise what it means?”.  Futures.  Vol. 44 (6). pp. 590–599.

 

 

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This post is part of an original essay about de-growth and the role of social enterprises in this new economic propositions written for internal objectives for ICCE department of Goldsmiths, University of London. If you want to read the whole essay or just debate the topic -which will be great-, please contact me at wtfwithyou@wtf2wow.com.

 

 

 

 

 

 

 

 

4 thoughts on “A new economy?

  1. I wonder how social enterprises (or the leaders/owners) view themselves? E.g. do they see the social enterprise as a political tool for change, or do they see it as just a business, but a more “moral” business, or do they just see social enterprises as a good marketable product, or is a collection of all these ideas? I’m unsure, it would be interesting to know these answer, what do you think?

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    1. Hi Adam. Thanks for your comment. I think, as literature can show, that the perspective is very diverse. Some will see social enterprises as ethical or value-driven business, others as a more political tool. At the end, as you said, I beleive is a mix of both. That is why they are “social” “business”. Both concepts are linked in one same action. I like to beleive they are something beyond business, though. For me, they are agencies of change and social innovation. At least they should. Like Divine Chocolate. They are not only being social through giving profits to the producers and through being a fair trade company. They are trying to trasform the whole chocolate industry in policy-making and in transforming the business model and chains. All from the heart of the business and its people. So, they are not just using ‘business as usual’ for good. But transforming the whole system for a better one. And yourself? What do you think? Only business doing good or social innovators?

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      1. I would agree with your comment that goals differ between different entrepreneurs and social change would be a key goal, but I also wonder what social change looks like for the entetprenuer e.g. when do they know when they have reached it? l also think that the social enterprise is political tool, although the entrepreneur may not even be aware that they are engaging in political action, I think this is especially the case for environmental social entrepreneurs with climate change being a prominent issue. Do you have a reference to some literature regarding goals of social entrepreneurs? I’m thinking this may be an area that needs further work? Thanks

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      2. Hello again! I would recommend you to look at Nichols research, he wrote a lot about different perspectives of social entrepreneurs in the world. You can also read this journal where they compare the European vs the US’ perspectives: Defourny, J. et Nyssens, M. (2010). “Conceptions of Social Enterprise and Social Entrepreneurship in Europe and the United States: Convergences and Divergences”. Journal of Social Entrepreneurship. 1 (1). Pp. 32-53

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