Dr Rory Ridley-Duff Reader in Co-operative and Social Enterprise Revealing the Social and Solidarity Economy York St John University, 1 st – 3 rd September

Dr Rory Ridley-DuffReader in Co-operative and Social Enterprise

Revealing the Social and Solidarity Economy

York St John University, 1st – 3rd September 2015

Social Economy in Higher Education Conference

Universities Developing Social Entrepreneurship through Cross-Sector Collaboration

Outline

• Critically evaluate how personal / collective philosophies link to the development of social economy.

• Articulate different ideological orientations towards economic and social value creation that impact on sustainable development.

• Identify a theoretical perspective that emphasises member-ownership and social solidarity, and apply it to current practice.

What is the argument?

• Exploring ideological choices helps to make sense of three alternatives to public (redistributive) and private (market-based) enterprise systems.

• Social enterprise varies according to its framing as a neo-liberal agenda (Big Society) or a radical response to neo-liberalism (social and solidarity economy).

• The social economy is politically branded and rebranded by social groups according to their ideology.

• Recent work on the design principles for collective action undermines the theory of the ‘tragedy of the commons’ and reassert the value of social solidarity.

An initial theory of social economyExternal InternalBeneficiary Orientation

Aim to benefitgeneral public orexternal group

MixedOrientation

Aim to benefitmembers of the

organisation

Charities and voluntaryorganisations that trade

to fund, or subsidepublic services

Market andFundraisingOrientation

anti-market(fundraising)

Voluntary associationsthat charge membershipfees to provide facilities

to members

pro-market(trading)

"Social" Coops andFriendly Societies

using mixed incomestrategies for the

benefit of members

Multi-stakeholderorganisations using mixed

income strategies tosupport more than one

stakeholder.

Multi-stakeholderorganisations trading tosupport more than one

stakeholder.

Co-ops that trade to fundmembers/workers'

welfare and secure asustainable income

Multi-stakeholderorganisations that fundraise

and/or seek grants tobenefit more than one

stakeholder.

Charities and voluntaryorganisations that fundraise

and/or seek grants todeliver a public or

community service.

Charities and voluntaryorganisations that use

mixed income strategies tofund a public or

community service.

Source: Ridley-Duff and Bull, 2011

Back to basics: philosophical assumptions

Activities directed by / towards others

Actions areself-directed

Benefit others

Benefit self

I'll help you to benefit others

I'll help you to benefit myself

I'll direct my efforts towards helping others

I'll direct my efforts towards helping myself

I'll help others without exploiting myself and share any benefits

received with others

These attitudes influence our enterprises



Benefit others

Benefit self

Public service

Community action

Social entrepreneurship

Private enterprise

Co-operative &mutual enterprise

Some basics of: socio-economics



Benefit others

Benefit self

Public service

Community action

Social entrepreneurship

Private enterprise

Co-operative & mutual enterprise

Polanyi, K. (2001, [1944]) The Great Transformation, Boston: Beacon Press

Redistribution Reciprocity Market

Dreu, C. and Boles, T. (1998) "Share and share alike or winner take all?", Organization Behavior and Human Decision Decision Processes, 76(3): 253-276

Philanthropic("Prosocial")

Cooperative

Individualistic

Pratchett, L, and Wingfield, M (1996) ‘Petty bureaucracy and wooly minded liberalism? The changing ethos of local government officers’.

Public Administration 74: 639-656.

Smith, A. (2006 [1790]) The Theory of Moral Sentiments, Sao Paulo: Metalibri

Let's consider underlying philosophies


Owen, R. (2014 [1816]) A New View of Society (Kindle edn: Gold Books).

Smith, A. (1937). The Wealth of Nations, First Published 1776DESIRABLE DISCOURSE ?

Ridley-Duff, R. (2007). Communitarian perspectives on social enterprise. Corporate governance: an international review, 15 (2), 382-392.


Benefit others

Self-benefit



Cooperative

Individualistic

Neo-liberal

Altruisticcommunitarian

Adam Smith's "Invisible Hand"

Pratchet and Wingfield's "Public service ethos"

Pragmaticcommunitarian

Social liberal

Robert Owen’s “co-operator"

Adam Smith's "Moral Sentiments"

John Nash's "Equilibrium"

Communitarian pluralism

(Kantian perspective)

Nash, J. (1950) "Equilibrium points in n-person games" Proceedings of the National Academy of Sciences 36(1):48-49.

Nash, John (1951) "Non-cooperative games" The Annals of Mathematics 54(2):286-295.

DOMINANT DISCOURSE

Analysing: types of organisations



Benefit others

Self-benefit



Cooperative

Individualistic

Neo-liberalism


Private enterprises

State agencies, foundations and charities


Socialliberalism

Unions and societies

Social businesses

Mutuals

and

co-operatives

Community businesses

Member-ownedbusinesses

social co-opsIndustrial & retail

co-operativesCommunity associations

Analysing: economic sectors



Benefit others

Self-benefit



Cooperative

Individualistic

Neo-liberalism


Private Company (CLS)

Public Corporation


Socialliberalism

Community Interest

Companies (CLG)Community

Benefit SocietyCommunity Interest

Companies (CLS)

CIO Foundation

CIO Association

CommunityAssociations

Social Co-ops

Co-opSociety Co-op

Business (CLS)

Employee-OwnedBusiness (CLS)

Public ServiceMutual (CIC)

Partnerships

Charity

PUBLIC SERVICES

PRIVATE ECONOMY

Unions and Societies SOCIAL AND SOLIDARITY ECONOMY

Analysing: sustainability


Philanthropic

Cooperative

Individualistic

PUBLIC SERVICES

SOCIAL AND SOLIDARITY ECONOMY

PRIVATE ECONOMY

Exploits

?

Environment

Sustains?

Enhances?

What effect doeseach socio-economic model have on the environment?

The tragedy of the commons

• The institutional bias toward private and state property (to the exclusion of group property) was influenced by Hardin’s theory of the ‘tragedy of the commons’.

• This theory postulated that ‘tragedy’ was ‘inevitable’ under conditions of peace: the commons would be over-used and so must be owned/managed privately or by the state.

(online at http://www.sciencemag.org/content/162/3859/1243.full)

Hardin, G. (1968) “The tragedy of the commons”, Science, 162; 1243-1248

http://www.sciencemag.org/content/162/3859/1243.full

Responses to the ‘tragedy’• Ostrom rejects Hardin’s thesis on the basis of empirical

evidence that resources are used in more sustainable ways when there is local group control over the resource.

• Using the example of Mongolia (group control), Russia and China (state / private control), Ostrom shows there is markedly less land degradation in Mongolia

• 10% (Mongolia) v 75% (Russia under state control) / 33% (China, under state, then private control).

Ostrom, E. (1990) Governing the Commons. The Evolution of Institutions for Collective Action. Cambridge: Cambridge University Press.

Ostrom et al. (1999) ‘Revisiting the Commons: Local Lessons, Global Challenges’, Science, 284: 278-282

Responses to the ‘tragedy’• Design principles for sustainable development with group-

ownership of property (common pool resources).

(Ostrom, 1990, p. 186)

• Principle 1 – clear definitions of the resource and the resource users (members responsible for creating and appropriating a shared resource).

• Principle 2 – ensure that appropriator rights (rights to use) are proportional to provider obligations (labour, materials and money necessary to sustain the resource).

• Principle 3 – local appropriation rules / rights are decided, partially or wholly, by those with rights of appropriation.

• Principle 4 - User / resource monitoring is subject to the principles of democratic accountability (officials who monitor use report findings to users of the resource).

• Principle 5 – low cost conflict resolution systems in which sanctions are graduated with clear links to the extent of resource / rule violation.

Revealing the social solidarity economy

Voluntary / communitysector

Public sector

Private economy

Social and solidarity economy

Based on Westall, A (2001) Value-Led, Market-Driven: social enterprise solutions to public policy, London: IPPR

Grants / no owners

shares /private owners

Relationship to private capital

State / public control

Autonomy / self-help

Who is in control?

Social solidarity: beneficiaries


Public sector

Private economy

Social and Solidarity Economy


Grants / no owners

shares /private owners

Relationship to private capital

Only community

benefit

Member + community

benefit

Member+ investor

benefit

Only MemberBenefit

Mutualbenefit

Only investorbenefit


Autonomy / self-help

Who is in control?

Social solidarity: control rights


Public sector

Private economy

Social and solidarity economy


Trustee controlled Investor owned/controlledMember controlled

Member owned

Member governed


Autonomy / self-Help

Who is in control?for the

communityto the market

for the state

Delivering value

Variations across the social economy


Public sector

Private economy


Trustee controlled Investor owned/controlledMember controlled

Member owned

Member governed

Ford Foundation

Wikimedia

John Lewis

Mondragon coops

Grameen bank

British Petroleum

WordPress

Raiffeisen Credit Unions

Leisure trusts


Autonomy / self-Help

Who is in control?

Summary• The social economy transcends traditional sector boundaries

and has the potential to form a social and solidarity economy with distinct characteristics based on Ostrom’s design principles.

• Social enterprise is a useful umbrella terms for any (democratic) organisation or activity where ‘people are not in it for the money’ but still trade to generate a financial surplus or mitigate dependence on others.

• A three sector model is useful for conceptualising the issue of hybridity

• A four sector model which acknowledges ‘group property’ and recognises the rise of the social and solidarity economy (new co-operativism) as distinct from charitable, state-owned and private sector models of enterprise.

References and Reading

Understanding Social Enterprise: Theory and Practice

(forthcoming, November 2015)

2nd Edition, Chapter 1

Documents

Dr Rory Ridley-Duff Reader in Co-operative and Social Enterprise Revealing the Social and Solidarity Economy York St John University, 1 st – 3 rd September