By Vasilis Taktikos

The Social Economy is the economy of solidarity and cooperation, of group, community and collective entrepreneurship. The economy that does not aim at the profit of the capitalists but at the creation of employment and income for all. It moves beyond the concept of competitiveness, overcoming the antinomies of the state and the market, the social and economic exclusion of the socially weak. It thus creates additional alternative income and employment opportunities where there would otherwise be hardship, unemployment and poverty. Its comparative advantage is the reduced transaction costs. The utilization of inactive materials and human resources. The open dissemination of knowledge and organizational technology.

The historical roots of the Social Economy go back to the cooperative enterprises of the 19th century in the form of mutual aid bodies, non-profit associations, cooperatives and collective enterprises which within two centuries evolved into various forms of social enterprises.

As long as statism “flourished” in the economy on the one hand, and monetarism on the other, and were able to satisfy the basic demand of development and employment for all, the Social Economy was under the limitation of the absolute sovereignty of the state and the market.

Today, the prolonged crisis of the welfare state and the inability of the market to create new jobs has allowed the return of the usefulness of cooperatives and the rise of a new form of Social Economy, the so-called “solidarity economy”. Thus, we have the expansion of its activities, from the production and distribution of material goods to a multitude of intangible goods, health, education and culture services and knowledge management.

The main tool for realizing the aims of the Social Economy are social enterprises and, secondarily, acts of charity. Social enterprises as an institutional tool can utilize inactive-fragmented material and human resources of Local Government, state organizations and institutions. Inactive fixed building facilities and plots of land, as well as exhibition spaces for the display of products in municipal and public spaces, providing jobs and income to institutions and social cooperatives. In this way, social enterprises can produce agricultural products and manufacturing products as well as services with socially beneficial purposes, having as an objective the expansion of employment.

The Social Economy, from an organizational point of view, is based on social networks, solidarity institutions and citizen partnerships. In solidarity cooperation, the so-called social capital is formed, on the basis of which investments are made possible at the local and regional level, transferring resources from the institutional networks of solidarity to sectors of the real economy which are necessary sectors, but in which the markets do not invest due to low profitability.

The term Social Economy does not of course refer to statism and the services of the welfare state and it does not concern state enterprises, which not only do not incorporate social capital and co-responsibility but also do not include employee self-management.

The Social Economy is the solidarity economy that either concerns non-monetary exchanges, or concerns social enterprises of public benefit in all sectors, such as: non-profit institutions, socially supported agriculture, cottage industries and manufacturing crafts, cooperative health services and education services through non- for-profit entities. The differentiation from private enterprises is that social enterprises do not have the sole purpose of profit but of social benefit and job creation. That is, they can be limited to the social gain of creating new jobs.

Many times private individuals who operate within the market as professionals or entrepreneurs set up social, supply, consumer and residential cooperatives themselves, in order to ensure better incomes, goods and services having a double economic status, which makes the idea increasingly acceptable of the Social Economy in wider strata of the population.

This pervasiveness of the Social Economy gives it another practical and moral advantage: that it can concern and serve almost the whole of society.

Very little has been written about the Social Economy in relation to its enormous importance in the modern world and even less has been communicated by the mainstream communication systems, although its contribution acts as an antibody shield for the entire economy. In the modern history of the market economy we witness the disastrous effects of “bubbles” in the financial markets, toxic bonds and banking products which lead to poverty and unemployment of large sections of the population. The Social Economy therefore comes to heal wounds, stabilize and rescue local societies from decline and corruption.

From another point of view, the Social Economy works like organic products and organic food. From a respectable percentage and above, it ensures the health of the economic system, like organic food the health of people and it achieves this, because with the cooperative-participatory organization of production, the whole society participates in the produced product and enjoys the benefits. Of course, there is no profit in a fictitious way, like the money markets, but it does not expose the economy to toxic products either.

Thus, the practice of the Social Economy is based on the participation of the community, on its free will, on open consultation at the level of Local Government, on building relationships of trust to reduce transaction costs, on solidarity care for the production of products and services for benefit of the many and not of the speculators.

Based on the collectives expressed by the Civil Society Organizations, important initiatives can be taken for humanitarian aid, the environment, culture, of a local and national nature and in this way to activate the local social capital, which ultimately contributes catalytically to the development of social entrepreneurship and this is something measurable today as a pragmatic phenomenon.

In the field of creative politics, the Social Economy is an institution horizontally from below alongside participatory democracy, with the formation of social capital, through the institutions of solidarity, volunteerism and social activism of Civil Society organizations.

At an international level, there is now scientific documentation that the indicator of development of Civil Society organizations has a direct relationship with the Social Economy and this indicator, in turn, has a relationship with the resilience of the economy and the response to the economic crisis and of corruption. Civil society, to the extent that it is developed, enforces clear rules of the economic game and transparency from below, thus supporting the economically weaker.


Here is a distinction should be made between traditional forms of Social Economy and modern informal and formal forms of systematic Social Economy in order to understand its historical evolutionary process.

The informal traditional Social Economy is that of solidarity, charity, non-monetary exchanges, systematic is the organization through social enterprises and institutions. In traditional rural economies, there was always an informal form of exchange in kind, labor and means of production, which facilitated the villagers in their exchanges, since they had objectively very limited money. They thus exchanged, not only products, but also labor time with each other – “chelation” is the term used in agricultural societies. This process, in essence, eliminated the middlemen and worked in favor of the producers.

Even today, in modern post-industrial societies, we find these non-monetary exchanges in the form of a club, where those who find it difficult to find satisfactory employment to make ends meet exchange labor time with each other to secure some basic subsistence services. We should note that similar initiatives are being developed by Civil Society organizations with the so-called time banks.

But beyond these informal forms (non-monetary exchanges) there is the institutional organization of the Social Economy of solidarity, which evolves through the social enterprises of the non-profit sector, creating permanent employment and income for the workers or cooperatives and thus ensuring , also benefiting small producers and those who offer social services.

In this sense, the Social Economy is a multiplier of social responsibility and functions as a saver of solidarity and human resources, in the face of social and economic exclusion. It creates incomes where there is insufficient concentration of capital but there is an increased willingness to cooperate to eventually invest in sectors that are socially necessary but do not offer a strong profit motive to attract private investment.

Thus, “investments” in social enterprises are made on the basis of a collective agreement for a social cooperative or a Partnership with social capital as a constituent element, capitalizing on the relationships of trust between the members of a cooperative as well as the relationships of trust with consumers. In these partnerships, as a guarantor, but also as a contributing partner, the Local Self-Government can also participate.

These relationships of trust can secure business in advance and deals that can make a business viable. In this way, Partnerships and Social Enterprises (Partnerships and Social Enterprises) present today as the most advantageous solution for Local Government in Greece, in order to address its operational gaps in the provision of social services in collaboration with social cooperatives .

The aim of the Social Economy, then, is not consumption as an end in itself, but primarily the meeting of basic needs, through a fair distribution of resources and relations of solidarity.

In other words, we are referring to the -in a broad sense- the third sector of the Economy, with the boundaries between the three not always being clearly visible. The first sector concerns the private commodity economy, i.e. businesses that operate for the purpose of profit. The second sector concerns the public or state economy, where the state or other units offer goods and services with a redistributive nature.

The third sector concerns the broad field of the solidarity economy. It is an economic activity that starts “from below”. It is primarily a citizens’ initiative (“citizens’ economy”, i.e. by the citizens and for their needs) that does not aim at profit. In other words, it is an “economy of “real” needs”.


Regarding the question of how the Social Economy is treated by the existing political system, the answers are divided between the progressive political elites and the conservative political system.

The progressive forces seek integration and the conservative ones seek repulsion from the economic system.

From the “federal” Europe, the Social Economy is recognized as a reality and financially supported for its development with specific programs and subsidies – as, of course, also happens in the private sector. On the other hand, the national-centric forces of the political system treat it with hostility, precisely because it is reinforced by the EU.

The political enemies are usually the so-called statists and national-populists, who oppose the Social Economy because they consider it a substitute for the welfare state and that its strengthening reduces the size of the privileges of civil servants and public suppliers.

Other more liberal, but at the same time utilitarian, positively accept the strengthening of the Social Economy, but under the control of private companies and often as a branch of large companies and try to integrate it into the “game” of the market.

These actually happen also because social enterprises, which are usually not-for-profit organizations, have the privilege of community grants or the privilege of tax-free turnover, which is not the case for private enterprises, and this privilege they are trying to reap. and many private individuals.

Thus begins and evolves the smuggling in the name of the Social Economy, with expansive interpretations for its purposes, by bureaucrats in key positions and “entrepreneurs” who set up businesses with the aim of grabbing the specific community resources for profit.

This is something that happens to a large extent in countries like Greece, where Civil Society organizations are fragmented, uncoordinated and in ignorance and confusion about the institutional framework of Europe. Of course, these conditions favor the economic and political elites, who want to control this space as well, while among them are banking institutions and business groups and other large enterprises.


In order to further define the field of action in which the Social Economy evolves, the object and subject of activity and, finally, what is and what is not a Social Economy, we must clarify what is the purpose, what are the contributors, what forms of social enterprises serve this the purpose and who the accomplices may be.

In principle, co-operating partners can be anyone. The state, municipalities, businesses, chambers and trade unionists. However, these cannot be the agents of the Social Economy. Clear actors of social entrepreneurship are cooperatives and institutions that produce social service work such as e.g. hospitals, educational institutions, cultural services, etc.

Municipalities can be protagonists in the development of the Social Economy, but they cannot be entrepreneurs by themselves, they can cooperate with cooperatives and collude. This is done and carried out in many municipalities throughout the developed world, where Social Economy and social enterprise actions are developed, offering essential solutions to combat poverty and unemployment, making them more effective compared to other municipalities that do not cooperate in social enterprises. Key in this direction are the “Social Development Partnerships” with partners of Civil Society organizations, chambers, cooperatives, local professional associations and unions.

The growth factors of the Social Economy are indicatively as follows:

• Civil Society organizations and all Non-Profit Bodies

• The cooperatives

• The Local Government

• The sponsors

• The church and various communities