The Social Economy: A Framework for Collective Well-Being

Leonardo Cunha

1 de março de 2025

The Social Economy comprises organizations and enterprises that operate with social objectives, prioritizing community welfare over profit maximization. These entities include cooperatives, mutual societies, foundations, and associations that follow democratic governance principles and reinvest surplus profits into their social missions (Defourny & Nyssens, 2013). The European Commission defines the Social Economy as “a major socio-economic player that provides over 13.6 million jobs and represents 8% of the European Union’s GDP” (European Commission, 2021).

The main characteristics of the Social Economy include:

Democratic governance: Decision-making is participatory, with a focus on equal voting rights rather than capital ownership.
Primacy of people over profit: Social and environmental objectives take precedence over financial returns.
Reinvestment of profits: Earnings are reinvested to sustain the organization’s mission and community impact.

This model is particularly relevant in European countries, where governments actively support Social Economy initiatives through policies and financial incentives. Countries such as France, Spain, and Portugal have implemented legal frameworks that recognize and promote Social Economy enterprises (Monzón & Chaves, 2017).

The Solidarity Economy: A Movement for Social Transformation

The Solidarity Economy, while sharing similarities with the Social Economy, is rooted in a broader ideological and grassroots movement. It focuses on systemic transformation by fostering economic relations based on cooperation, social justice, and environmental sustainability (Singer, 2002). Unlike the Social Economy, which often integrates within existing capitalist frameworks, the Solidarity Economy aims to create alternative economic structures that challenge traditional market dynamics (Mance, 2007).

Key characteristics of the Solidarity Economy include:

Horizontal governance: Emphasizes participatory decision-making and self-management.
Economic democracy: Encourages collective ownership and decentralized production systems.
Social and ecological justice: Prioritizes sustainable development, fair trade, and labor rights.

The Solidarity Economy is particularly prevalent in Latin America, where grassroots organizations, worker cooperatives, and community-led enterprises play a significant role in local development (Dacheux & Goujon, 2011). Countries such as Brazil and Argentina have witnessed a surge in Solidarity Economy networks, supported by public policies and social movements advocating for economic alternatives.

Key Differences and Contextual Applications

While both models aim to foster equitable and sustainable economic development, they differ in key aspects:

Conclusion

The Social Economy and Solidarity Economy provide compelling alternatives to conventional market-driven models. While the Social Economy focuses on fostering inclusive growth within existing economic frameworks, the Solidarity Economy advocates for a fundamental rethinking of economic systems. Recognizing their unique contributions and synergies is crucial for policymakers, social entrepreneurs, and communities striving for economic justice and sustainability.

References

Dacheux, E., & Goujon, D. (2011). The solidarity economy: An alternative development strategy? International Social Science Journal, 62(203-204), 205-215.
Defourny, J., & Nyssens, M. (2013). Social enterprise in Europe: At the crossroads of market, public policies and third sector. Policy and Society, 29(3), 231-242.
European Commission. (2021). The European action plan for the social economy. Retrieved from https://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=8460
Mance, E. A. (2007). Solidarity economy: Strategies for social transformation. International Journal of Social Economics, 34(1/2), 4-10.
Monzón, J. L., & Chaves, R. (2017). The Social Economy in the European Union. CIRIEC Working Paper 2017/03.
Singer, P. (2002). Introdução à economia solidária. São Paulo: Fundação Perseu Abramo.

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