Social Economics and the Solidarity City 2018019308, 2018021630, 9781315650579, 9781138122215

Table of contents :
Cover
Half Title
Title Page
Copyright Page
Dedication
Contents
List of Figures
List of Tables
Acknowledgements
1 Introduction
The Social Economy, the State and the City
Rolling Back and Rolling Out
Disembedding and Re-embedding
Social and Solidarity
Structure of the Argument
2 The Rules of the Game
Introduction
Disembedding the Market
Co-ordinating the Commons
Problems of Co-ordination
Social Enterprise Markets
Reassembling the Market
Conclusion
3 Urban Politics and Alternative Economics
Introduction
Neoliberalism and Its Limits
Countermoves and Resistance
The Social Base of Solidarity Economics
The Mode of Interest Mediation
Scale and the Neighbourhood as a Site of Struggle
Assembling the Social
Conclusion
4 Social and Solidarity Economics
Introduction
Distribution and Modes of Exchange
The Solidarity Economy and the Social Economy
Solidarity in Economic Practice
Social Entrepreneurship
The Social Base of Economics
Work Integration, Workfare and Empowerment
Non-monetised Trading
Barriers and Cognitive Traps
Conclusion
5 Enterprises, Legitimacy and Pursuit of the Social
Introduction
Defining Social Enterprises
Logics, Legitimacies and Pressures
Capture, Co-option and Resistance
Mission Drift
Communities, Assets and Local Accumulation
Conclusion
6 Actually Existing Solidarity Economies
Introduction
Basque Solidarity and Mondragon
Bristol and the Creative Commons
Québec and Solidarity Infrastructure
Red Bologna
Occupation in São Paulo
Peacebuilding, Social Economics and the Contested City
Conclusion
7 Scale, Replication and Money
Introduction
Scaling, Innovation and Social Value
Scaling-up
The Social Life of Money
Social Finance
Structure of the Sector
Supply and Demand for Finance
Diversification of Supply
Community Development Finance Initiatives (CDFIs)
Co-ordination and Finance Schemes
Conclusion
8 Conclusions
Introduction
The Social Base of Value
The Competitive Environment
Scale, Competition and the State
Network Power and Co-ordinating Institutions
Junctures, Overflows and Affecting Mechanisms
Knowledge and Learning
Skills
Profit Destination
Conclusion
Index

Citation preview

Social Economics and the Solidarity City

Social Economics and the Solidarity City explores the impact and potential of the social economy as a site of urban struggle, political mobilization and community organization. The search for alternatives to the neoliberal logic governing contemporary cities has often focused on broad and ill-defined political, social and environmental movements. These alternatives sometimes fail to connect with the lived realities of the city or to change the lives of those exploited in neoliberal restructuring. This book seeks to understand the capacity of the social economy to revitalize urban ethics, local practices and tangible political alterity. Providing a critical account of the social economy and its place in urban and state restructuring, this book draws on a range of international cases to argue that the social economy can be made a transformative space. Evaluating community enterprises, social finance, and solidarity economics, author Brendan Murtagh maps the possibilities, contradictions and tactics of moving the rhetoric of the just city into local and global action. Brendan Murtagh is a Reader in Urban Planning at Queen’s University Belfast, and has been involved in numerous research projects and books.

Routledge Research in Planning and Urban Design

Routledge Research in Planning and Urban Design is a series of academic monographs for scholars working in these disciplines and the overlaps between them. Building on Routledge’s history of academic rigour and cutting-edge research, the series contributes to the rapidly expanding literature in all areas of planning and urban design. Heritage-led Urban Regeneration in China Jing Xie, Tim Heath Tokyo Roji The Diversity and Versatility of Alleys in a City in Transition Heide Imai Cognition and the Built Environment Ole Möystad Public Space Unbound Urban Emancipation and the Post-Political Condition Sabine Knierbein and Tihomir Viderman Cities and Metaphors Beyond Imaginaries of Islamic Urban Space Somaiyeh Falahat Re-interpreting the Relationship Between Water and Urban Planning The Case of Dar es Salaam Maria Chiara Pastore Participatory Design Theory Using Technology and Social Media to Foster Civic Engagement Edited by Oswald Devisch, Liesbeth Huybrechts, Roel De Ridder For more information about this series, please visit: https://www.routledge. com/Routledge-Research-in-Planning-and-Urban-Design/book-series/ RRPUD

Social Economics and the Solidarity City

Brendan Murtagh

First published 2019 by Routledge 711 Third Avenue, New York, NY 10017 and by Routledge 2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN Routledge is an imprint of the Taylor & Francis Group, an informa business © 2019 Taylor & Francis The right of Brendan Murtagh to be identified as author of this work has been asserted by him in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloging-in-Publication Data Names: Murtagh, Brendan, author. Title: Social economics and the solidarity city / Brendan Murtagh. Description: New York, NY : Routledge, 2018. | Includes bibliographical references. Identifiers: LCCN 2018019308 (print) | LCCN 2018021630 (ebook) | ISBN 9781315650579 (ebook) | ISBN 9781138122215 (hardback) Subjects: LCSH: Urban economics—Social aspects. | Urbanization—Economic aspects. | Sociology, Urban—Economic aspects. Classification: LCC HT321 (ebook) | LCC HT321 .M86 2018 (print) | DDC 330.9173/2—dc23 LC record available at https://lccn.loc.gov/2018019308 ISBN: 978-1-138-12221-5 (hbk) ISBN: 978-1-315-65057-9 (ebk) Typeset in Sabon by codeMantra

For Denis Briege, Eilish, Aoife and Patrick

Contents

List of Figures List of Tables Acknowledgements 1 Introduction The Social Economy, the State and the City 1 Rolling Back and Rolling Out 3 Disembedding and Re-embedding 7 Social and Solidarity 10 Structure of the Argument 12

x xi xiii 1

2 The Rules of the Game Introduction 16 Disembedding the Market 17 Co-ordinating the Commons 21 Problems of Co-ordination 23 Social Enterprise Markets 29 Reassembling the Market 31 Conclusion 33

16

3 Urban Politics and Alternative Economics Introduction 36 Neoliberalism and Its Limits 37 Countermoves and Resistance 39 The Social Base of Solidarity Economics 44 The Mode of Interest Mediation 45 Scale and the Neighbourhood as a Site of Struggle 47 Assembling the Social 52 Conclusion 56

36

viii Contents 4 Social and Solidarity Economics Introduction 61 Distribution and Modes of Exchange 61 The Solidarity Economy and the Social Economy 66 Solidarity in Economic Practice 67 Social Entrepreneurship 69 The Social Base of Economics 72 Work Integration, Workfare and Empowerment 77 Non-monetised Trading 80 Barriers and Cognitive Traps 82 Conclusion 85

61

5 Enterprises, Legitimacy and Pursuit of the Social Introduction 91 Defining Social Enterprises 92 Logics, Legitimacies and Pressures 96 Capture, Co-option and Resistance 98 Mission Drift 100 Communities, Assets and Local Accumulation 106 Conclusion 108

91

112 6 Actually Existing Solidarity Economies Introduction 112 Basque Solidarity and Mondragon 113 Bristol and the Creative Commons 118 Québec and Solidarity Infrastructure 120 Red Bologna 123 Occupation in São Paulo 126 Peacebuilding, Social Economics and the Contested City 129 Conclusion 136 7 Scale, Replication and Money Introduction 141 Scaling, Innovation and Social Value 142 Scaling-up 145 The Social Life of Money 147 Social Finance 149 Structure of the Sector 150 Supply and Demand for Finance 155 Diversification of Supply 156

141

Contents  ix Community Development Finance Initiatives (CDFIs)  159 Co-ordination and Finance Schemes 160 Conclusion 164 8 Conclusions Introduction 168 The Social Base of Value 169 The Competitive Environment 170 Scale, Competition and the State 171 Network Power and Co-ordinating Institutions 172 Junctures, Overflows and Affecting Mechanisms 174 Knowledge and Learning 175 Skills 179 Profit Destination 181 Conclusion 182 Index

168

185

Figures

1.1 Fish processing facility in Robertsport, Liberia. Reprinted by permission of Stephen Akester 6 2.1 The reciprocal influence of the three social forces in market fields. Source: Beckert, 2009, p. 612. Reprinted by permission of SAGE Publications Limited 28 2.2 Model of institutional factors affecting the emergence and implementation of social enterprises. Source: Urbano et al., 2010, p. 66. Reprinted by permission of Taylor & Francis 29 2.3 Political articulation of emergent groups. Source: Callon, 2007, p. 159. Reprinted by permission of SAGE Publications Limited 33 3.1 Dynamics of social innovation. Source: Gonzalez et al, 2010, p. 52. Reprinted by permission of Taylor & Francis 49 4.1 Deconstructing the ethics of social enterprises. Source: Bull et al., 2010, p. 258. Reprinted by permission of Emerald Publishing Limited 69 4.2 Social enterprise as a combination of various actors, logics of action and resources. Source: Defourny and Nyssens, 2014, p. 50. Reprinted by permission of Taylor & Francis 75 5.1 The social welfare and commercial logics of WISE organisations. Source: Pache and Santos, 2012, p. 983. Reprinted by permission of SAGE Publications Limited 103 6.1 Reclaiming the water: Bristol Community Ferry. Reprinted by permission of Taylor & Francis 121 6.2 The Epiringa building, central São Paulo. Reprinted by permission of Urmi Sengupta 127 6.3 The performance of the social economy programme URBAN II 131 8.1 Learning styles and the culture of the SSE. Source: Based on Schweitzer et al., 2008, p. 53; Keen et al., 2005, p. 10 179

Tables

2.1 Contrasting modes of economic integration. Source: Peck, 2013, p. 1556. Reprinted by permission of SAGE Publications Limited 21 2.2 Social skills and actor practices. Source: Based on Fligstein, 2001 30 3.1 The impact of the social economy on urban regeneration. Source: Based on Vickers et al., 2017, p. 3 51 4.1 A diverse economy. Source: Gibson-Graham, 2006, p. 616. Reprinted by permission of University of Minnesota Press 63 4.2 Distinctive characteristics of the different types of economic behaviour. Source: Gardin, 2014, p. 116. Reprinted by permission of Taylor & Francis 64 4.3 Spectrum of ideological regimes. Source: Dey and Lehner, 2017, p. 757 after Boltanski and Chiapello (2005) and Boltanski and Thévenot (2006). Reprinted by permission of Springer Nature 72 4.4 Factor debilitating social innovation. Source: Based on Seyfang, 2011, p. 68 86 5.1 A typology of social enterprises. Source: Ridley-Duff and Bull, 2016, p. 78. Reprinted by permission of SAGE Publications Limited, Books 93 5.2 EMES International Research Network definition of social enterprises. Source: Based on Defourny and Nyssens, 2012, pp. 12–15 95 5.3 Threshold factors or social enterprises. Source: Young and Kim, 2015, p. 255. Reprinted by permission of Emerald Publications Limited 102 5.4 Legitimacies, conflict and strategies in social enterprise organisations. Source: Based on Pache and Santos, 2012, pp. 984–986 104 6.1 Principles of the Mondragon Corporation. Source: Based on Mondragon Corporation, 2015, pp. 34–35 115

xii Tables 6.2 Governance structures of Mondragon. Source: Based on MCC, 2012; Mondragon Corporation, 2015 117 6.3 Local multiplier effects of the Ashton Community Trust. Source: Grounds and Murtagh, 2018, p. 16 133 7.1 General policy framework: stimulating social innovation. Source: Swyngedouw and Moulaert, 2010, p. 232. Reprinted by permission of Taylor & Francis 143 7.2 Framework of actor levels and (pre)conditions with co-shaping social forces for scaling-up the impact of SEOs. Source: Scheuerle and Schmitz, 2016, p. 133. Reprinted by permission of Taylor & Francis 146 7.3 The structure of social impact investment. Source: SIIT, 2014, p. 3. Permission: Contains public sector information licensed under the Open Government (UK) Licence v3.0 152 7.4 Social Investment Matrix. Source: Based on Nicholls, 2010, tables 1 and 2, pp. 88–89 153 7.5 Socio-economic performance of BRAC. Source: Based on BRAC 2016 162 8.1 Knowledge, practice and the SSE. Source: Adapted from Rydin, 2007, p. 60 177

Acknowledgements

I would like to thank my colleagues in the School of the Natural and Built Environment, Queen’s University Belfast, especially Geraint ­Ellis, Wes Flannery, Phil Boland and Stephen McKay, for all the support they have shown to me over the last twenty years. I really appreciate the insight and experience of social entrepreneurs delivering radical change in their communities, especially Paul Roberts and Ciara Rea of the Ashton Community Trust, Audrey Murray from LEDCOM and ­A ndrew Grounds from the Ethical Development Trust. Over the last two decades I have gained valuable insights from Colin Stutt and Niamh Goggin (Small Change) and really appreciate the time and collegiality they have shown to me and to the sector more broadly. Ken Logue and Gail ­Birkbeck and their colleagues at the Atlantic Philanthropies also ­supported much of the research on which this book is based, and I am grateful for the contribution they have all made to social justice in ­I reland. Finally, I am indebted to Gorka Espiau at the Agirre L ­ ehendakaria Center for Social and Political Studies (ALC) in the University of the Basque Country as well as friends in the Mondragon Corporation for sharing their insights into the development of social enterprises and innovation at a global scale.

1 Introduction

The global financial crash in 2008 stimulated a critical debate about the power of a small number of centres of financial capital, widening inequalities in incomes and a concern for what and who economies are for (Castells et al., 2012). Popular street protests, the Occupy Movement, new political parties, especially in southern Europe, and anti-austerity coalitions reflected a deep unease about ascendant capitalism and its destructive effects on jobs, mortgages, lives, cultures and cities. However, the collective traction of these movements, and their staying power in the face of an emboldened, reasserted and even reformed faith in the market, is often limited as cities struggle to recover via aggressive competition, a leaner state and more efficient models of service delivery. Dikeç and Swyngedouw (2017, p. 7) point to the limitations of post-crash protests and, in particular, argue that ‘An infatuation with spectacular carnivalesque outbursts, combined with global attention, has made them contentious markers of a new political imaginary and potential politicizing sequence.’ The capacity to resist rearticulated urban capitalism raises concerns about the nature of protest and whether it is possible to be successful by sitting outside the processes that force its reproduction on the modern city.

The Social Economy, the State and the City The latest round of crises also refocused attention on the social economy as a technology to enable the state to withdraw welfare and reduce debt, as well as a survival strategy for the most marginal people and places (Nicholls and Teasdale, 2017). That it might be both and that it is inflected with conformist and radical ideas is at the heart of its own legitimation crisis, as well as its potential as a site of political struggle. The social economy is not new. Pestoff (2009) noted that mutual societies emerged as proto-welfare states in the 19thC and included insurance companies, health mutuals and building societies. Building societies and insurance companies are still significant financial institutions, although many have de-mutualised and restructured as commercial banks in order to find new markets and especially capital. As social business forms

2 Introduction become commercially successful, they are co-opted by the market to search out new opportunities for profit, losing anchorage with the interests and values that formed them in the first place (McMurtry, 2015). The story is one of incomplete disembedding of the economic from the social, services from communities and surplus from an ethic of care. Chapter 3 reviews the various ways in which the social economy is understood and the range of institutional, political, spatial and social perspectives in its scope and content. It is primarily concerned with trading goods and services but where profits are controlled by, and distributed to, a community of benefit (Ridley-Duff and Bull, 2016). It is the concept of solidarity that makes it different, in that it works for a collective set of interests where surplus is linked to ideas of redistribution, inclusivity and equality (McMurtry, 2015). The rediscovery of the sector by policy makers in very different institutional, political and global conditions has tended to focus on the crises of late capitalism and deepening forms of neoliberal rollout. Here, the emphasis is placed on its core economic functions in new legal structures, dedicated financial products and intermediaries that have created a narrow social enterprise culture in which communities and individuals are expected to take on responsibility for services, off-loaded and down-loaded by the state (Nicholls and ­Teasdale, 2017). A ‘shadow state’ has emerged in the spaces left behind by withdrawal processes but it, in turn, needs to be professionalised, reskilled and made more business-like to perform in an effective and disciplined way (Trudeau, 2012). Certainly, there is evidence of this shift, especially in the UK and the US, but the sector is a far more variegated and complex actually existing response to a mix of forces well beyond neoliberalising welfare (Kerlin, 2012). The social economy as the ‘conduct of conduct’ sees it as a ‘liberal Trojan horse’, designed to extend and naturalise markets or quasi-­ market forms across both the local and central state (McMurtry, 2015, p. 59) or as a flanking mechanism to enable neoliberal roll-out strategies (Trudeau, 2012). Moreover, it has become preoccupied with ‘inspiring examples and anecdotes of social purposes’ (Urbano et al., 2010, p. 57), hagiography and celebrated ‘war stories’ (Blundel and Lyon, 2015, p. 7) and inflated claims about its size and capacity as it appropriates sectors with only a thin connection to its values (Teasdale, 2011). Others argue that it is dominant in localised markets or low-grade labour sectors with weak value-added for its participants (Sunley and Pinch, 2014). Ultimately, its contradictory legitimacies mean that its economic capacity is muted by its social conscience in a way that will never rival predatory markets or an overbearing state (Nicholls, 2010). In this explicitly reactionary reading, the social economy fits neatly with the neoliberal emphasis on dismantling state institutions and services, marketisation and shifting responsibility onto the independent sector (Peck and Tickell, 2002). However, the relationship between the

Introduction  3 economy and neoliberalism as a somewhat vague collection of socio-­ cultural, political and institutional processes, is itself poorly articulated: In many cases where neoliberalism has been drawn deeper into culture, power and ideology, these elements tend to be over articulated at the expense of under articulated economic foundations. The problem this creates is not only that of an imbalance between an over-theorized, ideo-political superstructure perched on an undertheorized economic base, but of an absent interlocking rationale that connects them together into a congruent whole to demonstrate the desired direction of causality. (Venugopal, 2015, p. 175) All of this highlights the conceptual and empirical limitations of an omnipresent neoliberalism meeting an omnipresent conservative social economy. This book argues that a deeper understanding of the sector, and how it functions in urban conditions, does buy into and needs to buy into a certain form of marketisation, but looking at how it functions as an economy is also a key site of modern urban struggle. It is clearly never a complete answer, only a pragmatic space to make alternatives to the market by confronting it on its own terms, rules and logics.

Rolling Back and Rolling Out Wall (2015) points out that the largely Keynesian architecture of global finance that emerged in the post-war period aimed primarily to smooth out obstacles to global transfers, regulate instability and enable the extension of reconstructive capitalism. The crises of stagflation that accompanied de-industrialisation, new production sites and the rise of a more flexible service economy exposed the limits of the Bretton Woods Agreement. It also signalled a new order shaped by the Washington Consensus, the liberalisation of controls, regulatory agreements and easing the flow of capital and international aid. The General Agreement on Trade and Tariffs (GATT), now the World Trade Organisation (WTO), aimed to remove barriers to trade in order to accelerate economic growth, and the International Bank for Reconstruction and Development, or World Bank, was established to lend money for infrastructure damaged or depreciated by war and underinvestment. Finally, the International Monetary Fund (IMF) offered credit to countries with balance of payment deficits, but as Wall argues, the 1980s saw these realign to stimulate exacting neoliberal outcomes, discipline ‘beneficiaries’ and align with the interests of an essentially US corporate elite: Since the 1980s, the IMF, WTO and World Bank have advocated the so-called Washington Consensus of financial austerity (government

4 Introduction spending cuts), privatisation and market liberalisation. Swept along by the neoliberal counter-revolution against Keynesian economics, the consensus argues that for development to occur, barriers to the market should be swept away... Advocates of the Washington Consensus argued that the poorest countries in the world should cut government spending and increase taxes to reduce indebtedness. The tax burden should, of course, fall on ordinary citizens; taxes on profits would discourage investment and enterprise. State assets should be privatised as thoroughly as possible, while barriers to free trade should be swept away. (Wall, 2015, p. 23) Domestic policies are encouraged to promote export-led growth, rules on capital flows stripped to a minimum and domestic policies in planning, environmental protection and business compliance deregulated to remove barriers to development. Moreover, countries that fail to comply risk disinvestment, discipline by global institutions and financial destabilisation. Controlling inflation often means that the poorest countries need to cut spending to prevent prices rising, yet joblessness and low economic growth are far more damaging to both national economies and the poor. Wall shows how countries such as Botswana, which reached some of the highest economic growth rates in Africa, concentrated wealth among the already wealthy, increased poverty, saw AIDS spread and marginalised women in this new neoliberal era. Chang and Grabel (2014) also show that neoliberalism has increased inequalities between countries, partly because of the concentration of private capital flows within countries and partly because of a lack of wage protection, de-unionisation and cuts to welfare. They point out that international capital flows involve both state and private actors, including capital transfers between governments, multilateral organisations and international aid and foreign direct investment. Developing countries receive comparatively small amounts of global private capital and when they do, their effects are often short term, uneven and destructive: The liberalization of international private capital flows will be allocated by markets rather than governments. This shift in the allocation mechanism increases efficiency and ensures that finance will be directed towards those projects that promise the greatest net contribution to social welfare. These, of course, will be the projects promising the highest rates of return. (Chang and Grabel, 2014, p. 110) The search for returns encourages speculation-led development, which as the latest financial crises shows, results in unstable currency regimes

Introduction  5 and a concentration of power in a small cadre of ungoverned and ungovernable financiers. In contrast, Chang and Grabel (2014) show that income inequality has increased faster in countries that embrace the neoliberal model, including the US and the UK, than in those that still maintain social protection systems, such as Sweden. In particular, they find little evidence that wealthy countries have achieved their economic success through an unfettered commitment to free markets. For example, they point out that countries with large and well-resourced State-Owned Enterprises (SEOs), including France, Austria, Scandinavian nations and the most successful economies in South East Asia, are the fastest growing, with high per capita incomes (relative to highly privatised countries) and significantly lower rates of social inequality. Wall (2015) shows how Structural Adjustment Programmes (SAPs), pursued by the IMF and the World Bank, have devastated the economies of Sub-Saharan Africa by placing an emphasis on export-led growth, which has, in turn, depressed the price of home grown commodities in the interests of Western consumers. IMF policies, he charges, have led to the collapse of the Somalian economy, a catastrophic famine and, ultimately, a prolonged civil war. This new form of ‘super-imperialism’ has been accompanied by enclosure and ecocide through the intensification of agriculture, raiding resources for industrial scale farming and the displacement of millions of people for infrastructure projects (Wall, 2015, p. 63). Credit rating agencies monitor the performance of countries against a narrow range of metrics dictated by the IMF and the World Bank with disastrous consequences for the borrowing capacities of those who fail to make the grade. Here, poverty interventions are about ­buying-off and mutating dissent and providing just enough to supress violence without altering the conditions that privilege the financial interests of the global North (Roy et al., 2015). Liberia emerged from two brutal civil wars with significant damage to road, port, power and water infrastructure, its industries wrecked and public services decimated as it confronted the outbreak of Ebola. The World Bank, the US government agency called the Millennium Development Commission, the IMF, EU and China all piled in to help, or rather mobilise, around a particularly aggressive form of creative destruction in raiding the country’s assets. The main hydroelectric power station in Liberia is being rebuilt with foreign aid, but the price is to regulate (or deregulate) the energy sector to enable the plant to be sold to (overseas) investors. Proposals to reduce the sovereign fishing limit from six to three nautical miles would guarantee access to foreign factory ships, and rebuilt rail and port infrastructure have enabled raw ore to be extracted and shipped to other production sites and customers more efficiently. Common resources, such as mangrove forests and rubber plantations, have been privatised or enclosed, tearing them from cultural r­ ituals and

6 Introduction

Figure 1.1  F  ish processing facility in Robertsport, Liberia. Reprinted by permission of Stephen Akester.

the community husbandry that renewed them over centuries. Communities are encouraged to protect the mangrove forests with the promise of new jobs and incomes in tourism and conservation, laudable in itself, but it is difficult to see where and how this alternative economy will materialise in practice. In the small fishing village of Robertsport, international aid has helped to develop a new storage and processing facility to enable the artisanal fishing community to increase supply, distribution networks and prices (Figure 1.1). However, there is uncertainty about electricity connections, road access and most of all, who will operate the facility and whether it can be sustained as a going concern. The social economy, a co-operative and access to capital might help, but traditions of sharing and exchange, skills and governance capacity and access to cheap finance reveal their limitations as transferable solutions for the world’s poor. One of the most depressing aspects of local development in Liberia is that communities, public officials, NGOs and progressive donors all know that the rules of the game are stacked and uneven and who the winners and the losers are. The price of basic services and facilities is a high one for resource-cursed regions, as wealth and assets are extracted by global regimes, in which solidarity economics have limited room for manoeuvre.

Introduction  7

Disembedding and Re-embedding Whilst the neoliberal project represents the latest aggressive attempt to depoliticise and privilege self-regulating markets, it is always socially and politically connected in a constant ‘tension between disembedding and embedding processes’ (Laville, 2014, p. 108). What this might mean for urban economics, tactics and practices, social movements, relations with informal economies, private enterprises, finance and new legal formats, state-sector relations and policy making is a focus for this book. For all its power and resilience, neoliberal urbanism cannot be reduced to instrumental rationality, and there are opportunities for heterodoxy as markets are always socially produced and morally contradictory (­B erndt and Boeckler, 2010). Ferguson (2015) points out that there is nothing inherently neoliberal about market exchange any more than bartering or sharing is inherently ethical. The point is how they are being used, misused or potentially redirected towards the poor. It is not about leaving it to the market but seeing markets in a pragmatic way, in which activism and innovation might steer it in more inclusive directions. He argues for a minimum guaranteed grant to boost spending power by poor consumers within the market. The lack of waged work, moralising judgements about the undeserving poor and dependency welfare all call for more innovative and risky strategies to support consumption and flexible forms of distribution. Moreover, as Peck (2013) acknowledged: If a minimalist point of departure is that neoliberalism is never ­everything – either ‘within’ a particular social formation, governance regime, or territorial space, or in the realm of the extra-­ local relations – then it is clearly imperative that neoliberalism must inescapably and in every situation, be located amongst its others. Even where neoliberalism is demonstrably hegemonic, it is never the ­entire story, never the only causal presence; it never acts alone. Furthermore, fortuitous double movements, resistance, alternatives are ever present. (Peck, 2013, p. 150) Karl Polanyi (2001, [1944]) argues that the attempt to disembed the economic from the social involves a range of commodifying processes but that these inevitably set off a ‘double movement’ in which society will reject such exploitation. He shows how land, labour and capital are transformed from factors of production into commodities in their own right but that their fictive instabilities will cause people to organise communally and politically. In neoliberalism, these processes are intensified in the marketisation of nature (Castree, 2008), the exploitation of flexible and insecure labour (Upchurch et al., 2014) and in increasingly risky forms of global finance (Lyon, 2017).

8 Introduction Tizley (2017) makes the point that Polanyi failed to articulate the double movement and the complexities of political accommodation, compromises and refusals that accompany it, especially when it comes to profit. Dale (2016, p. 6) also points to a certain ambivalence in the double movement, distinguishing between a ‘soft’ version concerned with the capacity of self-regulating markets and a ‘hard’ one, which advocates a far more mixed economy of redistributive mechanisms. In the latter, price is only one of a number of exchange systems and is not in itself problematic. Harvey (2012, p. 22–23) argues that the right to the city is simply exercised through ‘greater democratic control over the production and use of surplus. Since the urban process is a major channel of use, then the right to the city is constituted by establishing democratic control over the deployment of surpluses through urbanisation.’ He goes on to claim that ‘To have a surplus is not a bad thing’ but that it needs to be ‘brought under democratic control’ (Harvey, 2012, p. 23). However, this does not automatically read across to local autonomy and contains the potential for disembedding as well as re-embedding processes: While on the one hand this opens space within which radical forces can more easily plant the seeds of a more revolutionary agenda... decentralisation and autonomy are (also) primary vehicles for producing greater inequality through neoliberalization. (Harvey, 2012, pp. 82–83) Mayer and Künkel (2012) call for a theoretical pluralism in the way in which the city is understood and in how politics is mobilised by state, economic and community interests. Attuned to the risks of theoretical eclecticism, they view structural Marxist and Foucauldian governmentality as sympathetic particularly to enabling empirical departures and methodological tests. Political economic accounts of urban neoliberalism draw attention to its processual roll-out, not in a fixed or stable state, but as a dynamic set of relations that are constantly in flux and capable of negotiation. The scope for that renegotiation foregrounds the subjectivities of state actors, governance arenas, discourses and unpredictable alliances, tactics and networks. Drawing on Gramsci, Mayer and Künkel show how hegemonies are asserted by a mix of coercion and consent. For example, materialist analysis highlights the growing importance of workfare, by identification and responsibilisation of the individual in welfare reorganisation and in cuts in public services. However, they also show that residents have refused such discipline and work within, against and outside these processes to assert alternative coping strategies. They call for methods and concepts that highlight ‘messiness, that is, the heterogeneity, changeability and internal contradictions of rationalities and government programmes as well as of identities and practices’ (Mayer and Künkel, 2012, p. 7).

Introduction  9 The very messiness of the approach and in particular, the emphasis on agency have tended to stress but also romanticise the meaning of, and scope for, resistance (Wacquant, 2012). Survival strategies that stress everyday realities tend to essentialism, descend into anecdote and in general, fail to mount a sustained alternative to the structural force of neoliberal ideologies and politics. Moreover, many apparently deviant practices simply ready places for hegemonic social norms and modes of development. Understanding what these alternatives mean, how they are constructed and regulated and who ultimately benefits requires ‘thick description’ and evaluation. Dean (2014, p.  161) suggests that any claim about the death of neoliberalism underestimates the way the regime of governing of and by states, including its commonplace political idiom and routine practices and technologies of government, has been shaped by the neoliberal thought collective. Moreover, while it is important to understand the contingent conditions of and processes of the formation and mutation of neoliberalism, this does not include the possibility that governmental regimes, once established, have their own logics and paths of development. Institutions, embedded values and professional routines all play into the reproduction of economic cultures and how they support the hegemony of capital. It is not just the power of money but how it is institutionalised and put to work by a mix of actors, cognitive frames and organisations that explains its primacy. However, this also suggests that it does not travel evenly and is path-dependent, institutionally specific and locally contingent (Purcell, 2009). The lack of uniformity and the incompleteness of disembedding processes open significant opportunities for alternative practices that have embraced a range of ‘transformative non-economic economic geographies’ (Lee, 2010, p. 281). The city is a site in which these contradictions are fought out, but this is not to necessarily privilege the urban in the hierarchy of spatial analysis. The cases presented later highlight the strength of urban-rural interdependencies in creating stronger social economies as well as the dangers of a local trap and a degree of community fetishism in describing its effects. Moreover, if alternative economics (if the social economy can be considered alternative) can challenge the authority of the state or private markets, then delocalising and scaling their impact implies a move away from the neighbourhood and fixed ideas of urban geography. The city is economically organised and socially produced and brings space into relation with economics and the politics of inequality, as ­Harvey (2012) suggests. It is more than an empirical container but seeing it contained and confined in the pursuit of ‘a more revolutionary

10 Introduction agenda’ is neither helpful nor accurate. Dikeç and Swyngedouw (2017, p. 7) put it succinctly, arguing that the ‘various insurgent urban movements that dot the landscape of planetary urbanism testify to the urgent need to rethink “the urban political” as an immanent field of action, as a political process that proceeds through the “act”.’ These acts unfold precisely because they are spatialised, and these sites in turn enable extraordinary politics of disruption aimed at transforming production, consumption and exchange and how they constitute spatial arrangements. Dikeç and Swyngedouw stress the importance of the act; how to act politically in the city, which brings us to the social economy as a field of action and how it is entangled in other markets and especially, a dominant capital logic: Revolution is not about destroying capitalism, but refusing to create it. To pose revolution as the destruction of capitalism is to reproduce the abstraction of time that is so central to the reproduction of capitalism; it is self-defeating. (Holloway, 2010, p. 254) Holloway points out that destroying capitalism is a hollow offer, a chimera that diverts attention and resources and simply puts off ideas about equality and justice to a never-to-be-realised future. Gibson-Graham (2006) argues that the task for anti-capitalism is to stop making it and to proliferate local alternatives in order to organise distribution in more sustainable ways. Exploring the cracks, experiments and endless possibilities, connecting them and building a political arena that sits outside purely capitalist formations are where urban struggle needs to be centred (Amin, 2009).

Social and Solidarity Foucault (2003) argues that capitalism is always more than economics and to understand it, we need to understand the complex dispositifs that recruit, activate and responsibilise citizens in its reproduction. Citizens are not constructed as unwitting dupes of an explicit economic hegemony but are made and re-made subjectively through everyday practices, ideas and representations they come into contact with. The concept of dispositifs focuses attention on the apparatus of discourses, institutions, regulatory frameworks and knowledge that are interwoven into the fabric of social arrangements, politics and the urban order. Here, Latour (2005) makes the distinction between the social as a fixed category and the social as an institutional concept: Even though most social scientists would prefer to call ‘social’ a homogeneous thing it’s perfectly acceptable to designate by the same

Introduction  11 word a trail of associations between heterogeneous elements. Since in both cases the word retains the same origin – from the Latin root socius – it is possible to remain faithful to the original intuitions of the social sciences by redefining sociology not as a ‘science of the social’, but as the tracing of associations. In this meaning of the adjective, social does not designate a thing among other things, like a black sheep among other white sheep, but a type of connection between things that are themselves social. (Latour, 2005, p. 5; italics – author’s original) The idea of the social economy as an assemblage is empirically important. If the project is to stop making capitalism, what is made in its place (or rather, its displacement)? What does this look like, and how practically do we, or can we, decouple urban markets from private accumulation? McCann and Ward (2012) highlight the auto-critical dimension of assemblage methods by encouraging unexpected connections and mutations, openness and risk and a more experimental analytical position: Our notion of ‘assembling urbanism’, then, points to the fact that cities are made coherent through the work of their inhabitants, through the efforts of actors located elsewhere, and through the power-laden and uneven relations among these various actors, all set within larger social and material contexts which tend to complicate straightforward assumptions about causality. (McCann and Ward, 2012, p. 43) The point about assemblages is not that the city or space can be understood by associations or ignoring power and its material effects, only that it offers an analytical frame to understand social economies and what they might mean for making more inclusive places. As noted earlier, places are locked into transnational capital, intergovernmental arrangements and the global flow of ideologies and rules in which the urban has limitations, economically and politically. Moreover, these scalar relations also emphasise the complexity of the social economy as an assemblage, beyond the local, where ideas of the social and the market might be more readily understood. There is an entire discipline concerned with defining the social and solidarity economy and much of this is important for unravelling its conceptual uncertainty and contradictions in practice. McMurtry (2015) brings together multiple literatures on rights, justice, the commons and economics to articulate a clear relationship between and within the Social and Solidarity Economy (SSE). First, he defines the social economy as ‘Economic activity neither controlled directly by the state nor the profit logic of the market, activity that prioritizes the social well-being of communities and marginalized individuals over partisan political directives or individual gain’ (McMurtry, 2015, p.  70).

12 Introduction Here, economics is ends-driven and instrumental in the service of ­discrete social aims: The social is understood as the space of community where the individualism of the market and the alienation of state bureaucracy are replaced with community voice and economic activity responding to community need. (McMurtry, 2015, p. 70) What pulls these together is the idea of solidarity in which the sector is a site of economic and moral activity, a democratic process, especially at the local level involving a ‘radical decentring of the rules of the game on the economic prioritisation of community decisions over individual choice’ (McMurtry, 2015, p. 70).

Structure of the Book We return to the rules of the game in Chapter 2. The argument is that there needs to be a deeper understanding of markets and how they function (and can be made to function) in creating alternatives to private accumulation and profit. Accumulation for social gain needs to address the same co-ordination problems as private and state markets and assemble the structures, networks, institutions and cognitive routines that might make it work in more inclusive ways (Beckert, 2009). Evaluating the market as a field, reworking it and not avoiding it, but engaging with its everyday practice are fundamental. There are different methods and layers of control as well as limits in what is possible, and in ­Chapter 3, the analysis turns to the city and how interests variously shape it as a political space. There is more than capital at work, and resistance involves a complex set of claims, modes of working and levels of access which, in turn, explain where the SSE sits in relation to other processes of change. This is a multifaceted arena, which is explained in Chapter 4, but it is also assembled around institutions, finance companies, firms, policy scripts and entrepreneurs. The more the sector is entangled with state priorities, profitability and scaling, the more it is likely to surrender its connection with its social base. These contradictory legitimacies are at the core of social enterprises and, like the firm, are the motor of accumulation, surplus and redistribution. Chapter 5 suggests that it is not possible to clearly map out a pure, reformist social enterprise that does not involve some form of tactical compromise, negotiation and even mimetic behaviour. Billis (2010), for example, dismisses the Faustian pact in which the sector loses its distinctive characteristics in return for private and public resources but highlights the need to critically and constantly evaluate decisions around trading, profit and service delivery. This includes tracing organisational

Introduction  13 roots and deciding where legitimacy comes from: Who are the owners and do they all share the same vision, or are we likely to see a dilution of the social, and what are the implications for revitalising organisational purpose? Here, it is important to follow the money and to see where surpluses go and not just how they are made. How far utilitarian ethics can carry the sector and what the costs might be are a central narrative in a series of cases described in Chapter 6. These places show how the SSE has been variously structured beyond the margins of welfare or repairing urban crises but also as a meaningful, economic and social assemblage in its own right. The chapter concludes by emphasising the limitations of these initiatives, restrictions on their profitability and imperfections in making alternatives to capitalist markets. It also identifies the factors that enable them to move to the centre of some urban and regional economies and what these mean for assemblage processes. These are developed in Chapter 7 by looking at the implications for scaling and replication with a focus on the ethically problematic relationship between social enterprises and finance. The connection between investment, social innovation and skills is also taken up in the conclusions (Chapter 8). The analysis suggests that a more organised confrontation with markets, investment capital and regulatory regimes is part of the tactics of resisting, refusing and reforming purely capitalist logics. This calls for a different skill set, evaluative criteria and debate about the ethics of economic development and what and who it is for.

References Amin, A. (Ed.) (2009) The Social Economy: International Perspectives on ­Economic Solidarity, London, Zed Books. Beckert, J. (2009) The social order of markets, Theory and Society, 38(3), pp. 245–269. Berndt, C. and Boeckler, M. (2010) Geographies of markets: Materials, morals and monsters in motion, Progress in Human Geography, 35(4), pp. 559–567. Billis, D. (2010) From welfare bureaucracies to welfare hybrids, in D. Billis (Ed.) Hybrid Organizations and the Third Sector: Challenges for Practice, Theory, and Policy, pp. 3–24, Basingstoke, Palgrave Macmillan. Blundel, R.K. and Lyon, F. (2015) Towards a ‘long view’: Historical perspectives on the scaling and replication of social ventures, Journal of Social Entrepreneurship, 6(1), pp. 80–102. Castells, M., Caraca, J. and Cardoso, G. (Eds.) (2012) Aftermath: The Cultures of Economic Crises, Oxford, Oxford University Press. Castree, N. (2008) Neoliberalising nature: Processes, effects and evaluations, Environment and Planning A, 40(1), pp. 153–173. Chang, H-J. and Grabel, I. (2014) Reclaiming Development: An Alternative Economic Policy Manual, London, Zed Books. Dale, G. (2016) Reconstructing Karl Polanyi, London, Pluto Press.

14 Introduction Dean, M. (2014) Rethinking neoliberalism, Journal of Sociology, 50(2), pp. 150–163. Dikeç, M. and Swyngedouw, E. (2017) Theorizing the politicizing city, International Journal of Urban and Regional Research, 41(1), pp. 2–18. Ferguson, J. (2015) Give a Man a Fish, Durham (NC), Duke University Press. Foucault, M. (2003) Society Must Be Defended, New York, Picador. Gibson-Graham, J.K. (2006) A Postcapitalist Politics, Minneapolis (MN), ­University of Minnesota Press. Harvey, D. (2012) Rebel Cities: From the Right to the City to the Urban Revolution, London, Verso. Holloway, J. (2010) Crack Capitalism, London, Pluto Press. Kerlin, J. (2012) Defining social enterprise across different contexts: A conceptual framework based on institutional factors, Nonprofit and Voluntary Sector Quarterly, 42(1), pp. 84–108. Latour, B. (2005) Reassembling the Social: An Introduction to Actor-­NetworkTheory, Oxford, Oxford University Press. Laville, J-L. (2014) The social and solidarity economy: A theoretical and plural framework, in L. Hulgård, V. Pestoff and J. Defourny (Eds.) Social Enterprise and the Third Sector: Changing European Landscapes in a Comparative ­Perspective, pp. 102–113, London, Routledge. Lee, R. (2010) Spiders, bees or architects? Imagination and radical immanence of alternatives/diversity for political-economic geographies, in D. Fuller, A. Jonas and R. Lee (Eds.) Interrogating Alterity: Alternative Economic and Political Spaces, pp. 273–287, Farnham, Ashgate. Lyon, F. (2017) Lending to social ventures: Existing demand for finance and the potential for social investment, in O. Lehner (Ed.) Routledge Handbook of Social and Sustainable Finance, pp. 177–188, London, Routledge. Mayer, M. and Künkel, J. (2012) Introduction: Neoliberal urbanism and its contestations: Crossing theoretical boundaries, in J. Künkel and M. Mayer (Eds.) Neoliberal Urbanism and its Contestations: Crossing Theoretical Boundaries, pp. 3–26, Basingstoke, Palgrave Macmillan. McCann, K. and Ward, K. (2012) Assembling urbanism: Following policies and ‘studying through’ the sites and situations of policy making, Environment and Planning A, 44(1), pp. 42–51. McMurtry, J-J. (2015) Prometheus trojan horse or Frankenstein? Appraising the social and solidarity economy, in P. Utting (Ed.) Social Solidarity Economy: Beyond the Fringe, pp. 57–78, London, Zed Books. Nicholls, A. (2010) The institutionalization of social investment: The interplay of investment logics and investor rationalities, Journal of Social Entrepreneurship, 1(1), pp. 70–100. Nicholls, A. and Teasdale, S. (2017) Neoliberalism by stealth? Exploring continuity and change within the UK social enterprise policy paradigm, Policy and Politics, 45(3) pp. 323–341. Peck, J. (2013) For Polanyian economic geographies, Environment and Planning A, 45(7), pp. 1545–1568. Peck, J. and Tickell, A. (2002) Neoliberalising space, Antipode, 34(3), pp. 380–404. Pestoff, V. (2009) Towards a paradigm of democratic participation: Citizen participation and co-production of personal social services in Sweden, Annals of Public and Cooperative Economics, 80(2), pp. 197–224.

Introduction  15 Polanyi, K. (2001) [1944] The Great Transformation: The Political and ­Economic Origins of Our Time, Boston (MA), Beacon Press. Purcell, M. (2009) Resisting Neoliberalization: Communicative planning or counter-hegemonic movements? Planning Theory, 8(2), pp. 140–165. Ridley-Duff, R. and Bull, M. (2016) Understanding Social Enterprise: Theory and Practice, Thousand Oaks (CA), SAGE. Roy, A., Schrader, S. and Crane, E.S. (2015) The anti-poverty hoax: Development, pacification, and the making of community in the global 1960s, Cities, 44(April), pp. 139–145. Sunley, P. and Pinch, S. (2014) The local construction of social enterprise ­markets: An evaluation of Jens Beckert’s field approach, Environment and Planning A, 46(4), pp. 788–802. Teasdale, S. (2011) What’s in a name? Making sense of social enterprise discourses, Public Policy and Administration, 27(2), pp. 99–119. Tizley, M. (2017) Reintegrating economy, society, and environment for cooperative futures: Polanyi, Marx, and food sovereignty, Journal of Rural Studies, 53(July), pp. 317–334. Trudeau, D. (2012) Constructing citizenship in the shadow state, Geoforum, 43(3), pp. 442–452. Upchurch, M., Daguerre, A. and Ozarow, D. (2014) Spectrum, trajectory and the role of the state in workers’ self-management, Labor History, 55(1), pp. 47–66. Urbano, D., Toledano, N. and Soriano, D. (2010) Analyzing social entrepreneurship from an institutional perspective: Evidence from Spain, Journal of Social Entrepreneurship, 1(1), pp. 54–69. Venugopal, R. (2015) Neoliberalism as concept, Economy and Society, 44(2), pp. 165–187. Wacquant L. (2012) Three steps to a historical anthropology of actually existing neoliberalism, Social Anthropology, 20(1), pp. 66–79. Wall, D. (2015) Economics After Capitalism, London, Pluto Press.

2 The Rules of the Game

Introduction McMurtry (2015) identifies the fundamental tension between the SSE as a regressive process of capitalist penetration in public resources and a progressive arena of community activity that can displace the individualism of the market and the alienation of state bureaucracy. However, to engage in this process, we need ‘a critical understanding of the “rules of the game” and a conscious movement to build alternatives, which meet the needs of communities who have been excluded and oppressed’ (McMurtry, 2015, p.  70). Karl Polanyi (2001 [1944]) saw these rules shaped by the attempt to disembed economics from its social context, not least by reworking nature, human labour and money as ‘fictitious commodities’ to be valorised and traded. Society will react in order to reclaim the dignity of labour, planetary resources and finance as modes of exchange, and this ‘double movement’ is constitutive of political struggle and the search for social-economic alternatives to capitalism. Understanding the rules of the game means understanding market dynamics and how disembedding and re-embedding strategies are performed and what they mean, tactically, for social and solidarity economics. Granovetter’s (1985) foundational work on modern markets emphasised their social formation and the importance of non-economic actors and networks required to hold them in place. Markets need to be sociologically embedded because interpersonal trust is ultimately vital to their stable reproduction and efficient operation. Uncertainty and risk characterise markets as they become faceless and placeless, and more complex socio-regulatory arrangements are needed to resolve co-­ ordination problems (Zukin and DiMaggio, 1990). Fligstein and Dauter (2007) show how networks, institutions and performativity interlink to explain the way in which markets function beyond rational economic exchange. Network theorists focus on the relational ties, how trust is accumulated and the importance of social capital as some of a range of assets in market dynamics. Institutionalists stress the importance of economic, organisational and regulatory context and how market rules,

The Rules of the Game  17 power and norms shape relationships and the scope for actor agency. The performative perspective places particular attention on the technologies, materials and discursive strategies that actors deploy to frame markets ideologically, in which the efficiency of neoliberal dogmas appears to be winning (Wall, 2015). This chapter focuses on the modalities of the market and understanding how the SSE is assembled in relation to the state, capitalism and the community. The first part explores the nature of economic embeddedness before turning to look more closely at co-ordination, value and co-operation and how the SSE has been marginalised by more robust state and private markets. The analysis concludes by evaluating Callon’s work on market dynamics, which suggests some of the ground rules for assembling alternative institutions, systems and knowledge, critical to the political, as well as the economic, mobilisation of the sector.

Disembedding the Market Wall (2015) relates globalisation to the decline of nation states and the increasing flow of capital, technology and intellectual property on a planetary basis. Fundamentally, globalisation is about the extension of market modalities, rationalities and behaviour, premised on the efficiency of utilitarian motives and outcomes. Markets work because they bring utility-seeking consumers together with profit-searching producers in a systematic, well-organised and fair exchange that satisfies needs and wants, increases economic welfare and spreads income across active participants. However, markets are not rational and behaviours are ­reflexive, conditioned by a reading of other actors and how they might respond to economic risks as well as opportunities (Çalışkan and ­Callon, 2009). For Polanyi, social interdependence is the foundation of humanity, freedom and individual, as well as collective, rights. Rejecting a formal, contractual view of markets, he stresses a substantivist economics in which socio-economic rights are legally protected and firmly embedded in administrative, cultural and political institutions. The creation of solidarity bonds, reciprocation and trust, not price, will democratise markets and protect freedoms, all guaranteed by public bodies, politics and the rule of law. As noted earlier, the heart of his analysis is the way in which these necessary social conditions are pushed out of market dynamics as land, labour and capital are turned into ‘fictitious commodities’ that, in turn, set off a reaction – a ‘double movement’ – in which society attempts to protect itself from exploitation. Land, labour and capital are factors of production and cannot be treated as produce to be valorised, bought and sold through price-based exchange. Here, Polanyi identifies with the non-contractual foundations of contract,

18  The Rules of the Game which values, but cannot valorise, the life-enhancing qualities of personal ­interaction, kinship, neighbourhood and environmental quality: Traditionally, land and labor are not separated; labor forms part of life, land remains part of nature, life and nature form an articulate whole. Land is thus tied up with the organizations of kinship, neighbourhood, craft, and creed – with tribe and temple, village, guild and church. (Polanyi, 2001 [1944], p. 187) In his thesis, he takes each factor in turn, showing how their exploitation in the service of accumulation is inevitably destructive but also creates the conditions for resistance and political action. Labour, for instance, is increasingly alienated from its social significance and ontological meanings, which Holloway (2010, p. 89) considers as ‘an activity that we do not control, an activity that produces the master, that produces capital … [and] another possibility (potentially, dream?): to engage in free, conscious activity, conscious life activity.’ As labour is abstracted from the concrete characteristics that make it socially useful, the exchangeability, or value, of commodities becomes the only logic of production. Alienation, he explains, focuses our attention on the experience itself, whereas abstraction highlights the relationship between labour in an accumulation process that nobody really controls: ‘It is the fact that nobody controls it that makes it absolutely essential to break it: not only is it the negation of human self-determination, but it is also clear that its dynamic is leading us towards human self-annihilation’ (Holloway, 2010, p. 95). The way our activities are held together and shaped through exchange processes imposes rules, order and a sense of social stability. However, we are also not totally subsumed into abstract labour and the tension with conscious, useful, concrete doing labour opens up cracks in the capitalist edifice that can be exploited by alternative ideas of the value of work. In other words, there is a ‘constant revolt of human activity against the constraints of abstract labour, the constant tension between our power-to-do and the way in which that power is moulded through the dominion of value (the rule of socially necessary labour time)’ (­Holloway, 2015, p. 98). Just as the commodification of labour dehumanises the individual, the attempt to parcel land into profitable stock encourages its further exploitation and degradation (Castree, 2008). Block and Somers (2014, p. 112) argue that When agriculture ceases to be a way of life and becomes simply a profit-making activity, entire populations will find themselves at risk of starvation because market signals mean that land will be

The Rules of the Game  19 exploited for raising industrial raw materials rather than food. Today the scale at which nature is being commodified has expanded to such a degree that planetary annihilation through radical climate change seems almost inevitable. Similarly, Prudham (2013) shows how environmental policy has deepened and extended the commodification of nature through a new round of enclosures including, for example, private claims over genetically modified crops. He argues that there is now ‘widespread recognition that neoliberal emphasis on private property rights under the rubric of conservation, sustainable development, payments for ecosystem services, and the like is resulting in a massive wave of private appropriations of nature or “green grabbing”’ (Prudham, 2013, p. 1578). Block and Somers (2014) also point out that the financial crisis of 2008 is further evidence of the value of Polanyi’s thesis. As the supply of money and credit is left increasingly to banks and other financial institutions, the search for profits leads to reckless lending, over supply of credit and devastation when investors and borrowers are forced to confront its fictive instabilities. By creating fictitious commodities, Polanyi saw the potential for social demolition but also political mobilisation in order to protect society from the destruction he saw as inevitable. He makes the point that the emergence of market economies was always dependent on non-economic actors, laws, regulations and political commitments: There was nothing natural about laissez-faire; free markets could never have come into being merely by allowing things to take their course. Just as cotton manufacturers – the leading free trade ­industry – were created by the help of protective tariffs, export bounties, and indirect wage subsidies, laissez-faire itself was enforced by the state. (Polanyi, 2001 [1944], p. 144) Block and Somers point out that, even before the modern welfare state, governments used immigration and emigration to balance the labour market, assist the unemployed and dispense poor relief. By establishing property rights, regulating land via planning codes and providing infrastructure, they have also become increasingly implicated in, not disentangled from, market processes. The creation of central banks and international monetary institutions and attempts to control inflation all underscore the centrality of government in overseeing the markets for land, labour and capital. In short, a pure, free market, autonomous from government, social structures and community networks, has never existed and cannot be sustained (Granovetter, 2017). Rolling back welfare, dismantling financial, labour market and environmental regulations and shrinking

20  The Rules of the Game government all form part of the disembedding technologies, but it is impossible, even in the most intense neoliberalising processes, to decouple the economic from the social. Market ideologies, in reality, ‘are not setting the market free from the state but are instead re-embedding it in different political, legal and cultural arrangements, ones that most disadvantage the poor and the middle-class and advantage wealth and corporate interests’ (Block and Somers, 2014, p. 9; italics – author’s original). Block and Somers argue that the deregulation of finance should be more properly thought of as re-regulation, in which there is a new set of rules that preference predatory lending, speculation and the marginalisation of risk in financial calculations. Moreover, they point out that Polanyi’s concern with the entanglements between markets and ­politics, social relations and institutions more accurately reflect an always-­embedded economy that may be in constant tension but never dislocates economics from its necessary social moorings. In his critique of Polanyi, Peck (2013, p. 1557) emphasises that Markets are constituted through instituted processes; markets co-exist with other forms of integration usually in awkward and contradictory ways and the extent that markets display disembedding tendencies, far from being a prelude to equilibrium or the attainment of ‘purity’, these are by definition disruptive, provoking a range of social and institutional responses (or ‘double movements’). In this respect, the market is not self-regulating or even stable but consists of a spectrum of more market-like forms as well as other modes of non-monetised integration. For example, as Table 2.1 shows, reciprocity is embedded in the subjectivities of give-and-take, evident in tribal economies, whilst redistribution is marked by centralised storage systems and political authority. Exchange is instituted via market processes, the centrality of price and logics of capitalist bargaining, while householding acknowledges the intimate domestic nature of circulation. Thus, Peck stresses the inevitable variegated combinations between these modes of integration and denies the strict binary between formalised capitalism on the one hand, and substantive extra-capitalism on the other. The idea of the double movement is also important methodologically, as the tension between active society and the market economy is worked through institutions, the state, finance, commodities of production, supply and so on. The reification of the means of production provokes responses, such as social protection (in housing, health and education), which are not dictated by productive interests but reflect their own logics and outcomes. This in turn, sets off counteractive roll-back forces in deregulation, the assault on welfare and austerity in which the factors of production and consumption are in a constant state of restless, political flux. As Peck (2013) concludes, the proper understanding of

The Rules of the Game  21 Table 2.1  Contrasting modes of economic integration Mode

Reciprocity

Locus

Community

Redistribution Exchange

Central authority Dynamic Symmetrical Centric Motive Mutual Dues/ sociality obligations Governance Societal Custom or law Subjectivity Give-and-take Allegiance Object Gift Tax-tribute Loci classici Trobriand kula rings

Householding

Instituted Closed group market Multidirectional Introspective Individual gain Self-provision Price Bargaining Commodity

Babylonian 19th-century storage systems capitalisms

Circulation Group Own-use resources Rural economies; patriarchal family

Source: Peck, 2013, p. 1556. Reprinted by permission of SAGE Publications Limited.

markets necessitates a ‘more-than-markets’ approach, which explicitly recognises the pluralist nature of social-economic interactions. Specifically, he argues that a ‘Polanyi-plus approach to comparative economics must entail creative and border-crossing methodological explorations, which span capitalist and non-capitalist forms, the market and its others’ (Peck, 2013, p. 1562; italics – author’s original). The discursive claiming of the natural world is especially prevalent in the green economy and in particular, in how ‘sustainability’ has been ideologically decoupled from ideas about growth and innovation. O’Neill and Gibbs (2016) suggest that policy is dominated by a ‘business-asusual’ discourse, which emphasises investment, responsible capitalism and the potential for technological innovation as well as jobs. Rarely articulated in policy is the idea that responsible environmental management might mean no, slow or even de-growth practices. While the green economy has become a focus for a bundling of national development and environmental objectives, ‘For the most part, the way it is interpreted within policy envisages incremental and reformist changes which do not challenge or undermine the dominance of neoliberal economic growth or consumption economics’ (O’Neill and Gibbs, 2016, p. 1731). O’Neill and Gibbs’s research with 55 green entrepreneurs and actors in the sector shows that experimental, disruptive or transformative green practices are marginalised by the dominance of a growth model and by the need to endorse the market in the search for legitimacy and business viability.

Co-ordinating the Commons Modes of market integration and how natural resources are turned into commodities are far more variegated, as revealed in the central struggle

22  The Rules of the Game between private property rights and the commons. In short, not all goods, especially environmental assets, can be understood as tradable commodities in the open market because of their cultural meaning, physical character, the multiple claims made on them and how these are collectively enacted. Ostrom (2015) developed her earlier work (1990) to identify four types of goods organised around the subtractability of their use and the extent to which they can exclude potential beneficiaries. Each one is subject to different market regimes shaped by the opportunity to marginalise rivals and the capacity to exhaust or replace resources. Club or toll goods are distributed in largely self-regulating markets and differ from public goods, primarily because resources in the latter are replaceable, with low rates of subtraction from the available stock. Rational choice behaviours are more prevalent in open markets for private goods, where there is a higher degree of competition, but this does not hold with the other categories. For example, Ostrom looked at 44 fishing groups and 47 irrigation systems, working in Common Pool Resources (CPRs), and found little evidence of exploitation, zero-sum competition or untrustworthy behaviour: In all self-organised systems, we found that users had created boundary rules for determining who could use the resource, choice rules related to the allocation of the flow of resource units, and active forms of monitoring and local sanctioning of rule breakers. (Ostrom, 2015, p. 128) Clearly, the size and disorganised character of common pool resources make it possible to exclude interests from receiving the benefits of their use, and because they can be diminished, they are subject, under conditions of scarcity, to congestion and competition. Drawing on her empirical and conceptual work, she clarifies the rules of CPRs, which are based on who has the right to appropriate resources; how they relate to other users; the boundary, or definition, of the resource to be managed; how extraction is monitored and the collective enforcement of sanctions for users who do not comply with the rules. She also highlights the importance of multi-layered organisational arrangements that place a particular emphasis on local, small-scale and diffused governance systems (Ostrom et al., 1994). The advantage of these systems is that they enable co-ordination problems to be addressed in a tangible way over a particular resource tension. Here, she suggests that co-operation is maximised when contacts are face-to-face, where reputations are known and where the time involved to manage the resource is comparatively long. The higher the marginal per capita return, where entry and exit are easy and when sanctions can be agreed, the more collaborative advantage outweighs rivalrous, individualised and utilitarian values. However, these temporalities and their spatial rootedness also mean that such solidarity does not travel effortlessly, nor can it be easily

The Rules of the Game  23 replicated through the social economy. Agrawal (2003) pointed out that these decision rules reduce the complexity of resource management to a technical fix and ignore, or dilute, the authority of property rights, the state, economic interests and the intrinsic nature of assets and how they are used. Resources can be stationary, stored, mobile and/or replaceable, with each state dictating a different set of possibilities, access channels and regulatory regimes. Demographic pressures and new technology can prompt changes in existing management rules and here, the private market can make inroads into previously stable pooling arrangements. Therefore, common pool resources can quickly shift into private, or public, goods, although cases of reverse flows are rare (Schlager and Blomquist, 2008). As new market actors gain access to stocks of CPRs, they can build alliances and influence the state and its capacity to organise and control property rights. McMurtry (2015) agreed that the problem for Ostrom is ‘whether or not common pool resources can be understood economically, not how to judge their ethical content in comparison with each other or dominant economic practice. In short, all common pool resource solutions are normatively equal’ (McMurtry, 2015, p. 67; italics – author’s original). Agrawal (2003) argues that this interpretation of the resource pool falls into a distinctive local trap by disconnecting extraction, distribution and consumption from wider market, state-local tensions and demographic pressures. The characteristics of the group also vary enormously including their size, prosperity, cultural homogeneity, the degree of competition between sub-groups and past experiences. Ostrom’s (2015) later work highlights the importance of polycentric governance arrangements in which multiple actors, with varying degrees of authority and influence, interact at different scales to smooth disputes and restore collective agreements. However, Young (2017) points out that binding, regulatory environmental agreements are cumbersome to set up and often difficult to implement in the face of political, economic and regulatory complexity. Moreover, the authority of actors in the institutional networks also varies with a proliferation of ‘unfunded mandates’ in which agencies have the illusion of authority but in reality, possess comparatively limited capacity to act (Young, 2017, p. 216).

Problems of Co-Ordination Jens Beckert also rejects a teleological understanding of rational markets guided by self-regulated behaviours because of the sheer complexity of economic decisions implied in means-ends relationships: The problem for actors is not so much that they have to balance their action goals between selfish interests and other norms and values but that they have to understand which means to use, that is, which strategies to follow, in order to make optimal use of existing

24  The Rules of the Game resources under given constraints. The rational actor model is a misleading conceptualization for the understanding of decision-making in economic contexts if actors cannot calculate the parameters rationally due to their complexity or novelty. (Beckert, 2003, p. 772) In reality, actors are left with contingent interpretations, based on calculations about market conditions, habits, the actions of others and likely future events. Co-ordination mechanisms are central to resolving the imperfections and asymmetries brought about by these subjectivities. It is evident that actors succeed in aligning their actions in ways that allow for market exchange to take place because they can form expectations about what others will do and because the expected behavior of others is sufficiently compatible with their own material or ideal interests. (Beckert, 2009, p. 246) Co-ordination is, in essence, a challenge of ‘mutual co-ordination’ in which three problems arise: the value problem, the problem of competition and the co-operation problem. The value problem is concerned with the assignment of different prices to heterogenous products that reflect a range of influences including ethical choices, cultural preferences and the satisfaction of basic wants. In short, price setting often contradicts assumptions of economic theory and ideas of effectiveness but reflects a wider mix of sociological influences. While competition is a constitutive precondition for markets, it also threatens the profits of producers, and they therefore have an interest in establishing structures to manage competitors, price, entrants and quality, in which the state plays a central role. Problems of co-operation also arise because of the social risks involved in markets where actors do not enjoy perfect knowledge, trust or rules to govern exchanges between producers and consumers. In turn, Beckert (2009) argues that co-ordination problems are resolved in the operation of three types of social structure: institutions, networks and cognitive routines. Actors (producers, consumers, regulators, intermediaries and so on) are embedded in the dynamic relations within and between these structures, and this field, or arena, shapes how they reproduce market behaviours. The field analogy is important and draws on Bourdieu’s work on the struggle to control economic, natural and cultural capitals in different social arenas. The rules of the field, the habitus and access to various capitals explain the relative position of agents, framed by power and class relations. The habitus is subjectively constructed by past events and inherited organisational forms as well as cultural memories that condition how we

The Rules of the Game  25 act in certain ways. Habitus is thus shaped unconsciously by the interaction between structures (of power and class) as well as individual agency to act in given contexts. These can lead to misrecognition, similar to false consciousness in Marxist thought, in which adherence to order and embedded inequalities, such as sexism or racism, coincide in the real and imagined worlds. Cultural capital is critical here by providing an aesthetic means of distinguishing classes and reproducing hierarchy and ultimately, domination. In his work on the structure of the housing market, Bourdieu (2005, p. 193) points out that agents, in this case, firms ‘create the space, that is to say, the economic field, which exists only through the agents that are found within it and that deform the space in their vicinity, conferring a certain structure on it.’ Firms, defined by the volume and composition of the assets they hold, determine the structure of the field. In housing, that structure is, in large measure, regulated by the state through financial compliance (at the centre) and land use zoning (at the local) and by banks and building companies ‘in socially constituted schemas of planning and appreciation that are socially maintained and reactivated by the actions of adversaries’ (Bourdieu, 2005, p. 89). Certainly, consumer behaviours, expectations and desires are subject to modification, and even discipline, by signing contracts and meeting obligations set by banks. The energy associated with each agent increases with the size of its capital, in which the weight of consumers would be entirely reduced to the effects of the field if they did not have interactions with it. However, there are also various species of capital configured in ­response to the stage of market development, mode of functioning and traditions, particularly in making pricing decisions. This includes financial, technological, commercial, social and symbolic capital: • • • • •

Financial capital is direct ownership, or control, through access to banks, of the principal resource for the accumulation and conservation of all other forms of capital. Technological capital is the portfolio of scientific resources, research potential, know-how and access to labour-saving devices in manufacturing processes. Commercial capital is about sales power and relates to the mastery of distribution networks such as warehousing, transportation and marketing services. Social capital is the totality of resources (including finance) activated through networks of relations, which creates a competitive advantage by providing higher returns on investment. Symbolic capital resides in the mastery of identity and recognition, knowledge and ephemeral but constructible concepts, such as brand loyalty (based on Bourdieu, 2005, pp. 194–195).

26  The Rules of the Game These capitals not only act indirectly, say to determine prices, but also exert a structural effect by shaping the relative position and weight of agents (or construction companies, in the case of the housing field). The ‘spaces of possibilities’ are defined by the, albeit unequal, distribution of capitals and can be manipulated in order to strengthen their integrative weight. The tendency for the structure to reproduce itself is immanent by achieving economies of scale, creating barriers to new entrants and reducing regulatory influence on the incumbents. Intermediaries, rules and institutions, including wage and debt contracts, trading agreements and market knowledge, help embed routines and transmissible skills that maintain the coherence of the field. Gemici (2012) is right to criticise Beckert for his lack of attention to these social, cultural and political influences but is wrong to suggest that he devalues wider structuring processes. In particular, Gemici (2012, p. 112) is critical of the essentialist understanding of actors’ behaviours and the emphasis on individuals operating outside power relations: This implies that a theoretical vantage point on the functioning of markets should involve context and history dependent propositions concerning the power relations, organisational structures, resources, networks, and institutions that constitute markets. Embeddedness, he explains, is a methodological construct, not a theory capable of explaining or interpreting the structure, regulations or crises in market behaviours. Co-ordination is not an independent variable but is constituted through the ‘global pattern of relations that market actors form when they forge organisational identities, secure niches, obtain political power, acquire consciously and unconsciously mastered practices, and control material and symbolic resources’ (Gemici, 2012, p.  114). Beckert is especially interested in explaining market functioning, failure and instability and how disruption can be avoided through interaction between actors, with legal guarantees and contracts to enforce trust across the system. He is less concerned about who, or what, markets are for, the social, as well as the economic, effects of achieving equilibrium or the uneven impacts that result from financial and fiscal ‘corrections’ (such as interest rate hikes, cuts in public spending, controlling inflation and so on). It is wrong however, to suggest that Beckert did not appreciate the significance of global capital or the political, as well as the social, structuring of market relations. Here, he draws on Fligstein (2001) to understand the market as a field of actors: The notion of the field refers to a population of actors that constitute a social arena by orientating their actions toward each other. The actors in a market field are producers (firms) and consumers as well as intermediating regulatory agencies that range from the state

The Rules of the Game  27 to lobbying groups, unions, advocacy groups, and social pressure groups. Agency in fields is structured by the influences that social forces exercise on the actors who populate the field. These forces consist of the relational topographies of networks, the institutional rules prevalent in the field, and the cognitive frames structuring the perception of agents. (Beckert, 2010, p. 609) Networks emphasise how firms, individual actors and intermediaries are organised in structural space. The relative force of these actors is ‘anchored in regulative institutional rules, which allow and support certain types of behaviour while discouraging others’ (Beckert, 2010, p. 610). He does not say what criteria or decision rules dictate what is permissible and what is not, nor does he explain how regulatory frames are reproduced or in whose interest. They are, of course, important, as he shows, for example, how antitrust laws prevent large firms from dominating the market and thus reduce the potential for competition and choice. Cognitive frames provide the ‘mental organisation’ of the social environment and include the ‘taken for granted’ scripts, socially inscribed rules and responses about how to act in order to gain influence. Figure 2.1 shows that, together, the three structures form a ‘social grid’ that entangles actors in a complex set of relations, tensions and contradictions. Agents must synthesize in their responses the demands stemming from different social forces. The demands are multifaceted and may stand in contradiction to each other, thereby opening up a variety of ways to respond to the situation and thereby recomposing the field. An agency-centred approach of this kind to the analysis of the role of social structures demands that the focus is shifted to the interaction of social structures and agency processes, based on the meanings these structures attain for market participants. (Beckert, 2010, p. 610; italics – author’s original) Beckert is then able to identify six interrelations explaining the dynamics of change and search for equilibrium. Social networks and structures are reproductive by blocking interests, creating alliances and shaping cognitive frames that support preferential (institutional) regulation. Change in one part of the structure creates conflict in another because it destabilises relationships and creates opportunities for some actors to speculate, while others can be blocked from resources or access to markets. The normative framing of markets is anchored in, and reinforced by, social belief systems that support the suitability and desirability of particular institutional forms. Hence, the institutional changes critical to the extension of neoliberalism in the 1980s, required such ‘cognitive hegemony’ to undergird deregulation and privatisation associated with the

28  The Rules of the Game Establish collective power to shape institutions

Institutions

Influence structure of social networks

Provide legitimation and shape perception of institutions

Make values socially relevant

Social Networks

Shape perception of network structures

Cognitive Frames

Shape and diffuse cognitive frames

Figure 2.1  T  he reciprocal influence of the three social forces in market fields. Source: Beckert, 2009, p. 612. Reprinted by permission of SAGE Publications Limited.

Washington Consensus. However, cognitive frames are also negotiable, can be disputed and contested ideologically, especially for the uneven or unintended consequences of market practices. Urbano et al. (2010) highlight the limits of institutional frameworks and in particular, the importance of informal, rather than organised, networks in social enterprise start-ups. Their approach, shown in ­Figure 2.2, stresses the motivation of individual entrepreneurs, distinctive regional and cultural characteristics and loose networks in forming social enterprises in Catalonia. Informal institutions are important for starting new enterprises in response to local problems and market opportunities (P1), but entrepreneurs and agreed social norms are vital to taking the project to the next stage (P2). Social networks help to address co-ordination problems, especially by bringing the community into contact with decision-making points (P3), but more formal institutions, such as technical support and funding, are critical for sustainable project implementation (P4). Indeed, much of the emphasis in social enterprise development has stressed soft networks, social capital and community embeddedness rather than finance, market intelligence and supply chains that generally characterise private sector assemblages (Lauesen, 2017). In his analysis of the ‘market-as-field’, Fligstein (2001) searches for greater empirical precision by drawing on Giddens and how, and with what scope, skilled actors shape social conditions and policy outcomes. The heuristic field contains insiders, who exist within a given network or policy system, and entrants, who aim to alter the precedents and rules in their interest. He stresses that, for a new, more advantageous field to emerge, challengers need co-operation from both allies and opponents in

The Rules of the Game  29

P2

Formal Institutions

P1

New Social Values

Entrepreneurial and Responsible Social Attitudes

Social Networks

Emergence of SE

Informal Institutions

P3 Support Mechanisms

P4

Implementation of SE

Figure 2.2  Model of institutional factors affecting the emergence and implementation of social enterprises. Source: Urbano et al., 2010, p. 66. Reprinted by permission of Taylor & Francis.

order to hold the group together and keep them motivated as a ­political collective. Actors matter because they can help form and reproduce identities, engage in negotiation, build coalitions and counter, or co-opt, opposition. In short, skilled social actors ‘frame “stories” that help induce co-operation from people in their group that appeal to their identity and interests, while at the same time, using those same stories to frame actions against various opponents’ (Fligstein, 2001, p.  113). ­Fligstein makes a series of propositions that describe the field dynamics but also help direct insurgents who aim to alter, or disrupt, its order, rules and ethics of practice (Table 2.2). Ultimately, incumbents seek stability to ensure that inter-firm competition takes non-destructive forms, and they hold the advantage in resisting any fundamental reconfiguration of the field. In turn, he warns that confrontational tactics are limited in that they simply invite coercion, or exclusion, by more capable actors. Change relies on the strength of the coalition among aspirant outsiders but also the tactical competence to impose, motivate or incentivise rule change in order to reconstitute the market.

Social Enterprise Markets Sunley and Pinch (2014) use Beckert’s framework to describe the emergence of a distinctive social enterprise field in four cities in the UK. They show how value within local social economies has been restructured by contracts with public sector agencies and especially, local authorities. Determining a value of the social worth of programmes, the methodologies to properly evaluate impact and the skills needed to manage ­contracts places social enterprises at a disadvantage in local negotiations. Social enterprises construct markets based on inherited traditions

30  The Rules of the Game Table 2.2  S ocial skills and actor practices No. Proposition

Implications for Actor Priorities

1

Finding ways to translate existing rules and resources to establish a new order via co-operation and formal alliances. Institutional entrepreneurs fabricate new institutional landscapes capable of uniting disparate interests based on a collective identity and agreed purpose. Skilled actors in dominant groups will attempt to push the limits of the field whilst not risking confrontation and potential crises in the established order. Actors in dominated groups face problems in stable conditions but their approach is to work with marginal interests to keep the group politically coherent, resilient and capable of mobilising in more preferential (unstable and crisis prone) conditions. Actors manage stability, consensus and the status quo in market relationships. Outsiders find fewer opportunities or niches for disruptive tactics. The impulse to keep existing rules intact, even if their legitimacy is popularly tested (the banking crisis being a case in point). Groups outside the established order need to reorganise identities and interests in order to reframe the market or create a new field.

2

3

4

5

6

7

Skilled social actors are pivotal for new fields of meaning to emerge. Skilled actors can help produce entirely new cultural fields for the field. Skilled actors as incumbent groups in stable fields will use existing rules and resources to reproduce their power. Skilled actors in challenger groups will try to create a niche and take what the system will give to keep the challenge alive. Where there is little internal turbulence or external threat, it is possible that social skills matter less for disruption. Skilled actors of dominant groups generally defend the status quo in crisis conditions. New frames will come from skilled actors in either invader or challenger groups.

Source: Based on Fligstein, 2001.

of community development, service gaps and the needs of user communities, whereas funders prioritise cost, volume delivery and instrumental performance evaluation. Moreover, they resolve co-ordination problems via networks, volunteering and peer support, with few involved in lending or social finance (Lyon, 2017). These stresses are reflected in aspects of the social grid, especially with the emergence of new institutional cultures, fiscal rules and legislation. Community Interest Companies (CIC) were launched in the UK in 2005 to enable social enterprises to adopt more business forms, placing a stronger emphasis on stewardship and the competencies of the Board, rather than the needs of communities. In practice, Sunley and Pinch (2014, pp.  795–796) found little difference in the performance of CICs over traditional Companies Limited by Guarantee (CLGs) but the field is fractured, unstable and it is ‘hard

The Rules of the Game  31 to perceive a market order in which social enterprises were dominant and strongly placed to exploit institutional rules.’ They also highlight the ­instrumental weaknesses of Beckert’s approach and its lack of emphasis on the social, when ethical logics assume a degree of importance over price, profit and shareholder influence. For example, social enterprises are not characterised by competitive struggles, market share and attempts to dominate the field: In effect, Beckert has displaced the rational economic actor homo economicus, but retained a view of agency driven by a search for self-interested power that is modelled on capitalist firms. (Sunley and Pinch, 2014, pp. 795–796) Fundamentally, different logics dictate social enterprise relationships within markets beyond price and muscling out the competition, but co-operation, even within the sector, is weak compared to private and public markets. As Muñoz (2010) emphasises, most social enterprise markets, if they exist at all as a coherent field, are local, responsive and disorganised. Moreover, institutional support is often at the receding borders of welfare, and many organisations have neither the organisational capacity nor the capital to enter the market, let alone achieve a dominant position.

Reassembling the Market Berndt and Boeckler (2010) argue that the moral contradictions of markets create opportunities for new alliances and participatory regimes outside the state and the private sector. For all their force and resilience, markets ‘cannot be reduced to instrumental rationality and there are openings for alternative imaginations in “moral markets” that are driven by a different set of rules and imperatives than rational instrumentality’, and heterodox markets can never be separated from morality but ‘are shot through with moral considerations’ (Berndt and Boeckler, 2010, pp.  560–562). Markets are not disembodied, freely operating systems but have material qualities including ‘physicality, corporeality, technicality’ that stress the importance of agentisation rather than actors, that is, the capacity to act and give meaning to action (MacKenzie, 2009, p. 3). Indeed, there are multiple socio-technical devices designed by economic agents, which are constantly fine-tuning supply and demand to stabilise the marketplace. Çalışkan and Callon (2010, p.  9) show that these Socio-technical Agencements (or assemblages) (STAs) ‘comprise human beings (bodies) as well as material, technical and textual devices.’ A large number of (human and non-human) entities take part in action, cognitive processes and competition to set the market in motion in which stable conditions are never really reached. Callon (2007) argues

32  The Rules of the Game that it is this incompleteness that holds the possibility for new social identities, movements and overflow effects: These effects are not necessarily interpreted as negative or harmful; on the contrary, they may be considered as positive, that is, as opening up new possibilities for action. In any case, whether they are perceived as positive or negative, they spawn matters of concern and trigger the emergence of concerned groups. These matters of concern are particularly difficult to treat by existing institutions and expertise since they are surrounded by profound uncertainties when they appear. (Callon, 2007, p. 143) Overflowings occur when goods and services act unpredictably or transgress the rational market frames set for them, such as the way in which pollution, environmental objections and green politics altered consumer consciousness, producer behaviours and new sustainable services. Concerned groups affected by the issue must objectivise it, build a (cognitive) understanding of its effects and mobilise beyond, usually, a small cadre of experts, to create new social formations. As Callon stresses, these overflowings may not necessarily be negative and can stimulate technological innovation and research collaborations as well as new market niches and profits. They also recognise the presence of the political in the economic and the scope of recognition for those who refuse the rules of the market and how it is cognitively framed. Figure 2.3 shows how group identities can be mobilised as political regimes in market conditions by fulfilling five requirements: • • •

• •

The inventory requirement is to establish the list of emergent concerned groups and their problems, even if they are not yet clearly visible. The second objective is to allow emergent groups – which initially are simply loose clusters of isolated, lost individuals – to express their problems and concerns (expression requirement). This is related to the third objective, which is to provide concerned groups, especially when their uncertainties are strong, with the means to specify their problems, to collect data and launch ­investigations and to explore problems and solutions (exploration requirement). The fourth objective is to facilitate the expression of demands, their confrontation and their composition (composition requirement). The fifth objective ought to be to organise constant interaction between the debate on demands and interests, on the one hand, and the exploration of problems and the search for solutions, on the other (iteration requirement) (Callon, 2007, p. 159).

The Rules of the Game  33

Composition of the Collective Inventory

Exploration Inventory

Exploration Expression Confrontation

Expression

Figure 2.3  P  olitical articulation of emergent groups. Source: Callon, 2007, p. 159. Reprinted by permission of SAGE Publications Limited.

Conclusion The attempt to disembed the economy from its social context has e­ ntered a more aggressive phase in deep neoliberalism (Brenner et al., 2010). However, it has not succeeded and cannot succeed in complete detachment because it needs social relationships, trust and institutions to organise the market, especially in the interests of capital. Goods and services vary in their structures and require a ‘more than markets’ approach when resources and their uses are not reducible to the price mechanism. Callon (and others) are important because they set out the rules of the market but more importantly, because they articulate what to do to resist disembedding processes. The assemblage of these countermoves focuses on how new actors are identified and work together to seek recognition and emphasises the mundane technical importance of co-­ordination in the performance of the SSE and how it sits within, and outside, capitalist relations. The institutions, networks and cognitive frames that work together to create markets are the same concerns for the SSE and how overflowing and disruption are made through solidarity logics and tactics in the modern city.

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34  The Rules of the Game Block, F. and Somers, M. (2014) The Power of Market Fundamentalism: Karl Polanyi’s Critique, Cambridge (MA), Harvard University Press. Bourdieu, P. (2005) The Logic of Practice, Stanford (CA), Stanford University Press. Brenner, N., Peck, J. and Theodore, N. (2010) Variegated neoliberalization: ­geographies, modalities, pathways, Global Networks, 10(2), pp. 182–222. Çalışkan, K. and Callon, M. (2009) Economization, part 1: Shifting attention from the economy towards processes of economization, Economy and Society, 38(3), pp. 369–398. Çalışkan, K. and Callon, M. (2010) Economization, part 2: A research programme for the study of markets, Economy and Society, 39(1), pp. 1–32. Callon, M. (2007) An essay on the growing contribution of economic markets to the proliferation of the social, Theory, Culture and Society, 24(7–8), pp. 139–163. Castree, N. (2008) Neoliberalising nature: processes, effects and evaluations, Environment and Planning A, 40(1), pp. 153–173. Fligstein, N. (2001) Social skill and the theory of fields, Sociological Theory, 19(2), pp. 105–125. Fligstein, N. and Dauter, L. (2007) The sociology of markets, Annual Review of Sociology, 33(1), pp. 105–128. Gemici, K. (2012) Uncertainty, the problem of order, and markets: A critique of Beckert, theory and society, Theory and Society, 41(1), pp. 107–118. Granovetter, M. (1985) Economic action and social structure: The problem of embeddedness, American Journal of Sociology, 91(3), p. 481–510. Granovetter, M. (2017) Society and Economy: Framework and Principles, Cambridge (MA), Harvard University Press. Holloway, J. (2010) Crack Capitalism, London, Pluto Press. Lauesen, L. M. (2017) The landscape and scale of social and sustainable finance, in O. Lehner (Ed.) Routledge Handbook of Social and Sustainable Finance, pp. 5–16, London, Routledge. Lyon, F. (2017) Lending to social ventures: Existing demand for finance and the potential for social investment, in O. Lehner (Ed.) Routledge Handbook of Social and Sustainable Finance, pp. 177–188, London, Routledge. MacKenzie, D. (2009) Material Markets: How Economic Agents Are Constructed, New York (NY), Oxford University Press, USA. McMurtry, J-J. (2015) Prometheus, Trojan horse or Frankenstein? Appraising the social and solidarity economy, in P. Utting (Ed.) Social Solidarity Economy: Beyond the Fringe, pp. 57–78, London, Zed Books. Muñoz, S. (2010) Towards a geographical research agenda for social enterprise, Area, 42(3), pp. 302–312. O’Neill, K. and Gibbs, D. (2016) Rethinking green entrepreneurship – Fluid narratives of the green economy, Environment and Planning A, 48(9), pp. 1727–1749. Ostrom, E. (1990) Governing the Commons: The Evolution of Institutions for Collective Action, Cambridge, Cambridge University Press. Ostrom, E. (2015) Beyond markets and states: Polycentric governance of complex economic systems, in D. Cole and M. McGinnis (Eds.) Elinor Ostrom and the Bloomfield School of Political Economy, pp.  153–161, Lanham (MD), Lexington Books.

The Rules of the Game  35 Ostrom, E., Gardner, R. and Walker, J. (1994) Rules, games, and common-pool resource problems in Rules, games, and common-pool resource problems, in E. Ostrom, R. Gardner and J. Walker (Eds.) Rules, Games, and ­C ommon-pool Resources, pp. 3–21, Ann Arbor, University of Michigan Press. Peck, J. (2013) For Polanyian economic geographies, Environment and P ­ lanning A, 45(7), pp. 1545–1568. Polanyi, K. (2001) [1944] The Great Transformation: The Political and ­Economic Origins of Our Time, Boston (MA), Beacon Press. Prudham, S. (2013) Men and things: Karl Polanyi, primitive accumulation, and their relevance to a radical green political economy, Environment and Planning A, 45(7), pp. 1569–1587. Schlager, E. and Blomquist, W. (2008) Embracing Watershed Politics, Boulder (CO), University Press of Colorado. Sunley, P. and Pinch, S. (2014) The local construction of social enterprise ­markets: an evaluation of Jens Beckert’s field approach, Environment and Planning A, 46(4), pp. 788–802. Urbano, D., Toledano, N. and Soriano, D. (2010) Analyzing social entrepreneurship from an institutional perspective: evidence from Spain, Journal of Social Entrepreneurship, 1(1), pp. 54–69. Wall, D. (2015) Economics After Capitalism, London, Pluto Press. Young, O. (2017) Governing Complex Systems: Social Capital for the ­Anthropocene, Cambridge (MA), MIT Press. Zukin, S. and DiMaggio, P. (1990) Introduction, in S. Zuckin and P. ­DiMaggio (Eds.) Structures of Capital: The Social Organization of the Economy, pp. 1–36, Cambridge, Cambridge University Press.

3 Urban Politics and Alternative Economics

Introduction The city has assumed a nodal position in transnational flows, information networks and labour markets as well as sites of significant neoliberal experimentation and innovation but also contestation and dispute. As Brenner and Theodore (2002, p. 351) argue, neoliberalism involves ‘path dependent, contextually specific interactions between inherited regulatory landscapes and emergent neo-liberal, market oriented restructuring projects at a broad range of geographic scales.’ In its roll-back phase, it dismantled entitlements, policies and institutions associated with Keynesian delivery, and as it rolled out, it assembled a new fiscal and financial environment, flexible governance and market modes of delivery. ‘In this sense, neoliberalization has never represented a stable institutional fix, though it has been repeatedly animated by the attendant search for one’ (Brenner et al., 2012, p. 33; italics – author’s original). Here, Brenner et al. (2012) suggest that disarticulated neoliberalism, centred on (de)regulatory experimentation, has been rebooted as deep neoliberalisation, which has moved from the uneven development of neoliberalisation to the neoliberalisation of uneven, regulatory development in a process that is always fragile, incomplete and ultimately unattainable. Certainly, capital has moved into an intense wave of disembedding, dismantling and commodifying nature, human value and predictably risky forms of finance. However, there are limits to the way in which capitalism is rolled out and how its re-formation opens opportunities for more complex entanglements with land, labour and capital. This chapter suggests that these are shaped around the social base of interests, how they are mobilised, the scale at which they operate and the multiple ethics always at work in the city. It shows that each of these dimensions has implications for the SSE and how it is assembled and reassembled, not just as a site of resistance, but as a dynamic arena guided by its own logics and embedding capacities and its uneasy encounters with contracts, profits and markets.

Urban Politics and Alternative Economics  37

Neoliberalism and Its Limits The progress of neoliberalisation involves a recalibration of intergovernmental relations by dismantling earlier systems of municipal support in favour of local entrepreneurialism and increasingly fuzzy forms of governance (Swyngedouw, 2009). As a result, the national level is no longer the pre-eminent geographic scale for the regulation of economic life paralleled by the declining affordability of manufacturing, transnational competition, de-industrialisation and the shift to the service economy. These have ushered in lean bureaucracies, market orientated forms of public management and weaker financial regulation. As the sovereign and the local have become less significant, the potential of anti-­neoliberal projects at the city scale has weakened, engendering ‘a lemming-like rush towards urban entrepreneurialism, which itself would only serve to facilitate, encourage and even publicly subsidize the accelerated mobility of circulating capital and resources’ (Peck and Tickell, 2002, p. 285). This also involves the destruction of the institutions of Fordism, which failed to provide a coherent basis for sustained capitalist growth. This phase of entrepreneurial planning is characterised by policy that: • • • • • • •

Promotes and normalises a ‘growth first’ approach to urban development, Rests on a pervasive naturalisation of market logics, justified on the grounds of efficiency and even fairness. Privileges lean government, privatisation and deregulation. Licenses an aggressive approach to inter-urban competition by local elites and states. Bases urban policies on an increasingly narrow range of instruments centred on capital subsidies, place promotion, supply-side interventions, central city makeovers and local boosterism. Punishes non-complying cities and leaders by excluding them from funding streams and the replacement of local cadres. Defines cities as key sites of economic and governance contradictions with increasing surveillance and regulation, sitting alongside organised resistance to neoliberalisation (based on Peck and Tickell, 2002, pp. 394–395).

Tenure restructuring is a critical component in the move from deep to disarticulated neoliberalism with the rundown of municipal housing, removal of rent controls, mass privatisation and a raft of subsidies to the private sector to supply low income housing. The creation of privatised spaces for elite consumption, the construction of mega projects to attract corporate investment and rolling forward the frontiers of gentrification have created purified enclaves, at the same time as they have intensified

38  Urban Politics and Alternative Economics social, ethnic and demographic segregation. Sager (2011) shows how entrepreneurialism has become a more significant feature of planning policy, urban governance and new forms of civic leadership. The need to attract mobile investment, compete with other production centres for skilled workers and attract prestige events, necessary for inter-local competition, has shifted ‘the emphasis of city politics from regulation and welfare issues... to re-imaging and marketing the city, creating employment opportunities, and acting as an entrepreneur in implementing large-scale urban development plans’ (Sager, 2011, p. 149). Boland (2014) also shows how competitiveness, creativity and culture have moved to the centre of an urban policy regime more concerned with spectacle, performance and place branding. A diverse economic base, a knowledge rich labour market, connectivity (virtual and material) and quality of life all focus attention on the softer cultural features of urban life and place positioning (Scott and Storper, 2015). This unstable mix of deregulation and financialisation, combined with technological advances in global markets, has, in turn, created the conditions for a new wave of capitalist crises. Castells et al. (2012) highlight the interconnected nature of these processes and how they pulled together to accelerate the international financial crash in 2008: • • •

•

• •

First, the technological transformation of finance enabled instant economic transfer, flattened space and increased ‘certainty’ in mathematical computation to aid more complex decision-making. Second, the liberalisation and deregulation of financial markets enabled capital to move more freely across global companies, further reducing the capacity of national regulators. Third, the securitisation of economic organisation and the creation of more complex products around derivatives and futures reduced transparency and supervision, especially via audit and accounting processes. Fourth, the credit-led expansion of the US economy, in particular, encouraged risky borrowing and lending, particularly by institutions confident that the federal government would bail them out should the need arise. Fifth, the mortgage crises, originating in the subprime market in the US, rapidly destabilised global financial institutions, international real estate and mortgage providers. Sixth, weak audit and financial monitoring systems enabled a new breed of broker to speculate in ever more reckless and cumulatively destructive ways.

In Aftermath, Castells et al. (2012) also identify sites, strategies and local practices that outflank these processes or remain impervious to their destructive effects. Local food networks, producer coalitions and ethical

Urban Politics and Alternative Economics  39 supply chains sit outside the crises of capitalism and organise life around different cultural and social rhythms (Conill et al., 2012). In short, the exploitation of land, labour and money is not universal or uncontestable and the city remains a site of alternative experimentation as well as rollout tactics.

Countermoves and Resistance Scott and Storper (2015) make the point that processes of financial ­deregulation, which transform housing from a home to an asset class, and restructuring welfare policies have an effect on the spatial distribution of wealth but that they are not distinctively urban. Similarly, The dense organisational tissue of cities and its complex set of decision-­ making jurisdictions impede the fluid evolution of rules and regulations and make deregulation difficult. Indeed, clientism, institutional and political exchange are far more important than any kind of ideology in explaining most urban management. (Storper, 2016, p. 225) The provision of public goods is a function of population density, ethnicity and distance; technologies reduce transaction costs and all sorts of responses, from local arts to community gardens, shape space in ways that do not obey the rules of neoliberalism. The city is an organising arena for the distribution of market ideas, but it also enables disorganisation, overflowing effects and local disruption. Pinson and Morel Journel (2016) argue that although neoliberalism is a temporally discontinuous process, it still exists as an overbearing market regime in which local responses that alter, outmanoeuvre or simply ignore its actually existing state are poorly understood. Moreover, it diverts attention from other sources of potential and change and prevents researchers ‘from seeing how neoliberal ideas and processes mix with other streams of ideas and processes to produce hybrids that are most likely the real source of political and urban change’ (Pinson and Morel Journel, 2016, p. 145). Here, the overbearing imprint of neoliberal explanation sees the SSE in a narrow, reductive role, there to fill the spaces left behind by retreating welfare and roll-back processes and reconstituted as roll-out technology to responsibilise the local to manage its own affairs (Weaver, 2017). As Venugopal (2015) pointed out however, this fails to meaningfully engage or explain how economies transmit neoliberal ideology or how alternatives might sit outside such framing: Neoliberalism purports to provide a lens through which this mysterious and hostile terrain can be surveyed, simplified, labelled and rendered understandable from a safe distance. Economic theory can

40  Urban Politics and Alternative Economics thus be vicariously critiqued and dismissed without one having to encounter it, much less understand it. (Venugopal, 2015, p. 180) Its very lack of definition creates analytical confusion about changes induced by neoliberalism and those caused by other forces of ‘rationalization and individuation characteristic of Western modernity in globo’ (Wacquant, 2012, p. 70). The potential of these other forces is poorly understood because they are often not exposed to critical (and credible) observation or are dismissed by the conceptual weight of neoliberal critiques. Kangas and Salmenniemi (2016, p. 9) call for a culturally specific empirical approach to post-socialist neoliberalism by disassembling the ‘socio-political materials’ of the city in order to uncover and direct alternative temporal and spatial trajectories, which are simply not reducible to a single economic logic. This process of disassembly and assembly helps to elaborate ‘The ways in which contingent articulations of neoliberalism do or do not work out in diverse social and political settings, but also of ways in which the settings themselves are simultaneously reassembled’ (Kangas and Salmenniemi, 2016, p. 9). Russell et al. (2011, p. 577) are also critical of concepts that fail to offer ‘signposts out of this capitalist present’ or suggestions that conditions will improve only with its total removal: Imagining and actively producing new assemblages is an unquestionable task, but … we need to move beyond utopian ideas of creating a world ‘outside’ capitalism (as if we would not just be recaptured anyway), and also beyond the false assumption it is possible to ‘destroy’ capitalism through a line of attack. (Russell et al., 2011, p. 580) Gibson-Graham (2016, p. 804) observed that moments of disaster produce ‘Diverse economic practices of mutual assistance and reciprocity [that] were, and still are, deployed to re-establish livelihoods.’ Similarly, Thompson (2012) highlights the logic of crisis displacement in which problems originating in the economy can be moved into political and social arenas to be expressed as a rationality crisis. Here, crisis-­ making, which naturalises market failure and contains objection and its ­counterweight, crisis-resistance, is shaped by interrelated processes of governance, alienation and the subjective framing of urban problems (Bayırbağ et al., 2017). The apparent flattening of urban governance and a more open, participatory planning process conceal new hierarchies that control who has access to resources and decision-making and who needs to be contained (Fuller and West, 2017). The uneven nature of capitalist development in shallow growth and severe, often savage, collapse alienates the dispossessed workers from politics and political arenas and also

Urban Politics and Alternative Economics  41 from wages, welfare and socially ‘cleansed urban centres’ (Weaver, 2017, p. 2051). Crises needs to be domesticated and disguised by a pragmatic and explicitly performative politics that appeals to consensus, collective responsibility and pulling together to restore the equilibrium (Bayırbağ et al., 2017). For example, urban resilience has become a prominent feature of the policy agenda since the 9/11 attacks in the US and highlights the need for cities to protect themselves against environmental risks and terrorist threats. The uncritical importation of concepts from the natural sciences to urban environments systemises risk, makes it controllable and devalues the complex interplay between economics and place that constantly restructures the local (Boland, 2014). For Mayer and Künkel (2012, pp. 5–6), this version of localism rests on a Foucauldian analysis [that] foregrounds the ‘conduct of conduct’. A governmentality or system of beliefs and steering people’s actions, which aims at mobilising the technologies of the self, that is – the policing of the self as part of subject constitution – for specific goals. The downscaling of governance to the neighbourhood and the incorporation of community actors into increasingly vague institutional arrangements might look like devolution but in reality involves the pacification of social disruption and a search for consensus and ultimately, urban stability (Swyngedouw, 2009). Resilience emerges as a related post-political trope that offers the logic and inevitability of recovery by displacing, or avoiding, problematic questions about the impact of the financial crash on the poorest places (White and O’Hare, 2014). This offloading and downloading are only possible by the creation of a ‘shadow state’ in which social enterprises have been scaled (via finance, legal and fiscal re-regulation) to play a stronger role in the delivery of functions previously associated with (distinctly Keynesian) local and central government. Trudeau (2012, p. 442) describes the shadow state as the way in which ‘Nongovernmental organisations working under state contract ultimately act as sites of state articulated regulation and control, which implement neoliberal agendas.’ He evaluated three social enterprises involved with refugees in the United States, showing how they emphasise individual self-sufficiency, restricted welfare and workfare integration. However, he also acknowledges that others have created culturally appropriate services that assert the dignity of migrant identities and that resist their identification around a narrow version of white American citizenship. Katz (2004) maps out strategies of resistance, reworking and resilience to explore the options open to deprived communities but also recognises the limits of action within state and local contexts. Collective resistance is built on an oppositional consciousness of protest and reworking problems, which alter aspects of people’s conditions but leave intact the power

42  Urban Politics and Alternative Economics relationships that keep them poor. In resilience, the state absorbs local cultures, co-opts ideas and groups and smooths opposition to inherited institutional and political structures. Geoghegan and Powell (2008) also show that there are multiple strategies open to communities, some of which are close to the state and the market, and some which sit outside such structuring processes. In the first, community development is subservient to the needs of economic development, there to flank measures to promote enterprise and mimic market behaviours. In the second, a corporatist arrangement involves a partnership between the state, market and civic society to deliver collaborative social services, and third is an activist version, where the sector ‘is envisaged as a locally distinct but globally linked struggle for emancipation’ (Geoghegan and Powell, 2008, p.  442). However, this assumes that communities decide which trajectory to select and that they are independent from each other. The idea that emancipatory action might involve, or come from, corporatist tactics and market entanglements suggests more complex means-ends behaviours across the social enterprise sector. The local is important because it is an arena to organise politically, build coalitions and allow groups to pursue their own accumulation strategies (DeFilippis et al., 2010). Social economics enable communities to move along the continuum from protest to reform because it offers either a partial or complete historical rejection of the established rules of international capitalism in order to access resources and services (Ridley-Duff and Bull, 2016). This more embedded understanding of community activism, and its relationship with land, labour and finance, stresses the importance of assembled institutional relationships and networks that move between spatial scales. Panelli and Larner (2010, p. 1360) advocate ‘timely partnerships’, in which state-activist alliances may encourage more effective practices but also enable connections to be made with other issues, institutions and neighbourhoods. ‘Less clear-cut divisions between state and activists now exist and more messy and contingent interactions (and temporally legitimized opportunities) have unfolded and been explicitly recognised as an integral part of political processes’ (Panelli and Larner, 2010, p. 1360). They see a shift in the skills of community development workers who have become more politically astute and aware of the risks of incorporation. Prior (2009) is also concerned with the range of roles that NGOs play by revising, resisting or refusing the authority of the state, although he stresses that these are, again, overlapping rather than exclusive: • • •

Revision involves the organisation’s modifying, distorting or steering policy delivery toward more inclusive outcomes. Resistance implies the creation of alternative strategies and practices outside the solutions offered by government. Refusal is more passive: NGOs disengage and ultimately withdraw from government programmes, influences and resources.

Urban Politics and Alternative Economics  43 Darby (2016) takes resistance further, arguing for a dynamic variant comprising four elements. Rejection means opting out of relations with the state altogether but risks eroding the autonomy of actors and sustaining useful work. Resilience prepares groups to survive outside dependent financial or contractual relationships, although Darby’s study of a community asset transfer scheme in the UK shows that the social enterprise faced bankruptcy and diverted attention from its social programmes to balance the books. Resourcefulness involves developing the skills and knowledge to anticipate problems, put contingencies in place and adopt business models to ensure the organisation can deliver its social aims. Finally, reflexive practice means watching, monitoring and formally evaluating the ethical implications of decisions and how this, in turn, affects financial performance and resource management. In doing this, social enterprises need to balance quantitative monitoring systems and a focus on profitability with indigenous and folk knowledge that provides a more anthropological understanding of how organisations relate to the communities they serve (Doherty et al., 2014). Williams et al. (2012) argue that Faith Based Organisations (FBOs) working in the social economy have adopted ‘critical pragmatism’ to lever resources and support, where programmes align with their values and expertise. They show that FBOs often adopt the imitative or mimetic behaviour of ‘successful’ organisational solutions and structures, presenting themselves as professional and ‘fit partners’, while maintaining values and practices ‘on the ground’ that retain a capacity for performative subversions of official government strategies. (Williams et al., 2012, p. 1488) Similarly, Cloke and Beaumont (2012) make the point that FBOs have encouraged a resurgent post-secular ethic for the city by delivering social care, drawing attention to spatial poverty and by crossing over theological, ideological and humanitarian boundaries to defy right-wing urban policies and politics. Wagenaar et al. (2015) also show that the Catholic Church initiated and incubated a number of community businesses that often moved out to a secular environment, becoming more politically active in the weak welfare conditions of southern Europe. The ethical origins of these social enterprises reveal different moral currents in the city and how they cross over into secular movements and ideas. Similarly, they show that interests organise around different economic, social and anthropological logics, whether they are migrants, faiths or consumption circuits. How they organise is also complex with rejection, resistance and resourceful tactics and networks displaying a far more multifarious political arena, typical of the SSE. However, where they organise and move between economic and political scales

44  Urban Politics and Alternative Economics also affects their ability to resist co-option, build alliances and replicate alternative urban economies. A range of authors, including Saunders (1986), Healey (2010) and Gunder and Hillier (2009), emphasise the institutional, regulatory and social base of issues in determining the scope for political action. The way interests mobilise is itself mediated by the scale at which the social economy operates and the capacity to enforce solidarity ethics in different modes of exchange. These related themes are considered next.

The Social Base of Solidarity Economics In his work on Legitimation Crises, Habermas (1975) highlights the effects of science and technology in revolutionising production and the crucial role that the post-war state played in managing the economy. As noted earlier, steering problems in late capitalist societies have been displaced from the economic to the political sphere but encounter enormous rationality problems in creating, directing and securing economic growth (Castells et al., 2012). Failure to resolve these problems threatens both the legitimacy of the system and the participation of the citizenry within it. Saunders (1986) acknowledged the centrality of the still-intact authoritative Keynesian state in maintaining the conditions for capital accumulation through the regulation of money supply, infrastructure provision and land use planning, as well as its role as a provider of collective resources, including housing, health and education. While these allocative functions are open to relative pressures by interests outside the state, this is not possible for productive functions, which are increasingly centralised, corporatised and removed from the pluralist arena. Production and consumption continue to regulate the mobilisation of different kinds of interests around different types of interventions. Class interests might be typically constituted by the social relations of broadly based production, but this does not hold for other services that cut across social groups, identities or geographies, nor the scope for economic alternatives. Seyfang (2011) argues that consumption enables a focus on alternative eco-based organisations using time, sweat equity, sustainable food circulation and ideas of slow growth. However, whilst consumption is clearly shaped by production, it can also exercise influence over it, especially in the way in which local money is organised. Han and Kang (2013) show that the Korean economy expanded from just above zero to over $1trn between 1960 and 2013, with remarkably low rates of income inequality compared with other high growth Asian regions. While much of the growth is based on large electronics conglomerates, they argue that the credit union movement has been overlooked, especially by strengthening consumption, enabling low income groups to save and access debt. The ability to accumulate and borrow propelled social mobility among the

Urban Politics and Alternative Economics  45 poor, effectively creating a new middle class. By 2012, Korean credit unions held total assets of $50bn and 5m members (a fivefold increase since 1985) and had consolidated its structure with fewer, but more stable organisations from mergers as well as the closure of unsustainable outlets. Similarly, Conill et al. (2012, p. 212) reviewed alternative economic practices in Catalonia and in particular, ‘The networks, organisations and individuals that, at least part time, consciously live apart from capitalist patterns of economic behaviour, and according to rules and values they find meaningful for themselves.’ They estimate that 14,000 people are involved in ecological farming and food processing, including community orchards and co-operative farms connected to ethical supply chains. Ethical consumer organisations have emerged as formal and informal networks linked to other regions in Spain and France and developed rapidly, especially with the promotion of healthy eating and a lack of confidence in produced food. The increase in supply and demand helped to create alternative exchange systems using bartered goods and services. Conill et al. counted 46 local exchange networks in Catalonia and 14 in Barcelona alone. However, they also acknowledge that A new politics must arise, as a necessary lever to move from the margins of society to a new social organisation of life... The stage was then set for a confrontation between a disciplinary model of hardened, shrunk, financial capitalism, and the deepening and diffusion of an alternative economy that a conscious minority had dared to start living in. This is a direct political conflict whose outcome will determine the world we will live in during the years after crises’. (Conill et al., 2012, p. 245)

The Mode of Interest Mediation It is clear that these interests mobilise around different logics of the state and the market but also organise their relationships in necessarily distinctive ways. Producer interests can organise in closed and corporatist circuits in elite decision-making sites that effectively obscure negotiating tactics and outcomes. Communities have little option other than to work in the public arena around open pluralist methods, campaigns and alliances (Seyfang and Longhurst, 2016). Instrumental theorists are wary of simple binaries (production versus consumption; corporatist versus pluralist; local versus central), arguing that agency is defined by the strength of alliances, the tactical use of knowledge and the ability to access different governance arenas. For example, Healey (2010) argued that urban conflicts are rarely entirely bourgeois or proletariat but reflect a more complex set of socio-spatial relations shaped by ethnicity,

46  Urban Politics and Alternative Economics age, race, gender and so on. The task for democracy is to transform antagonistic relations (between enemies) into agonism, which enables a focus on the generative potential of contestation (Featherstone, 2008). In his analysis of the ‘geographies of resistance’ and ‘maps of grievance’, Featherstone (2008, pp. 51–52) unsettles the friendship-hostility binary to reveal a more complex and diverse set of spatial solidarities: Constructing a totalising global resistance, then, is not the most useful or urgent political task. Rather, it is important to find ways of affirming the practices through which opposition to globalization is located at the intersection of routes of resistance. It is also to insist that these geographies can be generative of alternative political imaginaries and practices. This emphasises that the choice between local or global resistance is both false and destructive of political possibilities. (Featherstone, 2008, p. 188) Healey (2010) argued that the style of interest mediation depends on who is involved; the governance and governmental arenas in which issues are discussed; the nature of policy discourse and routines and how agreements are reached, enforced and monitored. Some are explicitly clientist: demands are made of the political system by specific interest groups, others are open and democratic and some use legal and quasi-­ legal methods within the structures of the state. Moreover, the opportunities for political expression are constantly changing in response to new policies, funding streams and institutions. Healey (2015, p. 19) argues that the new localism agenda, ‘however confused and rhetorical, has also created a space in which to position a voice’ for social enterprises. Securing genuine independence requires social enterprises to develop a strong community of practice, creating genuinely locally embedded governance and, linked to this, a constant focus on local legitimation strategies centred on inclusive discourse. Rejecting the ‘hero entrepreneur’ model, Healey suggests that core skills (financial management and planning), a network of actors (including universities) and the creation of critically reflective learning communities (constantly testing the value base of the agency) can help to maintain the political independence and advocacy strength of social firms: In terms of governance practices, then, we are combining a form of network governance, with a commitment to skilled and knowledgeable management and project development, and a strongly value-driven practice. We attempt an integrated, place-focused approach to development issues, focusing on people’s experience of living in ‘our kind of place’ in the round. We believe that being locally well embedded and knowledgeable should also bring benefits

Urban Politics and Alternative Economics  47 in providing good quality services with greater efficiency than can the much larger agencies which have so far dominated our governance landscape. (Healey, 2015, p. 21) Gunder (2003) argued that the seeking of certainty and the avoidance of conflict inherent in communicative rationality are unrealisable and potentially exclude other, less articulate voices and contended that agonism, not antagonism, is constitutive of inter-subjective, multi-linguistic and unpredictable urban struggle. Pløger (2004) also draws a distinction between antagonism and agonism, using the concept of strife, which is the ‘expressive form of agonism, and essential to disputes about words said and written and therefore to meaning, schemes of significance, interpretations and discourses in play’ (Pløger, 2004, p. 75). He defined several dimensions to strife in local development, which may hamper attempts to mobilise local community action. First is the tension between elected representatives and community leaders, vying for legitimacy and attention from ‘their’ community, decision-makers and those with resources. Second, he found that petty power structures and competition consumed the energies of activists over questions of leadership and control of the local development agenda. Third, intra- and inter-community rivalries fracture any sense of coherent empowerment and action by local people. Finally, he suggested that elites will work in their self-interest and against that of the local community, which underscores the need to appreciate community dynamics as well as the wider social context, within which antagonism, marginalisation and alienation are articulated. Social enterprises face downward pressures from government to conform in return for contracts and grants but also face upward pressures from communities to deliver locally useful services and sideways competition from other social firms and charities over limited resources. The social economy has a dark side in which resource competition, rivalries and egotism all play a role. Ultimately, the shift between asking someone else (public, private and donor sectors) and the power dependency it creates foregrounds exchange as a site of interest mobilisation and politicises the local around distribution and how it is organised.

Scale and the Neighbourhood as a Site of Struggle Moulaert (2010, p. 5) sees the neighbourhood as ‘heterogeneous but also decidedly localised, assemblages [that] are pivotal sites for initiating and implementing social change that may ripple through the city.’ The capability concept of local development focuses on the inherited assets within the community and offers an alternative to need and dependency in mobilising participatory effort. However, it tends to devalue the political complexity of community, how assets are configured in the first place

48  Urban Politics and Alternative Economics and, more importantly, how valuable they are in material, regeneration terms. Indeed, Callon (2015) relates innovation to overflowing effects in disrupting settled market arrangements in order to create new opportunities and rules. ‘Markets are continuously dismantled to be reconfigured differently, innovation being the weapon used by firms for this process of deconstruction/reconstruction’ (Callon, 2015, p. 325). What Moulaert (2010) offers is a concept of social innovation that is explicitly spatial, where social life is acted out, citizens’ rights are fought for and mobilisation against exclusion can be staged. As with Callon’s approach to market restructuring, Deleuze and Guattari (1987) outline a practical pathway to the process of social innovation: a

The generative component involves tracing stories of what has happened, why, how power relations shape the present and the scope for alternative processes. b The transformational component involves mapping the regimes, the strengths of relations, obstacles and tensions and how core and outlier actors are identified and in turn, shape outcomes. c The diagrammatic component is creative by imagining alternatives, identifying interstitial spaces and the strategic alignments needed to integrate political action. d Finally, the machine component outlines the programmes, activism and relations needed for a new regime to emerge (Deleuze and Guattari, 1987, p. 146). Gonzalez et al. (2010, p. 50) argue that innovation at the local level is embedded in a ‘broader geographical scaffolding that is constantly in motion in response to community politics as well as external economic influences.’ They developed an analytical model, ALMOLIN (ALternative MOdel of Local INnovation, Figure 3.1), that sees social innovation as a dynamic spatial and temporal assemblage, which locates social economy initiatives within a wider integrated programme of community renewal. Central to the model are social enterprises that respond to different strategic contexts (capitalist, mixed economy, welfare state and so on) but which are ultimately shaped by three criteria: the satisfaction of human needs, empowering communities and changing social relations. Here, the social economy rejects roles set for it by neoliberalism in order to re-embed its logics and functions in ‘needs-satisfying, allocating “fair” compensation to all production factors in the value-chain, and making use-value of commodities that reflect social and ecological quality’ (Gonzalez et al., 2010, p.  55). Empowerment relates to a movement for change by creating institutions and networks (including vertically with the metropolitan and central state) to create a collective identity based on an ethic of care and mobilising financial, human and

Urban Politics and Alternative Economics  49

SPACE: Territorial specificity (contextual constraints and opportunities, relations between spatial scales

TIME

SOCIAL EXCLUSION DYNAMICS: from employment, services, housing, citizenship, decision making

HOW

MOBILISATION OF RESOURCES: human, socio-institutional, organisational, financial: from employment, services, housing, citizenship, decision making

DEPRIVATION OF HUMAN NEEDS: material (food, clothing, shelter) social, (education, health), existential (selfexpression, creativity) and political (active citizenship

Visions and intensions

MOVEMENT FOR CHANGE SOCIAL ECONOMY INITIATIVES

Organisational and institutional dynamics of civil society

Culture and identity building

WHAT

Social innovation: Turning exclusion mechanisms into more inclusionary strategies and processes • • •

Satisfaction of human needs Empowerment Changes in social relations

Reordering of domains of innovative actions and institution building between: • State • Market • Civil society

Figure 3.1  Dynamics of social innovation. Source: Gonzalez et al, 2010, p. 52. Reprinted by permission of Taylor & Francis.

organisational assets to move to an agreed vision. Ultimately, the aim is fundamental change in social relations between civil society, the state and market sectors. The model is based on a review of 16 social economy projects across Europe, which emerged from a failure of the state and the market to provide basic services in poor neighbourhoods. They were not worked out to deliver marketised welfare but were locally inflected responses to ­everyday needs and service gaps. Certainly, each was vulnerable to incorporation and capture, and some lost rootedness as well as a capacity to innovate, but others also ‘took the opportunity to introduce, along with new modes of service delivery, forms of social economy and humanly enriched social relations, more democratic governance systems provoking a socio-political creative osmosis between community aspirations and universal social justice’ (Swyngedouw and Moulaert, 2010, p. 224). Tactically, they suggest that the transformative capacity of social economy projects in urban development rests on a number of related practices: 1 Seek out the cracks and spaces in state governance relations and be prepared to widen and shape them. 2 Build networks with others pursuing similar agendas, operating in the same or other cities, to enlarge the ‘scalar reach’ of activist initiatives. 3 Maintain a continuously critical perspective when asked to join up with state and civil society actors but avoid staying in ‘entrenched’ positions, as situations are in continual flux and entrenchment can provoke activism sclerosis.

50  Urban Politics and Alternative Economics 4 Demand resources from state agencies with as much spending autonomy as possible and demand the freedom to fail as well as to succeed. Failure is never a goal, but when it happens, it often provides a rich learning experience. 5 Emphasise the importance of respect from state actors for the capacities and values of citizens and their organisations, inside or outside the state and market nexus. 6 Recognise that state actors can learn new attitudes and practices and are often trying to escape from contradictions they are trapped in, providing a space for combined learning and design of new modes of governance. (Swyngedouw and Moulaert, 2010, p. 231) The framework resists an essentialist approach to the social economy and the risk of focusing on vulnerable localised social enterprise markets. Gonzalez et al. (2010) identify three dangers associated with the local trap. First, it exaggerates the power of local level agency in the context of national and supranational spatial development mechanisms and actors. Second, it suffers from an essentialist position by assuming that the neighbourhood can exist as a self-contained circuit of production and consumption when there are positive as well as negative external social and economic connections and realities. Third, it limits the analyses of inter-scalar relationships and especially the downloading of budgetary responsibilities to newly constructed policy versions of the local. Similarly, Seyfang (2011) points out that it is the very localisation of grassroots movements that reduce their capacity to scale beyond the neighbourhood: One cannot assume that grassroots innovations and local action is always socially cohesive. Ideological niches define themselves as ‘other’ or ‘alternative’ to the mainstream – an identification that makes outreach and diffusion difficult. (Seyfang, 2011, p. 80) Neighbourhoods with strong social economies seem to exhibit a stronger sense of place, self-identification and participatory decision-making (Klein and Tremblay, 2013). Networking within the sector, bringing the community into local distribution systems and building relationships with the public sector have created ‘development coalitions’, which ‘encourage solidarity based movements to work among growth regimes that traditionally characterise urban regeneration models’ (Klein and Tremblay, 2013, p. 234). Vickers at al. (2017) similarly argue that social economics, welded to an internal sense of place, is important but also politically limiting. In Table 3.1 they describe the impact of the social

Urban Politics and Alternative Economics  51 Table 3.1  T  he impact of the social economy on urban regeneration Creating jobs, strengthening skills and employability: • Providing employability support services and/or direct job creation for the most disadvantaged in the workforce. • Creating ‘decent jobs’ within SEOs – with fair pay, good working conditions and inclusive employment practices. • Developing other employment related support – such as the provision of affordable childcare, housing or transport. Building diversified local economies: • Contributing to entrepreneurship and innovation – introducing new services and alternative business models that contribute to emerging markets, sectors and sustainable development. • Brokering economic opportunities – including with private and public sector actors and enabling local people to take part in economic decision-making. • Building social capital and contributing to community well-being – through volunteering and related local activity. • Stimulating local consumption – supporting the retention and circulation of money within local economies. Contributing to wider economic and institutional transformation: • Supporting the creation of a more resilient economy with increased job security; there is strong evidence, for example, that co-operatives maintained jobs and output to a much greater extent than mainstream businesses during and after the 2008–2009 recession. • Influencing how all businesses could or should work as part of a more responsible and inclusive economy. • Promoting the wider uptake of ‘values-led’ innovation – influencing policy agendas and supportive institutional/regulatory change at national as well as city or regional levels. Source: Based on Vickers et al., 2017, p. 3.

economy in urban policy and show that it creates jobs and pathways to employment and improves services. Their review, based on an evaluation of practices, primarily in the UK, shows that they also stimulate local consumption, recycle resources and strengthen the advocacy power of even the most disadvantaged communities. However, Vickers et al. (2017) also stress the need to de-locate the sector to increase its impact, replicate practices and build resilience in the context of austerity. Here, the emphasis is on the need to create an enabling ecosystem that includes finance and business support, ­capacity building and leadership, knowledge sharing and stronger networks, ­especially those that connect with urban, regional and national actors. This normative focus is less concerned with isolated projects or individual entrepreneurial stories and more with how the social economy is ­replicated and scaled. The actors, relationships, resources, institutions

52  Urban Politics and Alternative Economics and fiscal environment all emphasise the need to look more closely at how coalitions and regimes might tactically steer the sector as a meaningful innovative and political space.

Assembling the Social Deleuze and Parnet (2007, p. 52) see urban assemblages as a ‘multiplicity constituted by heterogeneous terms [and] which establishes liaisons, relations between them’ (Deleuze and Parnet, 2007, p.  52). Here, the focus is on the interaction between humans, institutions, policies, scripts and material infrastructure through time and space and how they can be reassembled as politics by identifying alliances, tactics and sites of disruption. McFarlane (2011a) suggests that assemblage thinking offers a descriptive understanding of inequalities and how they form through history; a deeper conceptual appreciation of the notoriously slippery notion of agency and a critical imaginary of the city capable of directing political manoeuvres. Sensitive to criticisms about its lack of structural framing, he argues that it focuses on political-economy trajectories and overlapping power relations that ultimately form and reproduce poverty. Rather than privilege a class based analysis, it pays attention to the relative power of actors, how they collaborate and realign in response to shifting economic and social conditions and how their effects on urban formations are measured and evaluated. Baker and McGuirk (2017) argue that this permits a deeper understanding of neoliberalism, not as a unitary coherent project, but rather as a contingent and contradictory collection of processes that can disturb inherited power relationships and how they operate through the city. Similarly, McFarlane (2011a, p. 209) is concerned with assemblage as an analytical as well as a normative framework and its capacity to invent new connections and ways of inhabiting everyday urban life – and to the potential of urban histories and everyday life to be imagined and put to work differently, whether in the form of blueprint models, dreams or hopes for a better city, or in the capacity of random connections, to generate the possibilities of new ideas, encounters and collectives. This does not underplay the significance of neoliberalism but suggests it may only be one driver of inequality that relates to other processes of oppression and, critically, how they work and can be reworked in the socio-material world of the modern city. Urban assemblages are built around different forms of overlapping power relations, resource allocation and ownership processes, technology and the control and use of information. This leaves scope for a grounded analysis of how inequality is produced through the history of

Urban Politics and Alternative Economics  53 capitalism but also ‘how urbanism might be more justly reconfigured through political economic shifts, social movements and the construction of new norms in urban form and living’ (McFarlane, 2011a, p. 210). In turn, it highlights the importance of dialectic thinking, which seeks to uncover how agents come together as well as the contradictions, realignments and shifting relationships outside capitalist development and more importantly, the processes of reassembly, or new assembly, that might create fairer urban alternatives. These assemblages can be shaped by class, race and gender, but they can help direct the accumulation of the commons as an alternative to capital in which the processes of counter assembly are a conductor of political struggle (Hardt and Negri, 2009). Latour (2005) argues that we can understand social processes and how they are constructed, maintained and disassembled by examining five major uncertainties: 1 The nature of groups; there exist many contradictory ways for the actors to be given an identity. 2 The nature of action; in each course of action a great variety of agents seem to barge in and displace the original goals. 3 The nature of objects; the type of agencies participating in interaction seems to remain pretty wide and open. 4 The nature of facts; the link between the natural sciences with the rest of society seems to be the source of continuous disputes. 5 The type of studies done under the label of ‘a science of the social’, as it is never clear in which precise sense social science can be said to be empirical (Latour, 2005, p. 22). Latour (2005, p.  22) accepts that concepts of power, structure, society and context are important but argues that we should not ‘jump straight ahead’ with ‘sudden acceleration in the description’ of the city and sets out tools for tracing associations horizontally and vertically to global political circuits and institutions. As noted in Callon’s work, localising the global involves looking for the strands and points where ­macro-processes connect with micro-structures in order to craft associations between material and non-material forms. However, what is macro is already shaped, has formed in time and space, and is brought into contestation in the modern city. Privatising services, cutting public spending and the attempt to re-position social enterprises to a more central role in welfare delivery all rely, for example, on the expansion of social finance. These trends are not uniform, but they are globally connected and depend on a distinctive set of traceable relationships, an assemblage of money, organisations, laws, policy documents and rhetoric. The ‘field’ is not flat but already structured in uneven ways; the point is that it is not universal or inevitable but contestable on its own terms.

54  Urban Politics and Alternative Economics Mapping the structures, plotting out the depth and nature of associations, identifying who is inside and outside circuits of influence and the terms of access are the politics of contestation, resistance and economic alterity. Latour ‘redistributes the local’ by flattening the social world in which associations are positioned on the same scale and plane (Brenner et al., 2011). Reassembling the city is the very core of resistive politics, and alternative economics confronts a hard-wired system that is not that easy to dismantle, let alone rebuild. Müller (2015, pp. 28–29) emphasises five constituent features of assemblages. First, they are relational in that these are arrangements of different entities linked together to form a new coherent whole. Second, they are productive by creating, or helping to create, new territorial organisations, behaviours and actors. Third, they are heterogeneous, ­socio-material complexities that make no assumptions as to what or how relationships happen in practice. Fourth, they are integrated within a dynamic of deterritorialisation and reterritorialisation in that they establish and hold together territories as they emerge, but recognise that they are also constantly moving, transforming and breaking up. Fifth, they are desired and work to an always unstable end in the continuous flows (such as information) and objects (such as infrastructure) that make the city. Critically, Müller sees assemblages as a framework for analysing the interrelationships between power, economics and space and as a political ontology that provides tools to describe creative and/or destructive territorial processes. Actor Network Theory (ANT) shares cognate concerns with assemblages, especially in the work of Callon (2007) and Latour (2005). ­Similarly, McGuirk et al. (2016) argue that assemblage thinking reveals the relational, multiple and processual nature of urban regeneration policy and how it is implemented in practice. Structural processes (global, economic and political) are not ignored, but nor are they singular determinants of ­socio-spatial reality, especially as they are enacted and performed within social economics. An assemblage approach does not deny how power relates to, and is used by, specific actors, but it is not always predetermined and unnegotiable. This, in turn, allows for a critical and generative analysis of urban policy to show how situated ‘assembling mediates broader socio-economic processes (global competition, neoliberal ­urban governance) and, simultaneously, generates its own causal power to enact different forms of agency and generate different realisations of processes (domination, adaptation and, negotiation)’ (McGuirk et al., 2016, p. 135). However, its main strength is that it opens the multitude of possible capacities, realised in regeneration and the tactics that other networks use to block change and preserve the status quo. It is then possible to go to the generative source of urban inequality in the logics of capital, instituted through networks, nodes, actors, organisations, rules and discursive routines.

Urban Politics and Alternative Economics  55 Brenner et al. (2011) are especially concerned about the lack of a theoretical foregrounding for an assemblage approach, arguing that its value is primarily methodological and empirical. Similarly, Bender (2010) concedes that the focus on networks has the potential to level out the significance of actors, when some clearly start with more resources, access and, ultimately, power than others. This is precisely the problem with descriptive accounts of the social economy positioned in geometric relations with state and private markets and enclosed modes of exchange. Hence, Granovetter (2017) defines three types of power in the economy. In dependency, ‘someone [who] controls the resources that you value has power over you – can cause you to modify your behaviour in an attempt to obtain more of those resources than otherwise’ (Granovetter, 2017, p.  92). The resource dependency argument is an important one for social enterprises through the pressures that funders can exert on the behaviours, structures and programmes they pursue (Young, 2017). Second, and related to these processes, is economic power based on legitimacy and the tensions between the coercive use of rules and laws and the extent to which trust creates more freedom in market relations. When people feel part of a group, trust helps to create identarian solidarity in which compliance and obedience can be pushed out from market systems. Third is the ability to control the agenda by framing problems cognitively in order to block issues and maintain the status quo, but this is not always possible in pluralist arenas where knowledge is contested and potentially disruptive. Power over resources, rules and knowledge and the tactics to build it are what the ownership of value, through social economics, aims to establish. McFarlane (2011b, p. 376) also argues that his approach does not flatten power relations but draws on class based social movements to highlight ‘the different processes that historically produce urban inequality and the possibilities for those conditions of inequality to be contested, imagined differently and altered.’ He is explicit that we need to understand the transmission, reformation and spatial effects of neoliberalism along with a number of (often related) exclusionary processes and critically, how we might intervene to disrupt and transform their condition. Assemblage depicts both a process of how the urban is reproduced in socio-material histories and a name for particular objects (social and solidarity economics) to evaluate their dynamic effects in imagining a different future for the urban. Capitalism is structured through multiple logics, not just profit centred rationality in which value is produced through different sites, processes, institutions, actors and so on. In this respect, an assemblage cognition offers a means of describing these systems, how they form, are stabilised and also ruptured: Rather than supersede political economy, an ontology of assemblage involves a different approach to how political economy operates; it

56  Urban Politics and Alternative Economics approaches processes like value, work and policy mobility as constituted in their different enactments through socio material combinations and translations. (McFarlane 2011b, p. 380) Far from ignoring context, assemblages are compounded by locally distinctive pasts and opportunities, including the history of capital accumulation, moments of creative destruction and how roll-out strategies have created pro- and anti-market alliances. McFarlane (2011c, p. 737) thus stresses the centrality of ‘thick description’ which refers to A focus on how relations are assembled and change over time through new and changing interactions; that seeks to reveal how interactions might create surprises, opportunities, injustices and revelations; that is politicised from the start in its focus in finding openings and possibilities for critique and more equal urbanism. Thick description involves judgements about which actors, places and events to describe; the mode of description to expose how possibilities are closed down or opened up and the form of description, in which ­McFarlane stresses the causes of injustice, violence and poverty.

Conclusion McFarlane’s understanding of thick description brings us back to understanding the SSE as a formation shaped by the social base of interest mobilisation and the extent to which this is negotiable within state and private markets. It also casts empirical light on the mode of interest mediation to see how tactics and alternatives are opened or foreclosed within wider structuring processes and the spaces in which inequality might be challenged and changed. In turn, this emphasises the need to trace, in a normative way, the scalar relations within which economies, and especially, social economies, operate. The SSE is one relational arena in which the processual nature of urban change and activism is revealed, as well as the way in which the ethics that drive such remaking can be empirically tested and put to work.

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60  Urban Politics and Alternative Economics Vickers, I., Westall, A., Spear, R., Brennan, G. and Syrett, S. (2017) Cities, the Social Economy and Inclusive Growth: A Practice Review, York, Joseph Rowntree Foundation. Wacquant L. (2012) Three steps to a historical anthropology of actually existing neoliberalism, Social Anthropology, 20(1), pp. 66–79. Wagenaar, H., Healey, P., Laino, G., Healey, P., Vigar, G., Riutort Isern, S., Honeck, T., Beunderman, J., van der Heijden, J. and Wagenaar, H. (2015) The transformative potential of civic enterprise, Planning Theory and Practice, 16(4), pp. 557–585. Weaver, T. (2017) Urban crisis: The genealogy of a concept, Urban Studies, 54(9), pp. 2039–2055. White, I. and O’Hare, P. (2014) From rhetoric to reality: Which resilience, why resilience, and whose resilience in spatial planning? Environment and Planning C: Government and Policy, 32(5), pp. 934–950. Williams, A., Cloke, P. and Thomas, S. (2012) Co-constituting neoliberalism: Faith-based organisations, co-option, and resistance in the UK, Environment and Planning A, 44(6), pp. 1479–1501. Young, D (2017) Financing Non-profits and Other Social Enterprises: A Benefits Approach, Cheltenham, Edward Elgar.

4 Social and Solidarity Economics

Introduction Defining the scope, purpose and values of the Social and S­ olidarity Economy is an exhaustive, challenging, but at times circular and ­inward-looking, process. While it is productive and tactically important to surface tensions, this often descends into introspective essentialism about who is inside and valid and who and what should be excluded. It is important because the social has been appropriated by banks, oil companies and multinationals as a marketing device and deflection tactic at a time when corporate reputations have been damaged (De Grauwe, 2017). This chapter looks at the ethical basis of the SSE and makes the point that ethics are constantly in motion between the social and the commercial, not least because modes of exchange are so varied, complex and intertwined. At the heart of these exchange systems is solidarity, itself a slippery concept, especially when it is produced by price-based relationships. The compatibility between surplus and solidarity is what makes the SSE and its assembly a distinctive, but also problematic, arena of social change.

Distribution and Modes of Exchange Pestoff (2009) makes a distinction between an inherited social economy with its roots in 19thC co-operatives and mutual assurance and a post-political sector with a distinctly pro-market constitution and new public management styles. Since the 1990s, social enterprises have grown at the intersection of the private and public sectors via amalgamations and takeovers, which have reduced their participatory character as they have adopted a more business-like and corporate culture. Graefe (2002) also sees the sector as being actively reshaped and suggests three scenarios for its development in late welfare conditions. The first is a neoliberal one, where the marketplace is pre-eminent and where the social elements of the economy are pushed aside. The second involves a return to traditional corporatist forms where services are delivered in partnership with a reconstituted welfare state. However, neither of these, he suggests, is

62  Social and Solidarity Economics desirable, leaving a third option, which is to connect with market and non-market components in the modern economy: It is in this context that the social economy finds its full expression: as part of renewed social democratic strategy that includes worktime reduction, greater workplace participation, and the provision of services that meets new demands and needs. On the one hand, the social economy can meet new needs by mobilising resources latent within communities, and by building new solidarities. On the other hand, this social provision bypasses the Taylorist welfare state and is based on more participatory forms of organisation and ­decision-making. More broadly, as economic success increasingly comes to rely on extra-economic resources (such as social capital), strategic spaces are opened for a vision of development that integrates social priorities at every stage. (Graefe, 2002, p. 250) Jessop et al. (2013) also see the transformation of the SSE as part of the economic, as well as cultural, transition to post-Fordism. One strand of this change involves the emergence of political and ecological alternatives to the exploitation inevitable in capitalist growth. A second factor is economic restructuring and in particular, the rise of the service sector, flexible production systems and the capacity to generate profitable businesses without the need for significant investment. Third, state restructuring and the externalisation of public services, new public management and related modes of partnership governance saw the state divest responsibility for urban problems and unmet needs, including unemployment, social exclusion and uneven development. The peripheral and semi-peripheral, economic, political and social spaces that lack the necessary resources and assets to compete in the context of these processes run the greatest risk of being left behind. In such cases a resort to a social economy grounded in local social movements and concerned to empower the poor, deprived, and underprivileged seems to provide a more effective solution by developing a more self-sufficient economy that might then be able to insert itself into the wider economy or at least, secure the conditions for a viable, local, solidarity economy. (Jessop et al., 2013, p. 118) This recalibrated version of the solidarity economy is important because it asserts social reproduction over volatile capitalism and because it works against the commodification of public goods. This radical potential of solidarity has been framed by Gibson-­ Graham (2006) as post-development, in which proliferative and variegated economic practices sit outside price controls and market exchange.

Social and Solidarity Economics  63 Non-monetised trading, gift making, unpaid housework and co-­operatives all suggest a more diverse set of experimentation capable of resisting overbearing capitalist formations, especially at the local level. Drawing on ­Polanyi, they suggest that distribution networks are far more complex but that being further from price-based exchange does not always mean that economic practices are fairer or more ethical (Table 4.1). These formations do not operate in isolation from each other, and the idea of a pure solidarity economy, separate from the messy compromises brought on by entangling with the state and the market, is questionable, especially if it is to scale its work and transform the rules of modern capitalism (DeGrauwe, 2017). Scaling-up and replicating alternative distribution systems to private accumulation require such entanglements, as social economy organisations are ‘institutional configurations that are simultaneously influencing and influenced by the way public organizations, private enterprises and voluntary associations and non-­ governmental organizations work and interact with each other when facing social challenges’ (Hulgård, 2014, p. 78). Table 4.1  A diverse economy Transactions

Labour

Enterprise

MARKET

WAGE

CAPITALIST

ALTERNATIVE MARKET

ALTERNATIVE PAID

ALTERNATIVE CAPITALIST

Sale of public goods Ethical ‘fair-trade’ markets Local trading systems Alternative currencies Underground market Co-op exchange Barter Informal market

Self-employed Co-operative Indentured Reciprocal labour In kind Work for welfare

State enterprise Green capitalist Socially responsible firm Non-profit

NON-MARKET

UNPAID

NON-CAPITALIST

Household flows Gift giving Indigenous exchange State allocations State appropriations Gleaning Hunting, fishing, gathering Theft, poaching

Housework Family care Neighbourhood work Volunteer Self-provisioning labour Slave labour

Communal Independent Feudal Slave

Source: Gibson-Graham, 2006, p. 616. Reprinted by permission of University of ­Minnesota Press.

64  Social and Solidarity Economics Gardin (2014) is also concerned with the plurality of markets and how Polanyi understood the relationship between redistribution, reciprocation and price exchange, as set out in Table 4.2. Market rates are based on satisfying individual interests, price and the pursuit of profit, typically involving capitalist businesses and related mechanisms (finance capital, market intermediaries and so on). Redistribution on the other hand, aims to satisfy a wider public interest with a central authority determining the allocation of scarce goods in a hierarchical (and often undemocratic) way. Finally, reciprocation is based on gifting, volunteering and exchange, dictated by primarily non-monetised rules and rewards. For Gardin, the SSE is formed by the combination of resource allocation systems including the provision of social goods, subsidies, sale of services and giving and receiving time or sweat equity. However, reciprocity is, itself, a contested concept and Gardin describes different behaviours that reflect domination and control as well as solidarity and sharing. These can involve unequal reciprocity between providers and users; reciprocity among peers, which characterises self-organised groups and multilateral reciprocity, which brings together heterogeneous actors, including consumers, workers and volunteers, in more Table 4.2  D  istinctive characteristics of the different types of economic behaviour Economic Behaviour

Market (Decisional Exchange)

Redistribution

Reciprocity

Symmetrical relation of equivalence between the goods Immediacy of the exchange

Hierarchical relations with a central authority

Typical institution

Capitalist enterprises

Types of resource allocation

Purchase of goods and services

State, regional and local governments: para-public organizations Public funding (subsidies…)

Relations among symmetrical individuals and groups Long-term strengthening of networks of social relations Solidarity economy organizations

Dominant principle

Individual interest – Profit

Distinctiveness Characteristics Relations among actors/goal of the exchange Time

Lasting relation

Gifts, volunteering, grants etc. General interest – Give-and-take Commitment

Source: Gardin, 2014, p. 116. Reprinted by permission of Taylor & Francis.

Social and Solidarity Economics  65 symmetrical alignments. In unequal reciprocity, project promoters can be radicals, volunteers, professionals or state officials but are all characterised by the provision of services for someone else. On the other hand, peer groups may be workers in a producer co-operative concerned with more efficient integration between demand and supply or non-monetised trading schemes such as Time Banks. Multilateral reciprocation is, to some extent, less well developed, and Gardin sees its emergence in social finance markets, fair-trade organisations and housing co-operatives. Reciprocation is always in tension, struggling to restore equilibrium between the charity of the producer and the equality of the user, in which the receiver needs to exercise their rights in shaping more just and inclusive outcomes. The elevation of demand in response to supply repositions the consumer in the exchange process but also alters the nature of reciprocation itself and the ethics that dictate social-market relations. Seyfang (2011) sees the politics of consumption as an arena of community mobilisation and economic organisations but also mediates production and the scope for new forms of self-articulation on the supply side of the social economy. However, Gardin warns that the hybridization, critical to the smooth running of the solidarity economy by integrating these forms of distribution, could enable exploitation by market institutions. The state wants to deliver lower cost services and the private sector seeks legitimacy by staying close to the social, but the equality of reciprocation, and who wins and loses, are necessary criteria in evaluating the attainment of genuine (ethical) symmetry in distribution systems (Gardin, 2014). In reciprocal symmetry the individual cannot be constituted as homo economicus but is motivated by deeper, ontological needs, desires and strategies. Diprose (2016) sees the rationale for Time Banks in forming both a sense of the self as well as the desire to relate to others in the form of community. He shows that, in order to alleviate the anxiety of ‘singular finitude’ (that we will all die), subjects restlessly cross-reference the ‘self’ with the ‘non-self’ by creating a communal identity, or at least, a myth of community, that is both purposeful and undermining. The reality of being with a community is unstable, interrupted and un-worked. Or, in other words – there is a constant tension where myths work singularities into a sense of commonality (or perceived community), while experiences of singularity and anxiety constantly un-worked this commonality and make community inoperative. (Diprose, 2016, p. 1414) By avoiding simplistic notions of idealised and homogenised communities, he places the focus on the unstable and negotiated processes of identification and recognition at the heart of community work. The establishment and management of the Wellington Timebank in New Zealand

66  Social and Solidarity Economics was ‘messy and complex’, constantly mediating the need to deliver a service, hold the thin sense of community together, validate group identities and at the same time, respond to the anxieties of those at the margins of exchanges or outside them altogether. Solidarity bolted on to the social economy, without clearly defining what it is and whether it is achievable in any social sense, is problematic, especially when economic exchanges are the basis of reciprocal relations.

The Solidarity Economy and the Social Economy RIPESS (in English, the Intercontinental Network for the Promotion of Social Solidarity Economy) is a global network of five continental social and solidarity economy networks which, in turn, brings together national and sectoral practitioners, academics and individual social enterprises. Like McMurtry (2015), RIPESS (2015, p. 10) distinguish between the social and solidarity components of the SSE and how they are globally influenced by institutional cultures, economic structures and political systems. They provide a more detailed definition of the solidarity economy as an alternative to capitalism and other authoritarian, state dominated economic systems. In SSE ordinary people play an active role in shaping all of the dimensions of human life: economic, social, cultural, political, and environmental. SSE exists in all sectors of the economy – production, finance, distribution, exchange, consumption and governance. The social economy is understood as a ‘third sector’ of the economy, complementing the ‘first sector’ (private/profit-oriented) and the ‘second sector’ (public/planned). It includes co-operatives, mutuals, associations and foundations (CMAFs), which are collectively organised, profit-­seeking entities but deploy surpluses for social and environmental purposes rather than shareholder rewards. RIPESS again highlight the tension between those who see the social economy as a ‘third leg of capitalism’ and those who see it ‘as a stepping stone towards a more fundamental transformation of the economic system’ (RIPESS, 2015, p. 10). They place less emphasis on how these contradictions are resolved or what distinguishes the radical end of the social economy from its more conservative formations or whether, in reality, these can be separated in the economic transition to a ‘post-capitalist future’ (RIPESS, 2015, p. 10). They do show that the tension between solidarity and economic values shifts across continental networks, reflecting colonial and neo-­ colonial trajectories, national assets and different social structures. In French speaking Africa, solidarity ethics are prioritised, but in Asia, more emphasis is placed on enterprise development along with the need to build social economy supply chains. The Social Enterprise Promotion

Social and Solidarity Economics  67 Act (2006) in South Korea drew on the Italian co-operative tradition, which distinguishes between organisations providing a range of social services and work integration programmes and those who mobilise local food producer or consumer groups to achieve economies of scale (Bidet and Eum, 2011). The social economy and co-operativism in general are strongly rooted in Europe, but RIPESS detect signs of more spontaneous solidarity initiatives in response to the integration of business models and efficiency outcomes into the third sector. North America also has a strong tradition of individual enterprise, but this is also contested, and within C ­ anada, solidarity ethics have shaped a more integrated sector in ­Québec, compared with an entrepreneurial emphasis in English speaking areas. A more radical, transformative version of solidarity also survives in Latin America and the Caribbean, partly in response to globalisation and its environmental effects. North and Cato (2017, p.  4) stress the importance of theological solidarity in the ethics of the SSE in the global South and Latin America, where it has emerged as a coherent social movement rooted in local cultures of co-operation and not just as a coping mechanism in the crises-fuelled double movement, or an attempt to ‘recover a lost world of welfare’. Here, it has been able to outmanoeuvre neoliberalism, even where international finance intermediaries force weak economies to accept market rules and deregulated regimes.

Solidarity in Economic Practice We emphasize solidarity as an element that allows us to recognize ourselves in relation to others and to be concerned about their well-being. This implies mobilizing resources and establishing relations with other social collectives and movements in an effort to form an extensive network of people and organizations geared toward building a fairer, more democratic and equalitarian world. (RIPESS, 2015, p. 4) North and Cato (2017, p. 8) go further, suggesting a move beyond solidarity to an ‘agonistic economy’ in which Activists construct tools for tackling the pathologies of capitalism by, for example, occupying factories to prevent their owners moving to low wage production centres, creating new forms of money based on need not profit and replacing speculation with other forms of community ownership, squatting or land occupations. Laville (2014) also places solidarity at the centre of resistance to market society but argues against idealised versions that encourage cultures of dependency and need. There has been a long tradition of philanthropic

68  Social and Solidarity Economics solidarity, which carries with it the threat of a gift that can never be redeemed, trapping recipients in a permanent position of inferiority and reproducing hierarchies of inequality. In the first part of the 19thC, workers and peasant associations provided mutual aid, which helped to shape their consciousness as a political class, prioritise their demands and exercise political power through the value of their labour. Industrialisation and urbanisation marginalised such solidarity movements in favour of a redistribution of resources controlled by an expanding state. For Laville (2014), the SSE has emerged as a site of political struggle in refusing the authority of these rules and structures and the alienation of people from production and consumption: •

•

•

First, redistribution is deployed against the reduction of the economy to the market. As social risks have continued to grow in the process of rapid industrialisation, public services have expanded into the provision of goods aimed at redistributing resources from the well-off to the poor. Second, limits are imposed on apparently self-regulating markets through a process of institutional embedding in the creation of social protection, collective consumption and curbs on the excesses of the factory system. Third, attempts to establish non-capitalist enterprises have increasingly challenged the model of the firm, in which property rights are held by investors. In neoclassical theory, labour is subordinated to capital and profit maximisation, yet worker, consumer and supplier co-operatives reject the idea of a utopian market.

Behavioural economists also stress the importance of personal motivation and ethics, not just as active consumers in exchange processes, but as an emotional, non-rational component of market integration: In a behavioural perspective, pro-social attitudes such as trust support the production of greater economic surplus and social welfare, because they help to reduce transaction costs and to foster the pursuit of common goals. Motivational complexity also encourages the creation of a suitable institutional environment in which nonself-­regarding motivations interact with self-interested ones and are ­supported by conforming to shared rules of behaviour and standards. Relational and other-regarding preferences, together with an interest in fair procedures, play a crucial role in advancing the well-being of the actors involved. (Borzaga et al., 2014, p. 89) As Borzaga et al. (2014) point out, financial sustainability is not the same as profit maximisation, and perfect markets, idealised by classical

Social and Solidarity Economics  69 economists, disguise a far more complex mix of motives, business types and outcomes. Firms can survive, even thrive, when surpluses are not being maximised or where no profit appears on the balance sheet. Moreover, the short-term pursuit of profit can undermine longer-term organisational resilience and reproduce the type of volatility that characterised the real estate market in 2008. Bull et al. (2010) draw on the concept of ethical capital to relate the economic and social logics of each sector in crossover points in a dialectic in which the economic is always held in check by critical and evangelistic ethics (Figure 4.1). Ethical capital is not an entity in and of itself, but is in constant motion, and effective governance regimes are steering mechanisms to position the organisation on a solidaristic course: The presence of democratic structures (if upheld) act as guarantor that normative values cannot dominate over the long term: they remain open to challenge and continual renewal through discursive deliberation within the organisation. (Bull et al., 2010, p. 259)

Social Entrepreneurship Kickul and Lyon (2016) see social entrepreneurship as a blend of these ethics and the mix of functions, skills and knowledge required to balance the contradictory pull of business efficiency and social impact. They suggest that creativity and innovation are the traits that will help

Social Enterprise Charitable Enterprise

Private Enterprise Equilibrio/Blended Value “Balance” Economic Capital

Social Capital

Intellectual Capital

Economic Rationality (Performing tasks efficiently)

Virtue Ethics

Normative Ethics

Social Rationality (Developing equitable relationships)

Critical Ethics

Religious Ethics

Ethical capital Individualistic Thinking Heroic entrepreneur Visionary/Leader

Holistic Thinking Democratic Leadership Collective Entrepreneurship

Evangelist Philanthropist

Figure 4.1  D  econstructing the ethics of social enterprises. Source: Bull et al., 2010, p. 258. Reprinted by permission of Emerald Publishing Limited.

70  Social and Solidarity Economics social entrepreneurs steer through these tensions and avoid capture by the market or the public sector. This is evident in a number of related practices, including the creation of new processes for delivering or starting a service, bringing facilities to underserved communities and using new funding and organisational models. Social entrepreneurs never really settle but adapt and change as the organisation grows, responds to crises or moves away from immediate survival to enable more creative problem solving (Bornstein and Davis, 2010). What makes a good social entrepreneur in the formation and consolidation phases does not necessarily make a competent leader where creative innovation and rapid growth is called for (Durkin and Gunn, 2017). Similarly, Praszkier and Nowak (2012) emphasise less definable leadership qualities, empathetic values and a commitment to empowerment as inherited, rather than learnt, traits. The capacity to modify the parameters of social problems and seek out new solutions in a collaborative fashion makes social entrepreneurs distinctive from public sector managers and industrialists. All of this leaves social enterprises vulnerable when the entrepreneur leaves, and succession planning, building collective responsibility and developing a suite of multi-disciplinary competencies are critical to survival and growth (Bacq et al., 2017). Smith et al. (2016a, p. 677) agree that the ‘moral intensity’ of the social entrepreneur is critical in both forming and scaling economic responses to complex needs. The vigour of this morality is dictated by the likelihood of success, the immediacy of the problem, the agents’ proximity to the beneficiaries and the scale of the crisis. Haugh and Talwar (2016) show that this is the very essence of transformative politics, in which emancipatory entrepreneurship provides a means to empower women in rural India by challenging traditional, domesticated roles and patriarchal norms. By enabling their work in traditional handcrafts, social entrepreneurs opened opportunities for education, income generation outside the home and gendered solidarity business networks. However, Smith et al. (2016b) also show that the potential for moral behaviour is curtailed by the desire to control the organisation and the extent to which entrepreneurs can close out other actors. Social entrepreneurs have a dark side, display values indistinguishable from those in the private sector and can emerge as independent agents, bringing in a distinct neoliberal governmentality to the third sector (Chell et al., 2016). Here, Dey and Steyaert (2016) draw on Foucauldian subjectivity to challenge superficial assumptions around the authentic nature of social entrepreneurs and their capacity to act in progressive ways: Hence, though practitioners might be called on to think and act like real entrepreneurs, they are still agents capable of reflecting on and opposing the way they are being shaped. Importantly, it is by acting irresponsibly that practitioners in fact get to behave responsibly by

Social and Solidarity Economics  71 way of adopting an active role in shaping their subjectivity. Instead of merely embracing the entrepreneurial subjectivity offered to them by discourse, practitioners engage in practices of freedom by creating the conditions under which they are not governed all that much. (Dey and Steyaert, 2016, pp. 632–633) Entrepreneurs do this by enacting strategies of ‘problematization’ that undermine and reframe dominant conceptions of entrepreneurial reality and by creating alliances that transcend hierarchical structures of power, contract cultures and public management techniques. There is nothing inherently regressive in adopting managerial practices to achieve ethical outcomes or protect the ability of the organisation to deliver its social mission; they are interdependent rather than self-contained activities (Seanor et al., 2013). This complex interplay of motives and outcomes emphasises the need to unpack the practices of social entrepreneurship and how they are ideologically constructed. Dey and Lehner (2017) draw on Boltanski and Chiapello (2005) and Boltanski and Thévenot (2006) to show how everyday ideologies create frameworks of meaning that evoke particular ‘ideal subjects’ in the context of capitalism. ­Table 4.3 shows that these are organised as seven regimes, each attesting to different overlapping, but also contradictory, possibilities for social entrepreneurs and how they act. These resonate with the ideas of the inspirational leader as well as strong business competence and an ‘industrial regime’ that puts technical and scientific approaches at the centre of entrepreneurship. However, they also overlap with civic regimes that value solidarity and projective regimes, which stress the adaptive capacity of entrepreneurs and how they influence networks, wider opinions and interpersonal relations. Dey and Lehner describe the narratives on social entrepreneurship in reports, technical documents, publicity media and interviews with staff from the Impact Hub, a large London based NGO providing a range of support and intermediary services for the sector. They identify three ways in which social entrepreneurship is justified as an ideal subject, and each one has implications for how we understand their practice, as well as how their work is duplicated. The first is a security dimension, which emphasises the need to anticipate risks, build organisational resilience and broadly prioritise the financial sustainability of social enterprise programmes. The second is a fairness dimension, which indicates how a social entrepreneur can contribute to the common good, the scope for collective agency and co-production of ideas within a more explicit ethic of care. The third pattern is the excitement dimension, which centres on what is stimulating, meaningful and enjoyable about being a social entrepreneur. Dey and Lehner (2017, p. 762) suggest that this is closest to the inspirational regime, although it refuses neat categorisation and unsettles ‘the linear (and “reductionist”, while we are at it) narrative

72  Social and Solidarity Economics Table 4.3  Spectrum of ideological regimes Ideological Regimes The regime of inspiration … emphasises creativity and originality. The regime of inspiration stresses the accomplishment of the individual, not those of social collectives or society at large. The domestic regime … pertains mostly to the private sphere, particularly to the family. As such, the domestic regime emphasises issues such as hierarchy, tradition and intimate social ties. The regime of opinion … focuses on the fame, recognition and dignity of human beings in the public sphere. The regime of opinion thus stresses the ability to influence and attract others. The civic regime … stresses values of solidarity and respect. The principal value of the civic regime is justice. The market regime … concerns buying, selling and competition. The main value of the market regime is profit. The industrial regime … puts technical and scientific approaches centre stage. The key values of the industrial regime are performance and productivity. The projective regime … primarily stresses the value of flexibility as epitomized in how network organisations structure their activities around projects. Source: Dey and Lehner, 2017, p. 757 after Boltanski and Chiapello (2005) and Boltanski and Thévenot (2006). Reprinted by permission of Springer Nature.

of social entrepreneurship as a way of using business management to advance the common good.’ However, as Dey and Lehner argue, entrepreneurs and the ethics that guide their practice are highly structured by the market relations within which social enterprises work. Each set of relationships produces different opportunities, modalities and constraints, depending on which logics are in play at any one time.

The Social Base of Economics Murray et al. (2010) also see the social economy as relational, constantly oscillating between domestic and formal economic logics, obligations and scales of activity in which production and consumption are bound up with reciprocal values: The social economy is a hybrid. It cuts across the four sub-­economies: the market, the state, the grant economy, and the households. Each of these sectors has its own logics and rhythms, its own means of obtaining resources, its own structures of control and allocation,

Social and Solidarity Economics  73 and its own rules and customs for the distribution of its outputs. But the parts of these economies which we term the social economy are united by their four goals, by the importance given to ethics and their multiple threads of reciprocity. Their production ranges from the micro scale of domestic care in the household to the universal services of a national welfare state. Although analytically distinct from the private market, it includes social enterprises engaging in the market, as well as some of the activities of private companies that have primarily social goals. (Murray et al., 2010, p. 142) Defourny and Nyssens (2014) argue that the culture of the social economy in the US, the UK and Europe widened significantly in the 1990s as new-right politics and the muted communitarianism of Clinton and Blair reworked the relationship between the state and civic society. As noted earlier, the UK and the US emphasise an earned income approach that stresses the need to diversify investment streams, trade goods and services to replace dwindling grants and adopt a more contractual, outcome focused relationship with the public sector. A social innovation paradigm emerged in Europe, claiming significant agency for a new ethical entrepreneurship to reinvigorate the value base of the sector and resist the marketization of services. However, contracting out, competition and the creation of quasi-markets stimulated new organisational formats, financial discipline and higher levels of risk for social enterprises globally (Lyon, 2017). These have been encouraged by a shift in the enabling environment to allow co-operatives to strengthen their borrowing capacity, fiscal incentives to bolster investment in social enterprises and increasing the supply of social finance. As governments withdraw from direct grant aid, the charity sector is forced into the social economy to sustain its work. However, Kerlin and Gagnaire (2009) argue that there is relatively little evidence of a resource dependency argument for the rise of social enterprises since the 1980s, certainly in the US. Using tax data, they show ‘that social enterprises were not spurred on by declines in government grants or private contributions’ and that commercial, private and government revenues all increased by around the same level between 1982 and 2002 (Kerlin and Gagnaire, 2009, p. 95). Moreover, they point out that the increase in commercial income was a response to the growth in the number of non-profits, an intensification of social problems and the diversification of federal programmes on homelessness and public health. In contrast with western Europe, Defourny and Nyssens (2014) argue that the development of a distinct social economy has stalled in Central and Eastern European Countries (CEECs) following the break-up of communism, economic restructuring and the liberalisation of public services. The dominance and cultural embeddedness of the ‘transition myth’

74  Social and Solidarity Economics suggests that only neoliberal, free market ideologies will achieve the necessary adjustments in which the third sector has an uncertain and increasingly marginal role. Ideologically, co-operatives are associated with a discredited Soviet dogma and have been viewed with a degree of suspicion, while the NGO sector that emerged in the post-communist period is highly reliant on external donors and often lacks roots in local communities. They also show that there are weak confidence, business capacity and access to capital to grow a viable economy for a still-­evolving third sector. Moreover, the low level of contracting out to independent providers in favour of private suppliers has confined the sector to a ‘shunting yard for acute social problems rather than as a full-fledged partner in regular public service delivery’ (Les and Kolin, 2009, p. 49). Conditions are, to some extent, changing. Hungary has introduced public interest companies similar to the CIC model in the UK, and the Czech Public Benefit Company Law (2012) enables NGOs to provide a limited range of social and care services. Credit co-operatives have emerged in Lithuania and Estonia, where the co-operative sector is now a significant provider of social housing. The Law for Social Entrepreneurship (2011) in Slovenia also enabled the expansion of income-­ generating, non-profit organisations and work integration programmes, especially for disabled people, and they have expanded considerably in Poland as a result of the Act on Employment Promotion and Institutions of the Labour Market (2004). Defourny (2014) conceptualises the specific social enterprise sector, primarily as a tension between organisations offering their products for sale and those whose resources and services are non-market, and between mutual interest organisations that serve their membership and those that serve a wider set of non-member beneficiaries (interest groups, neighbourhoods and so on): The unifying role of the social enterprise concept resides primarily in the fact that it generates mutual attraction between the two spheres. It accomplishes this by drawing certain organisations within each sphere towards the central zone and by including them into a single group of organizations, because they actually are very close to each other. (Defourny, 2014, p. 35) In his analysis, there is a co-operative economy (consisting of workers’, users’ and social co-ops) that is explicitly economic at the one end and there are non-profit organisations that are more political, with confined income generation, at the other. The world in between is fuzzy and negotiable but is also where social enterprises resolve the contradictory logics and divergent rationalities associated with profit and advocacy, respectively. The state can restructure and reposition the space because

Social and Solidarity Economics  75 it has the regulatory authority, access to finance and can determine the fiscal rules to incentivise, or enforce, different relationships with the public and the private sectors. Developing this dialectical tension, ­Defourny and Nyssens (2014) draw on Polanyi as well as Pestoff (2009) to stress the complexity of exchange mechanisms beyond profit, which include redistribution, reciprocity and household economies. Figure 4.2 positions these modes of exchange in a triangle in which the state, private businesses and communities interact in dynamic relations across time and space. The market co-ordinates producers and consumers through the price mechanism, and the state gathers taxes to allocate collective resources and provide social goods. Reciprocation, as opposed to market exchanges, dictates a significant arena of household consumption, autarkic production and a system of rules based on mutuality and trust. The diagram places the social enterprise sector in a broader network of actors, organisational logics and motives, including non-utilitarian behaviours, but appears to read each mode of exchange equally. It implies that the market is in tension with non-market forces, which explains the dynamics, reformations and contradictions of the social economy; yet in practice, the market is dominant and hegemonic. This emphasizes the synergistic mixes of resources and rationales available to third sector organisations rather than clear-cut frontiers between sectors and the hybridity (characterized by the dotted line) equips social enterprises a degree of agency in realigning the grid as it seeks to expand solidarity ethics within market relations. (Defourny and Nyssens, 2014, p. 51)

Redistribution

State

Public

Third Sector Social Enterprise Not for Profit

For Profit

Private

Community

Reciprocity

For Profit

Market

Figure 4.2  Social enterprise as a combination of various actors, logics of action and resources. Source: Defourny and Nyssens, 2014, p. 50. Reprinted by permission of Taylor & Francis.

76  Social and Solidarity Economics However, clearly, social enterprises are movable across the plane: at times closer to the state, at times in tension with the profit motive, and at times it draws specifically on non-contractual obligations. Moreover, they are significantly closer to the state, at least in the global North, than either the private sector or household economies. The idea that they float between countervailing forces indicates a level of choice and control rarely evidenced in the politics and practice of social enterprises (Wheeler, 2017). In short, these forces are not even but have different levels of authority and resources that significantly distort the geometry of the social economy and the autonomy of even large social enterprises. Reciprocation and redistribution have been undermined, marginalised and domesticated as a mode of exchange, especially compared to demand and supply based on price in both the public and private spheres. Moreover, these relationships are co-constitutive, as The entering of the social economy into the centre of policy making is facilitated by a gradual transition, especially in Europe and North America, of welfare states from their traditional institutional and redistributive orientations towards newer enabling and work-­ orientated welfare policies. (Hulgård, 2014, p. 67) In this formulation, social entrepreneurs are ‘caring capitalists’, working largely to import the practices and ideologies of the market into the third sector (Jessop et al., 2013, p. 111). However, this is a very limited understanding of social entrepreneurs, the multiple regimes they bring together and the ethics they enact in different institutional contexts and sectors. These relate to the way in which the social economy field is structured around a mix of organisational forms, legal entities, labour market interventions and non-monetised schemes that reveal a far more complex assemblage beyond a mere appendage to capitalism or replacement for welfare. For example, co-operatives are structured as shareholding organisations, set up for, and by, their members on the basis of ‘one member: one vote’, rather than on capital shareholding. In general, they fall into two categories: user-led co-operatives, in which the consumer is the primary stakeholder, and those that are producer-, supplier- or ­employee-led, where whoever produces the goods or services is the primary stakeholder. Retail co-operatives fall within the first category, whilst agricultural co-operatives and worker co-operatives belong to the second group. As with other social enterprises, critics see worker co-­ operatives as another form of production within capitalist relations and thus, as subject to a muted form of labour self-exploitation (Atzeni and ­Ghigliani, 2007). However, in their review of industrial restructuring, factory occupations and worker takeovers in Britain, Argentina and the

Social and Solidarity Economics  77 former Yugoslavia, Upchurch et al. (2014, p.  61) show how emerging co-operative movements exploited legal and institutional rules to gain tax advantages and access to credit to control production processes and protect well-paid jobs. In short, the ethics and purpose of co-operatives and their capacity to realise ‘labour as commons’ are externally regulated by both the state and the market and can be read along a spectrum from conservative adaptation to more radical, transformative control. Upchurch et al. (2014) show that self-management may simply consist of shared ­decision-­making within capitalist processes and involve or lead to the demobilisation of worker militancy. However, in its most socially advanced form, it can embrace workers’ control over production and decision-making, enabled by the effective socialisation of ownership. Here, the political is shaped by strategies to retain member influence, ­implement professional systems and transparent financial reporting, resist punitive regulatory change and strengthen business networks within and between producers and consumer units.

Work Integration, Workfare and Empowerment Work Integration Social Enterprise (WISE) schemes and Intermediary Labour Markets (ILMs) are designed to provide temporary waged employment with personal support and mentoring to help unemployed people and other vulnerable groups to transition to work (OECD, 2015). They are also designed to create a local or community benefit, and most rely on packages of grant funding to sustain their activities. Transitional Employment Programmes also emerged in the US and the UK as a new generation of initiatives aimed at tackling long-term unemployment with an emphasis on getting hard-to-reach groups into the permanent labour market (OECD, 2015). Nyssens (2014) identified more than 50 WISE initiatives operating in Europe and suggests that they can be divided into four main groups. The first is the oldest and most established system and involves a long-term public subsidy to social enterprises, mainly to support disabled people in the labour market. A second group, more prevalent in the UK and among German co-operatives, offers self-financed employment through commercial activities, usually after a period of subsidy has ended. A third group aims to re-socialise especially vulnerable people through work and adaptation to mainstream life and includes protected employment centres in Spain and social co-operatives in Sweden. The work tends to be semi-formal, and an emphasis is placed on wrap-around social care and supported housing. The fourth and now largest sector offers ‘transit’ employment, or training through work, and aims to support participants to access the mainstream labour market. Most rely purely on grant aid, others use extensive volunteer networks, but some are commercial,

78  Social and Solidarity Economics if dependent on public sector contracts. Formal ILM Schemes in the UK illustrate the way in which work integration programmes have moved to the intersection of welfare and labour policies by linking paid work to a reduction in state benefits (Nyssens, 2014). However, Nyssens (2014) also points to a wide variety of public policy approaches which again, map onto different national and cultural responses to the social economy and social protection systems. In ­S candinavian countries, a more active labour market policy is accompanied by comparatively high welfare spending, although these budgets are increasingly under pressure. There are also relatively high levels of spending in Belgium, Germany and France, where the non-profit sector enables a secondary labour market to tackle unemployment and provide a range of social services among hard to reach groups and areas. A southern European tradition (Portugal, Spain and Italy) has comparatively low levels of spending on training and a more central role for charities, although there is growing harmonisation with access to EU programmes and finance. In the UK, a liberal model persists in which social enterprises are at the forefront of ILMs, often in partnership with private providers. Social clauses in public sector contracts have also been used to target the inclusion of specific groups (young people, the long-term unemployed and disabled people) in services, and these are being supported by dedicated procurement legislation across a growing number of EU countries. Barraket (2014) evaluated seven WISE schemes involved with immigrants in Australia and found that they had strengthened participants’ language skills, self-confidence and sense of worth as well as their social integration. A number of studies also show significant improvement in the psychiatric condition of participants in a disability programme with fewer emergency visits, care contacts and hospital admissions (Chan et al., 2017). However, there are also criticisms of the quality of work, the implications for state benefits and the impact of the schemes on poverty reduction. Chan et al. (2017) surveyed 127 social enterprises involved in work integration in greater Toronto and showed that while there were modest improvements in income, employment was commensurate with participants’ skills and capabilities. The data also shows that there were measurable improvements in participants’ well-being, self-confidence, access to services and family relationships. Trainees created better community and social networks and strengthened their coping skills and capacity to stay in paid employment. The sense of earning, rather than depending on cash income, was interpreted by most participants as enabling, empowering and validating in a way that had little to do with neoliberal workfare. This challenges the notion of a false conscious worker duped into low grade employment, because it vests significant agency in the participant’s decision to work for a range of ontological and practical reasons (Farmer

Social and Solidarity Economics  79 et al., 2016). Coe and Jordhus-Lier (2011) argue that employment reveals worker subjectivities other than those based on class or profession and shows that alliances between groups of workers and other social constituencies have promising neighbourhood potential: At the very base of this community orientation is a reinvented labour agency where organized labour enters the community as a new domain of mobilization. By actively placing new sets of issues on their agenda, beyond the realm of wages and employment conditions, or by daring to seek out new political allies in civil society and incorporate their claims into their struggle, organized labour is allowed to operate in new social spaces. (Coe and Jordhus-Lier, 2011, p. 15) Coe and Jordhus-Lier (2011) are critical of accounts of intermediary labour as an abstracted category that neglects the places they inhabit and how ILMs allow community businesses to build production networks and contracts with private businesses. Wilton and Evans (2016) make the point that it is the quality of social enterprises themselves that makes the difference to participants, their sense of belonging and the cognitive advantages they take from paid work. Their research on 67 social enterprises providing employment for people with mental health issues shows that they increased incomes, established new services and strengthened the financial performance of the core business. More significantly, the Creation of alternative economic opportunities is strongly tied to, and dependent on the creation of welcoming social environments, which attempt to unsettle the oppressive structure of attitudes and beliefs about mental illness that often shape interactions in mainstream employment settings. (Wilton and Evans, 2016, p. 338) Similarly, Muñoz et al. (2015) evaluated the Green Shed initiative in Australia, which provides opportunities for isolated older men to become involved in community gardening, allotments and food recycling. Again, they found that the approach offered a therapeutic space, which improved mental and physical well-being through productive work. Ferguson (2015) points out that neo-Marxist critiques of alternative economics are premised on the idea that labour is the source of all value and that distribution is derivative from, and secondary to, production. Not only have we seen the shift from primary production, in which labour was economically and politically central to industrial accumulation, we have also witnessed the massive growth of institutionalised systems of distribution, especially in the welfare state. The decline of wage labour as a mechanism of distribution in the global North and the always-present multiple forms

80  Social and Solidarity Economics of sharing and bartering systems of the South emphasise the importance of distributive justice as an arena of solidarity struggle. Ferguson argues that the formation of the social in classical Northern welfare states, widespread regularised waged labour, the male head of household, universal insurance and the nation-state as pre-eminent no longer exists, if it ever did in a complete or coherent form. Empirical analysis of how poor people engage the cash economy is entangled in social relations (remittances, love, sex, inheritance) in a way that challenges purely market dynamics. All markets are, to some extent, based on ­predation – even Time Banks are not purely altruistic – but cash is also vital in intergenerational transfers, gift giving and cultural obligations such that ‘market exchange is not the negation of sociality; on the contrary, it forms a vital – indeed irreplaceable – part of the co-ordinated life of any modern society’ (Ferguson, 2015, p. 126). In short, the confusion between market exchange and capitalism ignores broadly based, anthropological evidence on the dense, social relations of mutuality bound up in the cash nexus. Work is more than a cash exchange, and in the SSE, the dignity of labouring, especially among vulnerable people, tends to be devalued or dismissed in broader critiques of workfare.

Non-monetised Trading Two foundational Polanyian concepts are the diversity of distributional systems and the strength of modes of exchange outside the price mechanism. Sharing and bartering are hardly new and underscore the importance of reciprocation as a basis for post-capitalist social organisation (McLaren and Agyeman, 2015). However, McLaren and Agyeman (2015, p.  204) warn that ‘The marketization of sharing does not just corrupt our individual relationships, but risks undermining the social solidarity on which the welfare system depends.’ As everyday interactions are formalised and converted into currency, there is a danger that trust is removed from human relations and social encounters. However, as Collom and Lasker (2016) suggest, displacing capitalism also means organising something else, replicating different modes of co-ordination, establishing new values and scaling explicitly social forms of service delivery. They suggest that the rise of Time Banks, virtual currencies and local exchange trading schemes respond to needs defined by unemployment and depressed incomes but also from declining confidence in the financial services sector and the search for ethical alternatives to retail banks. Seyfang and Longhurst (2016, p. 6) also show how community currency schemes emerged from highly localised experiments to create a more sophisticated infrastructure of graded schemes with different aims and processes. They describe four broad schemes operating globally: •

Local currencies, which are paper-based note currencies (exchangeable for national currency) that circulate within a specific locality,

Social and Solidarity Economics  81

•

•

•

such as the UK’s Bristol Pound (see Chapter 6). They tend to keep money circulating in a local economy, supporting neighbourhood businesses and preventing leakage to multinational businesses and external services. Mutual exchange systems are formed by a group of users to trade goods and services as a unit of currency, which is transferred from the buyer’s to the seller’s account with no actual money involved or interest charged. Service credits are time-based currencies that enable users to trade units of time for services received and can operate in a neighbourhood, in agencies or between community organisations and social enterprises. Barter markets allow participants to trade goods and services in a specific time and place with an agreed currency and price, facilitating a higher volume of exchanges. These became particularly popular during the financial instability in Argentina in the 1990s, when confidence in markets, price inflation and service failures pushed people into locally organised alternatives.

Local Exchange Trading Schemes (LETS) typically mirror the value of the national currency, and members negotiate exchanges with one another, reporting transactions to the system accountant (Collom and Lasker, 2016). Members receive monthly statements of their accounts, which typically have credit and debit limits in order to prevent ‘freeloading’ and ‘hoarding’. Approximately 300 LETS operate in the UK, involving an estimated 22,000 people and a turnover equivalent to £1.4m annually (Seyfang, 2011 p. 147). However, Seyfang also points out that LETS activity peaked in the mid-1990s, and a significant number are restricted by low trading volumes, high administration costs and restrictions on welfare entitlements. Edgar Cahn developed the concept of Time Dollars in the 1980s, in response to a declining sense of community, rising inequality and poor standards of social care. There is no hierarchy of value for services, as one hour equals one unit of credit. In the UK, there are around 41,000 people and 5,500 organisations involved in Time Banking activities, and they exchange around 3.1m hours per year (TimeBanking UK, www.timebanking.org/, accessed August 2017). Time Banks operate with six core principles: recognising people as assets and that everyone has skills to share; redefining ‘work’ to include the unpaid economy of work in the neighbourhood; nurturing reciprocity rather than dependency; growing social capital; encouraging learning and skills sharing; involving people in decision-making (Collom and Lasker, 2016). There are a number of key differences between LETS and Time Banks. First, while LETS are proposed as an alternative economic model to strengthen the local economy and promote informal employment, Time Banks are socially oriented volunteering initiatives that provide services

82  Social and Solidarity Economics that are often not valued in the market economy (Marks, 2012). Second, LETS currencies tend to emulate the national currency and members negotiate amongst themselves to decide on the price, while Time Banks operate on a principle of equality, irrespective of the type of service. Third, unlike time credits, LETS currencies have not been declared exempt from tax and benefit calculations, which limits participation from the unemployed. Finally, LETS tend to be managed by volunteers, while Time Banks necessitate more investment for a drop-in office and paid staff to arrange exchanges and recruit members (Boyle, 2014). New Economics Foundation (NEF) (2008) also emphasise that these schemes are limited on their own, and to maximise value, they are best used alongside state distribution, including benefit take-up campaigns, the informal economy, volunteering and self-help, such as local credit unions.

Barriers and Cognitive Traps The social economy is complex, multi-layered and embraces a mix of schemes, some close to the state and some closer to the market. While its elasticity is a strength, it also weakens its corporate potency. In most places, it is not an equal partner with the private or public sector, and its scalability is unquestionably conditioned by the way it is being repositioned as a problem fixer: There is a danger therefore of social enterprises being boxed into that corner of the economy which deals only with the most disadvantaged in the poorest areas mopping up the problems of society as cheaply as possible by using voluntary and work-for-the-dole labour. In this scenario, the social economy would continue to be no more than the prop which underpins the ‘real’ economy – very much the third sector, subservient to the public and to the private, pre-­eminent sector. Not a third system and no longer an agent for change. (Pearce, 2003, pp. 69–70) Borzaga et al. (2014, p. 87) argue that new institutional economics serves to position co-operatives and non-profit firms as ‘residual forms of enterprise in market economies, since their ability to spread is questioned mainly on efficiency grounds, that is on their alleged lower ability to maximise costs and to pursue adequate financial and production objectives.’ Moreover, the social economy is hampered by governance regimes that prioritise participation and collective ownership over less cumbersome decision-making processes, streamlined accountability and a clear focus on a shareholder interest in financial profit. Thus, social enterprises are seen as transitional, helping to lubricate the shift between public and private markets, but once structural adjustments have been put in place (viable firms and alliances, procurement systems, legal frameworks and

Social and Solidarity Economics  83 pricing mechanisms), the social enterprises can be moved aside or relegated as a junior partner in service delivery. Borzaga et al. (2014, p. 86) conclude with the central dilemma that ‘Their presence is mostly due to market failure, while improved market regulation and heightened competition would tend to displace them.’ A significant element of this positioning is how social enterprises are cognitively framed in policy documents, the media and even by the sector itself. These help to assert the belief systems which, in turn, permit institutional networks to assemble the market in ways that can either confine or liberate social economics: The influence of institutions on cognitive frameworks takes place through socializing institutions like universities, business schools, and professional associations which shape the cognitive frame of their members. This can either be a stabilizing influence on dominant frames or one that transforms prevalent cognitive frames if the actors entering into the market field have been socialized into a different mindset than the incumbents. (Beckert, 2010, p. 618) Block and Somers (2014) draw on Polanyi to explain the naturalisation of markets in Western economics, culture and politics. Just as markets are socially constructed, so too is knowledge and what they term ‘ideational embeddedness, which foregrounds the related concepts of social naturalism and theoretical realism’ (Block and Somers, 2014, p. 39). Social naturalism owes its origins to Malthus and the idea that society is governed by the same laws that operate in nature and the physical world. They trace this in a recursive ‘perversity narrative’, which claims that the very policies designed to help the poor simply encourage their dependence and intensify their poverty. This dominated 19thC Poor Law debates, the assault on welfare in the 1980s and the austerity politics of the post-2008 financial crisis. These are, in turn, bolstered by ‘theoretical realism’, which rejects empirical evidence as the basis of knowledge in favour of abstract forces and hidden socio-economic properties. Perversity rhetoric, Block and Somers (2014) argue, needs severe crises for an ‘ideation coup’, which is fought out in the public arena and where ‘The market fundamentalist competitor has to gain a new mainstream legitimacy by establishing itself as the only possible solution to the now teetering old regime’ (Block and Somers, 2014, p. 157). Evidence, counterfactual testing and empiricism are not needed in a doctrinal attachment to the market, recycling the discursive power of the perversity and biologising the poor in a world without alternatives. Prudham (2013, p. 1577) highlights Polanyi’s concern with the reification of primitive accumulation in public and working-class consciousness, a problem that carried with it the foremost danger

84  Social and Solidarity Economics that the English working class would fail to see common cause with the various social organizations and movements whose diverse claims on nature comprised part of society’s pushback against market self-regulation. Linked to this, Gibson-Graham (2008) makes the point that the social economy is far too easily dismissed with thin or non-existent empiricism and in ways that underestimate the complex and necessary entanglements that are constitutive of anti-capitalist struggle: The paranoid stance yields a particular kind of theory, ‘strong’ theory with an embracing reach and a reductive field of meaning. This means that experimental forays into building new economies are likely to be dismissed as capitalism in another guise or as always already co-opted; they are often judged as inadequate before they are explored in all their complexity and coherence. (Gibson-Graham, 2008, p. 618) This exploration requires a shift from evaluation and description to a performative epistemology centred on economic experimentation and risk taking in the delivery of alternatives to hardened capitalism. However, attempts to reframe the social economy also suffer from boosterism encouraged by governments, academics and the sector itself. Teasdale et al. (2013) critically evaluate the apparent growth of social enterprises in the UK from 55,000 in 2003 to 62,000 in 2008 and stress the lack of an agreed definition, different methods of calculation and the varying quality of data sources. They also highlight the role of the academy in presenting a more favourable analysis of an effective and economically significant sector that supports an uneasy network of researchers, practitioners and policy makers: This would seem a form of symbolic action, used to legitimate policy measures driven by ideology, particularly pertaining to the encouragement of TSOs (Third Sector Organisations) to adopt more sustainable (market-orientated) funding mechanisms and to become involved in the delivery of public services. (Teasdale et al., 2013, p. 128) Maas and Grieco (2017, p. 122) argue that evaluations of social enterprises ‘seem to show that the warm glow of aiming for social value is stronger than the need for validation of their expectations’ and call for more rigorous multi-method approaches that reflect the limits, as well as benefits, of social action. Here, Mauksch et al. (2017) stress the need for a stronger ethnographic content within mixed methods evaluations, especially to validate the multiple effects of interventions on people in

Social and Solidarity Economics  85 the most marginal social and economic conditions. Ideas of value are being reframed by funders, and with more commercial forms of investment, the need to focus on efficiency metrics has become pronounced across  the social enterprise sector (Margarian, 2017). Klemelä (2016) reviewed the way in which Social Return on Investment has been used as participatory tool to valorise the financial impacts of programmes from a multi-stakeholder perspective. However, he points out that these often fail to capture the contradictory legitimacies toward which enterprises work and advocates the use of qualitative methods to reveal the discursive complexity of socio-economic value. Murray et al. (2010) argue that one of the obstacles to the long-term development of the social economy is a lack of the type of innovation seen in medicine, business and engineering. Social innovation involves ‘new ideas (products, services and models) that simultaneously meet social needs and create new social relations or collaborations. In other words, they are innovations that are both good for society and enhance society’s capacity to act’ (Murray et al., 2010, p.  3; italics – author’s original). How innovation actually happens in the SSE and whether it can create or sustain new social relations without working within and between institutions and markets remain significant challenges. Here, Seyfang (2011, p. 68) describes a diffusion challenge for social economics, arguing that ‘Entrenched cognitive, social, economic, institutional and technological processes lock us into trajectories and lock out sustainable alternatives. The term “socio-technical regime” captures this complex configuration of artefacts, institutions, and agents reproducing technological practices.’ Change is thus path-dependent and influenced by the entrenched nature of cognitive economic frameworks, the embedded nature of accepted technical practice and the inertia created by the competitive advantage of leaving things as they are (see Table 4.4). Professions, markets and even environmental regulations and the public acceptance of consumer lifestyles, all make it hard to steer alternative economic practices.

Conclusion The issue of measurement is an important one. The lack of reliable data on the performance of social economy interventions, self-acclimation and the appeal to virtue, in part, reflect the sector’s mix of ethics and objectives. It also makes it difficult to compete with discourses that can more readily identify, or at least construct, an overbearing efficiency narrative for the private market. The barriers to growing the social and solidarity economy run deeper than knowledge competition and relate to the scale and sophistication of often ill-defined subsectors, the nature of the enabling environment and the lack of dedicated resources tailored to the needs of social enterprises. It is a varied and multi-layered arena

86  Social and Solidarity Economics Table 4.4  Factor debilitating social innovation • The cognitive frameworks, routines, resources, capabilities and knowledge of technology producers and users, as well as expectations about what kinds of knowledge will be profitable in the future. • The way specific social and technical practices are embedded within wider, facilitating infrastructures, which subsequently restrict opportunities for alternatives. • Incumbent practices enjoy economies of scale such as mass markets and positive network externalities (it is easier and less risky to follow established practices than to invest in new practices). • The co-evolution of institutions with technological practices (like professional associations), government policies and market rules reinforce existing trajectories. • Prevailing market and social norms influence the kinds of performance deemed satisfactory and the lifestyle routines and norms that embed these practices further. Source: Based on Seyfang, 2011, p. 68.

with a busy diversity, firms, schemes and informal local agreements that are not explained or sustained by utility seeking producers and consumers. How these are organised, if they want to be organised, co-ordinated and escalated as an economy, underlines the importance of markets and the institutional relationships that make them work.

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Social and Solidarity Economics  89 McMurtry, J-J. (2015) Prometheus, Trojan horse or Frankenstein? Appraising the social and solidarity economy, in P. Utting (Ed.) Social Solidarity Economy: Beyond the Fringe, pp. 57–78, London, Zed Books. Muñoz, S.A., Farmer, J., Winterton, R. and Barraket, J. (2015) The social enterprise as a space of well-being: An exploratory case study, Social Enterprise Journal, 11(3), pp. 281–302. Murray, R., Caulier-Grice, J. and Mulgan, G. (2010) The Open Book of Social Innovation, London, The Young Foundation. NEF (New Economics Foundation) (2008) The New Wealth of Time, London, NEF. North, P. and Cato, M. (2017) Introduction: new economies in the North and South: Sharing the transition to a just and sustainable future, in P. North and M. Cato (Eds.) Towards Just and Sustainable Economies: The Social and Solidarity Economy North and South, pp. 1–12, Bristol, Policy Press. Nyssens, M. (2014) European work integration social enterprises: Between social innovation and isomorphism, in J. Defourny, L. Hulgård and V. Pestoff (Eds.) Social Enterprise and the Third Sector: Changing European Landscapes in a Comparative Perspective, pp. 211–230, London, Routledge. OECD (2015) Social Impact Investment: Building the Evidence Base, Paris, OECD Publishing. Pearce, J. (2003) Social Enterprise in Anytown, London, Calouste Gulbenkian Foundation. Pestoff, V. (2009) Towards a paradigm of democratic participation: Citizen participation and co-production of personal social services in Sweden, Annals of Public and Cooperative Economics, 80(2), pp. 197–224. Praszkier, R. and Nowak, A. (2012) Social Entrepreneurship: Theory and ­Practice, Cambridge, Cambridge University Press. Prudham, S. (2013) Men and things: Karl Polanyi, primitive accumulation, and their relevance to a radical green political economy, Environment and ­Planning A, 45(7), pp. 1569–1587. RIPESS (Intercontinental Network for the Promotion of Social Solidarity ­E conomy) (2015) Global Vision for a Social Solidarity Economy: Convergences and Differences in Concepts, Definitions and Frameworks, Madrid, RIPESS. Seanor, P., Bull, M., Baines, S. and Ridley-Duff, R. (2013) Narratives of transition from social to enterprise: You can’t get there from here! International Journal of Entrepreneurial Behaviour and Research, 19(3), pp. 324–343. Seyfang, G. (2011) The New Economics of Sustainable Consumption: Seeds of Change, Basingstoke, Palgrave Macmillan. Seyfang, G. and Longhurst, N. (2016) What influences the diffusion of grassroots innovations for sustainability? Investigating community currency niches, Technology Analysis and Strategic Management, 28(1), pp. 1–23. Smith, B., Kistruck, G. and Cannatelli, B. (2016a) The impact of moral intensity and desire for control on scaling decisions in social entrepreneurship, Journal of Business Ethics, 133(4), pp. 677–689. Smith, A., Hargreaves, T., Hielscher, S., Martiskainen, M. and Seyfang, G. (2016b) Making the most of community energies: Three perspectives on grassroots innovation, Environment and Planning A, 48(2), pp. 407–432.

90  Social and Solidarity Economics Teasdale, S., Lyon, F. and Baldock, R. (2013) Playing with numbers: A methodological critique of the social enterprise growth myth, Journal of Social Entrepreneurship, 4(2), pp. 113–131. Upchurch, M., Daguerre, A. and Ozarow, D. (2014) Spectrum, trajectory and the role of the state in workers’ self-management, Labor History, 55(1), pp. 47–66. Wilton, R. and Evans, J. (2016) Social enterprises as spaces of encounter for mental health consumers, Area, 48(2), pp. 236–243. Wheeler, P. (2017) Where have all the radicals gone? How normative pressures can blunt the radical edge of a social enterprise, Social Enterprise Journal, 13(2), pp. 163–179.

5 Enterprises, Legitimacy and Pursuit of the Social

Introduction The wide collection of activities that make up the SSE are necessary for its assembly and reproduction. The mix of entities, services and people, and the constant flow of ideas and practices that work into each other, are at the heart of its political potential, but its ability to create and redistribute wealth focuses attention on social enterprises as a motor of change and replication. Drawing on a neo-institutional perspective, Pinch and Sunley (2015) show how legal (regulation), educational (normative) and attitudinal (cognitive) factors have reshaped the social enterprise field towards a more fully-fledged market logic. Social enterprises seek advantage from these shifting regimes but are simultaneously compromised by them, and this chapter shows how these logics are defined, understood and managed to avoid an ultimate legitimation crisis. It is not simply a case of one or the other – profit at the expense of solidarity – but the restless search to seek tactical advantage, compromise and trade-off ethics to grow the social by necessarily engaging public, private and community markets. Social enterprises have become a more significant arena of policy attention, as a response to a crisis of urban governance and the reordering of local authority functions, as Ridley-Duff and Bull (2016) explain: • • •

•

The decline of state involvement in the planned provision of services and the marketisation of welfare, which disproportionately affect declining and poor neighbourhoods. The focus on a culture that emphasises self-reliance and personal responsibility and the rise of urban entrepreneurship and growth coalitions. Changes in funding opportunities within the non-profit sector, ­specifically the move from grant giving to contract/competitive tendering and the devolution, deregulation and privatisation of some mutual services. The financial and fiscal crises facing cities and the need to innovate in the design and delivery of public services, particularly in neighbourhoods that struggle to support mainstream provision (based on Ridley-Duff and Bull, 2016).

92  Enterprises, Legitimacy and the Social

Defining Social Enterprises Ridley-Duff and Bull (2016) argue that social enterprises can also be viewed as a spectrum of activity but share a common concern for trading goods and services, making a financial surplus and redistributing profit for a defined social purpose. This highlights the political intent of social enterprises rather than their sectoral, or institutional, characteristics, which Defourny and Nyssens (2012) see shaped by participatory decision-making based on a high degree of local autonomy. They are also entrepreneurial, defined by producing goods or selling services, a significant level of economic risk but also a balance between paid work and volunteer equity. Defourny and Nyssens (2012) connect the social to limited profit distribution, an explicit benefit to the community and projects that respond to locally defined needs. Bernholz (2014) shows that there are 1.1m public charities in the US with an asset base of $2.7trn, and that there are nearly 30,000 registered co-operatives with 300,000 members. In Europe, there are 240,000 co-operatives with 163m members. Data from the UK also suggests that social enterprises have the capacity to replicate business formats in even the most disadvantaged parts of the city. Social Enterprise United Kingdom (SEUK) (2015) estimate that there are approximately 62,000 social enterprises with small and medium firms contributing £24bn Gross Value Added (GVA) to the UK economy. Moreover, the median annual turnover of social enterprises has grown from £175,000 in 2009 to £240,000 in 2011, and they employ more people, relative to turnover, than mainstream small businesses. The spatial concentration of social enterprises makes them especially relevant to area based regeneration and the challenge of a contracting economic base. The SEUK review shows that 39 per cent of all social enterprises are in the 20 per cent most deprived communities in the UK, compared to 13 per cent of private businesses, and they also estimate that 83 per cent of profits are reinvested in the communities from which they are earned. Billis (2010) underscores the point that social enterprises are rarely fixed in one social, spatial or financial logic but constantly shift across a plane of activity depending on opportunities, resource constraints or market restructuring. He argues that some organisations exhibit shallow forms of hybridity by mixing core profit-making activities with grants, social outreach or volunteering. Enhanced hybridity is required when more developed and increasingly privatised forms of contracts, service-level agreements or partnerships with businesses are made. However, the ‘frenzied’ nature of change has stimulated ‘enacted’ hybrids’, often established by other organisations, to address complex problems and funding arrangements whilst others can develop in more ‘organic’ ways, driven by internal business needs (Billis, 2010, p.  61). Wry and York (2017) also criticise overly restrictive definitions, especially as emerging businesses could be excluded if they show limited volumes of

Enterprises, Legitimacy and the Social  93 trading or commercial activity. Moreover, such metrics tend to devalue the reformist, or disruptive, tendencies of social enterprises and their role in transforming community power to redistribute wealth. Ridley-Duff and Bull (2016) thus argue for a continuum that permits prescriptive and normative flexibility in understanding social enterprises and their relationship to the market, state and third sector. They show in Table 5.1 that social enterprise activity can be seen in relation to different sectors of the economy from those who promote corporate and ethical practices to pure charitable activities. Profit can also be can thought of in Table 5.1  A  typology of social enterprises Type A Non-profit Model In the boundary areas of the public and third sectors. Shares a ‘public’ interest outlook and hostility to private sector ownership and equity finance.

Social enterprise as a ‘non-profit’ organisation: obtains grants and/or contracts from public sector bodies and other third sector organisations, structured to prevent profit and asset transfers except to other non-profit organisations.

Type B Corporate Social Responsibility Model In the boundary areas of the public and private sectors; suspicious of the third sector as a viable partner in service delivery and economic development.

Social enterprises as a corporate social responsibility project: environmental, ethical or fair-trade business; ‘for-profit’ employee-owned business; public/private joint venture or partnership with social aims.

Type C More-than-Profit Model In the boundary areas of the private and third sectors; antipathy to the state (central government) as a vehicle for meeting the needs of disadvantaged groups and realistic about the state’s capacity to oppress minorities.

Social enterprise as a ‘more-thanprofit’ organisation: single or dual stakeholder co-operative, charity trading arm, membership society or association or a thrust that generates surpluses from trading to increase social investment.

Type D Multi-stakeholder Model (Ideal Type) At the overlap of all sectors; it replaces public, private and third sector competition with a democratic multi-stakeholder model. All interests in a supply chain are acknowledged to break down barriers to social change.

Social enterprise as a multi-stakeholder enterprise: new co-operatives, charities, voluntary organisations or co-owned businesses using direct and representative democracy to achieve equitable distribution of social and economic benefits.

Source: Ridley-Duff and Bull, 2016, p. 78. Reprinted by permission of SAGE Publications Limited, Books.

94  Enterprises, Legitimacy and the Social a continuum from organisations that are non-profit to multi-­stakeholder enterprises, committed to social democratic principles. This they regard as the ideal type, which replaces intersectoral competition with a multi-stakeholder model in which representative democracy defines the social, as well as the economic, benefits of activity. In their review of factory closures, co-operatives and microfinance, Ridley-Duff and Bull (2016) show that Employment rights were superseded by member ownership rights and responsibilities, transforming the relationship between workers and the machinery needed to sustain production. Property was subordinated to labour and (public) interest, rather than the reverse... Social enterprises acted to re-localise control and ownership, and reclaim wealth generated locally. (Ridley-Diff and Bull, 2016, p. 114; italics – author’s original) Their value is that they aim to subvert the logic of the free market, limit the effects of globalisation and seek to re-localise economic control through the ownership of assets. The global differences in the SSE are also reflected in the structure, purpose and value base of social enterprises, especially between mainland Europe and the US. Reflecting the pattern of the SSE more broadly, American social enterprises have a stronger link with philanthropy, entrepreneurs and market based responses, whereas in the EU, the emphasis is on collectivism, democratic forms of governance and a more explicit social purpose. The European Commission shows that the sector accounts for significant levels of employment, including 10.3 per cent of all jobs in France and 11.8 per cent in Belgium, and between 2008 and 2014, the Spanish social economy created 29,000 enterprises and 190,000 jobs (European Commission, 2015, p. 12). The Commission settled on a definition that stresses the connection between commercial practices, democratic governance and social benefit: A social enterprise is an operator in the social economy whose main objective is to have a social impact rather than make a profit for their owners or stakeholders. It operates by providing goods and services for the market in an entrepreneurial and innovative fashion and uses its profits primarily to achieve social objectives. It is managed in an open and responsible manner and, in particular, involves employees, consumers and stakeholders affected by its commercial activities. (European Commission, 2011, p. 2) Defourny and Nyssens (2014) developed a significant body of work involving empirical research, international comparisons and conceptual analysis across a range of disciplines in institutional economics, politics

Enterprises, Legitimacy and the Social  95 and sociology, to understand the distinctive character of the European social economy. Their work, as part of the Research Network for Social Enterprise (EMES) approach, makes explicit the participatory dimension of social enterprises and the rules and obligations associated with their constitution and ethics (see Table 5.2). They stress that social enterprises are a dynamic collective that respond to the expressed needs Table 5.2  E MES International Research Network definition of social enterprises Economic and Entrepreneurial Dimensions of Social Enterprises a) A continuous activity producing goods and/or selling services. Social enterprises, unlike some traditional non-profit organisations, do not normally have advocacy activities or the redistribution of financial flows (as, for example, many foundations) as their major activity, but they are directly involved in the production of goods or the provision of services to people on a continuous basis. The productive activity thus represents the reason, or one of the main reasons, for the existence of social enterprises. b) A significant level of economic risk. Those who establish a social enterprise assume totally, or partly, the risk inherent in the initiative. Unlike most public institutions, social enterprises’ financial viability depends on the efforts of their members and workers to secure adequate resources. c) A minimum amount of paid work. As in the case of most traditional non-profit organisations, social enterprises may also combine monetary and non-monetary resources and voluntary and paid workers. However, the activity carried out in social enterprises requires a minimum level of paid workers. Social Dimensions of Social Enterprises d) An explicit aim to benefit the community. One of the principal aims of social enterprises is to serve the community or a specific group of people. In the same perspective, a feature of social enterprises is their desire to promote a sense of social responsibility at the local level. e) An initiative launched by a group of citizens or civil society organisations. Social enterprises are the result of collective dynamics involving people belonging to a community or to a group that shares a well-defined need or aim; this collective dimension must be maintained over time in one way or another, even though the importance of leadership (by an individual or a small group of leaders) must not be neglected. f) A limited profit distribution. The primacy of the social aim is reflected in a constraint on the distribution of profits. However, social enterprises do not only include organisations that are characterised by a total non-distribution constraint, but also organisations which – like co-operatives in many countries – may distribute profits, but only to a limited extent, thus allowing an avoidance of profit maximising behaviour. (Continued)

96  Enterprises, Legitimacy and the Social Participatory Governance of Social Enterprises g) A high degree of autonomy. Social enterprises are created by a group of people on the basis of an autonomous project, and they are governed by these people. They may depend on public subsidies, but they are not managed, be it directly or indirectly, by public authorities or other organisations (federations, private firms, etc.). They have the right both to take up their own position (‘voice’) and to terminate their activity (‘exit’). h) A decision-making power not based on capital ownership. This criterion generally refers to the principle of ‘one member, one vote’, or at least, to a decision-making process in which voting power is not distributed according to capital shares on the governing body which has the ultimate decision-making rights. i) A participatory nature, which involves various parties affected by the activity. Representation and participation of users or customers, influence of various stakeholders on decision-making and a participative management often constitute important characteristics of social enterprises. In many cases, one of the aims of social enterprises is to further democracy at the local level through economic activity. Source: Based on Defourny and Nyssens, 2012, pp. 12–15.

of communities who check and ultimately control the distribution of social benefit. The relegation of capital to serve collective interests and paid, as well as unpaid, work is what distinguishes their potential as well as their economic identity. They later adjusted the third dimension on participatory governance to place emphasis on ‘a high degree of autonomy; a ­decision-making power not based on capital ownership; and a participatory nature, which involves various parties affected by activity’ (Defourny and Nyssens, 2014, p. 48).

Logics, Legitimacies and Pressures Social enterprises are therefore embedded in a range of political, institutional and social relations (Pinch and Sunley, 2015). In this respect Di Domenico et al. (2010) have identified strategies of effectuation whereby social entrepreneurs envision a range of development options that involve ethical compromises and opportunistic tactics to create competitive social value. Whilst this is a risky approach, ‘It is also liable to be more efficient because entrepreneurs following it are able to change track more easily in response to changing circumstances and to take advantage of new resources’ (Di Domenico et al., 2010, p. 684). In changing track, enterprises must, by necessity, negotiate different and often contradictory legitimation strategies. Here, Dart (2004) argues that entrepreneurs must achieve ‘social pragmatic’ legitimacy by exchanging a service or facility for monetary value through a grant or contract, usually, although not exclusively, from the state. However, this also brings isomorphic

Enterprises, Legitimacy and the Social  97 pressures to change the organisation in a way that preferences the commissioner. The most resilient social enterprises are those that can resist such pressures and activate ‘moral legitimacy’ to steer the organisation back, or closer, to its social purpose: The moral legitimacy perspective frames social enterprises not merely as something that earns revenues or achieves outcomes but as something that is a preferred model of organisation... the moral legitimate social enterprise activists remain relatively immune from performance-­based criticism and delegitimation. (Dart, 2004, p. 419) Nicholls (2012, p.  223) argues that the social enterprise sector is in a pre-paradigm stage in the UK, which contains opportunities but is also ‘a fluid institutional space for dominant actors to shape and exploit.’ He reviews the range of interpretations of the sector as a model of systemic social change; the solution to state failure in welfare provision; a new market opportunity for business; a model of political transformation and empowerment and a space for new hybrid partnerships. Nicholls identifies three discourses dominant in British policy, including the proposition of hero entrepreneur, business efficiency and communitarianism linked to social justice. He conceptualises change in social enterprise markets as a dynamic interplay between macro level institutions and micro level organisational actors. The institutionalist school of thought ‘suggests that individual organizations are subject to resource-based pressures to conform to extant- or society-level normative frames of reference in order to survive and prosper’ (Nicholls, 2012, p. 226). There is a cultural dimension to processing legitimation tensions in which networks, social influence and communicative capacity are central tactics in responding to a mix of isomorphic pressures distinctive to social enterprises: • • •

Coercive isomorphism captures the process by which powerful ­external factors, such as the state or resource providers, force ­organisations toward uniformity. Mimetic isomorphism encourages organisations to imitate other models to counter the risks of organisational uncertainty in underdeveloped fields. Normative isomorphism records the influence of professional bodies and standards who exert influence over organisational cultures, systems and codes of conduct. (Nicholls, 2012, p. 228)

Nicholls then identifies a fourth type of reflexive isomorphism, ‘which privileges agency over structure by suggesting that dominant organizations can shape the legitimacy of an emergent field to reflect their own institutional logics and norms’ (Nicholls, 2012, p. 228). The problem is

98  Enterprises, Legitimacy and the Social that the lack of institutional patterns of social entrepreneurship threatens their normative legitimacy and undermines the capacity of social enterprises to shape the field of action. Thus, Huybrechts and Nicholls (2013) argue that associational legitimacy becomes more important as a unifying dynamic bringing together other entities and interests to strengthen collective authority. Smith and Teasdale (2012, p. 163) suggest that it is the strength of ‘associative democracy’ in structures, policies and inbuilt routines that form a countervailing steering mechanism when coercive isomorphism attempts to discipline the social enterprise.

Capture, Co-option and Resistance Cornforth (2014) combines resource dependency theory with institutional management to explain the modalities of co-option and how to resist the mission drift produced by these contradictory pressures. The resource dependency argument highlights three areas of concern: • • •

The importance of the resources to the organisation. How much control those that supply the resources have over their deployment. Are there other sources of the resources or has the provider a monopoly?

Cornforth shows that in the UK, the growth of contracting out services has strengthened the dependence that many third sector organisations have on the state, and whilst markets and quasi-markets give the illusion of greater choice, in reality, they enable commissioners to reprimand or reward the sector. Certainly, there is evidence that voluntary organisations are providing more services previously associated with local government in leisure provision, social care and housing. Conforth (2014) cites research by the Charity Commission that shows that increasing numbers of NGOs are less likely to be inclined by their mission than their income and that more are reliant on government contracts to survive. Moreover, he shows that there is evidence that the state appears to interfere more in the governance of charities and that NGO Boards are becoming more concerned about their independence. Wheeler (2017) also argues that marketised management techniques, incentive financing and debt inevitably restructure the value base of even the most recusant ventures as neo-institutional pressures push social enterprises towards conformity with market rivals, meaning the radical approach, which assisted the formation of the organisation, becomes less observable. However, Dey and Steyaert (2012, p. 94) make the point that the social enterprise sector cannot be disciplined in such resource dependent ways, which ‘positions non-profit organisations in a ­Darwinistic plot, as only the most flexible and entrepreneurial organisations are

Enterprises, Legitimacy and the Social  99 deemed fit enough to morph with social entrepreneurship, thus averting their looming demise.’ In particular, there is little empirical evidence to suggest that the community and voluntary sector as a whole is shifting to a social enterprise model in order to replace grant income lost in a period of austerity (Maibom and Smith, 2016). In their study of social enterprises in the age sector, Whitelaw and Hill (2013) did find evidence that they were filling the gap left behind by rationalising and centralising services and have become preoccupied by business metrics and sustaining organisations, rather than meeting the needs of older people. Their research also highlighted the disruptive effects of formalising volunteering and restructuring community organisations as commercial businesses. However, where the service is genuinely coproduced and responds to the expressed priorities of users, such as in rural transport, they show that social enterprise models created a different sense of value and a more expansive understanding of community sustainability. Similarly, O’Shaughnessy et al. (2011) argue that social enterprises in the transport sector need the state (for finance, access to planning information, licenses and staff) to improve services. It is not the case that these are, or need to be, separate arenas of activity, but they are inevitably connected if the outcome is to improve access for the older user. For example, Margarian (2017, p. 53) points out that ‘Repeated project-based public support might create a harmful dependence on this kind of fund. To be effective, it needs to be targeted at nascent socially effective organizations with non-solvent clients.’ In short, grant aid works best with start-up, non-commercial projects and might crowd out more innovative fundraising among enterprises that have the capacity to diversify their income streams. SEUK (2015) argue that social enterprises respond to local, not state, needs and tend to be concentrated in the UK’s most deprived communities, with 31 per cent of all social enterprises based in the 20 per cent most disadvantaged areas, compared with 12 per cent of private SMEs. Moreover, 40 per cent of social enterprises have a female leader, compared with 18 per cent of SMEs, and 59 per cent have developed a new product or service in the previous 12 months, compared with 38 per cent of all SMEs (SEUK, 2015). For Wynne-Jones et al. (2015), the preoccupation with the celebrity entrepreneur linked to high performance social enterprises marginalises the collectivity that makes the SSE distinctive. However, as Kickul and Lyons (2012) demonstrate, they are also a necessary part of the assemblage in creating new services and products, finding and using resources (including social finance) and resisting external pressures by steering the organisation closer to its social mission. Pandey et al. (2017), in particular, highlight the increasing importance of skills in resource management rather than innate leadership traits in expanding the sector in a way that avoids capture. In short, there may be issues with a concentration on entrepreneurship, but it is an integral component of the social grid

100  Enterprises, Legitimacy and the Social and progressive enterprise development. Drawing on Kraatz and Block (2008), Cornforth (2014) defines four strategies for resisting capture where multiple interests attempt to exert influence on their work. First, a social enterprise may either deliberately or unconsciously eradicate pluralism by validating some claims while ignoring or devaluing others: In other words, many organizations adapt to pluralism by trying to eliminate pluralism. The organization’s leaders may, for instance, deny the validity of various external claims that are placed upon it, attack the legitimacy of the entities making the claims, attempt to co-opt or control these entities, and/or try to escape their jurisdiction or influence altogether. They may, in short, attempt to ‘delete’ or marginalize some of the institutional identities and attendant obligations that constituencies seek to impose upon their organization. (Kraatz and Block, 2008, p. 251) Second is to compartmentalise the plural identities in different organisational structures by establishing trading arms or subsidiaries or separate entities, loosely connected with the core charity. Third, the organisation can manage competing demands by integrating them and trying to get each one to acknowledge the other in a more collaborative management relationship but can also play stakeholders against one another in order to acknowledge the mutual dependence between them. Fourth, they may attempt to create a new identity altogether that is capable of accommodating competing logics and values via coalitions, networks and institutional relationships flexible enough to recognise and manage competing interests. Here, organisations might create more durable identities of their own or emerge as new social enterprises that hold on to the ideology of the original entities.

Mission Drift The restructuring of the social enterprise sector in response to welfare reform has widened the potential for mission drift, especially in the UK and the US (Young and Kim, 2015). The increasing role played by governments in the sector renders it subject to ‘vendorism’ and reduces it to an agency role, delivering a range of services that the state is no longer willing, or able, to provide. There has also been a discernible shift to diversifying and commercialising income streams, changing the fundamental character of many organisations as they are increasingly driven by market success and the need to sustain profitable business lines. As noted earlier, this stimulated a range of organisational entities better suited to emerging social finance products and contracting cultures:

Enterprises, Legitimacy and the Social  101 Mission drift is a form of instability for social enterprises that may or may not lead to serious social or organisational consequences over the long term. An organization momentarily adrift in its direction may be subject to corrective forces that bring it back to its intended focus, or mission drift may occur to the point where the organization loses its support and goals; or mission drift may ultimately lead to mission change or even restructuring to support a new direction. These latter contingencies manifest more severe forms of social enterprise ­instability – organizational failure and organizational transformation. (Young and Kim, 2015, pp. 236–237) Young and Kim see resilience in tactical ways by evaluating the capacity of a social enterprise to absorb disturbance before it needs (or is forced) to adopt another organisational state. In turn, they suggest that, in this transition, the enterprise must pass four thresholds that pull it away from a state of equilibrium and transform it into another form: a

Latitude is the amount a system can be changed before it crosses a threshold and cannot recover. b Resistance is the ease of changing the system. c Precariousness focuses on how close the current state of the system is to a threshold of change. d Panarchy represents the vulnerability to changes in the larger systems in which the firm is embedded (based on Young and Kim, 2015, p. 255). Four factors decide whether a social enterprise will pass through a threshold into the realm of instability (and possibly back to equilibrium), and Table 5.3 summarises the options during processes of disruption. Governance arrangements operate as the internal compass for social enterprises, with the executive board protecting the social mission, but they also reflect a wider range of interests, including beneficiary groups or funders who may have contrary expectations about profitability and contractual performance. Finance is becoming more complex, especially as bespoke products, fiscal incentives and commercial opportunities place distinctive commercial pressures on organisations seeking to grow or move into new service areas. ‘Organisational slack’ refers to the underused assets, human or financial capital or underemployed labour that might enable it to achieve efficiency, absorb losses or respond quickly to new markets. Leadership is ephemeral, and many social enterprises draw strength (but might ultimately suffer) from a founder with a distinctive vision and ethos. The capacity for succession planning, skilling-up the organisation or stimulating social entrepreneurship all dictate its capacity to adapt, bounce back or reform in the face of radical change.

102  Enterprises, Legitimacy and the Social Table 5.3  T hreshold factors or social enterprises Threshold Factor

Latitude

Resistance

Precariousness Panarchy

Shifts in economy or social climate may influence board composition and decisionmaking Strong external Shifting Legal form Finance economic and external incentives conditions opportunities or tenuous may financial affect conditions can encourage incentives change in to pursue or incite change balance of de-emphasise in balance of financial and financial and market or social goals social goals social goals Changes in Organisation Greater slack Greater slack Dearth of slack increases economic Slack permits wider provides set of choices more capacity vulnerability to conditions external forces may and greater for mix of encourage motivation to for change social and reduction of environmental resist change slack or allow goals it to increase Changes in Founders may Current Leadership Different economic resist change goal balance leaders may and social from original threatened by be more or conditions imminence vison; less flexible may attract of change in or committed successors different may be more leadership to specific kinds of combinations open or leaders with committed to of social vs alternative market goals change goals Governance

Board composition, rules and legal mandates constrain discretion on mission and goals Incentives implicit in legal form and sources of income, influence range of action

Board composition may foster or resist change in goal balance

Change in mix of involved stakeholders with different interests can tip the balance in goals

Source: Young and Kim, 2015, p. 255. Reprinted by permission of Emerald Publications Limited.

Pache and Santos (2012, p. 974) also describe the strategies that social enterprises use to satisfy contradictory commercial and ethical logics, focusing first on decoupling, in which ‘Organizations symbolically endorse practices prescribed by one logic while actually implementing practices promoted by another logic, often one that is more aligned with organizational goals.’ They show that such acts are limited by the extent to which all members adhere to the same logic and can resist or manage

Enterprises, Legitimacy and the Social  103 external stakeholders who have less investment in the organisation’s culture. The second approach is compromising, which involves the attempt by organisations to craft an acceptable balance between the conflicting expectations of external constituents. This might involve the adoption of different standards, creating new behaviours or skills and negotiating to soften the demands of referents. For example, they point out that ­micro-finance organisations need to agree a price that creates a commercial return and that is fairer than retail banks’, but such strategies tend to be short-term, as further compromises may not be possible to ensure longer term profitability. Third, hybrid organisations may reconcile competing logics by combining them within a single project or governance framework. Pache and Santos (2012) reviewed four Work Integration Social Enterprises (WISEs) in France and demonstrated how they traded off social welfare with a commercial logic (Figure 5.1). Their conceptual frame starts by defining the critical tensions between these rationales, which are shared by pro-social and pro-profit WISE models. Commercial logic is based on profit maximisation in the interests of owners who can appropriate surpluses compared with a social welfare logic premised on the provisions and services that are needed locally. Second, the organisational form emphasises associational working in the social firm compared with for-profit businesses that minimise costs and use assets and capital and human resources to maximise economic returns. Third, governance in the social economy stresses democratic control and accountability, compared with hierarchical models aimed at efficiency and strengthening returns for shareholders in commercial firms. Finally, professional Organisational Elements on Which Logics Prescribe Conflicting Demands

Legal Characteristics

GOAL What is the appropriate goal for an organization to pursue?

SOCIAL WELFARE AND COMMERCIAL LOGICS

Goal conflict is resolved at the field level by the state, which imposes endorsement of a social mission on all WISEs.

ORGANIZATIONAL FORM What is the appropriate organizational form to achieve that goal?

CONTROL How is control legitimately exerted in an organization?

Yet the state is agnostic about how to organize operations, therefore leaving ample room for conflicts on means.

Legal Status Ownership Profit Destination Site Form Site Governance Procedures Localization Brand (Name, Identity)

PROFESSIONAL LEGITIMACY What are the sources of professional legitimacy in an organization? Data source: Field interviews and field-level archival data

Monitoring Professional Affiliation Mobilization of Volunteers Data source: Case interviews and case-level archival data

Figure 5.1  T he social welfare and commercial logics of WISE organisations. Source: Pache and Santos, 2012, p. 983. Reprinted by permission of SAGE Publications Limited.

104  Enterprises, Legitimacy and the Social legitimacy in the social logic is driven by contribution, while in the commercial logic, it is dictated by financial expertise. As WISE organisations scaled their services, they made decisions about structure, governance and the co-ordination of new sites. They also decided what legal status to adopt, what ownership model to prefer and which processes should be localised, bespoke or standardised. In turn, this informed decisions about branding and image, how to assess and demonstrate impact and their use of professional and volunteer staff. Table 5.4 summarises these tensions in the context of the Pache and Santos’s four cases (2012) and identifies the strategies that enable enterprises to balance competing social and economic demands. Their analysis is important because it locates the source of conflict and the response to the maintenance of various legitimacies, which are constitutive of social enterprise practice. Legal structures can change to take advantage of fiscal rules or attract investment, but site governance needs to retain its local relevance, autonomy and access to its beneficiary community.

Table 5.4  L  egitimacies, conflict and strategies in social enterprise organisations Element

Source of Conflict

Demands from Social Welfare Logic

Demands from Commercial Logic

Legal Status

What is the legitimate legal status of operating sites?

Ownership

Who are the legitimate owners of the sites?

Sites should be formed as for-profits because that is more effective for producing goods and services. The legitimate owners of sites are those who have invested capital in the sites.

Profit Destination

What is the legitimate use of profits?

Sites should be formed as non-profits because that legal status is the best safeguard against mission drift. The legitimate owners of the sites are those who adhere to and are willing to protect the organisation’s social mission. The legitimate use of profit is its reinvestment in the mission of the organisation.

Site Form

What is the Site should be legitimate form structured as of the site? autonomous entities that allow local members to take ownership of the site.

The legitimate use of the profits is the distribution of the dividends to shareholders in proportion to the capital invested. Sites should be structured as entities that allow for control and oversight of the owners.

Enterprises, Legitimacy and the Social  105 Element

Source of Conflict

Demands from Social Welfare Logic

Local actors, as legitimate experts of local needs, should be involved in the leadership of local sites. Procedures’ Procedures should be Localisation adapted at the local level to adapt to the specific needs and resources of the local environment. Brand (Name, What is the The brand should Identity) legitimate be at the local level, scope for brand as a way for local identity? actors to express their knowledge and identity. Monitoring What is the No central resources legitimate are needed to level of site monitor sites because monitoring? practices designed at the local level should also be controlled at the local level. Site Governance

What is the legitimate level of involvement of local actors in site governance? What is the legitimate level of localisation of operating procedures?

Demands from Commercial Logic Experts, mobilised at the national level, are legitimate to address organisational and strategic challenges. Procedures should be standardised because this is a source of consistency and efficiency gains. The brand should be unified across all sites to project consistency in identity and quality.

Centrally designed standard procedures should be monitored centrally, thus requiring the mobilisation of resources at the central level. The work integration The recycling or Professional What is the federation is the place temporary work Affiliation legitimate industry federations affiliation with where the interests are the places where of work integration professional the interests of organisations? professionals are best represented and recycling and temp work are represented prompted. and promoted. Volunteers are not Volunteers are not Mobilisation What is the used as resources and of Volunteers legitimate use only valuable but are often considered desired resources of volunteers as amateurs in because they as a human the commercial embody a selfless resource? sector, where paid commitment to the professionals are social mission. the only legitimate human resources. Source: Based on Pache and Santos, 2012, pp. 984–86.

In practice, behaviours rarely conform to the ethical-commercial binary and are far more entangled, enmeshed and integrative as steering mechanisms for social enterprises. Pache and Santos show that commercially oriented WISE organisations adopted chameleon tactics to appeal

106  Enterprises, Legitimacy and the Social to multiple interests, create alliances and form new entities, especially to enable their development at a national level. They conclude that ‘hybrids that are persistently embedded in competing institutional logics combining elements of the competing social welfare and commercial logics by selectively coupling intact demands imposed by each logic, instead of adopting traditional strategies of decoupling or compromising’ (Pache and Santos, 2012, p.  993). For-profit operators use a range of cognitive techniques to gain legitimacy among social and state actors without fundamentally restructuring their dominant commercial ethos. As the policy and resource environment changes, these strategies are also ­activated by social enterprises, but their influence is controlled by the extent to which institutions enable or foreclose ethical and/or commercial outcomes.

Communities, Assets and Local Accumulation In 2010, the Conservative-led government in the UK introduced the Big Society agenda (as an alternative to the Big State) delivered by ‘new localism’, where communities were empowered to take on additional responsibilities, assets and services either in partnership or competition with local government (O’Sullivan, 2012). The Localism Act (2011) aimed to provide neighbourhoods with a greater say over planning, service delivery and owning and managing facilities formerly operated by local authorities. The Act introduced a Community Right to Challenge, which gives groups an interest in taking over facilities and related services and a Community Right to Buy, which requires local authorities to maintain a list of assets of community value. An important instrument underpinning transfers in England is the General Disposal Consent (Circular 06/03), which allows for the disposal of land for less than the best consideration that can reasonably be obtained. In an extensive review of community asset transfer in the UK, Aiken et al. (2011) distinguish between three types of schemes: •

•

•

Stewards – small, mainly volunteer-run groups with a single, long-standing asset (usually a building) used largely for hiring out to local community groups and residents. Such groups had a low income and rarely employed staff. Community developers – medium-sized organisations, often with a range of assets, involved in local service delivery and local partnerships. These organisations normally had paid staff and a mix of sources of income. Entrepreneurs – organisations running larger, more professionally styled social enterprises. While still community based, they had a mix of assets for social and commercial purposes and a business

Enterprises, Legitimacy and the Social  107 model. These organisations were more likely to have capital-­intensive assets. (Aiken et al., 2011, p. 6) Aiken et al. estimate that there are about £2.4bn worth of assets in community ownership across the UK and that they have allowed groups to strengthen their sustainability by owning property, stimulating social enterprises and building financial reserves. However, Czischke et al. (2012) point out that this has created tensions in hybrid housing organisations, between their social mission and the necessity to generate profits. S­ imilarly, Aernouts and Ryckewaert (2017) show how third sector providers loosen their anchorage in the community, as they are driven by balance sheets when they take responsibility for managing land and property. Hull et al. (2016) suggest that asset transfer has contributed to a 5 per cent growth of community businesses between 2014 and 2015 in ­England, which takes the total number to just over 7,000. These generate more than £1bn of income per annum, employ over 36,000 staff and engage nearly 200,000 volunteers (Hull et al., 2016, p. 13). However, they are susceptible to changes in the regulatory environment, and they show how the growth in community energy projects was curtailed by cuts to Feed-In-Tariffs to the electricity grid. They also show that only 25 per cent of community energy businesses employ staff and that the complex regulatory and technical requirements of energy projects mean that most rely on significant voluntary effort and expertise. Moore and McKee, who examined Community Land Trusts (CLTs) in the UK, feared that the localism agenda would turn out to be ‘a survival of the fittest’ where those with the time and affluence to engage benefit most, while marginalised populations remain on the fringes (Moore and McKee, 2012, p. 288). Engelsman et al. (2016) point out that CLTs originated as part of the US Civil Rights Campaign in the 1960s to develop affordable housing but has spread rapidly to urban areas as well as the UK, Canada and New Zealand. Land can be bought or gifted by the state or other donors and held in common by a community owned and operated trust. CLTs are usually defined in law but are not in themselves a legal entity. In the UK, the most popular legal form is a Community Benefit Society, which means that the CLT must be not-for-private-profit and that members control the organisation, usually through an elected board of directors. Aernouts and Ryckewaert (2017) see CLTs as an expression of Ostrom’s ‘commons’ because they bring into relation a producer (the local authority gifting the land), a provider (the CLT developing low cost housing) and a user (members who have access to the dwelling). There is a degree of stability in the market and security of the asset, as there are limits on rent increases and the sale of housing within the legally defined community of benefit (Bunce, 2016). Engelsman et al. (2016) argue that schemes have been able to resist gentrification, provide

108  Enterprises, Legitimacy and the Social decent alternatives in housing markets under pressure for second homes and have enabled low income groups to access home ownership. In the US, they insulated communities from the property crash and the effects of the subprime market in particular. However, Engelsman et al. (2016) also show that schemes are bureaucratic and slow to set up and that even where they are popular, they have not developed as a meaningful alternative to the provision of state housing or to the private market. In the US, where there are around 10,000 housing units under Trust arrangements, Bratt (2012) estimates that CLTs make up only about 0.1 per cent of total social housing. In the UK, CLTs also tend to be small-scale and are often found in rural communities rather than in disadvantaged urban areas where organisational capacities and resources are limited (Bunce, 2016). However, they are an enabling device that allows communities to enact and maintain accumulation strategies within capitalist property relations. Safransky (2017) points out that the community farming movement in Detroit (with around 1,350 registered community gardens) is vulnerable, as most of the projects have not been able to secure a legal title or resist evictions and foreclosures. She shows how the movement has been important in altering the nature of land ownership, the meaning of land use and how local people can challenge private property rights. Land trusts and assets simply offer an opportunity for communities to access these rights and to understand that there are compromises in such transfers. Private property is a bundle of negotiated social, political, legal and economic relationships that confer value through exclusion and as such, are negotiable, rather than fixed and unalterable. This also highlights the importance of historic struggles of Black people and subaltern communities over their alienation from land and property. Land may not have a commercial value in the distressed conditions of market failure, but it offers food, useful work, beauty, recreation and a space for socialisation for some of the most underserved communities in Detroit.

Conclusion There is a degree of conceptual uncertainty about social enterprises and the emphasis on business cultures within the SSE. For critics, these cultures are about shifting the sector towards the market, the techniques of capitalism and the always compromising pursuit of profit. Certainly, there is evidence that the state is incentivising market behaviours to ready the voluntary sector to deliver a range of services and functions. Community Interest Companies, workfare programmes and Social Impact Bonds are all part of the governing technology, but they are both negotiable and resistible. The reality is there is a far more ethically complex and integrated assemblage in which the surplus-market binary is

Enterprises, Legitimacy and the Social  109 not borne out by the evidence from very different cities and regions. The next chapter looks at these actually existing social economies and makes the point that businesses operating across urban markets are central to wealth creation and redistribution and that this, in turn, involves an entanglement with money, fiscal rules and institutions. The ideas of an ethically pure social economy and a compromised Faustian relation with the state and the market are neither accurate nor politically useful.

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110  Enterprises, Legitimacy and the Social European Commission (2011) Social Business Initiative, Communication from the Commission to the European Parliament, the Council and the E ­ uropean Economic and Social Committee and the Committee of the Regions, ­Brussels, European Commission. European Commission (2015) Social Economy: Taking Back the Initiative. White Paper on Proposals to Make the Social Economy a Pillar of the ­European Union, Brussels, European Commission. Hull, D., Davies, T. and Swersky, A. (2016) The Community Business Market in 2016, London, Power to Change. Huybrechts, B. and Nicholls, A. (2013) The role of legitimacy in ­social ­enterprise-corporate collaboration, Social Enterprise Journal, 9(2), pp. 130–146. Kickul, J. and Lyons, T. (2012) Understanding Social Entrepreneurship: The Relentless Pursuit of Mission in an Ever Changing World, London, Routledge. Kraatz, M. and Block, E. (2008) Organizational implications of institutional pluralism, in R. Greenwood, C. Oliver, R. Suddaby and K Sahlin-Andersson (Eds.) The SAGE Handbook of Organisational Institutionalism, pp. 243–275, London, SAGE. Maibom, C. and Smith, P. (2016) Symbiosis across institutional logics in a social enterprise, Social Enterprise Journal, 12(3), pp. 260–280. Margarian, A. (2017) Tell me your financing and I will tell you who you are: Organizations’ strategies and project funds’ effectiveness, Social Enterprise Journal, 13(1), pp. 53–77. Moore, T. and McKee, K. (2012) Empowering local communities? An international review of community land trusts, Housing Studies, 27(2), pp. 280–290. Nicholls, A. (2012) The legitimacy of social entrepreneurship: Reflexive isomorphism in a pre-paradigmatic field, in B. Gidron and Y. Hasenfeld (Eds.) ­Social Enterprises: An Organisational Perspective, pp.  222–249, Basingstoke, ­Palgrave Macmillan. O’Shaughnessy, M., Casey, E. and Enright, P. (2011) Rural transport in peripheral rural areas, Social Enterprise Journal, 7(2), pp. 183–190. O’Sullivan, H. (2012) A big society needs an active state, Policy and Politics, 40(1), pp. 145–48. Pache, A. and Santos, F. (2012) Inside the hybrid organization: Selective ­coupling as a response to competing institutional logics, Academy of Management Journal, 56(4), pp. 972–1001. Pandey, S., Lall, S., Pandey, S. and Ahlawat, S. (2017) The appeal of social accelerators: What do social entrepreneurs value? Journal of Social Entrepreneurship, 8(1), pp. 88–109. Pinch, S. and Sunley, P. (2015) Social enterprise and neoinstitutional theory: An evaluation of the organizational logics of SE in the UK, Social Enterprise Journal, 11(3), pp. 303–320. Ridley-Duff, R. and Bull, M. (2016) Understanding Social Enterprise: Theory and Practice, Thousand Oaks (CA), SAGE. Safransky, S. (2017) Rethinking land struggle in the postindustrial city, ­Antipode, 49(4), pp. 1079–1100. SEUK (Social Enterprise UK) (2015) The People’s Business: State of Social ­Enterprise Survey 2015, London, SEUK.

Enterprises, Legitimacy and the Social  111 Smith, G. and Teasdale, S. (2012) Associative democracy and the social economy: Exploring the regulatory challenge, Economy and Society, 41(2), pp. 151–176. Wheeler, P. (2017) Where have all the radicals gone? How normative pressures can blunt the radical edge of a social enterprise, Social Enterprise Journal, 13(2), 163–179. Whitelaw, S. and Hill, C. (2013) Achieving social enterprises for older people: Evidence from a European project, Social Enterprise Journal, 9(3), pp. 269–292. Wry, T. and York, J. (2017) An identity-based approach to social enterprise, Academy of Management Review, 42(3), pp. 437–460. Wynne-Jones, S., North, P. and Routledge, P. (2015) Practising participatory geographies: potentials, problems and politics, Area, 47(3), pp. 218–221. Young, D. and Kim, C. (2015) Can social enterprises remain sustainable and mission-focused? Applying resiliency theory, Social Enterprise Journal, 11(3), pp. 233–259.

6 Actually Existing Solidarity Economies

Introduction A number of social enterprise surveys and commentaries argue that their markets tend to be locally focused and that, as they diversify or expand, they risk losing distinctiveness and the legitimacies that come with being rooted in a clearly defined community (Sunley and Pinch, 2014). However, as Muñoz (2010) points out, geographers have properly evaluated neither these claims nor how markets are constituted within scalar relations from the neighbourhood to the urban and even the global level. Deep neoliberalism is worked through circuits of finance, knowledge and intergovernmental structures as prototypical policy fixes marginalise home grown initiatives and domestic solidarities. Just as neoliberalism is rolled out in path-dependent ways, so too does the SSE reflect different economic histories, cultures and institutional configurations (Kerlin, 2012). These institutions, cultures and histories are critical components in creating and maintaining the SSE as well as explaining significant planetary variations in its size, structure and value base: As we trace the connections and do the work of assembling community economies, we enact networks that may extend over space and include a variety of actors, human and nonhuman. Our political project becomes one of enhancing the network, of building associations and thereby ensuring the future of ethical forms of difference. (St. Martin, et al., 2015, p. 20) What is consistent about the cases presented in this chapter is the way in which the SSE has been put together, which networks and relationships give it authority and how they operate within markets and against stripped-out capitalist accumulation. It also shows how the sector uses the state to gather resources, gain legitimacy and deliver services. In this sense, the methodology of assemblage brings to life ideas about the right to the city but as a project that needs to be made by human and non-human actors and the liaisons between them in politics, markets and physical spaces.

Actually Existing Solidarity Economies  113 Assemblage thinking is concerned with how different socio-­temporal processes are historically drawn together at a particular conjecture and often made stable through the work of particular powerful actors, but can then be made to disperse or realign through contestation, shifting power relations or new contexts. Assemblages place emphasis on the depth and potentiality of urban sites, processes and actors in terms of their histories, the labour required to produce them and their inevitable capacity to exceed the sum of their connections. (McFarlane, 2011, p. 209) This does not underplay the authority of capital and its roll-out but shifts the emphasis to the generative potential of urban social movements and how they operate within markets rather than avoid such confrontations. McFarlane also shows how assemblages help to identify the constraints and restrictions of capital while developing possibilities for collective recognition and refusal. The process of reassembling emphasises how urbanism might be produced otherwise, assemblage thinking asks us to consider how an alternative world might be assembled. Not by implying a particular content of alterity, whether socialist or otherwise, but through the concern with the making of alterity. (McFarlane, 2011, p. 211; italics – author’s original) Pinson and Journel (2016) also argue that neoliberalism works through institutional contexts that are conducive and some that are resistant, not because they are politically organised, but because they have different organisational inheritances. Where efficiency is the main concern, typically in Northern Europe, local government is naturally endowed with mostly technical and managerial functions. However, in the global South, the process of national integration and state building is a confrontational one, in which municipal politicians and officials have a more prominent role in defending local interests. Here, the imperfect and spatially unequal development of Fordism, and the related Keynesian state, make it difficult to see a clear break to a neoliberal epoch. Where the industrial base is historically weak and collective consumption associated with municipalisation has developed in a rudimentary way, secondary circuits of capital (real estate, church-run schools and semi-private care) make it easier for social enterprises to make inroads (Garcia, 2011).

Basque Solidarity and Mondragon Castresana (2013) argues that this process is double-edged in the Basque Country, where comparatively weak welfare conditions enabled a strong co-operative sector to emerge, which, in turn, slowed the progress of

114  Actually Existing Solidarity Economies marketisation and insipient forms of public-private partnership. Similarly, Bakaikoa and Albizu (2011) make the point that, because the Basque state relied so heavily on co-operatives, there were fewer state institutions to marketise in the first place and that services were more likely to remain in community control. They see the co-operative movement as a pragmatic response to economic crises, deindustrialisation and agri-restructuring, although it survived a suspicious Franco regime, partly because it was backed by the church. Indeed, Molina (2011, p.  14) argues that the roots of the co-operative movement are deeply embedded in ‘spiritual economics’, a cultural acceptance of sharing and a history of Basque nationalism, none of which transfer readily to other regions. These cultural rationalities are constantly being reworked as the ­Catholic co-operativism, critical to enterprise start-up, is gradually replaced by more secular business methods, skills and organisational structures (Molina and Miguez, 2008). Calvário and Kallis (2017) also show that the alternative food movement in the Basque Country is built upon a long history of small farm unions and co-operatives that were always politicised around food sovereignty and the effects of corporate supply chains on local prices. The expansion of the sector required new farmers to come into agroecology, and the diversification of produce was supported by stronger financial and business management skills. However, the rapidity with which the market developed was only possible because it built upon anti-austerity sentiment, a desire for simpler and slower forms of production and an acknowledgment that land and food were an integral part of Basque identity. Moreover, the period of post-war economic autarky also provided protection for domestic and localised markets to grow and for vulnerable enterprise models to incubate more securely (Aranguren et al., 2014). Molina and Walton (2011) point out that there has always been a tension between Catholic theological radicalism and the traditional Basque left, and that, to some extent, the church saw the co-operative movement as a bulwark against the extension of communism, especially in the 1970s and with the rise of ETA (Euskadi Ta Askatasuna). The 1970s also saw a degree of liberalisation, which opened the Spanish economy to international trade, foreign investment and mass tourism. Domestic consumption, living standards and salary levels all increased, fuelling demand for household appliances, a key component of the Basque economy. This, in turn, opened the possibility for manufacturing co-operatives to expand, restructure and diversify into new markets, reflected in the particular journey of the Mondragon Co-operative Corporation (MCC). The corporation started in 1956, when a local priest helped to establish a technological college, not just to strengthen the supply of labour but to place the values of co-operative working at the heart of business culture (Morgan, 2016). Five graduates from the college (which was

Actually Existing Solidarity Economies  115 reconstituted as the Mondragon University in 1997) led a worker takeover of a failing factory in the small Basque town of 8,500 people in the mid-1950s. Table 6.1 describes the principles of the corporation and the emphasis placed on democratic governance structures and systems to include workers in decision-making at different levels and business sectors within the group. It also describes, in a Polanyian sense, the relationship between land, labour and capital and in particular, the primacy of workers in production processes: Labour is the main factor for transforming nature, society and human beings themselves. As a result, the systematic recruitment of salaried workers has been abandoned, full sovereignty is attached to labour, the wealth created is distributed in terms of the labour provided and there is a will to extend the job options available to all members of society... Capital is an instrument subordinate to labour, which is necessary for business development. Therefore, it is understood to be worthy of fair and suitable remuneration, which is limited and not directly linked to the profits obtained, and availability subordinate to the continuity and development of the co-operative. (MCC, 2012, pp. 34–35) Sanchez-Bajo and Roelants (2013) show that by 2009, Mondragon had grown into a huge co-operate conglomerate with assets worth €33bn, €14.78bn in sales and 73 plants in 18 other countries. The corporation is now organised into four divisions: finance, industry, retail Table 6.1  P  rinciples of the Mondragon Corporation • Open admission to all members without discrimination against any group or interest. • Democratic organisation by protecting the rights of members to access decision-making systems and structures of the corporation. • The sovereignty of labour. • Instrumental and subordinate nature of capital. • Participatory management by maximising the opportunities for involving members in decision-making across the corporation. • Payment solidarity by ensuring fair and sufficient pay for work. • Inter-co-operation by strengthening business-to-business relations internally, regionally, nationally and even globally. • Social transformation by placing social reconstruction, economic inclusion and a fairer Basque society. • Universality by strengthening the solidarity economy and its foundational principles of peace, justice and development inherent in the international co-operative movement. • Education to promote the capabilities of the person as part of the co-operative tradition. Source: Based on Mondragon Corporation, 2015, pp. 34–35.

116  Actually Existing Solidarity Economies and knowledge. These involve 281 companies in 27 countries and are all underpinned by the financial capital programme. This is centred on the Caja Laboral bank, which provides banking, insurance and social security to over 1.2m customers and had an equity fund of €4.5bn in 2011 (MCC, 2012; Mondragon Corporation, 2015). The retail area had gross sales of €8bn, the university had around 3,500 students enrolled and MCC invested €165m on R & D and business innovation in 2011 (MCC, 2012). The company’s Governance Council is overseen by a Social Council representing the membership and a Monitoring Commission designed to ensure compliance with social outcomes, as well as financial performance. Members of Mondragon are legally self-employed, but there is a programme of social insurance for members and their families, and because they purchase capital in the company, they also receive a share of the profits. Members are elected to the Governing Council, and while they can join trades unions, they are restricted by company by-laws in their right to strike. Ridley-Duff (2010) explains that each member buys a stake in their individual co-operative, which can be funded with the help of Caja Laboral. Each co-operative is organised as a sectoral group within a federal structure, which pays between 15 per cent and 40 per cent of their profits towards joint projects (such as marketing research, branding and so on), and a proportion of losses (up to 40 per cent) can be cushioned by group funds. The Mondragon Corporation receives 10 per cent of profits from the sector for high risk projects, and the Mondragon Foundation is allocated 2 per cent of sectoral profits for reinvestment in social and educational projects. For example, the Fund for Education and Interco-operative Promotion (FEPI) supports professional training and R & D to raise the technological capacity of co-operatives, and the Central Interco-operation Fund (FCI) invests in strategic projects with high growth potential, restructuring organisations, supporting innovation and creating synergies between existing and new-start co-operatives. The pooling of resources to cross-subsidise debts, spread risks and share resources is supported via the Corporate Solidarity Fund (FSC), which is especially important in helping to capitalise individual entities experiencing short-term trading problems. Wage control underpins business sustainability by linking the payroll to profit, maintaining equilibrium with the regional salary levels and minimising the difference between the highest and lowest wages (Table 6.2). Mondragon clearly does not occupy a marginal space at the edge of the market but is culturally embedded and politically backed as a central component of the Basque economy, which has one of the lowest Gini coefficients globally (Morgan, 2016). The assemblage of regulations, R & D and the emphasis on innovation, linked to self-generated finance, are at the heart of scaling-up and scaling-out strategies. In particular, Markaida

Actually Existing Solidarity Economies  117 Table 6.2  G overnance structures of Mondragon Organisation of the Co-operative • General Assembly: It is the supreme organ of the co-operative, an expression of the social will expressed by all the partners. • Governing Council: It is the organ of representation and government of the co-operative. Its members are elected in the General Assembly. • Social Council: Consultative body, represents the group of partners before the internal instances of the co-operative. • Surveillance Commission: Consultative body, its object is to rule on the correct fulfilment of the accounting aspects and those that require its consideration. • Board of Directors: It is the chief executive and executive team, made up of the manager and the executive members, corresponding to the executive direction of the co-operative. Governance structure of the Mondragon Co-operation • Co-operative Congress: Its function is to establish the strategic criteria for which Mondragon will be managed, through the planning and co-ordination of its business units. It is composed of 650 congressmen, delegates by the co-operatives, and meets annually. • Divisions: Associations formed in the framework of Mondragon among related co-operatives; co-ordinate the management of their co-operatives. • Standing Committee: Governs by delegation of the Co-operative Congress. Its basic function is to promote and control the implementation of the policies and agreements adopted by the Congress, exercising a continuous monitoring of the evolution of Mondragon. • General Council: It is responsible for the development and implementation of corporate strategies and objectives; co-ordinates the policies of the different Divisions and Co-operatives. • Industrial Council: It is a co-ordinating body of the Industry Division. Source: Based on MCC, 2012; Mondragon Corporation, 2015.

(2011) argues that Caja Laboral is a key source of Mondragon’s competitive advantage: The co-operatives often faced financial problems that greatly limited their growth, since neither members’ contributions nor accessible external financing was enough to sustain investment projects that required large amounts of capital. Consequently, having a co-­ operative credit union has allowed the channelling of domestic savings into the co-operatives in need of financing under preferential conditions. In certain times of crises, Caja Laboral has allowed financing with reduced or no interest rates for certain co-operatives experiencing difficulties and has waived repayment in extreme cases. (Markaida, 2011, p. 141)

118  Actually Existing Solidarity Economies In other words, the firm’s diversification strategy (into new product lines, organisations or countries) is largely sourced by capitalising its own wealth and where necessary, reducing costs (including dividends), strengthening intra-company transfers and adopting more flexible work patterns at times of crises (Markaida, 2011). Morandeira et al. (2011) also show that co-operatives in the Basque country have the highest rates of co-operation across business sectors, stressing the reliance on networks, supply chains and inter-firm trading, including with fully commercial companies. However, Upchurch et al. (2014) argue that co-operatives are ­subject to the same market pressure to compete as capitalist enterprises, causing them to adopt the same aggressive tendencies of corporations. They point out that there have been strikes in the Mondragon group, outsourcing and lower wages in production sites in developing countries and joint ventures with private companies, where employers are not members of co-operatives. A strike in 1974 was led by a group of lower paid ‘proletariat’ shareholders who felt exploited by a more powerful ‘bourgeois’ shareholder class, especially as manufacturing units adopted mass production techniques and efficiency measures. The strike ended with the expulsion of a small group of members but reveals the underlying tensions within the co-operative movement and resulted in the adoption of new rules restricting pay increases and disparities. Mondragon also reorganised its governance systems outside the Basque Country and adopted a code of ethics for its foreign enterprises. As growth and replication implicate social enterprises more deeply in profit and finance, as well as different labour market conditions, their inherent tensions increase, and many lack the analytical skills and strategies to properly evaluate the implications of scaling decisions.

Bristol and the Creative Commons Larner (2014) describes the emergence of a vibrant creative commons in Bristol, consisting of a network of artists, craft groups, health initiatives, local food markets and cheap rental accommodation for clusters of social enterprises. She challenges the idea that they represent a post-­ political governance but identifies their transformative edge in everyday interactions with beneficiaries in some of the poorest neighbourhoods in a comparatively wealthy city: The networked polyvalent political formations that emerge are not the depoliticised post-democratic institutions highlighted in the existing literature on post-politics. Instead, they fundamentally question the status quo and actively seek political alternatives. (Larner, 2014, p. 191)

Actually Existing Solidarity Economies  119 Larner evaluates the Coexist Project (Coexist) in Hamilton House, which was a derelict office block in Stokes Croft, one of the most disadvantaged areas in the inner-city. With the property recession biting, the owners invited NGOs to consider developing it as a facility for use by the local community. Coexist was established to create a space in which the ‘community can grow, share, collaborate and learn what it is to live in coexistence with each other’ (www.hamiltonhouse .org, ­accessed August 2017). Hamilton House currently hosts over 200 ­users, including painters, designers, illustrators, environmental groups, ­charities and a radio station. They also run a low-cost community kitchen, dance studio, a well-being therapy centre and the Bristol Bike Project. Groups and individuals can also rent studios or hotdesk space. Coexist is structured as a Community Interest Company and has incubated new creative projects and social businesses from conception to sustainability. Larner (2014) distinguishes the initiative from grassroots political movements or shadow state formations precisely because it is entrepreneurial, promotes flexible management and comparatively flat structures, has a minimum wage for directors and mobilises volunteer equity. The initiative rejects gentrification and conventional forms of cultural urban branding through ‘A “do it yourself” version of city living that privileges autonomy and anti-­ authoritarianism and aims to demonstrate that a less commercial and more sustainable inner-city is possible’ (Larner, 2014, p. 200). The social enterprise sector in Bristol can be traced to the region’s history in the trades union and co-operative movements, a strong green economy and the lead taken by the City Council in response to sustained unemployment in the 1970s and 1980s. The sector now creates innovative community enterprises and scalable social finance, which have a presence in regional, national and international markets. With the growth of the Triodos Bank, the Bristol Pound and a range of ethical finance providers, the city now has the largest social finance sector in the UK, outside London (SEW, 2013). By 2013, the social economy in Bristol included 601 enterprises, with a turnover of £378m per annum, and supported 10,333 jobs (SEW, 2013, p. 8). North (2014) argues that local currencies have the potential for alternative economic and political expression, especially if they relate to the production for use logic of the SSE. The Bristol Pound is a complementary currency backed by Sterling deposits, and while more is spent in independent retailers than national chains, Ferreira and Perry (2014) argue that it is less clear how circulation adds value to suppliers in the social economy or the charitable sector. However, they also show that among users, average spending comprises 14 per cent of all weekly expenditure, with 91 per cent using locally owned shops, especially for dining (85 per cent), groceries (66 per cent) and travel (64 per cent) (Ferreira and Perry, 2014, p. 5).

120  Actually Existing Solidarity Economies Like the Basque Country, the ecosystem in Bristol has evolved over time, and its key strengths include a strong, inter-sectoral partnership focused on the business needs of enterprises; advanced educational and skills programmes; a growing regional social finance market and intermediaries, well integrated into national capital funds (Vickers et al., 2017). The Bristol and Bath Social Enterprise Network (BBSEN) advocates for the sector but also seeks out collaborative market opportunities with local government and the private sector, while Social Enterprise Works (SEW) provides technical support to individual social enterprises. The Change Cluster is a joint initiative between national technical support organisations, social finance providers and local universities, to strengthen and broaden higher education support for social entrepreneurship and business start-up, especially in the creative economy, where the sector is particularly strong. The Watershed, which is the leading film, culture and digital media centre in south-west England, is based in a prime commercial site along the regenerated riverfront. The Pervasive Media Studio offers incubation space to develop creative arts projects and brings together over 100 artists, digital animators and academics to explore the future of mobile and wireless media. Rent is the main form of income, and the building includes three cinemas, a café/bar, flexible conference and events spaces, as well as the media studio. The case demonstrates that elite development sites, especially along waterfronts, which have traditionally outpriced social enterprises or effectively excluded community interests, can accommodate ethical businesses. The waterfront is also served by the Bristol Community Ferry Boats, which started in 1977 as a private business but faced liquidation in 2012 (Figure 6.1). In early 2013, a group of local people restructured the company as a community benefit society with around 900 shareholders, the majority of whom are Bristol residents. It is now profitable and operates a regular public ferry service, tourist trips and corporate hire, and they plan to extend their fleet and operating routes. Few would deny the exclusive nature of Bristol’s waterfront and the uneven, new-right ideologies it reflects (Larner, 2014). Neither the state nor the property industry is likely to open the space for alternative land use, but alternative economic rationalities have asserted a degree of influence in this development. The SSE has not restructured the space or even restricted a dominant property model, but it does show how accumulation has enabled more diverse uses, businesses and workers and ideas about who can use the riverfront.

Québec and Solidarity Infrastructure Trembly (2012) traces the development of the social economy in Québec to anti-state and anti-socialist politics in the 1920s, and in particular,

Actually Existing Solidarity Economies  121

Figure 6.1  Reclaiming the water: Bristol Community Ferry. Reprinted by permission of Taylor & Francis.

the role of the Catholic Church in community economic development. The co-operative movement in agriculture and food production gained traction in the 1930s and 1950s, which, in part, responded to the Depression as well as the poor quality of education, housing and social care. The 1960s and the 1970s were marked by consolidation and a stronger relationship with the state as social enterprises played a more central role in economic management, major infrastructure and welfare. Gilles et al. (2013) also argue that the social economy in Québec is rooted in a nationalistic rejection of neoliberal economics, the strong tradition of unionised labour and attempts, at a national level, to reposition the voluntary sector as a surrogate for welfare. The counter movements that emerged in this period saw significant developments in social finance, as well as new institutional arrangements as a result of strong sector-­ political-policy alliances at the local and state levels. For example, Chantier de l’Economie Sociale (Chantier) was established by the 1996 Summit on the Economy and Employment, which was a response to the continuing effects of the recession on young people, women and First Nations. Mendell (2010) argues that Chantier adopted a flexible definition of the social economy in order to create a broadly based coalition, prioritise solidarity values (at the expense of restrictive legal or organisational forms) and place an emphasis on

122  Actually Existing Solidarity Economies innovative grassroots movements. Chantier’s governance is based on electoral colleges reflecting different organisational types, areas, sectors and interest groups, including First Nations. It is at the centre of a social economy that includes enterprises, training and skills development, dedicated social finance instruments, research and advocacy. Downing and Charron (2012) claim that its real value is as a social innovator, as it enables policies and support systems to be genuinely co-produced, including a new legal category of Solidarity Co-operative, which includes people who use their services as members, considerably expanding their reach and social impact. Mendell (2010) also points out that the social finance market in ­Québec is well developed and highly differentiated with new patient capital products to help un-collateralised social enterprises to access larger equity and venture funds. Major trades unions have created a number of funds, specifically for co-operatives (supported by both federal and regional tax incentives) to strengthen investment in neighbourhood social enterprises, job creation schemes and projects with environmental benefits (Gilles et al., 2013). For example, Desjardins was established to provide loan capital to social enterprises and co-operatives, and in 1997, Chantier created the Réseau d’Investissment Social du Québec (RISQ), drawing on initial capital of $CAD5m in private finance, which was match funded by the Québec Government (Downing and Charron, 2012, p. 165). RISQ also provide technical assistance loans for business plans and to strengthen governance systems and provide social enterprises without assets with loans and credit guarantees. Downing and Charron (2012, p. 167) show they have supported more explicit political work as a form of ‘economic militantism’ in pursuing pro-co-operative policies and regulatory instruments, especially tax incentives for investment in the social economy. The Québec Social Economy Act (2013) brought many of these strands together and consolidated the enabling environment but also strengthened legislation, mandated state agencies to integrate the sector into investment programmes and developed reporting, financial transparency and accountability (Bouchard et al., 2015). The latest Plan d’Action Gouvernemental en Économie Sociale 2015–2020 (Gouvernement du Québec, 2015) involves spending around $CAD100m in order to create, or maintain, 30,000 jobs and leverage investment of over $CAD500m into the social economy by 2020. This includes a $CAD10m investment in RISQ and a $CAD30m budget to relaunch Investissement Québec to stimulate the capitalisation of larger social enterprises. It also involves a programme to support the development of new markets ($CAD3.5m) and a significant investment ($CAD29m) into grassroots organisations, especially in rural and remote regions. However, Lévesque (2013) points out that this institutional and legal diversity has created tensions between larger co-operatives, structured as

Actually Existing Solidarity Economies  123 businesses, and small, associative enterprises. Who speaks for the sector and who co-ordinates its political claims and reconciles these internal contradictions are endless processes in growing the social economy. This developmental and advocacy work has been strengthened by a specific programme of funded research on a sub-regional basis, along with universities across Québec. The programme is practical, exploring market research and evaluating impact, but is also conceptual, critically reviewing the value base of the social economy and the implications of state and federal policies in its performance.

Red Bologna Zamagni (2014) shows that the Emilia Romagna region of nearly 4.5m people has one of the densest co-operative economies in the world, with two out of three people members of a co-op and producing nearly one third of the region’s GDP. The movement is also deeply connected to politics and ideologically rooted in radical communitarianism and the comparatively long history of the Communist Party. In Red Bologna, Jaggi (1977) described a raft of innovative social programmes produced by the leftist administration in the 1970s, including free public transport, a shift in public health away from state institutions and toward community centred delivery and the delegation of planning and public housing to new area based co-operatives. Bassia et al. (2016) show that this heritage and the acceptance of co-operative business models are also reflected in a progressive policy environment that enables workers to take over failing businesses, exempts social enterprises from Corporation Tax and requires that 3 per cent of profits are reinvested into pooled development funds. Bologna’s citizens can also directly support the sector by allocating up to 0.5 per cent of their income tax liability to a social enterprise, and since 2007, the City Council has introduced procurement systems that can directly award contracts to accredited co-operatives. It can also sign agreements with social firms to implement specific projects, co-manage pilot initiatives and shape procurement policies across service areas. Menzani and Zamagni (2010) also show that the movement, centred on the capital, Bologna, has developed as a result of the professionalisation of management, mergers and the use of more flexible group structures, access to stock and bond markets and changes in legislation that facilitated the growth of a new co-operative class. Type A co-operatives deliver social, health and education services, usually on the basis of contracts with the public sector, (comprising 70 per cent of co-operatives in Emilia Romagna), and Type B mainly aim to offer disabled or disadvantaged people training and pathways to employment (Fonte and Cucco, 2017). Some co-operatives combine both types (A and B) and earn their own special status by integrating social service functions through labour

124  Actually Existing Solidarity Economies market intermediaries and neighbourhood regeneration programmes. EUROCITIES (2011, p. 7) show that in Bologna alone, there were 880 associations (570 in social, health cultural and environment), 88 social co-operatives, 63 foundations and 14 NGOs. Zamagni and Zamagni (2010) point to urban-rural interdependencies in developing co-operatives, especially around traditional agricultural sectors and artisanal production. This has enabled them to remain small scale and dispersed, but with strong co-ordinating infrastructure and well developed market networks. They contrast the monolithic dominance of Mondragon in the Basque Country, and all the features of a global conglomerate, with the more diffuse and embedded structure of co-operatives across Emilia Romagna. However, Zamagni and Zamagni (2010) emphasise that finance is critical to growth strategies and that legislative changes (especially in the early 1970s) exempted co-operatives from aspects of banking regulation, which allowed them to recycle reserves and raise capital from a large number of mainly small scale lenders and investors. EUROCITIES (2012) also highlight the integration of social enterprises with the private sector, such as the Associazione Amici di Piazza Grande, which provides accommodation, training and legal aid for homeless people in Bologna. Homeless people set up a monthly street magazine, are trained to manage the shelters where they live, provide outreach support and run a bicycle repair shop, which also provides basic education and training linked to a work integration programme. Piazza Grande have also established an association of street lawyers to provide homeless people with legal aid, and since it was set up in 2000, it has supported more than 2,000 cases, with the initiative now extended to 26 Italian cities. Menzani and Zamagni (2010, p.  103) show that the scale of the co-­operative sector and its regional diversity have created co-ordination problems, necessitating a complex, but highly effective, range of networks, legal agreements and formal business clusters. The first are horizontal networks, which help to increase market power, rationalise production, offer common services and share risk. This, they argue, was critical in the post-war recovery of the co-operatives after fascist control and was especially important in the industrial sector to achieve economies of scale. It focused on rationalising marketing and the integration of interdependent production processes and set the context for full mergers throughout the 1960s and 1970s. Legacoop is the national co-­operative federation and comprises several associations in agriculture, housing and tourism and provides lobbying, as well as technical support, for members. It also negotiates group bids on public services, enabling both a scale of delivery and efficiencies to access higher value contracts. Similarly, agricultural credit unions were traditionally small, had limited capital and mainly served rural communities, but throughout the 1970s, they rationalised, merged

Actually Existing Solidarity Economies  125 and created a thicker network to minimise risk and extend credit beyond the agri-sector. Vertical networks integrate the production and distribution value chain, often with small volume farmers selling on to producer groups and through wholesaler networks operating at a global level. The postwar period saw federations investing in new agri-food processing plants in order to challenge conglomerates that had pushed down prices for small farms. In turn, farmers created purchasing co-operatives that removed their dependence on a single (capitalist) buyer as well as reducing transaction costs by cutting out commercial intermediaries. Menzani and Zamagni (2010) argue that complementary networks are more recent and enable co-operatives to create synergies and interdependencies while retaining the business integrity of the core unit. They show that the national building co-operative started from smaller Bologna based companies, subcontracting works to specialist co-operatives, which, in turn, created consortia to tender for major contracts that strengthened capacity and spread risk, especially in complex infrastructure projects. Financial support networks have been pivotal in restructuring the co-operative sector in the supply of credit, temporary and long-term equity and technical assistance on business planning and company consolidation. Menzani and Zamagni (2010) show how a series of mergers created the Ccfs (Financial Co-operative Consortium for Development) for holding equities, supplying loans and acting as a clearinghouse for co-op credits and debts. Unipol is Legacoop’s bank-insurance pole and was the first joint stock company controlled by co-operatives to be quoted on the Italian stock exchange. The three most important umbrella organisations are Legacoop, Confcooperative, and AGCI (Association of General Cooperatives Italy). They came together to establish CFI (Co-operation, Finance, Enterprise) to provide financial support for the conversion of bankrupt private firms into employee-owned co-­ operatives. Cfi takes equity in newly formed co-ops, co-ordinates investments and provides management expertise to stabilise finances and bring the businesses to profitability. The final type of network concerns advocacy and political support for the sector, working on new co-operative development, strategic marketing, ethical control of the affiliated firms, circulation of know-how and human resources information, internal conflict resolution and co-ordination of the major strategic decisions, new legislative proposals, and lobbying at the local, national, and European Union level. (Menzani and Zamagni, 2010, p. 120) Here, Menzani and Zamagni (2010) emphasise the performative importance of ‘co-operativism’ by creating a brand identity for a significant

126  Actually Existing Solidarity Economies business sector with a distinct set of ethics, which increasingly resonate in the aftermath of the financial crises. They also stress the flexible and adaptive capacity of these networks, their participatory, bottom-up quality and their global potential, both as a political counter movement, as well as helping to extend the market reach of each sector.

Occupation in São Paulo The sprawling metropolis of São Paulo has, like many South A ­ merican cities, seen rapid population growth to around 11m people and an intensification of socio-spatial segregation with all the attendant problems of homelessness, poor conditions, over-crowding and poverty (Sengupta et al., 2017). Land and property prices have risen dramatically in the last decade, especially in the city centre, and there is now a need for an estimated 1.49m properties just to meet short-term demand (Earle, 2017). Sengupta et al. (2017) argue that changes in legislation, policy and fiscal instruments created the context for social housing movements to pursue meaningful occupation strategies and create alternative pathways to housing for homeless people with little, or no, credit history. Valença and Bonates (2010) show how the dismantling, in 1986, of the National Housing Bank (BNH), which had raised capital for social housing, led São Paulo state to create a new housing fund based on a 1 per cent increase in Value Added Tax. Left-leaning municipalities were able to pursue a mix of new build and rehabilitation schemes, using Article 6 of the Brazilian Constitution (1988) – which affirms the ‘social right to housing’ – and Article 21, Clause 20 – which requires the federal government to direct urban development – to provide the necessary infrastructure to meet housing commitments across the state. The use of rights legislation was supported by the launch of Minha Casa Minha Vida (My Life My Home, MCMV) in 2009, which is a R$180bn investment that aims to provide 4m homes to low income groups across Brazil. Sengupta et al. (2017) point out that most new build schemes under the programme are on cheaper peripheral sites with high transport costs, rather than in central areas, where land prices have increased considerably in the last decade. Frustration with the slow pace of change, poor conditions and corruption re-energised the Right to the City Movement, especially around housing. The Homeless Workers’ Movement (­Movimento dos Trabalhadores Sem Teto, MTST) originated from the Landless Rural Workers’ Movement in the mid-1990s, with a focus on occupying empty buildings, initially organised as squats, to reclaim their long-term use for homeless people. A mix of formal and informal tactics were used to target public and private buildings, and MTST organised communal cooking and cleaning, often-illicit connections to water, sanitation and power and provided security inside and outside the block. Earle (2017) estimates that there were between 40 and 60 occupied

Actually Existing Solidarity Economies  127

Figure 6.2  T he Epiringa Building, central São Paulo. Reprinted by permission of Urmi Sengupta.

buildings in the city centre, involving a range of strategies and tactics to gain access, provide services, organise communal support and generate income (mainly rents) to sustain the occupation. The Epiringa Building was constructed in 1968 for the Federal Labour Court (Figure 6.2) in central São Paulo and is currently being converted into social housing with 120 one-bedroom and studio units. The total cost of refurbishment is approximately R$11m (US$5.5m). The empty property was occupied by squatters who received legal aid, finance and technical assistance from a range of NGOs, as well as academics from the University of São Paulo. The refurbishment is nearly complete, and it is estimated that tenants will pay R$15 (US$7.50) per month, which is about one-tenth of the market rent. Sengupta et al. (2017) point out that the steady expansion of left-wing parties, grassroots organisations, technical support from a range of NGOs and capital investment from MCMV transformed ‘occupy’ struggles into a meaningful political process, capable of transferring assets to community use. The interplay between the state (resources and permissions), housing activists and homeless people reveals a more complex, rights-based alignment in which ‘MCMV has legitimised community firepower and an incremental housing approach, both important pillars of low-income housing delivery’ (Sengupta et al., 2017, pp. 16–17).

128  Actually Existing Solidarity Economies Earle (2017) cautions that it would be wrong to romanticise ‘occupy initiatives’ and points out that it involves a complex set of relationships in which formal and extra-legal channels comprise an ill-defined Right to the City Movement. These initiatives are well organised, disciplined, have rules, are intolerant of anti-social behaviours and focus on rent recovery, income generation and building an explicit economic dimension to sustainable occupation. The quality of the occupation itself is constantly renegotiated, as in the Epiringa case, where guerrilla entry, informal rules and securing the site characterised the first phase of the campaign. However, as the occupants and their advocates maintained a presence and put together a political alliance, supported by a financial case, they were able to establish a legal claim to rehabilitate the property and formalise allocation to homeless families. De Souza (2006) also warns against reading social movements in the global South from a Northern perspective, as the institutional, legal and cultural contexts throw open different opportunities, unpredictable alliances and more pragmatic municipal politics: In spite of the many problems which can be observed in metropolises such as Rio de Janeiro and São Paulo, there are not only problems there, but also solutions which are being proposed and to some extent also implemented both by the state and by social movements (sometimes together with the local state apparatus, sometimes despite the state, sometimes against the state). Probably it is even easier for social movements in countries such as Brazil (at least to some extent) to conceive and implement alternative strategies regarding spatial organization, not only because absence and inefficiency of the state apparatus makes engagement of civil society more necessary than in Europe or the USA, but also because urban law is not so effective or respected as, say, in Germany or the UK – apparent ‘chaos’ also means bigger room for manoeuvre for the people on the ground. (De Souza, 2006, p. 339) The case also shows the importance of intermediaries and advocates in protest politics and moving occupation beyond spectacle to challenge property relations and also how important urban assets can be brought under community control. Capacity, skills and knowledge are clearly not the only, or even the most, important dimensions to these struggles, but they are important. Dubeux (2013) describes the development of university practitioner networks in Brazil since the mid-1990s, including the Technological Incubators of Popular Co-operatives (TIPCs) and the Social Economic Incubators (SEI). The incubator concept is rooted in Latin American popular education and leadership programmes and offers technical support, space and access to equipment and financial brokerage to create ‘social technologies, understood as products, or techniques

Actually Existing Solidarity Economies  129 and/or methodologies that are developed through incubation with residents, and which represent effective solutions for social transformation’ (Dubeux, 2013, p.  303; italics – author’s original). The emphasis has shifted from narrow support for individual enterprises to broader, territorial development that locates the social economy in a more integrated regeneration framework, addressing ecological and social capital and assets as the basis of neighbourhood development and urban planning. Da Costa (2017) shows how SEIs bring together a mix of disciplines, resources and skills to support Social Enterprise Ventures (SEVs) with a particular emphasis on creating employment, improving income in poor communities and providing basic local services. The principles of the SEI approach include: • • •

An emphasis on self-management and devolving authority to workers to organise, plan and innovate, in order to build organisational resilience and local accountability. A commitment to the design of social technologies that are defined by the community, tailored to their skill levels, and are culturally, as well as functionally, useful. A dialectic process in which the multidisciplinary teams of staff and students in economics, finance and technology skill-up community organisation but also draw on their practice as a basis of critical learning and service improvement.

The pre-incubation process involves an interactive process of problem identification, clarifying needs and basic training, especially to maintain the self-managed ethic underpinning the approach. This sets the context for the incubation phase, involving the preparation of a business plan, designing the technical aspects of the project, including financial projections, governance arrangements, legal structures and accounting systems. Support continues in the post-incubation phase to strengthen trust and operating processes, consolidate the project and, especially, finances and enable the organisation to work independently. By 2017, there were 100 SEIs in 27 Brazilian cities, engaging around 700 academics and over 1,700 students and technical staff, and more than 20,000 SEVs servicing 1.5m people (Da Costa, 2017). Most incubators also organise politically to advocate, usually with local authorities, to better support the sector and campaign on a range of social, housing and environmental issues specific to each neighbourhood.

Peacebuilding, Social Economics and the Contested City Richmond and MacGinty (2015) argue that international peacebuilding is also dominated by the global North via liberal interventions, which promote the rule of law, the restoration of representative democracy and the imposition of outward facing, capitalist market structures. They are

130  Actually Existing Solidarity Economies also accompanied by more modest programmes that recognise ethnic, religious or racial identities, allegedly at the source of conflict, and aim to repair relations through elite community contacts and conflict resolution methods. The problem for many peacebuilding strategies is that these processes, more often than not, fail to reach the most damaged and divided places, and the type of liberal, and increasingly neoliberal, solutions that host countries are forced to accept work in the interests of external sponsors and international capital (Murtagh, 2016). As Sen (2006) makes clear, economic neglect and humiliation simply cultivate belligerent identities, sectarian competition and violence, ultimately leaving an unstable, imperfect peace. However, Khoury and Prasad (2016, p. 937) also show how ‘institutional voids’ in the Occupied Palestinian Territories prevent business development and how firms access market opportunities, mobilise resources and exert agency. Constraints include government instability, ineffective rule of law, poor education, lack of credit and unreliable public finances. Here, entrepreneurs are forced to rely on more innovative forms of bricolage by bringing together informal loans, modest grant aid, sweat equity and kinship networks to maintain business viability. This case reviews the role of the SSE in places coming out of conflict where, as in Liberia, it is difficult to resist the neoliberal outcomes that often come with international aid. The social economy is not a transferable solution across these contexts, but it does show that an alternative response is possible in disruptive processes where the scope for local agency may seem limited. In their review of urban regeneration and the social economy, Vickers et al. (2017) suggest that Belfast, in Northern Ireland (UK), is interesting because of the history of deindustrialisation and the role of social enterprises in nearly 30 years of violence between nationalists and unionists. The legacies of violence, identity, social deprivation and residential segregation, and the processes of peacebuilding, supported by significant investment from the European Union (in successive PEACE Programmes since 1994 and the URBAN II Programme in 2000), placed a particular emphasis on economic development and community-led regeneration (Murtagh, 2016). The city of 670,000 remains deeply divided, despite the end of violence and the signing of the Peace Agreement in 1998, with 40 physical peace lines still separating communities in the north and west of the city. At the same time, there has been a degree of modernity and desegregation in more prosperous neighbourhoods to the south as inward investment, tech industries and back office services have moved into the university precinct (Knox and Quirk, 2016). A range of urban programmes have promoted community economic development, with attention increasingly focused on policy support for social enterprises as part of more inclusive and integrated regeneration strategies (Bailey, 2012). The EU URBAN II Programme (2000–2006) supported a mix of social economy measures across Europe, including

Actually Existing Solidarity Economies  131

URBAN II CIP Measure 2.2 Social Economy

2000

2000–2006

2008

2012

15 Projects

Time Limited Project Funding

34 Projects

11 Projects

Project Terminated

€2.6m

Project Survived

Stayed the same

3

Reduced in size

4

Increased in size

1

8 Projects

Figure 6.3  T  he performance of the social economy programme URBAN II.

north Belfast, with a £2m investment aimed at creating new social businesses, consolidating larger organisations and enabling medium sized asset holding groups to get to the next stage of growth. However, the analysis in Figure 6.3 shows that, of the 34 projects supported, only one enterprise survived a decade later and the rest either failed to get beyond design stage, or operated for less than five years. The 11 projects that did start failed mainly because of a lack of expertise, access to investment capital and a weak assessment of their feasibility, market size and start-up costs. The largely abortive sector was crippled by poor access to affordable credit, and the only project to survive and grow was developed by the Ashton Community Trust (ACT), one of the largest social enterprises in the region. ACT is based in a mainly Catholic, inner-city neighbourhood, which is one of the most disadvantaged in the UK and which experienced some of the worst effects of violence during the Northern Ireland conflict. It started with a Community Share issue of 720 shares at £35 per share as initial capital, to develop a small enterprise centre. This pump-prime funding gave the community a material stake in the organisation and showed commitment and self-confidence to resource further developments. Over time, the organisation built up resources, primarily from rental income, to develop a new, multi-purpose facility that provides childcare, community services and ground floor retail units. ACT

132  Actually Existing Solidarity Economies currently employs 159 people, had a turnover of £5.88m, assets worth £2.78m, including 10 properties, and an operating profit of £1.18m in 2016–2017 (Grounds and Murtagh, 2018). Table 6.3 shows the local multiplier effects of ACT based on methodologies developed by the New Economics Foundation (NEF, 2008). These use data on financial performance along with surveys of staff and suppliers to show where and how money moves across neighbourhoods as well as within and between sectors to illustrate the effects of social enterprises in a series of rounds of spending. Table 6.3 shows that nearly two thirds of salaries (63 per cent) stay within the area (64 per cent in the top 20 per cent of deprived wards in Northern Ireland), and significant numbers also spend locally 51 pence of every £1 they earn. Suppliers are less proximate, and the supply chain has a comparatively weak spatial effect on north Belfast. Out of the £3.01m spent on suppliers annually, more goes out of the area (£1.67m, 56 per cent), which is further diluted when their spending is considered in round 3 (only £0.14m). The table also shows that salary and supply spending lost in round 2 comes back in at round 3 as, say, employers living outside the area re-spend at local cafés, shops and services. In sum, out of the gross spending of £5.88m, £1.77m is retained within north Belfast. The NEF (2008) methodology also counts all rounds of spending to calculate the cumulative effects of social enterprise investment. The table shows that every £1 ACT spent (on both suppliers and salaries) generated £1.78 within the local economy over the three phases measured. Moreover, when procurement, and in particular, supply chain data, is analysed, nearly three-quarters (£4.35, 74 per cent) is spent with other social enterprises, recycling investment across the SSE and supporting trading within particular clusters (principally training and childcare). Here, the approach has been to strengthen local multiplier effects and prevent leakage in the value chain, especially in supporting shops, services and specific programmes delivered by ACT. Grounds and Murtagh (2018) show that in 2017, ACT enabled 260 people to access work, and more than 600 have received some form of employment qualification. Surpluses have also been used to fund 22 educational bursaries and an arts programme that engaged 1,500 children, and 6,000 individuals have received services from the counselling and trauma service, called Bridge of Hope. This was set up in 2001 to provide support to victims and survivors of the Northern Ireland conflict and has developed into a wider initiative, dealing with suicide prevention and counselling, especially for young males. ACT also created a transitional justice programme, which helps ex-paramilitaries reintegrate into the community, find employment and become involved in peacebuilding programmes, especially at the interface. ACT has recently established a separate social enterprise, the Ethical Development Trust (EDT), as a partnership with the Queen’s University and LEDCOM, another large, asset based social

Table 6.3  Local multiplier effects of the Ashton Community Trust Source

Ashton Expenditure (£) Total Spend (R1) Direct Payroll Spend (R2) Direct Supplier Spend (R2) Total Direct Expenditure in North Belfast (R2) Local Payroll Re-spend (R3) Local Supplier Re-spend (R3) Total Re-spend in North Belfast (R3) Percentage Spend Retained in North Belfast LM3 Ratio

North Belfast Based Payroll Employees Non-North Belfast Based Employees and Suppliers and Suppliers

Gross Round Totals Net Spend in North Net Spend out of (£) Belfast (£) North Belfast (£) 5,881,330.36 2,872,368.48 3,008,961.88

1,508,225.64 1,336,470.81 2,844,696.45

1,205,598.76 559,870.42

1,082,393.98 420,417.03

1,765,469.18

1,502,811.01

30.02% £1 to £1.78

Source: Grounds and Murtagh, 2018, p. 16.

Net Spend in North Belfast (£)

Net Spend out of North Belfast (£) 876,902.16 1,672,491.07

425,831.66 916,053.78

123,204.78 139,453.39 262,658.17

753,697.38 1,533,037.68

134  Actually Existing Solidarity Economies enterprise, to expand its approach beyond north Belfast and traditional market sectors. The EDT is investing £1.2m to research, identify and accelerate the next generation of social enterprises, especially in tech, the maker sector and tourism. Shifting the SSE from traditional low value sectors to higher growth areas is also likely to embed social enterprises in private rather than public markets and a different set of skills, partnerships and investment constraints. Satgar (2014) also identified problems restructuring the social economy in post-Apartheid South Africa, partly because Black workers tended to be either urban and exploited or rural and subsistence-based, making it difficult to recover a communitarian tradition, especially where the national liberation movement was directed at the overthrow of White rule. As with north Belfast, Satgar shows that social enterprises failed precisely because they were in poor communities with limited access to more profitable markets and lacked the supply chains to sustain local businesses. The number of co-operatives grew from about 1,300 in the early 1990s to more than 30,000 by 2014, but they also had a high failure rate, at 87 per cent (Satgar, 2014, p. 209). The sector is now consolidating around stronger networks, more secure production lines and better prices, and this restructuring has been helped by strengthening credit lines from a new range of co-operative banks. However, at the same time, globalisation has intensified segregation along class, rather than racial, lines and has failed to deliver meaningful change for the urban poor. Townships, slums and favelas contain increasingly impoverished groups in marginal spaces that can be more readily supervised and effectively policed. Amit and Yiftachel (2016) argue that these ‘gray spaces’ are not fully incorporated into formal planning processes but are securitised and managed in an always-temporary state of being: While officially they are referred to as temporary, buffer zones remain in place for decades, if not generations. Buffer zones produce new socio-political relations in the divided city often leading to the ‘darkening’ of disempowered populations, involving attempts to economically and physically exclude them, and at the same time to the ‘laundering’ of empowered populations, which thereby enhance their legal and economic status even further. (Amit and Yiftachel, 2016, p. 145) Yiftachel and Ghanem (2004, p.  647) point out that these contested places are constantly restructuring around the differential weight of ‘ethnocracy, capital and governance.’ Governance enables the spatialisation of laws, resources and policies and is thus a key site of influence for a range of economic, ethno-national and political interests. Where the state bolsters liberal peace based on the rule of law and the market, ethnocratic regimes can be marginalised in favour of accumulation,

Actually Existing Solidarity Economies  135 competitiveness and growth. Where ethnocracy can assert itself or survive, even as a remnant of violence, resource competition and group logics reinforce divisions, both hierarchically and spatially. In post-conflict conditions, these processes are worked out in more complex and incomplete ways, leaving fragments of ethnocracy alongside spaces of modernity where neoliberal policies push out sectarian rivalries. The problem for Belfast and its peace walls, and South Africa and its townships, is that the reproduction of sectarian identities reinforces enclosed social relations and prevents them from flowing into each other: And all of these walls are identifications, the grand framework identification of the capitalism-that-is-and-always-will-be, and the lesser identifications of ‘we are gay, we are women, we are Basque, we are Zapatistas, we are anarchists, we are communists.’ And all these identities become so easily the basis for sectarianism, the perennial self-destruction of the left that makes life easy for the police. Far more effective than any system of secret police, identity is the reproduction of capital within anti-capitalist struggle. (Holloway, 2010, p. 113) The SSE is not the complete answer to these barriers, and Sepulveda et al. (2013) argue that the move towards social enterprise models has created a hostile environment for Black and Minority Ethnic groups by turning them into contract delivery programmes and at the same time muting their political potency. However, it also opens the possibility of new relationships and meaningful work shaped by people’s everyday needs. For example, Ramnarain (2013) highlights the importance of women’s savings and credit co-operatives, which were able to build a cross-community coalition in Nepal that refused both top-down, liberal peacebuilding strategies and ethnic identification. In the early 1990s, a group of women from Catholic and Protestant communities in the Suffolk area of west Belfast organised a sit-down protest against the number of children injured by traffic on a main arterial route dividing the neighbourhoods. The campaign resulted in a new pedestrian crossing, a realignment of junctions and traffic calming measures. This formed contacts, engendered trust and built confidence about the capacity of the groups to achieve, albeit modest, change. The gendered nature of the contacts was important in identifying priorities, which included the need for childcare services to allow women to return to work, more appropriate types of employment, new shops and services and addressing interface violence among young people. This development work focused attention on the regeneration of a derelict commercial block, houses and land that effectively formed the peace line. A long process of community dialogue, participatory planning and the preparation of a local Peacebuilding Plan ultimately led to

136  Actually Existing Solidarity Economies the creation of a partnership involving separate Community Forums in each area, along with an overarching structure constituted as a social enterprise: the Stewartstown Road Regeneration Project (SRRP). The Management Board of SRRP consists of four representatives from each Community Forum, four politicians and four independent directors. The site was transferred to the group from the housing authority, which, in turn, leveraged £1m in grants, mainly from EU and US donors, for the capital development costs. The group rebuilt the commercial block and rented out ground floor retail uses along with office and community space on the floor above, generating a sustained revenue stream. SRRP made a profit of nearly £100,000 in 2014–2015, which generated a Community Fund of £60,000, redistributed to the two Forums for a range of projects, including training and education, welfare advice and youth diversion to reduce conflict at the peace line (Murtagh, 2016). Under the terms of the constitution of the SRRP, one third of any surplus made by trading is allocated to each Forum and one third is retained by the company. Significant local multiplier effects have been created, including 90 FTE jobs, 78 of which are from the respective communities, which, in turn, supported £1.5m in salaries while new shops and services reduced financial leakage from the neighbourhood economy. The organisation now holds fixed assets (valued at £2m), which generates £1.7m in recurrent rental income, enabling a substantial reserve to be reinvested in new projects. The childcare centre provides both employment and training, and this is now one of the most profitable elements of the overall enterprise (Murtagh, 2016). Knox and Quirk (2016) showed that the scheme had a significant effect on inter-community attitudes and levels of contact and effectively removed violence at the interface. The area is still segregated, progress in removing the peace line has slowed, the economic effects are modest compared with the scale of poverty and the project is not well connected with other social enterprises in the area. The project is important in addressing poverty and service gaps, but it also demonstrates the limits of the social economy in tackling complex ethno-social urban problems on its own.

Conclusion In some senses, descriptions of social enterprises in different urban contexts fall into the same essentialism that characterises the way in which the sector is often narrowly depicted. The point is not to celebrate isolated examples, but to show that alternative economic spaces exist, thrive, grow and fail. The cases also identify the importance of the enabling environment, either created by the state or forced as concessions through effective advocacy. Preferential regulation, more flexible business models, cheap and available credit and capacity building are important leverage for social enterprises to replicate projects and maximise

Actually Existing Solidarity Economies  137 impact. Of course, they are put in place by states who often want to offload functions, but there is little evidence that actors are not aware of the compromises they make in the real politic of alternative economics. They build functional and cognitive networks, draw resources (and criticism) and make mistakes, fail and learn along the way. It is the very material of resistive politics in which alternatives to narrow forms of urban growth involve the constant reworking of capitalist relations within the state and in particular, the market.

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140  Actually Existing Solidarity Economies Sengupta, U., Murtagh, B., D’Ottaviano, C. and Pasternak, S. (2017) Between enabling and provider approach: Key shifts in the national housing policy in India and Brazil, Environment and Planning C: Politics and Space, DOI: /10.1177/2399654417725754. Sepulveda, L., Syrett, S. and Calvo, S. (2013) Social enterprise and ethnic minorities: Exploring the consequences of the evolving British policy agenda, Environment and Planning C: Government and Policy, 31(4), pp. 633–648 SEW (Social Enterprise Works) (2013) Mapping the Social Enterprise Sector in the West of England, Bristol, Social Enterprise Works. St. Martin, K., Roelvink, G. and Gibson-Graham, J.K. (2015) An economic politics of our time, in G. Roelvink, K. St. Martin and J.K. Gibson-Graham (Eds.) Making Other Words Possible: Performing Diverse Economies, pp. 1–25, Minneapolis (MN), University of Minnesota Press. Sunley, P. and Pinch, S. (2014) The local construction of social enterprise markets: An evaluation of Jens Beckert’s field approach, Environment and Planning A, 46(4), pp. 788–802. Trembly, C. (2012) Advancing the social economy for socio-economic development: International perspectives, in R. Downing (Ed.) Canadian Public Policy and the Social Economy, pp. 13–59, Victoria, University of Victoria. Upchurch, M., Daguerre, A. and Ozarow, D. (2014) Spectrum, trajectory and the role of the state in workers’ self-management, Labor History, 55(1), pp. 47–66. Valença, M.M. and Bonates, M. F. (2010) The trajectory of social housing policy in Brazil: From the National Housing Bank to the Ministry of the Cities, Habitat International, 34(2), pp. 165–173. Vickers, I. Westall, A., Spear, R., Brennan, G. and Syrett, S. (2017) Cities, the Social Economy and Inclusive Growth: A Practice Review, York, Joseph Rowntree Foundation. Yiftachel, O. and Ghanem, A. (2004) Understanding ‘Ethnocratic’ regimes: The politics of seizing contested territories, Political Geography, 23(6), pp. 647–676. Zamagni, V. (2014) The cooperative enterprise: A valid alternative for a balanced society, in T. Webb and S. Novkovic (Eds.) Co-operatives in a Postgrowth Era: Creating Co-operative Economics, pp. 194–209, London, Zed Books. Zamagni, S. and Zamagni, V. (2010) Cooperative Enterprise: Facing the Challenge of Globalization, Cheltenham, Edward Edgar.

7 Scale, Replication and Money

Introduction The uneven trajectories of social economies emphasise variations in the capacities of some sectors to grow and accelerate and others to stagnate and even regress. The examples of different market conditions also reveal the interplay between internal and external drivers of change, and Chapter 4 outlined some of the performative, institutional and financial barriers to growth. Granovetter (2017) argues that the social construction of markets is multi-scalar and identifies three levels of action relating to micro, meso and macro dynamics. The micro level centres on individual economic action involving subjective judgements made about scarce resources and the scope for actor choice. The second level involves the operation of the market itself and specifically the regulation of economic outcomes, including stable prices and wages. The third level refers to institutions which are larger complexes of action that set the framework for economic organisation and how things should be done. Institutions convey, as is well captured in the sociology of knowledge, a deceptive impression of solidity, they become reified, experienced as external and objective aspects of the world rather than as the products of social construction they are. (Granovetter, 2017, p. 2) Nicholls and Teasdale (2017) are also concerned with the relationship between scales and emphasise how durable macro neoliberal ideologies have been in shaping the social economy in the UK over the last two decades. At their meso level economic policy, legislation and workfare mediate the transmission of macro ideologies to the micro level in the form of the social economy but especially through social enterprises and related finance instruments. The micro level cannot shift the dominant neoliberal paradigm without movement at the meso and macro scale, but it retains significant agency within such structuring processes precisely because it is key to delivering these policies and programmes. Dey and Steyaert (2016) point out that agency in the social economy often involves mimetic misbehaving to trick the system by simultaneously

142  Scale, Replication and Money identifying with money profit and ethical benefits. Here, innovation, and what it means for growing solidarity, embraces a range of techniques and how they work together through institutions, networks and cognitive frames. Blundel and Lyon (2015, p. 85) point out that ‘Increasing the size of an organization should be seen as only one element in a more extended taxonomy of scaling’, but whether community or environmental effects of enterprises can be strengthened without finance, and whether finance inevitably dilutes their social mission, reveals a more complex set of relations in scaling processes. The field has expanded in the last two decades with the availability of complex debt products to traditional ‘bootstrapping’, involving the use of working capital, and ‘bricolage’, putting together loans, grants, reserves and donations for smaller projects (Lehner, 2017, p.  145). Scaling-up and replicating SSE practices, and especially social enterprises, is clearly not a simple linear process and involves more than money, especially to maintain solidarity ethics as financial pressures increase with growth.

Scaling, Innovation and Social Value Swyngedouw and Moulaert (2010) argue that projects involved in the state-market-civic triangle inevitably operate at multiple scales and that transcending place-specificity opens the possibility of more transformative politics for the social economy. Just as there are downloading risks, there are up-scaling opportunities, and based on their analysis of 16 social economy projects (see Chapter 3), they identified a number of objectives for inter-scalar work: 1 To diffuse their innovative practices and activities to other places in order to get recognition and validation. 2 To organise wider mobilisation around social, cultural and political issues. 3 To seek synergies among economic, social and political resources. 4 To move regional and national civil society organisations forward by lobbying for more appropriate, multi-level governance systems themselves. 5 To exert pressure on state institutions to force political transformation or policy change. (Swyngedouw and Moulaert, 2010, p. 226) Scalar tactics include, first, securing financial support and funding flows managed at different levels, including the EU, international donors and through global social finance. Second, initiatives developed at one level, say the national or municipal, are frequently delivered at the local, releasing resources but also restricting autonomy, as neighbourhood groups can be locked into rules and obligations set at higher scales. A third tactic involves creating networks, informal and formal alliances and virtual

Scale, Replication and Money  143 communities around shared interests and values. This enables groups to operate at a distance from traditional territorial forms of governance but also to share resources and knowledge as they move up and down policy hierarchies. As Table 7.1 shows, politics, policy and money are critical (and unavoidable) in the proliferation of transformative economies, reformulating urban regeneration and supporting the ecosystem for social enterprise development. While transnational capital flows and ideologies might attempt to impose their totalising logic on the city, there are also third spaces of experimentation and disorder.

Table 7.1  G eneral policy framework: stimulating social innovation Type of Policy

Pointers

Political Initiatives

a) Local empowerment and civil society insertions require (political) citizen rights. Effective state-civil society articulation necessitates the granting of European political citizenship rights to all local area residents. b) Recognising the role of the social economy as a vital and key ingredient for social revitalisation alongside traditional top-down initiatives. c) Recognising voluntary and civil society service delivery organisations as an integral part of innovative economic development systems.

Policy Initiatives

a) The fostering of collective contracts between civil society organisations and local, national or EU policy frameworks. b) Focus on active, socially innovative initiatives as pointers for support rather than traditional, territorially focused policies. c) Establishing cross-scalar and inter-local networks of socially innovative initiatives across the European space. d) Providing points of direct access for civil society initiatives at the national and EU levels.

Funding Initiatives

a) The formation and direct funding of European networks of socially innovative initiatives. b) The streamlining of funding procedures with an eye towards maximising access, minimising bureaucratic rules and by-passing deeply entrenched national procedures. c) Securing long-term viability of successful social projects, particularly those that generate continuous institutional, participatory and social innovation. d) The creation of social innovation centres. e) The creation of logistical support centres for local civil society initiatives.

Source: Swyngedouw and Moulaert, 2010, p. 232. Reprinted by permission of Taylor & Francis.

144  Scale, Replication and Money Seyfang (2011) is especially concerned about the dynamics of transformation, the obstacles to social innovation and why apparently effective local economic alternatives fail to scale their work or attract political attention and resources. Work on niche movements emphasises the spaces of experimentation and risk, which can survive despite external pressure from incumbent economic, environmental and political regimes (Raven, 2012). Niches comprise intermediary organisations and actors, which act as global carriers of best practice, learning and resources that can, in turn, inform new approaches beyond incubation. Seyfang and ­Longhurst (2016, p. 4) set out five stages to niche development: 1 Regime and landscape dynamics inform experimentation through the creation of new expectations and social networks. 2 Emerging local networks experiment with novel socio-technical configurations and learn how to make them work within a specific context. 3 Participants exchange knowledge with other actors, and lessons get translated into more generic rules that become applicable in different locations. 4 The emerging institutional field becomes a useful resource for subsequent experiments in new locations. 5 When sustained sufficiently over time, such cycles result in a stable institutional field, which may start to influence prevailing regimes or become a viable, competing socio-technical configuration. High impact niches diffuse their practices along three potential routes. First, scaling-up sees individual projects recruit more participants in order to grow and second, project replication can transfer radical ideas into new locations or contexts. Third, elements of niche ideas are translated into mainstream contexts to cope with steering problems in the wider economy but often lose much of their radical edge as they are embedded in mainstream political routines and cultures. Smith et al. (2016) reviewed community energy schemes in Britain and acknowledged that strategic niche management needs a more critical edge by building explicit advocacy strategies that unsettle dominant understandings of sustainability. Here, ‘critical making’ challenges hegemonic knowledge by proposing grounded research on practices capable of reframing problems and transforming structures to accommodate other ways of knowing (Smith et al., 2016, p. 411). A number of the more developed, place-based SSEs were strongly integrated with universities through incubators to develop social enterprises (Brazil), to create their own higher education infrastructure (Mondragon) or partnered with research centres to develop capacity and reflect on their practices (Bristol). Academia is important for skilling staff, bringing multiple disciplines together to provide strategic direction

Scale, Replication and Money  145 and to evaluate policies and programme effects. It is also performative as part of the legitimation of the SSE as a coherent arena of activity, worthy of study and debate and, ultimately, support. Drawing on Jessop et al. (2013), it is also possible to identify the different roles that researchers adopt to support scaling strategies: •

• • •

Virtual roles where the researcher brings appreciation of theoretical frameworks to understand social economics, its ethics, how it can and has been manipulated and crucially, how it fits within wider global state and market structures. Academic roles, which draw various epistemological and methodological ways of knowing the sector, how it works and in particular, how it can be changed. Active change roles where the researcher becomes involved in practice, takes sides and uses knowledge, concepts and data to advocate for a more ethically inclusive understanding of solidarity economics. Scenario design roles, which help to articulate, normatively, the implications of alternative developments and what it takes to implement change.

Scaling-up Bloom and Chatterji (2009) have developed the SCALERS Model (Staffing, Communicating, Alliance-building, Lobbying, Earnings-­generation, Replicating, and Stimulating market-forces), which links scaling-up to the quality of staff; the ability to communicate and convince multiple stakeholders of the organisation’s value; the effectiveness of coalition building and lobbying capacity, particularly with politicians, legislators and policy makers. They also point to operational criteria, including earnings generation, the ability to replicate programmes and the capacity to influence, or change, market conditions (such as the use of microloans or the introduction of carbon credits). Weber et al. (2012) reviewed the literature on scaling social enterprises and non-profits and identified 241 drivers of change and 144 separate scaling strategies, drawing out a number of themes. These include the commitment of the individuals leading the scaling process; professional management; entire, or partial, replicability of the operational model and the ability to meet social demands. They also identify the capacity to obtain necessary resources, the potential effectiveness of scaling with other actors and adaptability to new market opportunities, territories and groups. Scheuerle and Schmitz (2016) also bring scaling processes back to the essential characteristics of the market, the barriers to co-ordination and the entanglements with institutions, networks and knowledge that Social Entrepreneurial Organisations (SEOs) need in order to sustain their work. Table 7.2 draws on Beckert’s (2010) original concept of the social

146  Scale, Replication and Money Table 7.2  F  ramework of actor levels and (pre)conditions with co-shaping social forces for scaling-up the impact of SEOs Scaling-up (Pre)Condition

Willingness

Ability

Admission

Dominant influence of cognitive frames

Dominant influence of social networks

Dominant influence of institutions

Inhibiting Factor Level Leaders Organisation Ecosystem

Source: Scheuerle and Schmitz, 2016, p. 133. Reprinted by permission of Taylor & Francis.

grid (see Chapter 2) to show how different levels from leaders (entrepreneurs and managers), organisations (social enterprises) and ecosystems (external stakeholders, funders, policymakers and beneficiaries) relate to three scaling preconditions. These include willingness to grow, which focuses on entrepreneurial commitment, ambition and motivation; ability, which refers to the capabilities, skills and knowledge across organisations and actors and admission, which is regulated by laws, policies and resources, usually by external agencies. The matrix in Table 7.2 interprets Beckert’s (2010, p. 606) ‘irreducible social forces’ of cognitive frames, social networks and institutions within the social economy. Cognitive frames relate to shared meanings, interpretations and subjectivities that shape commonly accepted understandings of the market as a cultural reality. As noted earlier, the overbearing discursive weight of rational, efficient and self-stabilising capitalist markets separates out and attempts to marginalise the social logic of economics. Ideas are not just about breakthrough thinking, innovation and diffusion, but are the battleground between solidarity ethics and the authority of bourgeois accumulation and use of surplus. Scheuerle and Schmitz (2016) argue that social networks, internal to the social enterprise sector, and, externally, with professional groups, policy makers, academics and politicians, determine the ability of actors involved in scaling social enterprise impact. Institutions reflect the constraints imposed by the regulatory landscape and have the most effect on admission and how effectively SEOs comply with the rules, laws and cultures necessary to leverage contracts, grants and loans in a competitive market position. These cells are not exclusive, as ability, for example, is not simply related to networks, but draws on cognitive frames and uses knowledge (of markets, price, competitors and so on) to gain recognition and admission to decision-making sites and actors. Fonte and Cucco (2017) provide an illustration of how these assemblages shape the SSE in Emelia Romagna, Italy. By 2015, there were more than 5,000 co-operatives, ten of the 50 largest agri-food enterprises were

Scale, Replication and Money  147 co-operatives and the four main national federations had a turnover of €36bn, employed 92,000 people and involved 820,000 members. Processing activities, dominated by dairy, wine, fruit and vegetables, were valued at €19bn, which was 37 per cent of the national value of agricultural production in the country (Fonte and Cucco, 2017, p. 294). As the sector consolidated and rationalised throughout the 1960s and 1970s, it had lost much of its radical edge, as ‘red co-operatives’ serving vulnerable groups and neighbourhoods were marginalised by a smaller number of large producers and retailing federations. In 1991, the government took a more direct approach by legislating for Type A organisations to provide welfare services and Type B to focus primarily on labour market integration. This more corporatist approach emphasised managerial styles, profitability and extra-regional markets, broadening the division between large, quasi-welfare and more local, member oriented organisations. In short, legislation reshaped the character of the sector, which now lies more in ‘a new welfare model based on a partnership between civil society and the state, than in its capacity to reorient the co-operative movement towards a deeper embeddedness of economic activities’ (Fonte and Cucco, 2017, p. 298). However, Fonte and Cucco also show that the 2008 financial crash and growing concern about food security initiated a counter-movement in community agriculture and a new form of social co-operative growing outside the structures set by the 1991 Act. The number of these smaller community organisations increased from 7,363 in 2005 to 13,938 in 2009, supported by a new Network of Social Farms. They helped to establish solidarity purchasing groups, short supply chains and a closer connection between local producers and consumers as well as a range of public services including health, education and recreation. This also created upward institutional pressures, resulting in new regional laws to recognise and support a separate class of community co-operative, which then enabled these networks to expand into tourism, sustainable energy and biodiversity.

The Social Life of Money Harvey (2007) argues that the financial system is crisis-prone partly because technological change and competition create disequilibrium and partly because it vests independent power in money capitalism. When credit instruments, such as mortgages, extend beyond the capacity of waged labour to afford them, their illusionary qualities are realised as loans are debased and sovereign governments step in to preserve the value of money. In turn, financial discipline, austerity, welfare cuts and suppressed wages are imposed on those at the bottom of the economic hierarchy. In Commonwealth, Hardt and Negri (2009, p. 195) point out that this face of money wields power over labour and social reproduction, and that by diffusing the control of capital to a ‘multitude’ through diverse

148  Scale, Replication and Money systems of distribution, its excesses might be tamed. Re-­appropriating finance involves remaking different versions of the commons in which the social life of money brings it out from the control of capital (Dodd, 2014). In short, there is a need to personalise and differentiate money in order to understand the social practices embodied in how it is handled by the user: as a gift, familial remittances, local currency systems and charity (Zelizer, 2011). As Dodd (2014, pp. 310–11) concluded, Culture (i.e. shared meanings and practices, and their symbolic representations) should be seen neither in opposition to money nor as exogenous to it. There are many ways in which money’s value, its function as an accounting system, its commensurability with persons and things, the practices associated with lending and borrowing it, as well as broader connections between monetary values and social hierarchy, are constituted by factors that have conventionally been viewed as an entirely separate world in which money has no natural place. He draws on Local Exchange Trading Schemes to suggest that they sit outside a Marxist critique of worker exploitation simply because they rely on time, rather than labour value. Time is an egalitarian leveller because it is based on co-operative mutual relationships and reciprocity, not monetised exchange. Debt is repaid to the collective only by promising to make credit on future services, but it cannot be converted into collateral or surplus. Fainstein (2010) shows how financialisation has been critical to the transformation of real estate into liquid assets but that this has created speculation in the land market, price inflation and ultimately mass foreclosures in the housing system. She is also careful to point out that financialisation alone is not the root of urban problems, but the way in which governments choose to direct it to neoliberal ends, uneven development, boom and bust cycles and accumulation by ­dispossession as established communities are displaced (via zoning laws, tax incentives and joint agreements) to make way for further speculation. Equally, however, Financialisation, by increasing flexibility in approaches to new construction and regeneration, could enable an improved distribution of the benefits of urban development by helping to reproduce property ‘commons’ in the form of low-income housing co-operatives, community land trusts and lease-purchase agreements for locally led economic renewal. (Fainstein, 2016, p. 1507) Finance is, of course, tricky, not least because it has constituted a systemic shift in capitalism to a specific finance driven regime of accumulation (Pike and Pollard, 2010). However, Pike and Pollard (2010, p. 35)

Scale, Replication and Money  149 also point out that financialisation has embraced a new range of actors and processes that cannot be disassociated from ‘the inescapably geographic, material rootedness of financial relations.’ Moreover, despite its carnivorous tendencies it is not beyond some form of political authority and state regulation. The negative social and spatial effects of financial markets reveal a more complex set of scalar relationships (not least in global, technologically driven, financial circuits) that is always concerned with value extraction rather than value creation from assets, liabilities and securitisation that are fixed in places. Moreover, its disastrous effects on sovereign debt, housing markets and local economies provide opportunities to challenge scientific construction of financial markets in a Polanyian style double movement: The damaging and pervasive effects of financialization and its crises of accumulation and regulation have now the effect of reopening questions about state ownership, regulation, democratic control and alternatives to contest the ‘one-best-way’ technical universalism of financialized capitalism and shape its process and outcomes in patently more progressive ways. (Pike and Pollard, 2010, p. 48)

Social Finance Whether social finance is patently more progressive, creates alternative accumulation regimes or simply enables re-regulation of the SSE, is contestable. A theme running through this analysis is that it is all of these things, and negotiating investment finance, debt and surplus is critical to progressive, as well as conservative, versions of the social economy. The UNRISD (United Nations Research Institute for Social Development) (2016) refers to Social and Solidarity Finance (SSF) as: Exchange and financial mechanisms based on collective self-­ organization through which people manage their resources according to principles of solidarity, autonomy, trust and mutual aid. SSF encompasses ethical banking, financial co-operatives, community development banks, solidarity microfinance crypto and complementary currencies, community based savings schemes (e.g. rotating savings and credit associations, RACS), participatory budgeting, crowdfunding, social impact bonds and forms of solidarity impact investing. (UNRISD, 2016, p. 1) These funds do not prioritise financial returns but aim to integrate surpluses within the social or environmental objectives of the organisations they support. They have a long history in, for example,

150  Scale, Replication and Money 19thC co-operative banks and credit associations and have proved to be more stable and financially resilient than mainstream banks (Hesse and ­Čihák, 2007). This is a result of proximity to personal and business client markets, personal relationships and local knowledge to guarantee returns and reduce risk. SSF funds’ ability to accumulate capital, control debt and embed themselves in local economies, supply chains and established markets enabled solidarity models to survive and even prosper in the context of global financial uncertainty (MBM, 2015). Interpersonal trust, better risk sharing and reducing information asymmetries reflect the cultural capital and methods of working that the retail sector either cannot afford or is not prepared to invest in (Lyon, 2017). Solidarity finance includes community banks, credit unions and mutual credit and savings associations, and UNRISD (2016) show that these have sustained projects in underserved areas and sectors. However, Murtagh and Goggin (2014) also show that many are under-capitalised, remain locally focused and are prone to failure, especially when they attempt to develop new markets or build core capital. UNRISD (2016) emphasise that the very ideology of the sector in pursuing social and environmental goals over profit cuts off a large section of the retail finance market from investing. Organisations often lack the appropriate legal status, or members lack the accumulated capital or securities to attract debt funding. Credit rationing can also affect well established enterprises, causing many to adopt more hybrid approaches to access a mix of private loans, public sector grants, new forms of impact investment and donations.

Structure of the Sector The Social Impact Investment (SII) sector has grown rapidly in the last two decades in response to a growing interest by individuals and investors in tackling social issues at the local, national and global level. The most recent economic crisis has further highlighted the tremendous social and economic challenges facing countries across the globe. Governments are seeking more effective ways to address these growing challenges and recognising that private sector models can provide innovative approaches. (OECD, 2015, p. 10) The problem for the SSE is that social value, and how it is created through investment finance, is being constantly reworked around private sector definitions and rationalities. For example, the blending of hard economic returns with a mix of soft socio-environmental outcomes was prominent in the G8 Social Impact Investment Forum in London in 2013,

Scale, Replication and Money  151 the subsequent launch of the Social Impact Investment Taskforce and the Organisation for Economic Co-operation and Development (OECD) Overview Paper published a year later (Wilson, 2014). This sees SII as The provision of finance for organisations with the explicit expectations of a measurable social as well as financial returns and includes products that mitigate risky environmental practices, to impact-only funds that address social challenges, but which cannot guarantee a financial return for investors. (OECD, 2015, p. 13) The Social Impact Investment Taskforce (SIIT, 2014), in the UK, describes the structure of the market and identifies the range of co-­ ordinating networks, actors and trading relationships that comprise an increasingly complex field (Table 7.3). On the demand side, there are organisations that seek impact investment and returns (increasingly governments) and those that need capital, including charities and neighbourhood groups that want to diversify their income streams or form new social enterprises. The suppliers of capital have also diversified with a range of intermediaries, social banks, crowd-funding platforms, community shares and Community Development Finance Institutions (CDFIs) offering a variety of loans, shares, bonds and equity investments (Benedikter, 2011). This balance between market and social objectives, fundamental to the identity of the sector, is sharpened when investors seek financial returns, as each is driven by a distinct set of rationalities and business models. Nicholls (2010) identifies three social investment logics inherent to finance and how it operates across the SSE: First, it can focus on generating only social and environmental returns, for example through government spending or support for social movements. Second, it can generate ‘pure’ financial returns to capital in an analogous way to conventional investing... [and third] blended value creation that combines [both] an attention to financial return and a focus on social/environmental outputs and outcomes. (Nicholls, 2010, p. 75) These logics are associated with a particular set of means-ended rationalities to more value based orientations and products. In between, a systemic rationality combines utilitarian and mission-driven practices to generate a mix of social, economic and environmental returns (­Table 7.4). This combination leads to a typology of social investment that forms the tensions, as well as the tactics, embedded in scaling strategies and the inevitable contradictions it creates. The table shows that the first type is about means-end profit maximisation reflected in commercial

Table 7.3  T he structure of social impact investment →

DEMAND Impact-seeking Purchasers Government procurement of services

Impact-driven Organisations

Grant-reliant organisations (e.g. charities) Government as Grant funded commissioners of organisations with outcomes trading activities Foundations as Social enterprise/ commissioners of profit constrained outcomes organisations Socially minded consumers Profit with purpose of goods and services businesses Socially minded corporate purchasers of goods and services

FORMS OF FINANCE

←

SUPPLY

Channels of Impact Capital

Sources of Impact Capital

Secured loans

Social banks

Government/EU investment

Unsecured loans

Community development finance institutions

Social investment wholesalers

Charity bonds

Impact investment fund mangers

Social impact bonds

Impact investment intermediaries

Charitable trusts and foundations Local funds Institutional investors and banks Corporate High net worth individuals

Business setting significant Equity outcomes objectives Grants

Crowd-funding platforms

Mass retail

Source: SIIT, 2014, p. 3. Permission: Contains public sector information licensed under the Open Government (UK) Licence v3.0.

Table 7.4  Social Investment Matrix Investor Rationality

Investor Logic Financial

Type of investor Blended

Social/Environmental

Means-ends Driven Clean Energy Investment

Socially Responsible Investment

Venture Philanthropy

Systemic

Impact Investment

Social Enterprise Investment

Government Investment

Value-driven

Philanthropy

Mutual Investment/ MRI

Social Change Investment

Source: Based on Nicholls, 2010, tables 1 and 2, pp. 88–89.

Capital created

Profit maximising £900 bn individuals and institutions, venture philanthropists Social investors, social £17 bn venture capitalists, government £3.6 tn Charitable trusts, philanthropists, cooperatives, community development finance institutions, members of social movements

154  Scale, Replication and Money green energy sectors but also in a range of Socially Responsible Investments, as well as venture philanthropy, where high net worth investors seek soft returns. The second category reflects systemic investor approaches, which typically aim to balance means-ends and value-driven rationalities. Again, it is differentiated from Socially Responsible Investment for profit, direct investment in social enterprises, encouraged by institutions, such as Community Interest Companies, and new forms of public sector funding, such as Social Impact Bonds, which aim to lever private investment to tackle a range of complex social problems. The third type is value-driven investor rationalities, which include traditional forms of philanthropy, Mission Related Investments that blend social and economic returns and more radical interventions designed to achieve longer-term, systemic social change. Nicholls shows that each of these sectors has grown significantly in monetary terms, but despite the assumption that market logics are driving the SSE, value-driven investment is still the largest, in terms of capital flows, at £3.6trn in 2011. This diversity of logics, norms and modes of working underscores the pre-paradigmatic nature of the social finance field. Nicholls sees this ambiguity as the main barrier to growth, not least because it undermines its credibility to asset managers, governments and the mix of beneficiary interests: From this perspective, the most important pre-requisite for the accelerated development of social investment is to establish its own distinct epistemology that coalesces around a limited set of institutionalized logics and norms rather than to continue to encompass a diverse range of institutional logics. (Nicholls, 2010, p. 89) Each of these investor logics presents a different set of scenarios for community development and how it might evolve in relation to changing public sectors and private markets. Trudeau (2012, p. 442) argues that a particular form of financialisation is emerging to help expand the ‘shadow state’ as NGOs are supported to adopt more commercial models in order to deliver services formally associated with the local state. Roy (2012, p. 39) also criticises the ‘financialization of development’ and the circulatory capacity of ‘centres of calculation’, such as the World Bank and USAID, to transfer best practice from Northern finance regimes to the global South. However, she also acknowledges that such movements are double-edged and that micro finance schemes have supported significant pro-poor, gender inclusive and equality objectives. Thus, social finance is not just tied to state restructuring aims and processes. For example, Moore et al. (2014) argue that investment is likely to focus on accelerating growth in small-scale, break-even, start-up businesses that can address a range of social, economic and environmental

Scale, Replication and Money  155 problems. A more radical scenario sees social investment institutionalising values-driven rationalities in order to bring them into mainstream capital markets. ‘This scenario would generate systemic change across all investment via radical and disruptive action seeking a broader or deeper transformation of society marked by more explicitly political, critical and counter-cultural orientations’ (Nicholls, 2010, p.  92). The rise of ethical consumption, a broader social concern for climate change and banking failures could help to re-embed economics in a wider set of welfare, and specifically egalitarian, concerns. Nicholls sets out the structure of the market primarily in a UK context and draws attention to its complexity, but also the significant obstacles to social enterprise growth and consolidation. In particular, social investment players operate in a fragmented landscape with limited exchange of information or incentives for co-­operation, and there are asymmetries and co-ordination problems that hamper integration. Part of this is due to the lack of financial literacy in social enterprises, which leads to a risk-averse approach to new resource strategies but also to weak demand from the SSE sector, even among larger organisations.

Supply and Demand for Finance Nicholls argues that on the demand side, actors need new financial instruments that fit with their multiple social and economic objectives and that build into calculations space for innovation, inclusion and growth potential. For social enterprises without collateral or reserves, incentives such as underwriting or guarantees from third parties (including from within the sector) could also strengthen their investment readiness. However, they also need to improve transparency and produce reliable data on impact over time, and this involves properly accounting for social value, not just adopting business metrics for the convenience of investors. Intermediaries also need more regular, validated reporting on impact and a less fragmented investment landscape with a greater mass of higher capacity suppliers, especially to improve liquidity. Supply side actors need economic literacy, finance across the organisational lifecycle, legal and contractual mechanisms to protect against mission drift and incentives to diversify income (Nicholls, 2008). Part of the problem is that conventional finance markets do not prize social or environmental value. This will, in any case, be difficult because of the lack of comparable performance information to support the creation of a new, or modified, social investment marketplace (Kroeger and Weber, 2017). However, the limitations of the sector also relate to the weakness of supply. The lack of a sustainable deal flow and the feasibility of a commercial return are also likely to divert private investors to other more profitable sectors. Exit strategies are not clear for investors in social enterprises, and whilst it might be relatively straightforward to put

156  Scale, Replication and Money money into a project, it is less clear how to get it out quickly and profitably (Hornsby and Blumberg, 2013). Transaction costs, particularly on equity deals, tend to be high, given the technical knowledge and systems required to manage investments. This also holds true for the public sector, where there is a different understanding of risk and a lack of experience in managing debt and grant income as part of a portfolio of funding distinctive to social enterprises (Thorlby, 2011). Iona et al. (2011) also emphasise the lack of processing capacity between demand and supply and the need to support intermediaries to generate bankable deals. The European Venture Philanthropy Association (EVPA, 2014) evaluated failures in 12 Venture Funds across Europe and showed that these were largely explained by three types of systemic risk. In the first, ­organisational risks relate to weak governance systems, poor skills, the contradictory expectations of organisations and social investors and especially, the capacity of the enterprise to sustain itself after exit. The second set of strategic risks are created by a misalignment in the investment strategies of venture organisations. For example, the sponsor often has an interest in a sector that simply cannot sustain the deal flow, the capacity of the social enterprise to absorb funding and the expertise to handle debt as well as grants. Third, the EVPA identified execution problems due to inadequate screening of projects, weak due diligence (particularly governance arrangements) and poor monitoring and compliance procedures. The lack of valid and reliable data on performance, social impact and leverage is an issue across the SSE, but especially for investors looking for a track record on which to judge priorities, as well as risks. Tischer et al. (2016) emphasise the problems of mixed legitimacies and thus, the range of stakeholders who need to be satisfied, which has created contradictory and confused information needs across the social enterprise sector. This is especially the case in valorising customer experience, member trust, employee fairness and community benefits as well as ­delivering financial returns, demonstrably ensuring regulatory compliance and reporting on the quality of governance systems. Indeed, Nicolopoulou et al. (2015) argue that the SSE cannot compete with the hegemony of market analysis based on econometric models, government data, credit rating agencies and academic research, in which social enterprises are forced to accept versions of economics that are unethical and even contradictory to their values.

Diversification of Supply Moore et al. (2014) also show that the supply of social finance has strengthened globally in terms of value, segmentation of the market and the diversification of products mainly aimed at larger charities with the capacity to deliver volume services. They also point out that many of these instruments borrow from private sector techniques and

Scale, Replication and Money  157 expectations. For example, social venture funds, which are becoming more prevalent but are small-scale, often do not have a track record, making it harder to attract investors, and there is a lack of viable opportunities for this higher risk environment (GHK, 2013). Some are independent, whilst others are affiliated with larger banks and financial institutions, including, for example, the Social Venture Fund, based in Germany, and Bridges Finance, established in London in 2002. Incentive finance, led by the state, has also increased, including pay for success instruments, such as Social Impact Bonds, in which commissioners reward independent providers for the achievement of specific outcomes. Pay-for-success models have expanded considerably, and Clifford and Jung (2017) identify 28 SIB schemes, with most in the UK, followed by North America and Australia. Clifford and Jung also show that they have grown in their complexity as they have addressed new problems and accepted a greater level of risk. Pay-for-success models tend to be at the commercial end of the investment spectrum and have attracted criticism, not least by reducing complex social problems, such as recidivism and homelessness, to an economic opportunity for speculation (Murtagh and Goggin, 2014). In the 2014 Budget, the UK Government established a new Social Investment Tax Relief (SITR) scheme, which gives individual investors in broadly defined social sector organisations a reduction of 30 per cent of the investment on their income tax liabilities for the financial year. This builds on the experience of Community Investment Tax Relief (CITR), which also enables private investments in specific Community Development Finance Institutions (CDFIs), again with tax relief incentives for the investor. There has also been a strengthening of wholesaler investors, especially linked to an increase in CDFIs. Big Society Capital (BSC) was launched in the UK in 2012 as a social investment bank to provide finance to CDFIs who lend on to social enterprises, charities and voluntary organisations. It was funded from £400m in dormant bank accounts, in addition to £200m from the four main British retail banks. Its main investment activity centres on capitalisation and balance sheet growth, risk and working capital, sustainability and organisational resilience and strengthening the market, especially to increase the supply of investment to CDFIs (GIIN, 2013). The growing volume and diversification of supply has also raised issues about what is meant by social and how the eligibility rules have been stretched to accommodate for-profit businesses. Lyon (2017) showed that in the UK, the restructuring of social finance to charities and CICs with a clear asset lock has been loosened to include profit-with-purpose businesses. The danger is that suppliers, such as Big Society Capital, provide more preferential, or easily accessed, loans to organisations with a thin connection to social or ethical returns. The lack of agreed definitions or data on the performance of products and the displacement effects of commercial lending has limited the growth of the sector.

158  Scale, Replication and Money The Global Impact Investing Network (GIIN) was established in 2008 by 40 investors, mainly to address barriers to investment by training, strengthening research and introducing new reporting standards (GIIN, 2013). For example, the Impact Reporting and Investment Standards (IRIS) are a set of metrics that describe the social and environmental performance, as well as the financial health, of social purpose organisations. They aim to tackle the lack of transparency and reliability in how organisations measure and publicise their performance, particularly to social investors (OECD, 2015). The struggle to protect social value when commercial pressures to make a return are prioritised is an ongoing one for the SSE more broadly. However, part of the problem is that providers have moved into more commercial markets because of a lack of demand, particularly for higher risk finance. Intermediation is also important in order to minimise transaction costs, reduce risk, create liquidity and, at the same time, secure social value. Social stock exchanges enable charities to attract capital but also provide investors with a degree of certainty about liquidity and risk management. The London Social Stock Exchange was established in 2013 and is now authorised and regulated by the financial authorities as an investment exchange for trading in securities of social enterprises and social purpose businesses. The Impact Exchange aims to become a social stock exchange across Africa and Asia for mission related investments, but liquidity and exit still remain significant obstacles to charities, as does the way in which they access equity finance (GHK, 2013). Lyon (2017, p. 178) shows that the appetite for loan finance, compared with grant aid, remains comparatively low, with a UK survey showing that 61 per cent of medium and large charities were unlikely to take out repayable finance, and only 12 per cent had a current loan. He also shows that commercial banks provide the largest share of lending, despite the emergence of new social finance providers and products. Here, Baker and Goggin (2016) point out that social enterprises face a number of related problems, including the lack of viable projects capable of attracting debt investment, weak skills and a cultural aversion to borrowing, despite falling grant income. They stress the need for a more sophisticated range of products given the size, stage of development and asset base of larger community business. Social investment is being increasingly shaped by the needs of large, well secured charities capable of delivering public sector contracts, rather than small and medium sized enterprises. At this level, community organisations are not likely to be prime providers, as local authorities shift from grants to contracts, and they often find themselves at the end of long supply chains (Baker and Goggin, 2016). The delay in receipted payments, compared with up-front grants, creates cashflow problems and a demand for working capital (which, given the comparatively small amounts involved, short lending periods, unsecured nature and comparatively high transaction costs, lenders are reluctant to supply). Smaller charities and community development organisations

Scale, Replication and Money  159 have thus seen an increase in demand for patient capital, which involves blended loans and grants, technical support, lower-than-market-rate returns and significantly longer (and more renegotiable) repayment periods than private sector loans (Thorlby, 2011). Hull et al. (2016, p. 45) also show a significant increase in the number and size of Community Share issues, with 98 successful offers launched in 2015, compared with 63 and 65 in 2013 and 2014, respectively. Community Shares are withdrawable share capital, unique to co-operatives and community benefit societies, and despite recent growth, a lack of liquidity and a ready exchange market have hampered their longer-term development (Brown, 2010). Community energy projects were the principal driver of national growth, along with Community Land Trusts and alternative food and horticulture projects. Crowdfunding also continues to increase, especially as a number of local authorities in England have used joint ventures as a way to leverage their limited funds, and to direct these towards projects with the strongest local backing. Hull et al. (2016) show that between 20 to 25 local authorities are now signed up as co-funders to the Spacehive crowdfunding platform, alongside local businesses, housing associations and grant bodies.

Community Development Finance Initiatives (CDFIs) It was noted earlier that CDFIs are specialist organisations whose primary purpose is to promote social welfare and not to make a private profit by providing affordable finance that would otherwise not be available to social enterprises from high-street banks and loan companies (Nicholls, 2010). Many CDFIs are funded by governments and charitable trusts, although they usually do not take savings or deposits as with commercial banks. The New Economics Foundation (NEF, 2008) showed that CDFIs have been effective in getting funding into under-­ invested areas but that most are small and growing slowly and that there is over optimism about their longer term economic impact. The Grameen Bank was founded in Bangladesh by Mohammed Yunus in 1976 (Yunus, 2010). Microcredit provides unsecured, very small and often longer-term loans that retail banks consider too risky to offer. The solidarity concept is built into the structure of the loan, which is made to a ‘solidarity group’, so that if an individual defaults, the credit score of all the members is affected, although the collective is not liable for the defaulted part of the loan. Microcredit now operates in 43 countries and has spread largely from the global South to the North, and Grameen Bank, which is owned by borrowers, has developed services in America that made around $85m worth of loans between 2008 and 2013 (Dodd, 2014). Dodd showed how micro-credit went into its own crisis, analogous to the subprime crash, as it attracted new companies interested in commercial, rather than ethical, returns. Some lending practices included a failure to conduct proper credit checks, lending unrealistic amounts,

160  Scale, Replication and Money predatory lending and excessive interest rates. Regulation followed in I­ ndia, Mexico and Peru, which has encouraged greater financial discipline and a more commercially driven focus, suggesting that as microfinance scales-up, it becomes more familiar with commercial banking: There are growing concerns that the conventional microfinance model centred on providing loans to individual borrowers, has become too market driven and too focused on credit for consumption rather than on economic activities, its contribution to poverty reduction, local economic development and sustainable development is in question. (UNRISD, 2016, p. 3) UNRISD point out that non-profit investment schemes that reconnect microcredit with solidarity values are often centred in the global North with more commercial approaches characterising schemes in the South. However, Roy (2012) shows how local interlocutors have a degree of agency to translate international aid, and especially microfinance, in different and contradictory ways. Her evaluation of schemes backed by international development funds and commercial banks is that they simply extend profit-­making logics to the global South under the cover of responsible impact investment. The microfinance revolution is, on the one hand, a reinvention of development as an enterprise of building global industries and global asset classes. For such a task, new types of development expertise – those that proclaim the financialization of development – must be produced and circulated. On the other hand, is the aspiration that such development can democratize capital and stretch market forces to reach the world’s bottom million. (Roy, 2012, p. 32) Such contradictions, she contends, are best understood as neoliberal populism that risks financialising development, strengthening economic discipline and ultimately, expanding debt cultures. Here, the World Bank and USAID have ‘circulatory capacity in research, best practice, international networks and connections to sources of capital to “convert the poorest to heroic entrepreneurs”‘ (Roy, 2012, p. 39). Double agency is also possible to pursue progressive pro-poor and gender inclusive approaches to financial equality, but it also relies on significantly weaker, subaltern circulatory capacity.

Co-ordination and Finance Schemes Saguier and Brent (2013) show how the global economic crisis in 2008 devastated Latin American economies, resulting in renewed interest in

Scale, Replication and Money  161 the social economy, co-operatives and regional approaches to improve co-ordination between countries and market sectors. MERCOSUR (MERcado COmún del SUR) is the customs union and a trading bloc in central and south America and, together with the Andean Community of Nations, is part of an ongoing process of economic and social integration within the Union of South American Nations (USAN). It launched new programmes and marketing agreements to improve integration across members but also to support national level policies on the SSE, especially through the establishment of the MERCOSUR Social Institute (ISM) in 2007 (Saguier and Brent, 2013). This programme involved technical assistance to support associative enterprises and regional and sub-regional networks and to improve supply chains, especially in environmentally vulnerable frontier areas. This was accompanied by a major initiative (initially led by the Chavez regime in Venezuela) to create the Banco de Sur in 2009 as a joint venture by Latin American countries to create a financial architecture to rival, or rather, resist, the more punitive strategies of the IMF and the World Bank. The proposal was that member countries contribute equal shares of the bank’s initial capital, and support for the SSE was to be a significant focus of the investment strategy (Saguier and Brent, 2013). However, progress in establishing the bank has been slow in that the extent to which it will offer a radical alternative to mainstream finance is questionable, not least given the dependence on agri-foods and mining in the leading economies. In the end, the potential for a dedicated finance stream for SSEs has not emerged, and support for the sector is focused on well-established co-operatives rather than on a radical transformative agenda. Saguier and Brent (2013) conclude that [The] current SSE regional policy frameworks do not provide the necessary mechanisms to challenge centers of power or restructure the dominant economy. Co-operatives are particularly strong actors, but the SSE sector has still not significantly engaged with centres of economic policy and production, and the SSE is treated as a policy ‘add-on’. (Saguier and Brent, 2013, p. 17) BRAC (Bangladesh Rural Advancement Committee) in Bangladesh has 111,000 employees, an annual expenditure of $1.1bn, 48 schools and 117,000 community health workers (BRAC, 2016). It delivers programmes on health, water and hygiene, education, capacity building for NGOs and local economic development. The BRAC approach involves the creation of a connected network of enterprises, development programmes and a standalone financial investment capability. Half of all surpluses from the social enterprises is reinvested to reduce their grant dependence on external funders, and international aid in particular.

162  Scale, Replication and Money BRAC operates 16 social enterprises across health, agriculture, green energy and retailing. Aarong, a fashion retail chain in Dhaka, was one of the first enterprises developed, initially to provide secure distribution outlets and fair prices for rural craft workers. By May 2015, Aarong had served 9m customers through 15 retail stores and e-commerce sites, generating an annual turnover of $62m. It employs 3,000 people, with 65,000 artisans in the supply chain, who are, in turn, organised into 80 producer groups in 15 craft production centres and 535 hand embroidery centres. Producer groups also provides a framework to deliver health care and sanitation programmes, family support and popular education (BRAC, 2015). The idea of a resource-dependent NGO subjected to, and unable to resist, depredating intergovernmental agencies transacting neoliberal solutions is simply not borne out by the evidence (Table 7.5). Strategic investments, primarily in low-income housing, microfinance and small enterprises help to develop reserves and cross-subsidise parts of the business that are struggling, starting-up, facing short-term liquidity problems or that want to open branches or start new product lines. All of this has helped reduce dependence on international aid, which has declined from $191.44m in 2015 to $100.2m in 2016. Over the same time, microfinance investment increased from $171.35m to $195.44m and education programmes from $64.99m to $71.40m. By 2015, BRAC had invested $150.61m in social enterprise development. The BRAC Urban Development Programme recognises that access to decision makers and organising beyond local elites are critical to empower communities and has reached 500,000 people living in poverty in Bangladesh. The programme began in 2015 with in-depth research on 150 target slums and low-income settlements, which mapped existing services and providers, identified gaps and opportunities to collaborate and prioritised infrastructure investment, including mini piped water supply systems, sewerage and sanitation and drop-in centres for street children. Table 7.5  Socio-economic performance of BRAC Indicator

Performance

Lifted people out of extreme poverty Child deaths averted People with new access to toilets Graduates from primary schools Loans distributed Total borrowers Proportion of borrowers who are women

1.3m 350,000 16.7m 860,000 $2.5bn 4.9m 87%

Source: Based on BRAC 2016.

Scale, Replication and Money  163 Banco de Povo Crédito Solidário (BPCS) is one of the largest microfinance providers in Brazil and emerged in response to the economic crisis of the 1990s and especially, the collapse of traditional industrial sectors. It has its origins not in international aid or capitalisation models, but in the trades union movement in Santo André in São Paulo province. A partnership between the Banking Workers Union, the ABC Metal Workers Union and the Union of Freight Transport Companies founded the bank, initially as an NGO, to promote self-employment, informal work and replacement for jobs lost in heavy industries. The partners supplied the initial capital and helped to establish the technical team, operating systems and organisational structures. The initial focus of the bank was on the most disadvantaged areas but it spread rapidly to other cities and client groups, and broadened its scope to improve education and gender equality and tackle child poverty. The bank gradually moved away from individual lending to a solidarity group model, in which small groups borrow collectively and group members encourage each other to repay loans. The solidarity group now makes up 50 per cent of total lending. This has the highest growth rate and lowest default of any of the bank’s subsectors; a total of 58 per cent of the investors are women, and 99 per cent of the enterprises it supports are in the informal or co-operative sector (www.bpcs.org.br, accessed November 2016). AGROSOLIDARIA also emerged in the 1990s, mainly in response to the commercialisation of agricultural production by large, multinational corporations in Colombia. The confederation organises 32,000 farmers into producers’ associations in three sectors: agribusiness, crafts and solidarity tourism. It connects small producers and distributors with mainly domestic consumers and ultimately creates an ‘agroecology and fair trade between the city and the countryside’ (www.agrosolidaria.org, accessed July 2017). AGROSOLIDARIA provides finance, production capacity, distribution networks and technical assistance to participating co-operatives. Ecological management, careful renewal and harvesting strategies and intergenerational learning about cultivation and conservation are key elements of the solidarity concept. Financialisation focuses on the source of money, especially from guaranteed prices, which in turn, supports responsible and sustainable production that ultimately creates transformation by improving health, education and incomes. Distribution networks are based on well developed rural-urban interdependencies, which, by providing a viable agri-economy, have sustained peripheral communities and reduced migration to low paid sectors and poor housing conditions in South American cities. These initiatives have their origins in attempts to resist the industrialisation of traditional economies (often by global capital) by providing finance, networks, supply chains, productive capacity and decent prices to underserved communities. Resolving co-ordination problems has enabled communities to

164  Scale, Replication and Money arrange production, consumption and finance to push out purely capitalist logics and conglomerate businesses. Tridos Bank was established in the Netherlands in 1968 to finance companies, institutions and projects that add social, environmental or cultural value and make a commercial return. It is now registered as a European Bank with offices in the UK, Belgium, Germany and Spain but is not listed on the stock exchange, as all shares are held by a separate trust to maintain its independence and identity. There are around 10,000 investors, and no depositors can acquire more than 7.5 per cent of the holding in any one share issue. Increasingly, the bank has separate investment funds to specialise in social impact sectors such as renewable energy, microfinance in developing countries and organic agriculture. They argue that these more strategic investments have had a significant impact on national energy strategies and consumption patterns, such as in Honduras, where, in 2011, energy imports accounted for 51 per cent of net energy use, mostly from oil. Tridos Green Fund backed a government plan to help shift the energy mix to 70 per cent renewable energy by 2022 by investing in schemes in remote areas with ground mounted solar panels. One scheme in a mountainous region in south-east ­Honduras has now connected 10,000 households to clean energy, low cost supplies. However, if the approach is to stop promoting capitalism, or to re-embed its practices in social aims and cultural meanings, how Tridos expands beyond individual projects is critical for its political, as well as its economic, potential. As was noted in Chapter 6, in the Basque Country, Mondragon was able to extend its co-operative network because it had access to its own sources of significant financial capital. Similarly, the French financial system is dominated by co-operative banks where such institutions represent 60 per cent of the credit market. Co-­operative banks include a range of organisational forms including La NEF (La Nouvelle Economie Fraternelle – The New Economic Brotherhood) established in the late 1980s and are now one of the largest financial co-operatives, with nearly 40,000 members. More recently, they have become an important investor in community energy, unsecured social enterprises and agricultural diversification projects (Artis, 2017).

Conclusion Some, and by no means all, of these schemes have responded to highly localised crises, including factory closures, poverty, unemployment and lack of credit. They have used the technologies of finance, stayed close to government and helped create preferential regulatory conditions for co-operative and social enterprise growth. Finance and recycling self-generated surpluses have been critical to social enterprises and their own assemblage tactics and practices. As Nicholls shows, the market is turning to the SSE for new investment platforms and for security, publicity and, for some, deliberate ethical outcomes. To reassemble social

Scale, Replication and Money  165 finance in more reformist ways, intermediation, research and impact measurement that is more explicitly pro-social are all priorities. The SSE will not alter these imposed logics, but it can steer them. The skills, knowledge and learning needed to use social finance are critical foundations for using it responsibly, making judgements about its effects, balancing means-driven and value-driven aims and being clear about its social, environmental and economic outcomes.

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8 Conclusions

Introduction Yiftachel (2009) described the proliferation of ‘gray’ cities, in which poverty, racial segregation and violence are now embedded features of planetary urbanism. Gray spaces sit alongside sites of modernity, where labour and housing markets converge to create elite places of concentrated wealth. Clearly, there is greater spatial complexity than a wealth-poverty binary, but it is fundamentally economic processes that segregate the poor, older people and ethnic minorities in these degraded spaces. The SSE is not the answer to these processes, but it has potential because it works through markets and their uneven effects, making the technologies of capitalism (money, price, institutions, cognition) sites of urban struggle. Protest is located in the arena that reproduces reification, alienation and poverty in an attempt to make something different. The idea that this ‘making’ offers simple solutions, predicated on the removal of international capitalism, or that it happens without compromises and losses, is a vacuous one and largely irrelevant to life in the gray city. The conclusions suggest that the process of assembling the SSE involves institutions, networks and people, which Beckert (2010) captured in his description of the social grid. But his grid is specifically economic and involves specific market relations, models of working and logics, especially profit. Von Jacobi et al. (2017) animate this grid in the context of social enterprises by emphasising a range of capabilities and assets that people and places need to create alternative trajectories of local development. Creating and supporting the SSE grid starts with the problem of value and how co-ordination and co-operation are vital to its reproduction as an economy. Here, value extraction responds to the mobilisation of the groups most affected by the destructive force of capital restructuring but needs the technologies of the market to maximise its social potential. This, in turn, requires knowledge, learning and skills to understand the role of financial capital and property rights to scaling processes. The chapter concludes by suggesting that knowledge has explicit political value in asserting the identity and potential of solidarity ethics in the urban economy.

Conclusions  169

The Social Base of Value As Beckert (2010) emphasised, defining, circulating and maximising value are central dynamics in any economy, social or otherwise. The problem for the SSE is that this is patchy. In the Basque Country and Emilia Romagna, the value of products and services is well defined in the co-operative economy, but where the SSE does not rest on a strong tradition and network of co-operatives, it struggles to move into high growth sectors. In these places, it is at the periphery of state and private markets, in highly localised sectors and under-capitalised businesses, dominant in poorly paid labour markets and reliant on donors to keep going. It also tends to be most active around consumption, where value chains are often limited and the opportunities to create and recycle wealth, incomes and turnover are restricted. Moving social enterprises into high growth, skilled and competitive sectors with significant barrier entries is not easy, but it does happen. The Mondragon Corporation established the Mondragon Team Academy (MTA) as part of its university to research and explore the potential of new co-operatives, especially in nanotechnology, IT and finance. The approach is a type of accelerator that places an emphasis on interdisciplinary work to test ideas and use (limited) risk capital to innovate with new products and markets. Prototyping, fabrication and business development skills are brought together in MTA Labs to identify the next generation of social firms by understanding where growth is likely to concentrate and where social, as well as financial, value can be maximised. The Brazilian Social Incubator model is also community-centred and adopts spin-out methodologies from the private sector to bring innovation into favelas, in partnership with local actors, the state and a mix of academics and students. These challenge the notion that high-growth enterprises must inevitably be stripped of their social base in order to survive in a competitive commercial environment. The SSE is hampered by a lack of innovation, certainly compared with science and engineering, and ‘social innovation’ is often framed in highly localised ways or describes fairly conventional processes of service delivery. Multiple distribution systems that get services to people who want them and where value is not reduced to a price exchange are all part of the ecosystem, but skirting around the contours of capital is hardly likely to reform it, never mind remove it altogether. A second, related problem with value is how the SSE measures it. As Teasdale et al. (2013) point out, the inflationary claims of social enterprises, the appropriation of intermediate sectors and the flexible interpretations of the ‘social’ have not helped. There are few agreed, valid and reliable methods of measuring value in a way that an investor, whether it is a community, donor or social finance provider, can really understand or find credible. Social Return On Investment (SROI) and related methods are important, but muted success and certainly failure

170 Conclusions do not tend to characterise the impact investment field. Learning from Failures in Venture Philanthropy and Social Investment (EVPA, 2014) highlights some obvious problems of weak governance and due diligence processes but also the lack of performance data on which investors and beneficiaries can judge the success of a particular project. This relates to a third feature of value, which is that it is made and does not exist exclusively in a world of prices, stock exchange indices and rates of return. Callon et al. (2002, p. 197) argue that the multitude of actors, ethics, politics and firms means that the ‘organization of markets becomes a collective issue and the economy becomes (again) political.’ The qualities of a product are a process of continuous differentiation that brings together producers, ideas and representations to singularise goods and attach meaning for the consumer. Socio-­technical capacity involves human competencies, material devices (increasingly online media) and marketing imagery to ‘distribute cognition’ in the active differentiation and qualification of the goods and services being traded (Callon et al., 2002, p. 208). What the SSE often misses is the type of socio-technical capacity and the authority to create the same cognitive impact around the complex but singularised social value of the sector. Certainly, ethical consumption has shifted behaviours around fair trade, organic produce and locally sourced food, but the investment required to compete with the cognitive framing of market consumerism is significant and, for most SSE organisations, prohibitive. Moreover, the SSE tends to define value in ways that, often unintentionally, reproduce ideas of charity, dependence and cheapness. How different forms of value are normatively produced around the redistribution of surplus emphasises the ideological and performative confrontation necessary to position solidarity economics in mainstream markets and consumer behaviours.

The Competitive Environment Callon (2007) argues that Socio-technical Arrangements (Agencements) (STAs) are reframed by a constant process of overflowing in which (social, economic and environmental) events disrupt previously settled arrangements. Core to this change is an affected group that is most likely to affirm, reject or use the overflow produced by the market: The formation of an affected group, on the basis of concerns and inquiries that are often individual or limited to a small social circle, involves long explorations and the simultaneous establishment of metrological devices. Through these enquiries new, original and often unforeseen identities emerge, which sometimes demand to join the collective and recompose it. (Callon, 2007, p. 144)

Conclusions  171 Here, Callon puts detail on the double movement and the conditions of affectation, disruption and realignment that are constitutive of social and solidarity economy practice. Community development processes are good at locating affected groups but often fail to then rework such identification as a pathway out of poverty and exclusion. This is a distinct task within community development, in which ‘Skilled actors are pivotal for new fields to emerge. They must find a way to translate existing rules and resources into producing local orders by convincing their supporters to co-operate, and finding means of accommodation with other groups’ (Fligstein, 2001, p. 116). Fligstein argues that it is in conditions of turbulence that there will be most opportunity to mobilise dissatisfaction into niches, alliances and more durable networks capable of changing underlying conditions. Table 2.2 (p. 30) suggested that social entrepreneurs, as ‘skilled actors’, have the capacity to enact their own processes of destructive reassembly to exploit opportunities and create new institutional arrangements. Doing this work by encountering value, co-­ordination and co-operation in specific restructuring processes is the arena of counter-assemblage politics. However, work on scaling tends to suggest a linear progression, rational decision points and choices about where to move affected groups through overflowing manoeuvres and innovation strategies. The point about replication and reworking affectation into a social movement is that it needs to engage the market and socially relevant determinants of value, the creation of surplus and systems to redistribute it, networks and institutions that engage and can shape the regulatory environment and how solidarity is framed as a normative logic for economics. Solidarity is, of course, the guiding principle in decision-making, but social enterprises are constantly conflating contradictory moral choices in single decisions, all the time, as they engage different structures, opportunities and expectations. The economics of the SSE is where the priority rests, and working through markets requires a distinct assemblage, but one that is tied with public and private transactions and the inevitable trade-offs these involve.

Scale, Competition and the State There are many differences between the SSEs in Bilbao and Belfast, but the scope of the enabling environment is critical to their trajectories, as a central component of the economy in the first, and as a largely marginal space in the second. The market is regulated by the state in a way that shields some sectors from internal and external competition, blocks entrants or creates incentives for new markets to grow. In this case, the state is the most important regulator in the market and can smooth co-ordination problems that are particular obstacles to replicating the SSE. Of course, it sets the rules to preference certain outcomes

172 Conclusions that may or may not (usually both) be in the interests of social firms. In the Basque Country and Emilia Romagna, a new co-operative class, fiscal rules, investment packages, technical support and social clauses have enabled the SSE to grow in different ways. In the first case, it is more centralised and dominated by a small number of large and well differentiated firms, whilst in the latter, producer and consumer co-­ operatives are more diffuse but integrated via complex networks and governance layers. In the UK and the US, the enabling environment has stimulated new instruments, such as Social Impact Bonds, Community Interest Companies and social finance products based largely on capital investment models. The commercialisation of community development and readying the sector as a form of welfare are undeniable aims of this particular assemblage. Since it is structurally top-down, much of this infrastructure is not that useful for social enterprises or the way in which they address co-­ ordination problems outside state restructuring processes. In Bristol and Belfast, social enterprises often get better deals from retail banks than they can from dedicated social finance providers, and most small scale service organisations that do not have collateral find it difficult to access any form of debt. The point is that the state is crucial to integration, competition and creating the rules that treat the sector favourably. Mobilising the ‘affected group’ in these tactics has been less effective in the SSE, certainly in the UK, blunting the capacity of the double movement to create transformative change. But community development in these processes has also often lost its way, focusing on activity, participatory structures and an inward facing approach to development (Fisher and DeFilippis, 2015). What community development is for and where it takes affected groups place an emphasis on the outcomes, which are, for many in the sector, too close to the efficiency logics of ‘the system’. In São Paulo, community activism is about the identification and appropriation of assets, finance, state subsidies and systems to allocate resources. Community development does other important and useful things, but how it mobilises the affectation of poor people involves an explicit encounter with the market because it is economics that causes their poverty in the first place.

Network Power and Co-ordinating Institutions Networks, building advocacy coalitions and social capital more generally are all part of the assemblage of community development, stimulating collaborative endeavour, consensus and local power (Healey, 2010). However, the landscape of ‘fuzzy governance’ and the downloading it permits often enclose and essentialise community politics. The networks in Emilia Romagna bring together economic activities, supply chains and purchasing groups to make the co-operative economy function.

Conclusions  173 They regulate standards, create trust between suppliers and the consumer, guarantee prices and seek out new opportunities to sustain a small firm economy. They also advocate politically to strengthen the enabling environment to preference co-operative models and shield them from competition. Fundamentally, they address co-ordination problems internal to the sector, externally with suppliers and buyers, vertically to national and even international markets and to access capital and technical support. Where the SSE is reduced to guerrilla tactics and these traded interdependencies are poorly developed, a different type of network evolves for different stages of growth. Purchasing groups have enabled smaller social enterprises to bulk-buy products and negotiate cheaper prices for pooled services. In Italy, networks are explicitly economic and respond to the needs of diffuse and locally embedded cooperatives. These ‘voluntary cooperative’ movements do not respond exclusively to imposed legal forms and regulatory controls, and because of this, ‘their construction, their effective case, their metabolism and hence their durability are fundamentally different’ (Polanyi, 1919, in Resta and Catanzariti, 2014). But volunteerism is also constrained and shaped externally through the regulatory environment and internally by the co-operative coherence of the sector. Both contexts require a mix of mediation techniques from collaborative volunteerism to more adversarial and agonistic tactics. Social firms compete for markets, skilled people, recognition and resources, and these processes can reinforce sectarian, race or place competition. Their tactics are also externally aggressive but re-form in order to reflect different circumstances and responses. In São Paulo, guerrilla occupation gave way to legal advocacy as the homeless movement sought property rights and capital from the local state and revenue income from tenants to make the project viable. The protesters knew the value of public and private markets and the need to rework their logics to achieve more inclusive outcomes. Community development, social capital and soft networks are vital in embedding these initiatives, but they worked in the Epiringa Building because the occupiers understood the value of physical assets and financial collateral and how to bring them together. Finance is the main resource for the conversion of other forms of capital into social value but more importantly for community accumulation regimes that invariably implicates the SSE in the market. Pache and Santos (2012) developed evaluative criteria to monitor the impact of commercial decisions on the welfare aims of social enterprises. Reorganised as an ex-ante template to help decision-making, this might offer a useful systemisation of governance processes in the same way as economic appraisals or business plans do for other aspects of organisational planning. Table 5.4 (pp. 104–5) showed that the commercial-­ welfare tension needs to be evaluated for its impact on ownership, profit and its use, staff professionalism, internal procedures and governance

174 Conclusions arrangements. Developing such an audit may not mean that a social enterprise behaves differently, nor that all decisions are reducible to such formality, but it does highlight the need to create bespoke systems that guide SSE practice in assessing everyday opportunities and market constraints.

Junctures, Overflows and Affecting Mechanisms Callon (2007) sees the reconfiguration of markets as a process of disruption, assertion and ultimately transformation in the relationship between the buyer and seller and the nature of the services they exchange. Different influences and strategies affect the evolution of the market, including exploration of new products and services and confrontation, where consumers refuse the current order and work collectively to establish a new set of rules and values. Urbano et al. (2010) are also concerned with these processes and focus on the junctures where change is most likely to happen and where skilled actors have the most work to do. Failure is an integral part of, and essential to, processes of destruction and the search for new opportunities for accumulation. The same disorder is, for Callon, Urbano and Picciotti, another opportunity to enact overflowing strategies, but it means knowing the market, how it functions and how it is always dysfunctional. Informal markets, bartering, trading time, sharing and so on all explore the ‘cracks’, but to open these spaces to be more than disconnected, transitory resistance means reframing market logics and the identities that drive such experimentation (Holloway, 2010). A starting point is ‘research in the wild’, where markets are understood as locally relevant arrangements, contingent and socially produced responses to the defined needs of communities as the consumers as well as the producers of goods and services (Callon, 2007, p. 144). Spatialising the SSE is one way to enact such research, especially to stimulate alternative accumulation regimes. Cities and regions with ‘thick’ sectors, well-integrated markets and clusters of interdependent firms tend to be characterised by a co-operative heritage as well as effective, devolved institutional support (SEUK, 2017). SEUK have developed the concept of Social Enterprise Places, which involves mapping out the strategies to build community businesses, create networks within and between the sector and other networks and to understand how cash and capital flow around even the poorest neighbourhoods. Responsible Finance (2017) show how a partnership model of social finance in the United States brought credit unions, CDFIs and government funds together to reduce risk and create efficiencies, especially through the shared use of IT systems. They set out a pathway to build financial architecture in which local assets are organised to better understand what is needed and to integrate demand with different supply channels. This might simply be referring on to other providers, integrating existing suppliers to simplify processes or creating new consortia to fill gaps and bring in new actors.

Conclusions  175 Here, the emphasis is on creating macro level assemblages connected to higher level institutions, funding, technical capacity and market opportunities. Scaling is achieved by working through public and private markets and by addressing co-ordination problems in the search for co-operation and ultimately to recycle value within the social economy. Planning social economy places, zones or clusters is just one way of organising markets, addressing integration problems, especially in finance, and extracting favourable conditions, in the same way as Urban Development Corporations, Enterprise Zones and Comprehensive Development Areas have done for private capital. There is a danger of falling into a distinct economic local trap, and as Nicholls and Teasdale (2017) show, the SSE needs to move through the spatial hierarchy in order to create meaningful solidarity outcomes. How it is made, anchored in community interests and maintains relevance to social, as well as financial, objectives suggests that the neighbourhood is still an important site of political, as well as economic, organisation. Incubating ideas that meet local needs, taking risks, investing early and providing wraparound legal and business services have all helped social ventures grow, even in the most challenging conditions (Miller and Stacey, 2014). New ideas can incubate, attract equity investment, test markets and integrate suppliers, and these accelerator methods are as important for the SSE as they are for creativity in the private sector (Clarysse et al., 2015).

Knowledge and Learning MTA delivers undergraduate, postgraduate and master class programmes to create new companies through a learning-by-doing method that builds prototypes, concepts and skills in high growth sectors. The Labs have spread globally, providing co-working space, technology and access to finance, legal services and business expertise for small teams to create co-operatives and deepen their entrepreneurial capacity and business skills. By 2014, 743 teampreneurs, 73 team co-operatives and 10 ecosystem Labs had been created by MTA (2014). The teampreneurs approach challenges the individualism of the ‘hero entrepreneur’ but does recognise that people, skills and talent are critical to the growth of the sector. The SSE in Bristol is more comfortable with the idea of entrepreneurship, especially as a catalyst for new-start social enterprises. Entrepreneurship, particularly during start-up and growth, is far too readily dismissed as somehow incompatible with solidarity values. Yet, it is a dynamic component of the Basque economy, deliberately made (as far as entrepreneurs can be made) but carefully nurtured as part of an explicitly co-operative culture. Finding out what is possible as a basis for developing the SSE is only one small part of the knowledge gap, especially when compared to the cognitive framing of the private market, consumerism and processes of

176 Conclusions reification. Different types of knowledge support different strategies, decisions and tactics, and Table 8.1 draws on Rydin (2007) to emphasise the importance of cognitive framing for the future of the SSE. Her work is also concerned with places and how policy and planning interventions need a mix of epistemologies, methods and data to perform different functions, whether they are resisting dominant state formations or opening more participative alternatives to development. Expert knowledge, especially presented by think tanks, universities, consultants and lobbying organisations, is vital to neoliberal economics and how it moves to other sectors, problems and countries. However, this does not mean that normative research is inferior to or uncomfortable with the participatory ethics of the sector. On the contrary, it is critical in order to show where the SSE is going, or needs to go, and to inform the actions required to get there. The conceptual component is missing from Rydin’s framework but, as Table 8.1 shows, there is a need to constantly monitor the ethical landscape of the SSE and how it is being reshaped, by whom, for what and which entities (enterprises, projects and entrepreneurs) are being shifted across this moral plane. Dey and Lehner (2017) (see Chapter 4) connect knowledge production to a spectrum of ideological regimes and the complexity of tactics necessary to the diffusion of social and economic impact. This, in turn, also highlights the potential of experimental knowledge and research that evaluates policy impacts, failings and the need for specific interventions (finance, laws, technical capacity) to support the sector. However, the production of knowledge is, itself, only part of the assemblage, and shaping (false) consciousness has always been critical to the hegemony of capital markets, as well as the state. Knowledge that helps the SSE perform better is critical for Fligstein’s ‘social actors’ and how they operate across a complex policy, financial and contract environment. How knowledge relates to learning cultures within the SSE is therefore important, and again, we can borrow from frameworks that show how different learning styles use knowledge to create value for social enterprises and entrepreneurs. The assemblage is not just about policies, legislation, money and reworking structures but also about how evidence and learning are brought together to support overflowing, niches, resistance, refusal and so on. Kean et al. (2005) highlight the need for learning partnerships and platforms that broker and translate research for use by actors in order to challenge policy assumptions and, most importantly, to assert the values of the SSE inside and outside the sector (Figure 8.1). There are formidable administrative, bureaucratic and ideological traps in which knowledge produced by the SSE can be easily dismissed, not least because much of it is simply not competently produced (Teasdale et al., 2013). Knowledge legitimacy is a problem for the sector, especially where superior centres, usually private or state-led and normative, tend to dominate. However,

Table 8.1  K  nowledge, practice and the SSE Type of Knowledge Claim Description

Category

Possibilities for the SSE

Current State

Empirical account of current socioeconomic and environmental situation

Experiential/ Empirical

Predicted State

Prediction of future scenario under trend conditions

Predictive

Societal Processes

Process understanding of social, economic and environmental processes affecting society

Process

Policy Process

Process understanding of policy

Process

• Descriptions of the value, size and capability of the sector. • Evaluating the performance and triple bottom-line effects (economic, social and environmental). • Valuing lay knowledge, citizen science and embracing affected groups in setting priorities and disseminating research. • Where is the economy going in terms of growth sectors, areas and markets? • Market research into sectors with interdisciplinary and mixed methods into the socio-technical nature of spatial economics. • Feasibility studies, economic appraisals and business plan analysis. • Where do the opportunities exist to connect the values of the SSE with local problem solving? • What do people want and need, and how does this feed into different ways of tackling poverty, isolation and exclusion? • What assets are available, and can they be mobilised as a basis for planning the SSE? • Understanding the processual nature of urban change and the implications of economic restructuring for the spatial economy. • Critically evaluating policy making processes, institutional context and the legal and regulatory environment. • Mapping local power and how the SSE interfaces with economic interests and policy. (Continued)

Type of Knowledge Claim Description

Category

Possibilities for the SSE

Outcomes State

Empirical account of outcomes of planning processes in specific societal context

Experiential/ Empirical

Policy-societal Interactions

Process understanding Process of how policy and societal processes interacted to create outcomes Understanding of desired Normative goals for the SSE

• Appreciating of the influence of the place-specific aspects of the economy. • Path dependencies, market lock-in and barriers to alternative economics. • Forming projects, prototyping, proof of concept and evaluating the ethics of practice. • Policy impact and effectiveness of the SSE. • Identification of gaps in the assemblage that policy can help to fix. • The changing nature of poverty, exclusion, isolation and loneliness in which the SSE is embedded. • How to create, scale and replicate the SSE. • Understanding the architecture of the sector including the scope for network planning and market integration. • Finance and investment priorities for SSE growth. • Challenge the performative authority of market knowledge and the instabilities of capital as a basis of challenge. • Alternative explanations of economic change and uneven spatial effects and policy inefficiencies. • Anthropological knowledge that identifies and values the mix of distribution systems and how they work together spatially.

Normative Knowledge

Epistemological

Understanding the philosophical basis and competing conceptual interpretations of the SSE

Source: Adapted from Rydin, 2007, p. 60.

Conceptual/ Theoretical

Embodied in physical action, deliberation and speaking

Collaborative Learning

Through cooperation, negotiation and communicating concepts

Communities of Practice

Through networks, disciplines, actors and affected groups from a range of sectors

Learning Groups

By organising groups of actors to complete a specific task

Peer-to-Peer Learning

Through collaborating among people who are like each other in similar contexts and cogitative levels

Project or ProblemBased Learning

By developing materials, resources and prototypes and evaluating their effects

Service Learning

By focusing on the ethics of action and what it tells us about the implications of action

Learner-Centred Learning

Where actors control learning by forming their own problems to solutions on their own terms

Learning Partnerships Methods, rules, agreements/tactics and formal activities to activate multiple but interrelated leaning styles

Learning Platforms Arenas to show, translate and broker knowledge, test claims, validate data and falsify evidence

Learning Values Problem solving is transformed by multiple analysis and placing ethics at the centre of framing analysis and normative policies

TRAPS

Active Learning

Administrative | Competency | Bureaucratic | Legitimacy | Competition

Conclusions  179

Figure 8.1  Learning styles and the culture of the SSE. Source: Based on Schweitzer et al., 2008, p. 53; Keen et al., 2005, p. 10.

there are effective learning platforms that do affect counter-narratives and support emergent groups to explore, exploit and confront, as Callon suggests. The Social Economy Incubators in Brazil bring expert knowledge, high levels of technical specification and sociologists into community learning processes in some of the poorest favelas in the country. In Mondragon, MTA is helped because the corporation has developed its own university, knowledge frameworks and learning methods to support its business roll-out strategies. The university research programme in Québec is funded by the state and has underpinned the development of regional markets, has strengthened skills, particularly in finance, and has helped to legitimise the SSE across government agencies (Bouchard at al., 2015).

Skills There is also an impressive infrastructure in the skills arena, some of which is aligned to higher education, some bridging the ‘epistemic community’, such as the School for Social Entrepreneurs in the UK, and others who have built a global coalition of innovation centres (Stacey, 2012). There are also important guides, workbooks and online toolkits that bring activists through start-up and incubation processes to growth and ultimately, financial sustainability (Gabriel, 2014). These emphasise the skills mix around strategic planning, organisation management, human resources and innovation. They also stress entrepreneurship and how to support effective leadership and participatory planning and

180 Conclusions maintain relevance to the community of interest. VeneKlasen and Miller (2007) set out a range of methods that community groups can use to evaluate the implications of local practice in the context of power and how it is employed in the poorest places. They suggest mapping power as a basis for local planning and distinguish visible power in laws, rules and policies; invisible power that shapes how problems are interpreted and which solutions get priority; hidden power where some groups have access to decision-making sites and exclude alternative interests and narratives (VeneKlasen and Miller, 2007, p. 47). As Bull et al. (2010, p. 251) show, social enterprise decisions move across an ethical plane, from normative rationality at one end to solidaristic values at the other, and ‘critical ethics’ and ‘intellectual capital’ are part of the steering mechanisms of projects, especially as they grow. Good governance systemises these reflective capacities, not to suggest that there are distinct positive and negative paths, only that organisations are clearer about the type of decisions they take and their implications for connecting economics with solidarity outcomes. A central set of skills is about economics and, especially, how markets work. The ability to identify local assets (all communities have capital), how they can be mobilised, where critical services are needed and how places relate to the wider spatial economy (even though they may be weak) is an important and underdeveloped competence within community development and even the SSE more broadly. McMurtry (2015, p. 57) put it neatly in describing the need to unsettle the ‘useful fiction’ that community development (and the SSE) is a coherent panacea for a range of social and market ills. Acknowledging that it is not and recognizing the need to be more technically competent on economics, market dynamics and money, are starting points in ‘opening up the discursive space on where the sector is going’ (McMurtry, 2015, p. 57). Central to this are finance and confronting the messy relationship that the SSE has with money. Grant aid comes with all sorts of conditions. Donors and philanthropists impose, or at least incentivise, market behaviours, and so does debt. As Nicholls (2010) shows, there are pressures on organisations coming through each of these channels and the contradictory logics they bring into social enterprises. Knowing the sources of finance and how they are used, managing debt and leveraging assets to sustain and develop new businesses are often uncomfortable territories for the sector. ACT, in Belfast, started with a community share issue and deployed the technologies of investment finance to create a locally owned and rooted set of businesses in the context of poverty and violent alienation from the local state. Mondragon and BRAC created their own financial infrastructure to pool capital and subsidise underperforming business lines, and the state-backed social investment ­ uébec moved community enterprises to a mainstream role in market in Q the regional economy.

Conclusions  181

Profit Destination Money, as a material and social construct, is vital to broadening the use of surplus for collective purposes, and it is ‘profit destination’, not profit in itself, that is the central concern for the SSE (Pache and Santos, 2012, p.  983). Following the money and what it does, rather than its inherent qualities, is more relevant, as price is just one of a number of co-­ordinating mechanisms that is as useful for solidarity exchange as it is for other forms of distribution. The problem is that these instruments have been shaped by the commercial banking sector and profit logics and for the convenience of policy producers rather than for the SSE. The state and the market have the resources and the authority to impose such discipline, but self-assembled financial circuits that recycle wealth within and between social enterprise networks can challenge dominant financial formations and create more appropriate local m ­ odels. ­Chapter 7 points out that there is a well-developed supply side to support larger charities and social enterprises with loans, equity investment and fiscal incentives. Moore et al. (2014) emphasised the need for a graded mix of finance to meet the requirements of social enterprises at different stages of growth. Much of the demand remains at the bottom end of the development chain and with instruments that meet the needs of community based enterprises, responding to locally defined problems. Proto Research and Development funds (from pooled resources of larger charities and social enterprises) have enhanced the type of innovation that Mondragon and BRAC have achieved from their own profits. Piloting initiatives, testing new markets and proof of concept all require a degree of risk capital and time to reposition social enterprises away from a crisis response to play a more progressive and planned role in market restructuring. Linked to this is patient capital, which is available but not widely used because many social enterprises and start-up projects lack the collateral to get good terms. Structured as a grant-loan hybrid, these models provide working capital below market rates, repayment holidays and technical support (Responsible Finance, 2017). In short, creating blended debt products and the skills to use them is secondary to the social, but financial capital will always be a central and necessary component of agonistic politics and creating alternative economic regimes shaped by community interests. Accessing, generating and using money is the type of interest mediation that connects the social base of local communities to transformative political action. Intermediation services are critical to addressing co-ordination problems and have accelerated the SSE in Québec, Emilia Romagna and the Basque Country. The emergence of stock exchanges for ethical investment reflects a growing concern with the weakness of this part of the SSE as a separate asset class and the appropriation of finance by a range of vaguely social businesses that have undermined its ethical coherence.

182 Conclusions Technical assistance and capacity building are related to skills and knowledge, in which finance is seen as a way of extracting social value and not just sourcing different pots of money. This could also help to develop a shared and coherent approach to impact measurement and how performance is evaluated in a reliable way. Social accounts that are valid are as important for communities and beneficiaries as they are for demonstrating a track record for investors. But it needs to be believable and based on authentic descriptions of what actually happens and what fails in social enterprise activity.

Conclusion Amit and Yiftachel (2016) paint a grim picture of the urban condition, with deeper socio-spatial, ethnic and, above all, economic segregation. Gray cities emerge in the expanding peripheries of successful economic spaces in which exploitation, degraded environments and poverty disconnect people from assets, services and their own dignity. These conditions, and the processes that create them, are not likely to change by wishing away capitalism. The task of displacing, reworking and replacing an economy driven by private accumulation raises fundamental questions about the political potential of the SSE. Starting with the processes of the market and how it works and understanding its intricate and contradictory dynamics is one path. It is, of course, an uncertain and unpredictable one, not least because these processes are not easily tamed or controlled, least of all by capitalism itself. The social will always be present in the economic but needs to be assembled in asserting alternative logics in the market and to give meaning to solidarity ethics in the contemporary city.

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184 Conclusions Teasdale, S., Lyon, F. and Baldock, R. (2013) Playing with numbers: A methodological critique of the social enterprise growth myth, Journal of Social Entrepreneurship, 4(2), pp. 113–131. Urbano, D., Toledano, N. and Soriano, D. (2010) Analyzing social entrepreneurship from an institutional perspective: Evidence from Spain, Journal of Social Entrepreneurship, 1(1), pp. 54–69. VeneKlasen, L. and Miller, V. (2007) A New Weave of Power, People and Politics: The Action Guide for Advocacy and Citizen Participation, Washington (DC), Just Associates. Von Jacobi, N., Nicholls, A. and Chiappero-Martinetti E. (2017) Theorizing social innovation to address marginalization, Journal of Social Entrepreneurship, 8(3), pp. 265–270. Yiftachel, O. (2009) Theoretical notes on ‘Gray Cities’: The coming of urban apartheid? Planning Theory, 8(1), pp. 88–100.

Index

Page numbers in italics indicate an illustration and bold a table. Actor Network Theory (ANT) 54 Aernouts, Nele 107 Africa 5–6 Agrawal, Arun 23 AGROSOLIDARIA 163 Agyeman, Julian 80 Aiken, Mike 106–107 Albizu, Eneka 114 ALMOLIN (ALternative MOdel of Local INnovation) 48–49, 49 Amit, Ilan 134, 182 Ashton Community Trust (ACT), Belfast 131–132, 133, 134, 180 assemblage thinking 52–55, 112–113 Australia 78, 79 Bakaikoa, Baleren 114 Baker, Leila 158 Baker, Tom 52 Banco de Povo Crédito Solidário (BPCS) 163 Banco de Sur 161 Bangladesh 161–162, 162, 180, 181 Barraket, Jo 77–78 Basque Country and Mondragon Co-operative Corporation 113–118, 115, 117, 169, 172, 175 Bassia, Andrea 123 Beaumont, Justin 43 Beckert, Jens 23–28, 31, 83, 168 Bender, Thomas 55 Berndt, Christian 31 Bernholz, Lucy 92 Big Society Capital (BSC) 157 Billis, David 92 Block, Fred 19–21, 83 Bloom, Paul 145 Blundel, Richard 142 Boeckler, Marc 31

Boland, Philip 38 Bologna’s co-operative economies: governance structures and financial systems 123–124, 172–173; networked markets and support 124–126 Bonates, Mariana Fialho 126 Borzaga, Carlo 68–69, 82–83 Botswana 4 Bourdieu, Pierre 24–26 BRAC (Bangladesh Rural Advancement Committee) 161–162, 162, 180, 181 Bratt, Rachel 108 Brazil: Banco de Povo Crédito Solidário, finance services 163; São Paulo’s social housing movements 126–128, 127, 172, 173; Social Economic Incubators (SEI), support services 128–129, 169, 179 Brenner, Neil 36, 55 Brent, Zoe 160–161 Bristol’s creative commons: community space and networks 118–119, 120, 121; entrepreneurship 175; intersectional partnerships 120; social finance sector 119–120, 172 Bull, Mike 69, 91–92, 93, 93–94, 180 Cahn, Edgar 81 Çalışkan, Koray 31–32 Callon, Michel 31–32, 48, 170–171, 174 Calvário, Rita 114 Canada: Québec’s social economy 120–123, 179, 180; work integration schemes 78 capture, resistance strategies 100

186 Index Castells, Manuel 38–39 Castresana, Juan 113–114 Catalonia 45 Cato, Molly 67 Chan, Andrea 78 Chang, Ha-Joon 4–5 Chantier de l’Economie Sociale 121–122 Charron, Alexandre 122 Chatterji, Aaron 145 Clifford, Jim 157 Cloke, Paul 43 Coe, Neil 79 Coexist Project, Bristol 119 Collom, Ed 80 Columbia 163 common pool resources 21–23 community asset transfer schemes (UK) 106–107 community development: community asset transfer schemes 106–107; local currency schemes 80–81; multiple activism strategies 42–44, 172–173, 174–175; reciprocation, pros and cons 64–66; state and local pressures (strife) 47; work integration schemes and empowerment 77–80 Community Development Finance Initiatives (CDFIs) 157, 159–160 community farming 108 Community Interest Companies (CIC) 31, 119, 172 Community Land Trusts (CLTs) 107–108, 159 Community Shares 159 Conill, Joana 45 co-operative movements: Basque Country and Mondragon Co-operative Corporation 113–118, 115, 117, 169, 172, 175; Bologna’s co-operative economy 123–126, 172–173; categories 76–77; Community Shares 159; credit co-operatives 74, 136; Italy’s legislative reshaping 146–147; regional finance schemes 161–164, 162; registered membership 92 co-option and resource dependency 98–99 co-ordination mechanisms: housing market, capital and agent interaction 25–26; market as field of actors 26–27, 28–29, 30, 171; problems and resolutions 23–24,

168; social enterprise development 28, 29, 171; social structures and agency processes 24–28, 28 Cornforth, Christopher 98, 100 credit co-operatives 74, 136 crowdfunding 159 Cucco, Ivan 146–147 Czech Republic 74 Czischke, Darinka 107 Da Costa, Reinaldo Pacheco 129 Dale, Gareth 8 Darby, Stella 43 Dart, Raymond 96–97 Dean, Mitchell 9 Defourny, Jacques 73–75, 92, 94–95 Deleuze, Gilles 48, 52 De Souza, Marcelo Lopez 128 Dey, Pascal 70–72, 98–99, 141–142, 176 Di Domenico, MariaLaura 96 Dikeç, Mustafa 1, 10 Diprose, Gradon 65–66 Dodd, Nigel 148, 159–160 double movement (Polanyi): concept 7, 20; critiques 8; disembedding and social protection strategies 17–18, 19 Downing, Rupert 122 Dubeux, Ana 128–129 Earle, Lucy 126–127, 128 Engelsmen, Udi 107–108 Estonia 74 ethical capital 69 Ethical Development Trust (EDT) 132, 134 ethnocracy and exclusion barriers 134–135, 168, 182 EUROCITIES 124 Europe: co-operatives, numbers of 92; social economic approaches 73–74, 94; work integration schemes 77–78 European Union (EU): conditional foreign aid 5; social enterprise definition 94 European Venture Philanthropy Association (EVPA) 156 Evans, Joshua 79 Fainstein, Susan 148 Faith Based Organisations (FBOs) 43 Featherstone, David 45–47 Ferguson, James 7, 79–80 Ferreira, Jennifer 119

Index  187 fictitious commodities (Polanyi) 17–19 Fligstein, Neil 28–29, 171 Fonte, Maria 146–147 Foucault, Michel 10 France 164 Gagnaire, Kristin 73 Gardin, Laurent 64, 64–65 Gemici, Kurtuluş 26 General Agreement on Trade and Tariffs (GATT) 3 Geoghegan, Martin 41–42 Ghanem, As’ad 134–135 Gibbs, David 21 Gibson-Graham, J.K. 10, 40, 62, 84 global economy: entrepreneurialism and financial crises 38; globalisation and unrational markets 17, 44; post-war neoliberalism and development inequalities 3–5 Global Impact Investing Network (GIIN) 158 Goggin, Niamh 150, 158 Gonzalez, Sara 48, 49, 50 Grabel, Ilene 4–5 Graefe, Peter 61–62 Grameen Bank 159 Granovetter, Mark 55, 141 green economy, market led 21 Grieco, Cecilia 84 Grounds, Andrew 131–132 Guattari, Félix 48 Gunder, Michael 47 Habermas, Jürgen 44 Han, In-soo 44–45 Hardt, Michael 147 Harvey, David 8, 147 Haugh, Helen 70 Healey, Patsy 45–47 Hill, Carol 99 Holloway, John 10, 18, 135 housing market: local government and tenure restructuring 37–38; social structures, capital and agent interaction 25–26; see also social housing Hulgård, Lars 76 Hull, Doug 107, 159 Hungary 74 Huybrechts, Benjamin 98 Impact Exchange 158 Impact Reporting and Investment Standards (IRIS) 158

Intermediary Labour Markets (ILMs) 77–78, 79 International Monetary Fund (IMF) 3–4, 5 Italy: Bologna’s co-operative economies 123–126, 172–173; food co-operatives, legislative reshaping 146–147 Jaggi, Max 123 Jessop, Bob 62, 145 Jordhus-Lier, David 79 Jung, Tobias 157 Kallis, Giorgos 114 Kangas, Anni 40 Kang, Yeon-soo 44–45 Katz, Cindi 41–42 Keen, Meg 176, 179, 179 Kerlin, Janelle 73 Khoury, Theodore 130 Kickul, Jill 69–70, 99 Kim, Choony 101, 102 Klemelä, Juha 85 knowledge and learning: knowledge, practices and interventions 175–176, 177–178; learning culture within SSE 176, 179, 179; skills development 179–180; teampreneurs approach 175 Knox, Colin 136 Korea 44–45, 66–67 Künkel, Jenny 8, 41 labour: as fictitious commodity 18; sovereignty with co-operative 115; worker co-operatives 76–77; work integration schemes and empowerment 77–80 land and nature commodification 19–20 Larner, Wendy 42, 118–119 Lasker, Judith 80 Latin and South America 160–161 Latour, Bruno 10–11, 53, 54 Laville, Jean-Louis 67–68 legitimation strategies and pressures 96–98 Lehner, Othmar 71–72, 176 Lévesque, Benoît 122–123 Liberia 5–6, 6 Lithuania 74 Local Exchange Trading Schemes (LETS) 81–82, 148 London Social Stock Exchange 158

188 Index Longhurst, Noel 80, 144 Lyon, Fergus 142, 157, 158 Lyon, Thomas 69–70, 99 Maas, Karen 84 MacGinty, Roger 129–130 Margarian, Anne 99 Markaida, Imanol 116–117 market economies: commodification of nature 19–20; economic integration, multi-faceted 20–21, 21; globalisation and unrational markets 17; Polanyi’s double movement 17–18, 19; political integration 19–20 Mauksch, Stefanie 84–85 Mayer, Margit 8, 41 McCann, Eugene 10 McFarlane, Colin 52–53, 55–56, 113 McGuick, Pauline 52, 54 McKee, Kim 107 McLaren, Duncan 80 McMurtry, John-Justin 10–11, 16, 23, 180 Mendell, Margie 121–122 Menzani, Tito 123–126 MERCOSUR customs union 161 Millennium Development Commission 5 Miller, Valerie 180 Minha Casa Minha Vida (MCMV) 126, 127 mission drift, contributing factors 102–106, 103, 104–105 Molina, Fernando 114 Mondragon Co-operative Corporation: competition pressures 118; governance structures and financial systems 115–118, 117, 180, 181; guiding principles 114–115, 115; Mondragon Team Academy (MTA), research and training 169, 175, 179 money: financialisation, response to 148–149; perceptions of value and power 147–148; see also social finance Moore, Michele-Lee 154–155, 156–157, 181 Moore, Tom 107 moral markets and emergence groups 31–33, 33, 170 Morel Journel, Christelle 39–41, 113

Moulaert, Frank 47, 49–50, 142 Müller, Martin 54 Muñoz, Sarah-Anne 31, 79 Murray, Robin 72–73, 85 Murtagh, Brendan 131–132, 150 Negri, Antonio 147 neoliberalism and economic policy: damaging of African economics 5–6; disembedding and re-embedding 7–10; post-war development inequalities 3–5; urban politics and disarticulated neoliberalism 37–39 Netherlands 164 New Economics Foundation (NEF) 132, 159 Nicholls, Alex: multiple activism strategies 175; multi-scalar markets 141; social enterprises, legitimation pressures 97–98, 180; social investment logics 151, 154, 155 Nicolopoulou, Katerina 156 non-governmental organisations (NGOs): community activism 42; co-option and resource dependency 98; co-ordinated finances 161–162, 162; inter-sectional partnerships 119; shadow state and social enterprises 41, 154; social enterprise, Eastern Europe 74; social entrepreneurship 71–72; social housing support 127 non-monetised trading 80–82 North, Peter 67, 119 Nowak, Andrzej 69–70 Nyssens, Marthe 73–74, 75, 77–78, 92, 94–95 OECD 150–151 O’Neill, Kirstie 21 O’Shaughnessy, Mary 99 Ostrom, Elinor 22, 23 Pache, Anne 102–106, 103, 104–105, 173 Pandey, Sheela 99–100 Panelli, Ruth 42 Parnet, Claire 52 patient capital 158–159, 181 peacebuilding and social economy programmes: credit co-operatives, Nepal 136; ethnocracy and

Index  189 exclusion barriers 134–135; outreach issues 129–130; regeneration and local multiplier effects, Belfast 131–132, 133, 134, 135–136, 172; URBAN II failures, Belfast 130–131, 131 Pearce, John 82 Peck, Jamie 7, 20–21, 21 Perry, Mark 119 Pestoff, Victor 1, 61 Pike, Andy 148–149 Pinch, Steven 29–31, 91 Pinson, Gilles 39–41, 113 Pløger, John 47 Poland 74 Polanyi, Karl: critiques 19–21; double movement concept 7, 17, 20; market disembedding and social protection strategies 16, 17–18, 19; primitive accumulation 83–84 Pollard, Jane 148–149 Powell, Fred 41–42 Prasad, Ajnesh 130 Praszkier, Ryszard 69–70 Prior, David 42 profit destination 181–182 Prudham, Scott 20, 83–84 Québec’s social economy: Chantier de l’Economie Sociale coalition 121–122; nationalistic traditions 120–121; state and regional developments 122–123, 179, 180 Quirk, Pádraic 136 Ramnarain, Smita 135 Research Network for Social Enterprise (EMES) 95, 95–96 Réseau d’Investissment Social du Québec (RISQ) 122 Responsible Finance 174 Richmond, Oliver 129–130 Ridley-Duff, Rory 91–92, 93, 93–94, 116 RIPESS 66–67 Roelants, Bruno 115–116 Roy, Ananya 154, 160 Russell, Bertie 40 Ryckewaert, Michael 107 Rydin, Yvonne 176, 177–178 Safransky, Sara 108 Sager, Tore 38

Saguier, Marcelo 160–161 Salmenniemi, Suvi 40 Sanchez-Bajo, Claudia 115–116 Santos, Filipe 102–106, 103, 104–105, 173 São Paulo’s social housing movements: occupation and refurbishment strategies 126–128, 127, 173; Social Economic Incubators (SEI), support services 128–129; state scheme dissatisfaction 126 Satgar, Vishwas 134 Saunders, Peter 44 scaling strategies and growth: integration with universities 144–145; multi-scalar markets and interplay 141–142; niche development 144; scaling up, elements and processes 145–147, 146; up-scaling, objectives and tactics 142–143, 143 Scheuerle, Thomas 145–146, 146 Schmitz, Bjorern 145–146, 146 Scott, Allen 39 Sen, Amartya 130 Sengupta, Urmi 126, 127 Sepulveda, Leandro 135 Seyfang, Gill 44, 50, 65, 80, 81, 85, 144 shadow state and social enterprises 41, 154 skills development 179–180 Slovenia 74 Smith, Adrian 144 Smith, Brett 70 Smith, Graham 98 social and solidarity economics: assemblage thinking 52–55, 112–113; economic behaviour characteristics 64, 64; economic, cultural and institutional diversity 112; modern modes and transformations 61–63, 63; reciprocation, pros and cons 64–66; social based value and related problems 169–170; social entrepreneurship 69–72, 72; solidarity, economic practices 67–69 Social Economic Incubators (SEI), Brazil 128–129, 169 social economy: assemblage of elements 10–11; domestic and formal sectors 72–73; financial

190 Index 2008 crisis, reactions to 1; innovations, diffusion challenges 85, 86; mutual societies to neoliberalist perspectives 1–3; neoliberal urbanism 7–10; non-monetised trading 80–82; RIPESS definition 66; social and solidarity economy (SSE) 11–12; social enterprise and political influences 73–74, 171–172; unequal partner and problem fixer 82–84 social enterprise: adoption factors for public services 91; capture, resistance strategies 100; community activism 43–44; co-operative movements 76–77; co-option and resource dependency 98–99; definitions and typologies 92–96, 93, 95–96; ethical relationships 69, 69; evaluation critiques 84–85, 169–170; legitimacies, conflict and strategies 104–105, 104–105, 173–174; legitimation strategies and pressures 96–98, 180; locally embedded governance 46–47; local trap dangers 50; mission drift, contributing factors 100–106, 102, 103, 104–105; modes of exchange (actors, actions, resources) 74–76, 75; political influences and extent 73–74, 171–172; problem fixer and transitional labels 82–84; shadow state involvement 41; state and local pressures (strife) 47; workfare and empowerment 78–80; work integration schemes 77–78 social enterprise markets 29–31 Social Enterprise Places 174–175 Social Enterprise United Kingdom (SEUK) 92, 99, 174 Social Enterprise Ventures (SEVs) 129 Social Entrepreneurial Organisations (SEOs) 145–146, 146 social entrepreneurship: characteristics and practices 69–72, 76; ideological regimes 72; innovation and local agency 130; legitimation strategies and pressures 96–97, 99–100, 171; teampreneurs approach 175 social finance: Bristol’s initiatives 119–120; Community Development Finance Initiatives (CDFIs) 157, 159–160; Community Shares 159; crowdfunding 159; diversification

of supply 156–159; exchange and financial mechanisms 149–150; incentive finance and eligibility 157–158; microcredit, benefits and risks 159–160; multilateral reciprocation 65; national and regional finance schemes 160–164; patient capital 158–159, 181; profit destination 181–182; Québec’s initiatives 122; Social Impact Investment (SII) 150–151, 152–153, 154–155; social venture funds 156, 157; supply and demand, feasibility issues 155–156 social housing: Community Land Trusts (CLTs) schemes 107–108; Lithuania and Estonia 74; São Paulo’s re-homing movements 126–128, 172, 173 Social Impact Bonds 154, 157, 172 Social Impact Investment (SII): financial impetus 150–151; investment logics and rationales 151, 153, 154–155; market structure and actors 151, 152 social innovation 47–50, 49, 85, 86 social naturalism 83 Social Return On Investment (SROI) 169–170 social venture funds 156, 157 Socio-technical Agencements (STAs) 31–32, 170–171 solidarity economics: organized economic practices 67–68; personal motivation and ethics 68–69; RIPESS interpretations 66, 67; socially based practices 44–45 solidarity economies: Basque Country and Mondragon Co-operative Corporation 113–118, 115, 117, 169, 172, 175; Bologna’s co-operative economies 123–126, 172–173; Bristol’s creative commons 118–120, 121, 172, 175; Québec’s solidarity infrastructure 120–123, 179, 180 Somers, Margaret 19–21, 83 South Africa 134–135 State-Owned Enterprises (SEOs) 5 Stewartstown Road Regeneration Project (SRRP), Belfast 135–136 Steyaert, Chris 70–71, 98–99, 141–142 St. Martin, Kevin 112 Storper, Michael 39

Index  191 Structural Adjustment Programmes (SAPs) 5–6 Sunley, Peter 29–31, 91 ‘super-imperialism’ 5 sustainable consumption 44–45 Swyngedouw, Erik 1, 10, 49–50, 142 Talwar, Alka 70 Teasdale, Simon 84, 98, 141, 169, 175 Theodore, Nik 36 Thompson, John 40 Tilzey, Mark 8 Time Banks 65–66, 80, 81–82 Tischer, Daniel 156 Transitional Employment Programmes 77 Trembly, Crystal 120–121 Tridos Bank 164 Trudeau, Daniel 41, 154 United Kingdom (UK): Bristol’s creative commons 118–120, 121, 172; community asset transfer schemes 106–107; Community Interest Companies (CIC) 30–31, 172; Community Land Trusts (CLTs) 107; Intermediary Labour Markets (ILMs) 78; Local Exchange Trading Schemes (LETS) 81; Localism Act 2011 and community empowerment 106; peacebuilding and regeneration project, Belfast 131–132, 133, 134, 172; social economic approaches 73; social enterprises, legitimation pressures 97–98; social enterprise statistics 84, 92; Social Impact Investment Taskforce (SIIT) 151; social investment incentives 157, 172; Time Banks 81; URBAN II programme, Belfast 130–131, 131 United States (US): community farming 108; Community Land Trusts (CLTs) 108; shadow state and social enterprises 41; social economic approaches 73, 94, 172, 174; social enterprise statistics 92 UNRISD (UN Research Institute for Social Development) 149, 150, 160 Upchurch, Martin 76–77, 118 urban assemblages 52–56 urban economics: disembedding and re-embedding 7–10; social and solidarity economy 10–12

Urbano, David 28, 29, 174 urban politics and alternative economics: crisis displacement and resistance 40–41; interest mediation, place focused 45–47; neoliberalism’s masking of alternative perspectives 39–41; scaling beyond the neighbourhood 50–52; shadow state and social enterprises 41, 154; social economy and regeneration 50–51, 51; social enterprise, adoption factors 91; social innovation 47–50, 49; solidarity economics 44–45; urban assemblages 52–56; urban entrepreneurialism and its effects 37–39; urban resilience and community activism 41–44, 174–175 Valença, Márcio Moraes 126 VeneKlasen, Lisa 180 Venugopal, Rajesh 3, 39–40 Vickers, Ian 50–51, 130 Von Jacobi, Nadia 168 Wagenaar, Hendrik 43 Wall, Derek 3–4, 17 Walton, John 114 Ward, Kevin 10 Washington Consensus 3–4 Weber, Christiana 145 Wheeler, Peter 98 Whitelaw, Sandy 99 Williams, Andrew 43 Wilton, Robert 79 Work Integration Social Enterprise (WISE) schemes: initiatives and approaches 77–78; legitimacies, conflict and strategies 104–105, 104–106; mission drift, welfare and commercial logics 103–104, 103 World Bank 3–4, 5 World Trade Organisation (WTO) 3–4 Wry, Tyler 92–93 Wynne-Jones, Sophie 99 Yiftachel, Oren 134–135, 168, 182 York, Jeffrey 92–93 Young, Dennis 101, 102 Young, Oran 23 Zamagni, Stefano 124 Zamagni, Vera 123–126