The social economy and the active welfare state



















The social economy and
the active welfare state: new forms of co-operation as key drivers towards
a sustainable, just and human society
 
Els ReynaertFons
LeroyVlaams Ministerie van Werkgelegenheid en ToerismeBrussels,
June 2000
 

Introduction
Technological evolutions have
been widely expected to free people from the necessity of labour. The
growing productivity would allow us to maintain the same standard of
living while having to invest less and less time to paid and alienating
labour. Instead we would be able to develop individual talents through
social, cultural and political activities.
The aim of the present paper is
to prove that this ideal is a false utopia. Apart from the fact that
exemption from labour is not a realistic perspective, it is not even
desirable, since work remains a key socialising factor. In this paper a
more realistic utopia will be developed and an attempt will be made to
detect the forces that can help to reach this vision on society. To this
end we will try to reveal some of the mechanisms that make our society
evolve in a direction which we do not approve of. A deeper understanding
of these mechanisms will help to formulate alternative
pathways.
Our idea of the active welfare
state is a society in which every one can participate through either
meaningful paid work or non-paid activities, such as family care,
personal development and voluntary work. It is an open and dynamic
society based on the democratic building stones of dialogue and
co-operation. It is one in which the economy rediscovers its real
meaning, because in essence economics is no more or less than the
process through which humans create social and environmental
outcomes.
 
Why the "End of Work" is a
fiction
Facts contradict the thesis of
the American economist Rifkin that "the End of Work" is nearby. Some
types of labour disappear and new ones appear, old markets shrink and
new ones evolve. Routine jobs in the industrial sector are replaced by
jobs in the service sector. New needs are created, which offer
opportunities for job creation.
One of the main reasons why the
end of work will not materialize lies in the fact that growth and
efficiency remain the key drivers of the economic system. This implies
that new products, new services, new markets are continuously developed.
It also implies that more and more activities are seen in an economic
context and hence are subject to calculations and higher
efficiency.
Furthermore the higher
productivity of the last decades has been translated into a higher
income and not in more free time. This is a rational choice within the
economic framework, because a higher income boosts consumption, and
hence stimulates growth to a greater extent than when economic progress
would be translated into more leisure. In this rationality consumption
also becomes an addiction, and as the American economist Juliet Schor
argued: "as a result of habit formation and relative status
considerations, people develop preferences to accommodate that level of
spending. Attitudes towards consumption are not preordained but are
actually formed in the process of earning and consuming itself" (Schor
1991: 128). Moreover, due to their busy working life employees can
hardly discover other important values, which puts them in a state of
numbness, in which the pressure and responsibility for creating onełs
own life disappears. In that way the economic rationality offered an
alternative for the traditional values of the Middle
ages.
 
The inequality mechanism
Another mechanism at work in the
economic system is the winners and losers scenario. Facts and figures
show that despite falling unemployment rates, there is increasing social
inequality as to participation in the labour market. Only a select group
of people (most often highly educated, not too young and not too old),
are deemed fit enough to participate in a process that is getting ever
more intense and complex. Their daily work demands increasingly more
time and energy. Beside this very active "upper class" there is a
growing layer of people who have poorly respected jobs, under flexible
contracts and bad labour conditions. Next to these two categories there
is the group of drop-outs, who are protected by safety net. We may speak
of winners (those who are in the system) and losers (those who are out),
but wełd better qualify the first group as Trojan winners, since this
group is increasingly under pressure to perform better, is often
overworked and liable to early burn-outs.
The Matheus effect adds to this
inequality: those in a vulnerable position get fewer opportunities,
which weakens their position still further.
 
The importance of paid
work
Research has shown that being
unable to participate in the labour market has far-reaching negative
influences on the personal and social activities and living conditions.
Beside the direct function of income creation, work plays an important
role in the process of social integration, time structuring, development
of competencies, Labour thus continues to have a key socialising role
in society.
Economic motives too plead for a
higher participation in the labour market, since today too many people
depend on social security, which has to be funded by a too small group
of working people.
Policy-makers have often
responded to these findings by trying to create work as a
quantitative objective, whilst overlooking the quality of labour. This
way, a subcircuit of secondary labour and dead-end jobs may be created,
reinforcing the dualisation in the labour market
 
Work as a combination of
alienation and self-fulfilment
The ideal of a society exempted
from work is based on the assumption that work is an alienating
activity, a necessity for survival that we have to live with. In the
framework of this paper we define work as paid work. It is the activity
that the French thinker André Gorz calls heteronomous labour and which
he defines as "work that is subject to a social division of labour,
specialized and professionalized and performed with a view to
commodity exchange. Neither the exchange value of such work, nor its
length, nature, goal or meaning can be determined by us as sovereign
individuals." (Gorz 1989: 166). Gorz pleads for freeing ourselves from
this kind of labour as much as possible in favour of autonomous labour,
which doesnłt have an alienating character and is part of the world of
freedom and personal choices.
This strict division between
autonomous and heteronomous work denies the dichotomy of work. Work
always has a double valorisation. Work can be seen as alienating in a
political-economic system but is at the same time an excellent tool for
self-realisation. Just as life itself work is a varying combination of
pleasure and burden, of emancipation and alienation.
 
Proceeding economic
reductionism
Since the Industrial Revolution
there has been a growing tendency towards economic reductionism. A first
step into this direction was the development of liberalism and the free
market economy. Land and labour were turned into commodities, that is,
they were treated as if produced for sale. Labour and land, which were
henceforward bought and sold freely, became subject to the market
mechanisms. As early as 1947 Dr. Karl Polanyi stated that liberal
capitalism had led to the emergence of an economic sphere which was
sharply delimited from other institutions in society. From then on, a
functional separation was made between the economic, the social and the
ethical spheres. Furthermore, the other domains in society came to
depend on this autonomous economic zone. The market mechanism moreover
created the delusion of economic determinism as a general law for all
human society and invaded other spheres of life.
Even when the welfare state
gradually replaced the "laissez faire" society, economic reductionism
remained the underlying ideology. There was a clear division of
responsibilities : the market would take care of economic growth and
government, supported by labour unions and ngołs would take care of
justice and social welfare. In this vision, companies were still viewed
in a neoclassical economic way. Milton Friedman defined this as follows:
"there is one and only one social responsibility of business
to use
its resources and engage in activities designed to increase its profits
so long as it stays within the rules of the game, which is to say,
engages in open and free competition without deception and fraud."
This means that values like justice, equality, ecological harmony,
care, social cohesion etc. arenłt automatically incorporated in the
economic system.
The deficiencies of the economic
rationality however are ever more apparent. The classical dominant
economic way of thinking leads to a schizophrenic world in which we are
pushed forward by the iron grip of the market and at the same time have
to try to correct the "externalities" of the economy. Externalities are
the costs or benefits not included in the price, which are
incurred through immediate transaction. The best-known negative
externality is pollution. Other examples are social exclusion,
decreasing quality of life and the widening gap between North and South.
Positive externalities include research and education. Individuals and
business firms underinvest in education and research because benefits
are diffuse. Firms which train their workes may not receive a full
return on that investment, since the workers may take jobs elsewhere.
Private returns do not equal social returns, so we cannot rely on
profit-maximising individuals when looking for optimal levels of
investment. There is a social return on having a well-educated workforce
and citizenry. Or as some bumper sticker sagely puts it: "if you think
education is expensive, try ignorance."
While classic economists saw
externalities as exceptions, we have started to realise that these are
far too important to be dealt with in a curative way only.
Gorz resumes: "Economic
rationality could not begin to express itself until the traditional
order had decayed to such an extent that economic reasoning could free
itself from the externally and internally imposed limitations of the
customs and commandments of religion. Until then, in so far as it did
exist, it was enslaved: forced to cope with alien or even contrary
requirements and to serve ends assigned to it by political or religious
authorities. Capitalism has been the expression of economic rationality
finally set free of all restraint."
 
The need for political
intervention and new rationalities
We can draw some conclusions from
the observations above. First of all the economic system does not
automatically lead to the end of work. The dominant principles of
efficiency and growth do lead to inequality, though. Instead of
realising a desirable equal division of work and leisure, it
automatically leads to a society where a group of people is overworked
and others drop out of the system. Another important observation is that
the socialising role of work remains extremely important and that work
can play an important role in the self-realisation of people. Lastly
economic determinism is a very dominant driver in our society and pushes
us into directions which are not necessarily inspired by free
choice.
This last observation implies
that, if we are to follow new pathways, we will need a mainstream
feeling about the direction in which we want society to evolve. This
will require political intervention, a widely accepted vision on
alternative ways of life, strong partnerships and political
intervention. We want to stimulate the debate by proposing some new
pathways.
The World Business Council for
Sustainable Development developed three scenarios for a sustainable
future. The first scenario is the FROG! (First Raise Our Growth)
scenario. Itłs the pessimistic scenario of the boiled frog. The economic
growth model remains dominant and society reacts as the frog: when put
it boiling water, he immediately jumps out. But put in cold water which
slowly warms up to the boiling point, he dies. The geo-polity scenario
is the second scenario. In this scenario the dangers of economic growth
are recognised in time and solutions are sought in a technocratic and
direct control of the market by new global institutions.
The third scenario is the jazz
scenario, in which different actors cooperate in order to find ways to
create a sustainable development. Ngołs, governments, businesses, labour
unions, financial institutions, employees and consumers realise the
desired development through dynamic and creative interaction.
This last scenario is the one
which we want to stimulate, as it is the most democratic and
constructive way to evolve as society.
 
Re-enriching work
The first main goal in our
framework is to re-enrich work.
Firstly this means that political
action and autonomy should be fully integrated into work. Work is more
than a contractual relationship between employer and employee. It is a
political-economic relationship that expresses a social relation which
opens collective and indirect rights. Seen in this way, job contracts
imply the acknowledgement of employees as members of a legally protected
collectivity. Hence work has both an individual and a collective
dimension and it is this collective dimension which we have to
safeguard. In this same vision work should hold more autonomy. Employees
should have more personal freedom in planning their careers and leisure
time. More importance should be given to the opportunities for
empowerment and self-realisation through work.
Secondly work should be
distributed more equally. Participation and individual development are
prior concerns in an active welfare state. Work plays a central role in
this. The slogan of Gorz and Aznar "travailler moins pour travailler
tous" (Gorz, 1991: 274-284; Aznar, 1993) has to be translated into a
labour market law that "the labour time should be reformulated as the
labour time that is available per person" (Leroy, 1994: 34-38). Full
employment can therefore be redefined as the distribution of the
necessary and desirable amount of labour in society over all members of
society. The redistribution of work should entail a redistribution of
unpaid work and leisure time. Full employment in this vision means that
individuals not only have the right to work, but also the right for
activities outside work.
Thirdly we plead for a full
recognition and remuneration of care labour, which we include in the
concept of full employment. This new trend already resulted in the
development of the social profit sector. But new forms of
care-related activities too could become an integral part of the labour
world. Just like other forms of work it is indispensible for society and
should be valued as such. Some fear that this will colonize our lives
still further. They rightly warn against the danger that this
care-related work may be contaminated by the economic principles of
efficiency and increasing productivity and therefore lose their typical
aspects such as communication, personal relationship and quality. Still,
we believe that through including this type of work the economy can be
reoriented, so that the economic rationality would be more geared to the
quality of life. Thus new values can be introduced in the
economy.
Lastly re-enriching work means
that we have to pay attention to the sustainability of work.
Sustainability in this context has different meanings. In essence it
refers to the quality of work. It implies an integrated approach of the
worker as a citizen. It also encourages life time development, which
allows alternation and combination between work, family and personal
development. Finally it means that the impact of work should be taken
into account.
 
Re-enriching the economy
Within our framework, not only
labour, but the economy as a whole should be re-enriched. Despite the
growth of wealth which the industrial and technological revolutions,
globalisation and the economic growth have created, they have also
generated some important negative impacts: environmental damage,
unemployment, the exclusion of more and more people "who arenłt good
enough to play along", the widening gap between North and South, a
decreasing quality of life As already mentioned above, society is held
in an iron grip by the dominant economic principles of efficiency and
growth.
A reorientation of the economy is
called for if we want our societies to evolve in a more sustainable,
just and inspiring way. This new economy should incorporate ecological
and social values and is to give everyone full opportunities to
participate. It should also be extended to new forms of care-related
services. New forms of co-operation, creative partnerships, open
dialogue and the commitment of individuals, companies, ngołs,
governments, trade unions, academics, will be crucial in
this.
 
Three evolutions paving the
way
Three evolutions are paving the
way to this renewed economy. It should be noted that there isnłt a
strict demarcation between these evolutions but for analytical reasons
we mention them apart.
First of all, the social economy
is increasingly acknowledged as an important actor. This varied sector
of dynamic initiatives has always pointed out the negative impacts of
mainstream economy and has always looked for new approaches to offer
solutions to problems. A new wave of collective initiatives sprang up in
the 80Å‚s: co-operatives, employment initiatives for disadvantaged
people, ecological companies They are the pioneers of combining social,
ecological and economic objectives. This sector has a lot of experience
in co-operating, empowering people, increasing social capital and
embedding their activities in the community life.
A second evolution comes from
within mainstream economy. Corporate social responsibility has become
more than a buzzword. For several reasons it is regarded as the only
possible way future businesses can operate. Through the process of
globalisation and the information revolution the activities and impacts
of companies have become increasingly transparent, whether they want it
or not. Active ngołs and critical consumers put pressure on them to
operate in a respectable way. More and more employees are looking for a
fulfilling job. Post-material values are increasingly adhered to. Since
companies have become complex networks of stakeholder relationships
embedded in a rapidly changing society, the focus has shifted from
maximalisation of profits to stakeholder management. Enlightened
managers are aware of their bigger responsibility because of their
companyłs increasing power and impact and are anxious to maintain their
license to operate. So companies will have to learn to integrate
economic, social and ecological successes. They will have to learn to
co-operate with their different stakeholders. Governments have to
stimulate this process.
The third evolution is the
emergence of new needs in the local community, because of demographic
and sociological shifts. Needs which are not yet satisfied or which only
exist on the black or grey markets. They are personal needs
(housekeeping, help for the elderly or less mobile people,) or
collective needs (renovation of the neighbourhood, needs in the
environmental or cultural area, safety, and maintenance). We need to
acknowledge that this is a full-fledged part of our economy and that
only full-fledged jobs should be created on this local level. In this we
donłt agree with Gorz who states: "The development of personal services
is therefore only possible in a context of growing social inequality, in
which one part of the population monopolizes the well-paid activities
and forces the other part into the role of servants." Two conditions
need to be fulfilled if we want to avoid this. Firstly, these jobs too
need to have a collective dimension, viz. political action and autonomy,
as mentioned above. Secondly, the jobs should be equally valued by
society. Or to put it in the words of Marie Arena, the Walloon minister
of Labour: "the services delivered by the woman or man who baby-sits my
children are as valuable and indispensible as the work I do as a
minister."
The dynamics of this local
economy, which strengthen social networks, is vital for our global
societies. In this context too creative partnerships between the private
sector, social economy and governments will be crucial.
We have to learn from the
experience that has so far been built up and which has reinforced these
evolutions. In all these areas the alchemy of partnerships will be
crucial and already proves successful.
 
Re-enriching society

It is clear that going this path is
not the sole responsibility of companies. It is the responsibility of each
citizen who can make decisions: whether to increase his/her consumption
level or to spend more quality time, whether to choose the products that
are made in a just and sustainable way or not, whether to invest his/her
money in a speculative or in a human way, whether to work in a fun and
responsible company or in a quick money making company, whether to do
research around these evolutions or not, whether to engage in creating
social networks or to sit in front of the television, whether to try to
avoid taxes or show solidarity,
The renewed society is envisioned
as an active society, in which not only paid work but also voluntary work,
personal development and social activities are regarded als
valuable.
 

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