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‘New’ social economy means non-social economy 15 May 2015

Posted by cooperatoby in social economy, Social enterprise.

Oh dear another attempt to redefine democracy out of existence.
In the footsteps of the terms social enterprise, social entrepreneurship, social business, social innovation and social investment, all of which, brandished in the wrong hands, seek to take the mantle of the social economy and depoliticise it, we now have a takeover bid for the very term social economy itself. It comes from about as far away from Europe as you can get in this world, California.
In her blog Lucy Bernholz notes that Rob Reich, also at Stanford has “coined” the phrase ‘new social economy’ to mean, wait for it:

    Organizations and financial structures that deploy private resources for shared social benefits – i.e. the sector formerly known as philanthropic, independent or nonprofit.

A presentation setting this out is here and an audio lecture about how the established model of the social economy needs to change is here.

It is simply extraordinary and leaves me speechless that the project is to redefine the social economy entirely in terms of impact investing, with nary a mention of the “social” dimension of any ownership, decision-making, production processes or impacts.



1. Geof - 19 May 2015

What’s important to me Toby is to recognise the vibrancy of both what for brevity I’ll characterise here as the more European more democratic social enterprise tradition, and the more American more individual social entrepreneurial culture.
Looking back over 30 years designing organisational structures for social enterprise, and seeing what actually works in the long term in many various real situations, I’ve learnt that some democratic participation in the ownership and management mix is usually a strength – but sometimes you really do have to enable the individual social entrepreneur to drive it.
I therefore think it’s most important to keep a very broad church conception of ‘social enterprise’ – although it is true of course that ‘social economy’ has had slightly different and more European usage.

2. katalin - 15 May 2015

hi there,
has this to do with Mintzberg’s notion of plural sector?
“When one sector of society becomes dominant—as the public sector did under communism and the private sector is now doing in the name of capitalism—societies go out of balance and people suffer. A healthy society requires a respected public sector, a responsible private sector, and a robust plural sector. Calling it “plural,” in place of inadequate labels like nonprofit or third, will help this sector take its rightful place alongside the other two and also help us to appreciate the unique role it has to play in restoring that balance.”

see more on

cooperatoby - 15 May 2015


It’s odd how Mintzberg writes as if he’s only recently discovered the social economy, and fears it might fade away unless he rescues it by giving it a new name. I don’t buy either of his justifications for his name, because ownership structures are pretty various (‘plural’) in the public and capitalist sectors too. I agree that ‘non-profit’ is misleading – it should be ‘non-profit distributing’. But if i had to rename the social economy maybe I’d prefer to call it value-led or member-led. But I suspect that adherents of the social economy would prefer to be left alone to choose their own name.

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