Solidarity economy

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Solidarity economy or Social and Solidarity Economy (SSE) refers to a wide range of economic activities that aim to prioritize social profitability instead of purely financial profits. A key feature that distinguishes solidarity economy entities from private and public enterprises is the participatory and democratic nature of governance in decision-making processes as one of the main principles of the SSE sector. [1] Active participation of all people involved in decision-making procedures contributes to their empowerment as active political subjects. However, different SSE organizational structures reflect variations in democratic governance and inclusive participation. [2]



Some refer to solidarity economy as a method for naming and conceptualizing transformative monetary qualities, practices, and foundations that exist throughout the world. These incorporate, yet are not constrained to, egalitarian and participatory monetary conduct by people, laborers, and makers, for example, by a person who is a moral shopper, specialist, and additionally financial specialist, or by a specialist co-op, reasonable exchange business, or dynamic association. [3] It is an economic formation which seeks to improve the quality of life of a region or community on the basis of solidarity, often through local business and not-for-profit endeavors. It mainly consists of activities organized to address and transform exploitation under capitalist economics and the large-corporation, large-shareholder-dominated economy and can include diverse activities. [4] For some, it refers to a set of strategies and a struggle aimed at the abolition of capitalism and the social relations that it supports and encourages; for others, it names strategies for "humanizing" the capitalist economy—seeking to supplement capitalist globalization with community-based "social safety nets".


"Solidarity economy" was used as an economic organizing concept as early as 1937, when Felipe Alaiz advocated for the development of economic solidarity among worker collectives in urban and rural areas during the Spanish Civil War [5] It emerged more widely as a term in Latin America over the past twenty years in response to community and worker demands to expand forms of social inclusion and unity. Different conceptions of Solidarity Economy originated among movements seeking to create grassroots economies during the military dictatorships that dominated Latin America during the 1970s and 1980s and subsequently, flourished as of the emergence of financial neoliberal democracies in the 1990s up to the present. [6]

The term "Social Solidarity Economy" started to be used in the late 90s.  The first meeting of what would thereafter become the RIPESS (Intercontinental network for the promotion of social solidarity economy) network, took place in Lima, Peru on July 4, 1997 and the participants from more than 30 countries agreed that there needed to be a strong integration between the more traditional social economy structures (collective enterprises – a sector of the solidarity economy) and the more holistic and alternative approaches of solidarity economy practices and communities. In fact, while in most francophone and hispanophone countries the expression used is "Social AND Solidarity Economy", when the RIPESS network was formally announced in December 2002, it chose to eliminate the "AND" in its official name, in order to stress solidarity economy's aim of transformative system change, which includes going beyond the social economy. Another global network with the same aims, the Alliance for a Responsible, Plural and United World, produced an enhanced definition: "Production, distribution and consumption activities which contribute to the democratisation of the economy via citizen engagement at the local and global level. [7]  Many networks continue to use the term Solidarity Economy and institutions usually refer to SSE as Social and Solidarity Economy. [8]  

Solidarity-based economic approaches

One SSE approach focuses primarily on making the current economic system sustainable. Its objective is the creation of enterprises that serve its members or the community, instead of simply striving for financial profit by prioritising people and work over capital in the distribution of revenue and surplus. [9] United Nations Research Institute for Social Development has concluded that "social and solidarity economy, a science-in-the-making, cannot go very far in framing discourses and in engaging with the bigger picture, as an alternative to the crisesridden "dominant economic paradigm"" and calls for further developing SSE into a new scientific theory with its own foundations which would offer an alternative to the homo economicus . [10]

Core values and principles

The RIPESS Charter [11] of the Intercontinental Network for the Promotion of Social Solidarity Economy sets out eleven core values to promote the ethical and value-based economic model:

  1. Humanism – putting human beings, their dignity, culture and full development at the centre
  2. Democracy – promoting democratic values
  3. Solidarity – mobilizing resources and establishing relations with other social collectives
  4. Inclusiveness – establishing dialogue based on the respect for ideological differences
  5. Subsidiarity – promoting grassroots development to overcome common problems
  6. Diversity – encouraging representation of players of all sectors of society
  7. Creativity – promoting innovation that contribute to social change
  8. Sustainable Development – respecting the balance of the ecosystem by protecting the environment and biodiversity
  9. Equality, equity and justice for all - fighting against all forms of discrimination and oppression
  10. Respecting the integration of countries and people - opposing economic, political, and cultural domination of the North over the South
  11. A plural and solidarity-based economy - providing an alternative to the neoliberal economic model by taking actions towards a plural and solidarity-based economy

Also, sharing some of the above-mentioned points, six principles have been described in the REAS Charter for Solidarity Economy: [12]

  1. Principle of equity. Introduces an ethical or justice principle in equality. It is a value that recognizes all people as subjects of equal dignity and protects their right not to be subjected to relationships based on domination regardless of their social condition, gender, age, ethnicity, origin, ability, etc. Society must satisfy, in an equitable manner, the respective interests of all people.
  2. Principle of work. Work is a key element in the quality of life of people, community and economic relations between citizens and states. Importance of recovering the human, social, political, economic and cultural dimension of work that allows the development of people's capacities. Work is much more than a job or an occupation.
  3. Principle of environmental sustainability. All productive and economic activity is related to nature. The good relationship with nature is a source of economic wealth and health. Therefore, environmental sustainability must be integrated into all activities, evaluating the environmental impact (ecological footprint).
  4. Principle of cooperation. Cooperation instead of competition. Model of society based on harmonious local development and fair commercial relationships. Solidarity Economy is based on participatory and democratic ethics, which wants to promote learning and cooperative work between people and organizations.
  5. Principle of non-profit-making. The economic model to be pursued is aimed at the integral, collective and individual development of people, and as a means, the efficient management of economically viable, sustainable and profitable projects, whose benefits are reinvested and redistributed. This "non-profit-making" is closely linked to the way of measuring results, which take into account not only the economic aspects, but also the human, social, environmental, cultural and participatory aspects; and the final result is the comprehensive benefit.
  6. Principle of territorial responsibility. Participation in the sustainable local and community development of the territory. Organizations fully integrated into the territory and social environment in which they carry out their activities, which requires involvement in networks and cooperation with other organizations of the nearby social and economic fabric, within the same geographical area. This collaboration is a way for concrete positive and solidary experiences to transform the structures that generate inequality, domination and exclusion.

Challenges of Solidarity Economy

Market relation pressures - As Solidarity Economy enterprises expand, it often becomes more immersed in market relations and global value chains, making it confront new pressures that force large SSE organizations to adopt practices that are characteristic of for-profit enterprise and dilute core SSE principles. An example of such a case could be the growing criticism of microcredit practices.

Informal economy vulnerability – Solidarity Economy interacts with the informal economy of atomized workers and producers a complex web of social relations. The challenge lies in transitioning out of this informality, transforming a wide array of informal social relations with multiple actors into governance and adopting necessary regulations.

Internal dynamics - Solidarity Economy organizations can be prone to elite capture and social exclusion. This might be because of the types of producers that integrate organizations such as cooperatives and/or due to the fact that those with better education and skills end up dominating governance structures.

Balancing multiple objectives – Solidarity Economy enterprises are required to balance a variety of potential objectives related to efficiency and equity, or economic, environmental, social and emancipatory dimensions. This could be made additionally difficult by the organization's membership homogeneity, misalignment of incentives between managers and members, increased reliance on external support etc. [13]

Social economy businesses

Social economy businesses (SEB) are situated at the overlap of the social economy and the private sector. This kind of hybrid organisations earn all or some part of their income from the marketplace and they may be in competition with private sector organisations. As many businesses that are primarily viewed as part of a private sector have modified their business imperatives and taken on social business models, it can sometimes be difficult to distinguish between private sector and social economy businesses. The main difference with private sector organisations is that SEB are guided by social objectives that are reflected in their business mission and strategies and built into their structure. In other words, in case of SEB the prerogatives of capital do not dominate over the social objectives in the organization's decision making. [14]

Examples of organizations

The term social and solidarity economy alludes to a wide scope of organizations that are recognized from ordinary revenue driven venture, business and casual economy by two center highlights. To start with, they have unequivocal monetary and social (and frequently ecological) goals. Second, they include differing types of co-employable, affiliated and solidarity relations. [15] They include the following examples:

See also

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