Social economy

Putting people before profits

We live in a market economy where most businesses exist to generate a profit to fund individual wealth, where profits are put before people and the planet.

At Caritas, we want to turn this around and create a social economy, where people and planet are prioritised before profits and where revenue goes towards meeting social objectives.

We are calling for policies that ensure that business models re-balance economic, social and environmental objectives and are based on participatory decision-making and inclusive governance. We want profits to be invested in people, in their capacities and creativity, and to be used to provide training and help people access the labour market.

This is not some kind of utopian dream. Slowly more and more businesses across Europe are adopting new approaches and contributing to the creation of a social economy. Social and solidarity economy models are also already functioning outside Europe. Latin America is one of the regions where the social economy has seen the greatest expansion, employing more than 13 million people, developing networks rooted in popular and informal economies. These economic forms show that solutions are out there, waiting for the chance to become politically viable.

However, such models will only become the norm if policies are put in place and funding made available to speed up this transition and to ensure that social, economic and environmental needs are being tackled.

In recent years, we have witnessed:

  • An increase in precarious work and in-work poverty, where those in work are still unable to meet their basic needs and the needs of their families because of poor pay and poor working conditions;
  • Difficulty accessing decent work for youth, women, migrants, persons with disabilities, older workers, non-standard employment workers, Roma and other ethnic minorities;
  • Less and worse access to quality services, such as social and healthcare support, education and housing;
  • Worsening effects of climate change.

The labour market created by today’s economy in Europe entails a number of poverty risks, especially when salaries are inadequate and insufficient to meet basic living costs, when working conditions are indecent and when the balance between work and family life is not taken into consideration. There is also an increasing tendency to offer temporary or precarious contracts, leaving workers without social protection in case of unemployment.

At the same time, many people in vulnerable situations struggle to access the labour market due to discrimination and prejudice.

The impacts of the economic crisis we have been experiencing since 2008, compounded by COVID-19 and the current cost-of-living crisis, demonstrate that our economic model is not sustainable and that the traditional social support system is obsolete.

As the effects of climate change and environmental degradation become ever more apparent, it is clear that we need to shift gear and adopt an approach to work that is more sustainable for people and for the planet.

We need to rethink social protection and social cohesion to ensure that nobody is left out in the cold.

A social economy works by investing profits in social and environmental objectives and democratising decision-making.

This means, for example, offering free professional training for unemployed persons or helping people in vulnerable situations to access the labour market and remain in quality jobs through mentoring programmes, instead of paying shareholders large bonuses.

The social economy creates spaces for participation and for sharing ideas and promotes cooperation, awareness and engagement among different communities. It shifts power to people who are otherwise left out of decision-making, such as producers, workers, community groups or environmental and consumer organisations.

The social economy also contributes to protecting the environment, fighting climate change and encouraging the sustainable development of companies rather than the pursuit of exponential growth to the detriment of the world’s natural resources.

The social economy benefits individuals by empowering them to start their own businesses, access more quality jobs and gain a better sense of community belonging. Communities become more cohesive, since social economies can facilitate the development of inclusive local policies and contribute to the common good of local communities.

The whole of society benefits from innovative ideas and solutions that answer society’s needs and contribute to changing mind-sets. It therefore makes sense that the social economy is one solution towards building a stronger, more cohesive Europe.

Caritas helps thousands of people out of poverty and exclusion by supporting and running hundreds of social economy initiatives across Europe. At the same time, we advocate for the EU to upscale investments in the social economy within Europe as well as in partner countries by, for example, increasing social economy businesses’ access to finance and supporting existing solidarity economy networks.