The social economy should not be seen as an alternative to public services, EU Employment and Social Rights Commissioner Nicolas Schmit told EURACTIV.
Nevertheless, Nicolas Schmit argued that there was a need for a “third way” between the profit-driven private economy and the public services that the social economy can provide.
“I am not convinced that a classic corporation provides the right services for many social activities,” Schmit told EURACTIV.
As a normal company, he said, you always have to think about how to earn a lot of money for your shareholders, which is incompatible with some social benefits. Schmit gave the example of the French home operator Orpea.
A book titled “Les Fossoyeurs” (The Gravediggers) by journalist Victor Castanet recently revealed how Orpea retirement homes mistreated, starved and abandoned retirees in their excrement.
The “Third Way” for Social Enterprises
A state investigation found that the company prioritized “financial performance” over the welfare of residents.
“You can’t make money from this kind of social service,” said Schmit, arguing that private companies should not replace public services.
However, he stressed that there was room for private initiative: “I think there is a kind of ‘third way’ for social entrepreneurship,” he said.
According to Schmit, the advantage of the social economy is that it is not constrained by the need to create maximum shareholder value, as is the case in most of the private sector.
He also argued that the social economy was also not constrained by the rigid bureaucratic requirements that were known to burden the public sector.
When it comes to financing the social economy, Schmit advocated both private and public resources and reinvesting his own profits.
“In principle, the social economy is not a profit-making enterprise, which does not mean that it cannot make money. But the profits are reinvested, not distributed to shareholders, he explained.
Schmitt said even venture capitalists can take place in this area as long as they don’t ask for a 10 or 15 percent return.
To leave neoliberal capitalism behind?
From the concept of the social economy, it follows that the rest of the economy is not very successful at achieving social goals. However, the Commissioner expressed his hope that the rest of the economy could draw inspiration from the social economy.
“I think we are now in a phase where the very idea of neoliberal capitalism has lost its appeal,” Schmit told EURACTIV, referring to the neoliberal economist Milton Friedman.
In a 1970 essay, Friedman stated that “corporate social responsibility is about increasing profits.”
While Schmit argued that this idea was a thing of the past, he stressed that the rest of the economy might not necessarily be more social. Part of the modern economy has become very insecure for workers, especially the concert economy. Schmit was in favor of a legislative proposal regulating the work of the platforms.
“These people should have social rights and collective bargaining,” he said, urging unions to tackle this new class of marginalized workers.
“We cannot have a social market economy and a balance between the interests of workers and the interests of capital if one side is not really represented. If one side is not really organized, it would mean that we are going back to the 19th century system, ”warned Schmit.
“The unions have a great responsibility to be attractive and persuasive to this new breed of workers,” he said.
[Bearbeitet von Zoran Radosavljevic]