The intervention of the local government in the social economy
The intervention of the local self-government in the social economy, with resources and infrastructure, is decisive in its development and especially in the creation of local employment. By analogy with state intervention in the private sector when it is in economic crisis and high unemployment.
And this happens in practice where the social economy is applied in the field of local self-government as it contributes with measurable results in dealing with unemployment and the impoverishment of the population.
There are Municipalities with excellent examples of results that we can refer to such as, the municipality of Madrid and the municipality of Barcelona which are run by two female mayors Manuela Carmena, in Madrid and Ada Colau in Barcelona. Let’s note that there are also smaller municipalities with a specific policy agenda for the social economy.
The municipal authority of Madrid instituted the Council of Solidarity Social and Collaborative Economy, in which participate the Regional Federation of collectives from the neighborhoods of the Spanish capital and the European network of fight against poverty and social exclusion actions that strengthened local employment.
The municipal authority of Barcelona has also institutionalized the solidarity economy as one of the political axes of the local government, with the protection of social housing and the creation of a local currency at the forefront.
Also, in a number of municipalities in Europe, Spain, Belgium, Denmark and Germany, citizens who are local communities and local governments have set up over 2,000 energy cooperatives. Other smaller municipalities have developed actions in the health and social care sector with excellent results. While it is estimated that 2000 energy cooperatives exist and operate throughout Europe. But also important social enterprises in the health sector that are facilitated by the Local Government.
We could also refer to hundreds of successful examples in the European area, which certify the dynamics of the social economy when supported by local collective initiatives. But our subject is not the individual successful examples of which there are indeed many. The issue that concerns us is the phenomenon of the social economy with universal effect, in dealing with unemployment, poverty and social exclusion. This is because although the list of good examples is long, this does not mean that the social economy is on the agenda of the majority of local government bodies. local government. This is also the reason why a roadmap for the development of synergies and capabilities of local self-government with social enterprises is necessary.
The European Framework of involvement of local government social economy.
In the European context of the social economy already, since the beginning of the 1990s, Local Self-Government together with civil society organizations are considered important actors and factors of the development policy of the developed countries of the European Union, which is also specialized in similar European Financial programs. Something similar applies (without being shown, of course) in the United States of America, Canada, Australia, etc. While at the level of the European Union, the European Commission has recognized the role that synergies between OTAs and civil society organizations can play by promoting appropriate cooperation policies.
However, the institutional environment for the creation of social enterprises presents deficiencies, as it is not part of the general logic of the private sector of the economy. In any case, the implementation of the Social Economy in practice is not only a question of the central Government, but mainly a question of the Local Self-Government, due to proximity to the social base, but also due to the need to supplement the services provided to the Local Society. Municipalities at the present time can start their creative experience in the social economy from the energy sector.
From direct self-production and self-consumption to reduce the cost of energy in each municipality, at the same time setting an example for households to create energy communities in turn. With this experience of reducing the cost of essential services as a guide, they can be transferred to other areas of the social economy, such as strengthening local food self-sufficiency and health and social care services.
Inactive human and material resources in local communities
One of the main causes of the impoverishment of the population and unemployment, as well as the inadequacy of health and social care services, are the inactive human and material resources that are not exploited locally by the private and public sectors. Such unused spaces (school lands, public buildings, forests ) and on the other hand inactive human resources, high youth unemployment, and great needs for social services are the contradictions that can be solved by the social economy that emphasizes livelihood and not profiteering.
In other words, there are largely inactive material and human resources which private entrepreneurship has no interest in developing nor the public sector in mobilizing. Taking into account, of course, that the resources of the welfare state are not sufficient to cover all the growing welfare and social care needs.
And this happens given that, the increasing taxation on which the welfare state is based has reached the highest limits, which is suffocating small businesses resulting in the inability to cover the ever-increasing social needs. On the other hand, increasing unemployment due to technological developments is a cause of economic and social exclusion, creating a situation that cannot be dealt with over time by the welfare state alone.
The increasing supply of products does not cause the corresponding demand from consumers as wages and incomes are limited.
Thus, the inactivity of resources at the level of covering basic needs of food, shelter and social care is one of the main causes of the problem of stagnation of economic activity. The state and the market cannot cover all the needs of society. The complementarity of the social economy, through the rational approach of exploiting inactive resources by social enterprises, can certainly fill the gap and would benefit both the public and private sectors, given the expansion of employment and consumption . Precisely because complementarity will further have positive effects on the level of mass consumption and also on the expansion of the tax base. Thus claiming the reduced cost of transactions arises the need for the development of the social economy.
Many admit that the policy of benefits to people who have the ability to work is not the right social solution. The generally accepted right policy is interventionism to create new jobs. Therefore, the desired goal should always be, in relation to the appropriate incentives, the strengthening of entrepreneurship that expands employment. And this is what social enterprises can achieve based on reduced transaction costs.
Subsidies from the European Social Fund can be given to cover a part of the labor costs of employees, in social enterprises as leverage for the mobilization of inactive human resources.
This should be the request and the request to every government from the side of the Local Government, but also from the organizations of the Civil Society with the aim of strengthening the social enterprises.
The synergies of local government social enterprises and “Social Development Partnerships”
The local government owns common areas, as we mentioned elsewhere. It owns municipal lands, Mountains, forests, rivers, seashores, squares and buildings. These are material resources that objectively belong to the citizens. These resources can only be utilized to a limited extent with municipal enterprises, while it is possible to utilize them on a larger scale through synergies between municipal enterprises and social enterprises.
First of all, in the energy sector, through energy communities (Energy cooperatives) it can proceed on a large scale by utilizing new technologies, for renewable energy sources, drastically reducing up to 70% the cost of electricity in every local community, business and household .
In the area of agri-food local self-sufficiency, providing land and infrastructure support to social agricultural cooperatives can improve local income and local self-sufficiency.
In the health-social care sector, creating infrastructures for social enterprises Health and social care, strengthening preventive health, social care and combating poverty.
In the environment sector, alongside eco-protection, to utilize the natural environment. with green entrepreneurship in forest and ecosystem management.
In the field of internet and digital work, strengthening initiatives for Digital Citizen Service Advisory Centers, with the aim of supporting new social enterprises.
In the social housing sector, offering land and housing infrastructure to housing cooperatives.
In the field of cultural entrepreneurship where there is a tradition of intervention by the Local Government. To cultural parks of leisure and entertainment in the context of social entrepreneurship.
Such an approach at the level of local government requires in principle to have a political agenda of the social economy. Specific funds in the annual budget and recording of available resources for social entrepreneurship.
Creation of TA interventions Agenda
Recording and planning of utilization of inactive resources
Collaborative solidarity networks
Participatory processes of gathering social and intellectual capital.
Knowledge management and dissemination structures.
Based on a local vision and development plan of the social economy, it is necessary to inventory the inactive resources and needs in each Municipality. So that the available material infrastructures are known in the local community and that this works as a diagnostic tool for Municipal Councils and other local bodies. In order to take initiatives to exploit the comparative advantages of the region.
Another condition for the development of the social economy in local government is the municipal social economy networks at the National and European level, so that the initiatives can be institutionally supported.
The complex task of mobilizing human resources and networking social enterprises from all sides – citizens, consumers, professionals, producers, social agencies of Local Government needs to be served by a system of networking and organization. Therefore, we would say that we are dealing with an open call to local collectives to participate in social entrepreneurship with the support of the Local Government.
There are thousands of civil society organizations in every country that offer practical help to the homeless, drug addicts, immigrants, the elderly, the disabled and various vulnerable social groups. But without often having a local plan that will increase the possibilities. However, to the extent that the social economy is on the agenda of the Local Government, more human and material resources can be mobilized.
And this objectively can only be done through the structures of the social economy and social entrepreneurship as this form of entrepreneurship ensures reduced production costs and reduced transaction costs. Finally, reduced costs are the foundation for sustainability in areas that cannot be met by private entrepreneurship and wage labor.
In conclusion, municipal interventionism, to support social enterprises, can reduce the cost of public services, create local employment where the state and the market fail, reduce transaction costs and ensure the sustainability of services where there is no other way out. . Based on this institutional framework and the synergy with Local Government, Civil Society organizations can acquire a more dynamic role where they become, at least at the national level, an equal interlocutor in the social dialogue, regarding the distribution of resources and in particular the European Social Fund.
The ultimate goal is to boost the social income and the so-called “social wage” of citizens with benefits in services as a counterbalance in an era of declining demand for wage labor and precision, in basic livelihood goods.