There is No Solidarity Economy

« Hitherto men have constantly made up for themselves false conceptions about themselves, about what they are and what they ought to be. They have arranged their relationships according to their ideas of God, of normal man, etc. The phantoms of their brains have got out of their hands. They, the creators, have bowed down before their creations. Let us liberate them from the chimeras, the ideas, dogmas, imaginary beings under the yoke of which they are pining away. Let us revolt against the rule of thoughts. », Karl Marx, Preface, The German Ideology [1] - L’idéologie allemande in Œuvres, vol.3, Gallimard, « Bibliothèque de la Pléiade », 1982

The notion of “social and solidarity economy” has been institutionalized without really being discussed: it is now used as a concept in academia and defined by the political world as an administrative category for public policy interventions. Nonetheless, this term raises several questions which have not been addressed in the numerous publications dealing with this topic since it has surfaced. The creators of this oxymoron believe the social and solidarity economy’s momentous missions are to respond to “development’s financial constriction, the economy’s deregulation and the liberalization of capital flows, which are causing widespread unemployment; recurrent bankruptcies, the increasing marginalization of long-term unemployed people and of those who know they will not be able to land a new job because of their age, their lack of qualifications or work experience, their ethnicity, their gender, etc.” [2]. According to the signatories of the Manifesto for a Solidarity Economy (Manifeste pour l’économie solidaire) released during the last campaign for the French presidential election, the social and solidarity economy is “present whenever an initiative pursues the common good or provides employment for the underprivileged” [3]. These are definitely high expectations, considering that the values and practices this notion purportedly includes vary significantly among actors: should the polysemous definition of the “social and solidarity economy” include, for instance, promoting “skill-based volunteering” as carried out by businesses like “The Walt Disney Company”? During their working time (or when they are off from work, with strong strings attached to their “volunteering”), its employees are made available to nonprofit causes to make capitalism more conscious and ethical. [4] On the rare occasions when authors venture a definition of the term, the normative and performative dimensions of these attempts are mystifying and spark skepticism: “a specific component of the economy, alongside the public sector and the commercial sector, the solidarity economy can be defined as the collection of economic activities governed by the intent of acting in accordance with democratic principles, making social solidarity relationships prevail over individual interest or material benefits; it therefore contributes to democratizing the economy by means of citizens’ initiatives”. The “solidarity economy” is both vague enough to be claimed by a vast array of actors, from “moral entrepreneurs” in the nonprofit world to “social and citizen” entrepreneurs in the capitalist world, and sufficiently performative to imply that the practices it covers are autonomous. In this regard, the notion seems to have been forged to provide an illusion of cohesion for a field which is actually both heterogeneous and heteronomous.

As a response to social and solidarity economy advocates’ frequent presentation of the nonprofit sector as a space naturally fit to encourage practices which “democratize the economy”, this article’s [5] primary objective is to set forth a social and historical framework for the development of nonprofit work. This framework is characterized by demographic, ideological and legal challenges to the grounds of public law statutory employment. Indeed, contrary to the illusion portraying the increase of nonprofit activities as a means to overcome the antagonism between the State and the market, it is urgent to underscore that this increase is simply the result of a deliberate political blurring of the limits between private and public. In no case does it manifest an unraveling of the age-old frictions between the historical development of capitalism and wage system institutions [6]. The growing development of nonprofit work (by employees, volunteers and even the more specific case of “nonprofit volunteers” [7]) is in fact merely the outcome of the double process of “privatizing” the public and “publicizing” the private. The “privatization” of the public, as defined by jurists as the decay of administrative law, has been noted for the last twenty years, namely through the transformation of public officials’ statutes and citizens’ expectations vis-à-vis public policy. Since the beginning of the 1980s, public institutions have been instructed to demonstrate the effectiveness of the measures they develop; their legitimacy can no longer just be based on the reference to universal values. Moreover, systematic public policy impact assessments were enshrined in the 2005 financial regulation (LOLF, Loi organique relative aux lois de finances). Regarding public officials’ statutes, the most striking evolution was undoubtedly the 2003 reform which matched public sector pensions on private pensions. There have been other stealthier but equally significant changes: the implementation of the June 28, 1999 European directive by means of the law of July 25, 2005 - about two months after France had refused to adopt the treaty establishing a Constitution for Europe -, now allows the administration to recruit officials for fixed-term contracts, renewable once, before becoming permanent employment contracts [8]. This enforcement of EU norms is in compliance with the European Commission’s stance when it states that “public officials and public sector employees are workers in the sense of EC article 29” [9]. Some public service law specialists are concerned by the legal confirmation of a dual public service, with on the one hand holders of public law jobs and on the other hand group contract officials with temporary or permanent contracts [10] (not to mention the non-permanent staff, which has significantly increased over the last 10 years according to the Directorate-General for Government Administration and the Civil Service; DGAFP - Direction générale de l’administration et de la function publique) [11].

Conversely, “publicizing” the private has been impelled by the rhetoric of commending “citizen entrepreneurship” and alleged “social responsibility” policies. This ideology is meant to question the State’s monopoly over public interest. It is manifested by the development of financial sponsoring through corporate foundations as well as by the possibility of using the skills of a company’s workers (during their working hours or non-working time) for a nonprofit project based on a partnership between nonprofit organizations and businesses. This new rhetoric legitimizing capitalism, patiently dissected by Sabine Rozier in her doctoral dissertation [12], has been promoted since the beginning of the 1990s in managerial circles and namely in Christian-leaning organizations such as the Centre of Young Leaders of the Social Economy (Centre des jeunes dirigeants de l’économie sociale). At present, it is concretely expressed in all the policies implemented by major corporations in the name of their “social responsibility”, which is assessed by “independent” rating agencies.

However, this blurring of limits is not the result of a “hybridization” of the economy’s different spheres, but rather of a historical endeavor to de-legitimize the State’s social mission and to legitimize businesses’ contribution to the production of public goods. Settling for a conception of the nonprofit sphere as a “third sector”, i.e. as a dominated sector, amounts to crushing its capacity to subvert the market economy. Therefore, the nonprofit sector can no longer be idealized and misconstrued as a compromise between different and antagonistic logics. It must be addressed in light of what it has become: a labor market. Indeed, as long as nonprofit work remains negatively defined in employment policies (especially subsidized contract mechanisms which address their recipients as “beneficiaries” of a benefit and enjoin them to find a “real” job) as well as underpaid, the people who hold these jobs will be forced to “make a virtue of necessity” to not lose face. Presently, the huge success of the notion of “social and solidarity economy” can undoubtedly be put on the account of its capacity to conceal the most diverse adaptation strategies people are adopting as a reaction to the privatizing of the public and the publicizing of the private. Used as a totem, the “social and solidarity economy” thus provides young higher education graduates with a temporary or lasting alternative to the drop in public service positions; as for white-collar executives facing the issue of professional reorientation, it provides an outlet to adjust their aspirations to the actual career prospects before them. Moving beyond this aporia requires seriously considering the creation of a specific form of employment governed by social utility, which is irreducible to the other categories of public and private workers. This implies delving beyond apologetic invocations of solidarity and citizens’ participation to perform a genuine sociological analysis of nonprofit work.

Nonprofit Workers’ Condition and its Genesis

The illusions implied by the phrase “social and solidarity economy” must be uncovered and set aside, first because its advocates have failed to develop a combined analysis of the morphological transformations of public service and of entrepreneurs’ and managers’ conversion to “ethical capitalism” as a new variation of the spirit of capitalism. Construing the “social economy” as an established and coherent sector inevitably entails a static and reifying description of the career developments it involves. Indeed, denying diversity entails a certain level of abstraction which in turn induces a nebulous representation of the nonprofit world. This is precisely what happens when this false concept is used - though it actually does the very opposite of a concept by establishing what it is supposed to explain instead of explaining what has already been established. Addressing the “social and solidarity economy” amounts to focusing on the tip of the iceberg while leaving the true causes of its development in the deep and murky waters of French society’s transformations. In fact, it seems that the reference to values of “solidarity”, which systematically pervade nonprofit workers’ speeches, is used to justify the gap between stymied initial aspirations and the objective chances of holding a position above or beyond the scope delineated by their resource structure. This is the case for a fifty-year old manager who has been laid off and decides to open a social grocery store. To do so, he puts the contact network he has built up throughout his private-sector career to use, to “be of use to society” but also to find a respectable new career [13]. Nonprofit organization managers are in the same situation: they were appointed to the Ministry of Education when the social State was expanding and they are now in their fifties and sixties. In their case, community work and popular education [14] were stepping stones for social promotion, which could certainly not have been expected of their original profession (the modal category here being public education primary schoolteachers). By means of temporary outplacements or provisional assignments within the large federations created to complete public service provision and implement public interest activities, and despite their limited educational capital, these managers experienced upward social mobility at the end of the 1970s and during the 1980s.

It must be noted that the number of public officials has presently reached a historical peak, at the turn of the 21^st century. Overall, public official staffing has steadily and seemingly inexorably increased over the last two centuries, despite short-term variations evidenced by Alain Darbel and Dominique Schnapper [15]. The year 2002 was a historical turning point since the number of State public employees (statutory and non statutory public officials) started declining (this trend has been confirmed for the last two years by the French national statistics institute INSEE [16]). This decline will most likely become steeper as numerous public officials appointed during the social State’s period of growth retire. Currently, approximately 100,000 public officials retire every year (against 60,000 in 1995), and DGAFP [17] estimates indicate that the average should reach 130,000 a year starting in 2010. Up until now, this demographic shockwave had been imperceptible on the total public officials’ staff because, as pointed out by Louis Chauvel, regulation efforts have focused on entry flows instead of the public officials in place: “despite a constant sacrifice of youth, which has suffered from the loss of more than half the positions in public service over the last twenty years, the number of public officials has remained exactly the same since 1984. As in other sectors, the choice was made to deal with the influx of new employees, who have been sacrificed, for want of being able to act on the unassailable stock” [18]. Paradoxically, the available positions have become ever scarcer at a time when the wish to become a public official is at its height. It has been established that public service is most coveted in the event of a labor market crisis, since public service stands for much valued employment safety and stability [19]. Nonetheless, the studies performed by Alain Darbel and Dominique Schnapper in the 1960s also demonstrated that public service is characterized by one of the highest professional inheritance rates among the working active population: a public official’s son is twice as likely as anyone else to become a public official himself [20]. There have never been more sons and daughters of public officials than there are now and many are looking beyond public service to fulfill their wish to serve society.

This drastic reversal of a centuries-old upwards trend in public employment raises a daunting political and sociological question: what will become of the individuals who were destined to be public officials and who have been socialized in a historical context which is increasingly adverse to their aspirations? In all likelihood, the new cohorts of employed workers, characterized by a marked aspiration to public service, will end up being disillusioned; they are bound to be victims of a context that cannot make their hopes, which are also excessive, come true [21]. It is, of course, impossible - at risk of surrendering to a prophetic temptation the sociologist is never completely free from - to foresee the depth of this discrepancy and the adjustments it will necessarily entail. Nonetheless, chances are that this discrepancy will be an opportunity to radically transform the social structure by the rise of new professions. Indeed, contexts of discrepancies between subjective aspirations and objective opportunities are usually favorable to the birth of new social categories [22]. Currently, it appears that the holders of “devalued degrees”, who could have counted on public service positions in a more open historical context, have now been pushed aside by both the decreasing offer and the increasing educational competition between the applicants for these positions (incidentally, this competition is fundamentally unequal given the dual French higher education system with underfunded universities and overfunded prestigious colleges).

The cohort of 1970s nonprofit sector employees only accounted for a minor share of what sociologists designated as the “new middle-class employees”, which was made up of “intermediary” professions according to INSEE nomenclature (special education teachers, health related professions, instructors, etc.). At present, it is crucial to reflect on what nonprofit employment represents for the generations now entering the labor market [23]. The Youth Employment Program (Programme “emploi-jeune”) launched in 1997 led to the creation of 100,000 nonprofit jobs and estimates indicate that one out of every two of these positions still existed after the program stopped functioning [24]. Since employment administrations provide no official statistical assessment of the contracts created within the Police and the Ministry of Education through the “New Jobs for New Services" program (“Nouveaux emplois nouveaux services”) [25], it seems that very few people have been granted public law statutory employment contracts compared with the nonprofit sector’s position creation rate. The “Stepping Stone Positions” (“Emplois tremplins”) program, implemented by the Socialist regional authorities voted into office in 2004, has prolonged the impact of this employment public policy. Their explicit mission is to support nonprofit job creations for people with similar socio-demographic characteristics as the target for the “New Jobs for New Services” program. Our hypothesis is that nonprofit employment could be becoming an increasingly serious alternative to the scarcity of public service positions, especially among higher education initial training graduates whose parents are public officials and whose primary socialization is still marked by a public service culture and the concern of being of use to others. The statistical data collated by INSEE’s annual employment survey (see Graph 1) has already evidenced a significant rise, between 1993 and 2002, of the probability of being a nonprofit worker rather than a statutory State public official among generations under 40.

Graph 1: Ratio of Nonprofit Workers to Statutory State Public Officials by Age

The non-renewal of one out of every two retiring public officials was presented as a key component of the new government’s reform agenda. However, for younger workers this could increase the chances of becoming a nonprofit worker rather than a statutory public official. Therefore, since it is completely pointless to consider that “civil society” can, on its own, solve the long-lasting tensions between the historical forms of capitalism and wage system institutions, the genesis of the insufficiently analyzed category of the “nonprofit worker” can neither be viewed as the apocalyptic sign of the end of public service nor used to further relinquish the universal principles of public service in favor of piecemeal and arbitrary nonprofit initiatives which are governed by morality rather than the law. In other terms, nonprofit workers summon up the ideology of the social economy and solidarity to not lose face; the fanciful idea of “democratizing the economy” conceals structural developments such as increasingly scarce positions in public service and discontinuity in employees’ careers leading to numerous situations of career reorientation (in direction of humanitarian organizations, social businesses or social integration through economic activity, for instance [26]). Nonetheless, analyzing the nonprofit worker’s condition within the framework of the transformations which have led to its production should not be considered a denial of the specific type of employment it represents. To perceive this specificity, the nonprofit world must be acknowledged as a work-driven world.

Conceiving the Nonprofit World as a World of Work

If nonprofit work continues to develop under the consensual catch phrase of Social and Solidarity Economy and the superficial explanation of the hybridization of economic spheres, its specificity will be diluted and its institutional partners will tighten their control over nonprofits. Nonprofit work would thus turn into the ideal instrument for providing depraved capitalism with an ethical token, by means of corporations’ “social responsibility” policies. It would also generate a reserve army for the decaying public service, destined to compensate the increasing shortcomings of state intervention. This situation also involves a risk: it could conceal the relations of production which have nevertheless become a crucial aspect of this sector, even though most nonprofit workers are still invisible workers. However, I am arguing here in favor of acknowledging nonprofit employment as a subversive form of productive activity: it is non market-oriented work and it produces value that cannot simply be assessed by calculating what its production cost for the community is (contrary to public administration officials’ work). It is subversive inasmuch as, according to capitalist conventions, the only commodities socially recognized as having an economic value are those defined by a market-set price. However, since the 1998 directive confirmed in 2006 [27], nonprofit organizations performing economic activities are subject to sales taxes (such as VAT, business tax, corporate tax), pursuant to a highly debatable method. A monetary valorization of their “social utility” has since been performed by the tax administration. These procedures allow State services to grant a tax exemption to the nonprofit organizations which have economic activities, on the grounds that their action generates “social utility”. Thanks to this procedure, the tax administration implicitly - because for accounting purposes this is merely one less expense but not additional revenue - attributes a monetary value to the social utility which is produced. Nonprofit work’s specificity is therefore its capacity to produce “social utility”, which is now endowed with a monetary value. This observation is in line with more global current analyses by proponents of a constructivist approach to the wage system, namely Bernard Friot who considers that “the value attributed to work is a social convention which varies significantly from one period or place to another” [28]. Likewise, François Eymard-Duvernay asserts that “value is neither founded in nature nor anthropologically. It is established socio-historically” [29]. This also explains why standardizing principles and criteria for the assessment protocol of nonprofits’ social utility has become a crucial issue in view of acknowledging and attributing a monetary value to nonprofit work. In this regard, the guide on assessing social utility published by the French Agency for Valorizing Socioeconomic Initiatives (AVISE, Agence de Valorisation des Initiatives Socioéconomiques, an organization created by the Caisse des Dépôts et Consignations) sets forth a method for nonprofits. If this type of methodological tools for assessing social utility is broadly circulated within the nonprofit sector, it could bring about more balanced relations with institutions. This could lead to more dialogue between nonprofit partners and public authorities. The crucial point is achieving recognition of the monetary value of the social utility produced in nonprofit projects.

Nonetheless, if nonprofit work (which, as it has been highlighted, has many structural attributes in common with public service concerning workers’ qualifications, gender and social origin) is based on the social utility [30] it produces, this would represent a radical break from the core principle in public service that a worker’s wages are not a compensation for the service he/she provides. As Supiot writes: “this stability of income, which does not fluctuate according to market criteria, is meant to give public officials the peace of mind required to fully perform their functions. Thus shielding the public official from the torment and the desire caused by lucre, guaranteeing the official’s impartiality vis-à-vis market influences, this peace of mind is part and parcel of the spirit of public service” [31]. On the contrary, in the case of nonprofit employment, wages are determined by the market and depend, at least theoretically, on the service that is to be provided. However, if wage determination is subject, at least apparently, to market principles, it is quite clear that the assessment of the service (i.e. the implementation of the nonprofit’s agenda) cannot solely be based on market criteria. Otherwise, it would contradict the project’s very reason for existing. Indeed, this would mean assessing an emergency shelter according to its capacity to welcome as many poor people as possible in the shortest possible timeframe while using the least resources. If nonprofit work aims at producing social utility, but at the same time the assessment of this social utility cannot be expressed through market criteria, it justifies formulating the hypothesis that the wage gap which can be noted between positions in the nonprofit sector and equally qualified positions in the for-profit private sector [32], is the result of a denial of the monetary value of the social utility produced by nonprofits. This subversive attribute is precisely what is singled out and used as an excuse by the institutions which refuse to measure nonprofit employment, or by national accountants who split nonprofit organizations into different categories to reduce their contribution to production [33]. In this perspective, the nonprofit world is less of a nuisance if it is willing to simply act as a mainstay for the social State and as a moral alibi set forth by the new spirit of capitalism [34]. Nonprofit work also alleviates the negative impact on social cohesion caused by the separation of the State’s “left hand” from its “right hand”, as it is stripped down to its strictly sovereign functions. Asserting the unity of nonprofit employment therefore depends directly on establishing institutions able to provide a monetary valorization of “social utility”, according to criteria which must yet be defined.