Because only the inability of the private and public sector to
provide as many jobs as are needed, to deal with
unemployment and deal with economic exclusion, leaves
vital space for the development of the social economy.
The social economy is a necessary condition in our time for
two main reasons first: to deal with social economic
exclusion and poverty and second: to expand employment
in sectors of public benefit, which despite of being vital
importance are abandoned by the private sector due to
lack of profitability. On the contrary in the social economy the job can be done without profit, for the
purpose of public benefit by the non-profit enterprises and
cooperatives and thus the economic activity can be
expanded.
Another reason is transition, which takes place with
technological modernization, the transition from the 2nd
and 3rd industrial revolutions to the 4th industrial
revolution, which brings with it the increase of productivity
as a consequence, and the labor transformation which
involves the shrinking of wage labor in industry and
services.
Such major work transformations happened historically
with the great agricultural revolution about 6000 years ago,
such transformations with the industrial revolution in the
last three centuries and similar is today the work
transformation passing industrial specialization to the
digital age and artificial intelligence.
It is this labor transformation that shrinks wage labor and
simultaneously creates the necessary conditions for the
development of the social economy as there is pressure for
self-employment and cooperation which is ultimately a
prerequisite for the social economy.
30% of youth unemployment in the Mediterranean
countries proves the inability of the public and private
sectors of the economy to cover this deficit.
Obviously, state interventionism has reached its limits in
relation to tackling social exclusion and unemployment and
needs the contribution of the social economy. Almost all
policies and strategies to deal with unemployment are
based on the model of strengthening wage labor mainly
through the process of continuing professional training.
However, tackling unemployment only with wage labor, as
we mentioned, has its limits and cannot be a universal
solution.
Let’s just think that in the pre-industrial period, employees
were a limited percentage of the total labor supply and
demand. While in the industrial period this percentage took
off and in some countries it reached 90% of the employed,
however nothing guarantees us that this will continue. In
the post-industrial era that we are already living through,
the high percentage of wage labor is decreasing compared
to the total volume of employment for a number of reasons
that we will examine next.
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In fact we have an increase to self-employment that in
some cases equals the pre-industrial period. The current
production conditions no longer favor the state and private
employment policies. In particular, this happens as there is
an important part of the real economy that emerges beyond
the state and the private sector and refers to the
cooperative business model.
In the transition from the 3rd to the 4th industrial revolution,
work faces among others the challenge of deep
restructuring which needs to be institutionalized and
appropriate policies should be adapted.
Until about the end of the 20th century we knew that new
investment and growth automatically created new jobs. But
now a review is needed, that in large industrial enterprises
and services, technological modernization is largely
eliminating labor. Government intervention beyond active
demand has also reached its limits.
The effects of hyper-automation, digital technology and
robotics are reducing jobs without expanding employment.
Under this suffocating climate, labor-intensive small and
medium-sized enterprises are squeezed and a vacuum of
business activity is created, as they do not have sufficient
capital to withstand the great competition. For example,
about 1/3 of small and medium enterprises disappeared in
the European south after 2008.
The result is stagnant unemployment while many workers
are forced to become self-employed, and work from home.
And this, of course, contradicts the established notion that
every technological advance increases the supply and
demand of labor without limit.
The fact that with the industrial revolution the rate of wage
labor reached its highest limit does not mean that with
further automation, robotics and computer science we will
have the same trend. Exactly the opposite is happening
with the new technological revolution and the digital state
and banks are expected to completely overturn one-
dimensional wage labor.
The limitation is a given, whatever the individual statistics
say about wage labor. It is also known that much of the
conventional industry has moved to the third world, in
China, India, Vietnam in Polynesia, creating high rates of
unemployment in the west. In the statistics on the
development of wage labor in the West which is 800
million, we should include the other five to 6 billion of the
world’s population and the supply of labor in the globalized
economic system.
What we can also observe is that the law of “supply and
demand” concerning work is not self-regulating, at least as
much as classical theories promise. State interventions are
not always done in a rational way for the needs of society.
They may of course respond to the conditions of economic
growth and the production of wealth, but they ignore the
part that lives in poverty. Surprisingly there is no science to
fighting poverty.
The classic theory of value concerning labor does not work
as it is believed and needs revision. According to the
thinking of three classic economists: Adam Smith, David
Ricardo and Karl Marx, the Theory of Value focuses on
labor. Smith proposes labor as a measure of value, in the
sense that it is a means to express the purchasing power
of the commodity, just as money is to express the
purchasing power of the commodity in its price.
In this sense, labor is simply a measure of value, a “true
standard” of measurement.
Ricardo argued that all production ultimately comes from
the employment of labor, capital, and land. That is, he
argued that the value of goods is affected by the amount of
capital in the form of tools used in their production.
Marx argued that labor was the only substance that creates
value and that the total working day is divided into two
parts, one of which reproduces the subsistence of labor,
the other of which provides the surplus value of capital.
Keynes, the great economist of the twentieth century,
observed that new technologies were promoting
productivity and reducing the cost of goods and services at
unprecedented rates. They also drastically reduced the
man-hours required to produce goods and services. Thus
he introduced the term ‘technological unemployment’.
Keynes was quick to add that technological unemployment,
while inconvenient in the short term, is a great blessing in
the long run as it means that humanity will move into plenty
and work fewer hours.
If this has not happened yet despite enormous
technological development, it is because the monopolies
and multinational corporations that control large capital and
investment resources direct them exclusively to highly
profitable sectors for which there is no free competition and
the concept is a myth of competitiveness. As for example is
happening now with the energy crisis.
We live in a series of antinomies of the system. On the one
hand, hard competition in the search for profit reduces the
rate of profit, and on the other hand technological
innovation and automation as well as intellectual property
ensure high profitability for the Capital that buys, invests in
innovations and owns property rights. Thus creating new
privileged areas in profitability with fewer workers. On the
other hand, we cannot ignore how labor-intensive sectors
are being destroyed as they cannot operate within the
profit-making framework without state subsidies.
In view of these developments, the social economy is a
necessary condition for one more reason. As the range of
small and medium-sized enterprises decreases and the
workforce employed decreases, the state will have a
reduced tax base and limited revenues. So not only can it
not expand recruitment, it can’t even keep it at the same
level, since it necessarily manages fewer resources and
has to cover more needs in the area of social policy and
social benefits.
Wage work was a condition for business profits and profits
were a condition for the creation of new jobs by employers.
Since the new technological revolution profits no longer
come from this relationship, but for a large part of the
capital comes mainly from automated industries, financial
markets and banks, with few employees and limited
bureaucracy, then employers operating in traditional but
necessary small and medium enterprises are in a
disadvantageous position and disappear. This happens as
the motivation to maintain their businesses disappears,
leading as a final result to the loss of a significant part of
jobs.
The destruction of the middle class reduces the scope of
entrepreneurship in the small and middle classes where
additional jobs are lost and in the end all this contributes to
the fall of the ideal of consumerism. The new conditions
are changing and the consumption patterns as the society
inevitably gradually gets used to a more frugal life that is
focused on the basic needs of energy, food, housing and
health care.
This trend became evident in the Mediterranean countries
and for example in Greece we had after the crisis and the
closure of more than 100,000 businesses from which a
corresponding 1,000,000 jobs were lost. This deficit is not
going to be compensated for the simple reason that there
cannot be viable private enterprises without profit in the
future. Profits now exist only in those big businesses that
exploit mass markets, public infrastructure and
construction, tolls, fuel, energy, ports, transport and
financial transactions.
After all, many small and medium-sized businesses are
trapped in debt and continue only to avoid losing the
properties they acquired before the crisis. Others just to
secure a salary, like what their employees get. It is
therefore not essentially about profit-making businesses
but about new potentially non-profit-making businesses,
which, if they want to survive in the new suffocating
environment of competition, must be supported by the
social environment and social networks. We should also
take into account that the rise of working at home and
adapting to these new conditions is coming.
The question here is what are the alternatives to the
system, beyond wage labor in the state and the private
sector. What will happen to the surplus workforce?
If it is true that the work that is being lost is rediscovered in
new organizational forms and in many new areas of social
services then it must be sought beyond the private and
public sector. In the social economy and social
entrepreneurship. The private sector is no longer needed to
operate the full volume of wage labor supply.
This happens because in conditions where a part of small
and medium enterprises is destroyed, they are forced (and
this is possible) to become “entrepreneurs, collectives,
united consumers, members of an entire community based
on the cooperative model of entrepreneurship. There is the
potential to create cultural institutions and humanitarian
charities.
These can activate inactive resources, buildings,
abandoned facilities, land, common areas, forests, etc. in
collaboration with Local Government Bodies. These can
organize inactive human resources by offering social
services in the field of nutrition and health. They can
employ unskilled people to help around the house. At this
level of job search, a new kind of homemaking and crafting
can develop.
This issue becomes more understandable when it comes
to the earth’s energy sources. On the one hand, fossil fuels
governed by the law of scarcity of resources, cause the
problem of unequal distribution of energy poverty. And on
the other hand, we have the possibility of spreading
alternative energy sources that can be developed in the
largest part of the earth. And here the social economy can
make a decisive contribution with the energy communities
which are a new institution in Europe.
The SUN as an energy source beyond the cost of the initial
state of energy collection is characterized by the
abundance and can free energy, thanks to the new
technologies of extracting energy directly from the Sun but
also the transformation of this energy into hydrogen.
This perspective, which has emerged only in recent years,
brings enormous rearrangements of capital and labor. It
may not significantly increase employment but it frees
households and businesses from unaffordable energy
costs contributing to their sustainability and to the
sustainability of jobs.
The financial oligarchy is certainly not interested in the
social economy. In our time, its planning is facilitated as
work is not the absolute measure of concentration of
wealth while its deficit is the source of poverty. In addition,
there are other factors that replace paid work, such as
unpaid digital work of users and consumers, and beyond
the value of land, intellectual property.
In conclusion, the old ‘classical’ views of work are one-
dimensional. They see only one side of the hill, whereas
today work is a multidimensional affair. There is of course
paid salaried work on a large scale, there is self-service,
self-employment and voluntary work, which contributes to
the total product of society. The internet, for example, is full
of digital content and free software, the product of unpaid
work.
There are therefore sectors of the economy that tend to
reduce costs in favor of the consumer such as the IT and
digital economy sectors, as well as mild forms of energy
sourced from the sun. There are also natural monopolies in
public infrastructure granted to private individuals by the
state itself which arbitrarily increase costs see fossil fuels.
There are also sectors such as the food and health sector
where human labor is not replaced by robots and have
increasing needs in employing human resources. This is
the case of sectors in which labor intensity will persist as it
cannot be replaced by new technologies. All these data
must be considered and taken into account in a
multifaceted manner.
Labor policy planners should take into account all these
parameters of self-employment and unpaid work and not
only the parameter of wage labor, which they try to
maintain with continuous training programs, targeting
sectors where no new jobs can be created.
In order to deal with the problem of unemployment, social
exclusion and poverty, a new theory is needed, a new
“software” for the value of work and unpaid digital work on
the internet in view of the radical changes of labor.
The transformation now taking place at the level of
economy and work is not like that transformation of manual
labor in the past into mechanical work, which again
required laboring hands. Now it is intellectual work that is
transformed into artificial intelligence that not only replaces
manual labor and intellectual work reducing at the same
time the human factor within businesses.
To put forward Adam Smith’s theory today to explain
modern phenomena is like asking Aristotle to talk about
another system besides slavery which he knew.
Today’s big profits are big
In other words, we have self-management and customer
service and an intangible profit mechanism exploited by
large monopolistic businesses.
In other words, there is what we could schematically divide
and see as relativity in the values of work, within an
economic system that has no moral commitments to the
type of activities it does or does not do.
The exploitative system can comfortably manufacture new
games of chance and toxic bonds, at the same time that
there are huge social needs in the field of social welfare.
Google and Facebook and other platforms on the internet
do not earn their truly enormous amounts of profit from the
labor of their employees, but mostly from the unpaid labor
of accumulating data of the very members and consumers
they manage. In this sense, large digital technology
companies do not only need employees, but mainly
consumers and customers who buy the services they own
and manage, the available software and robots.
There are other commoditized symbolic and intellectual
values and conditions for wealth accumulation that are not
horizontally defined by wage labor.
All sorts of sports and art stars who enjoy huge salaries
and financial rewards are not subjected to the uniform
system of wage labor and in no way can they be justified
by the logic of converting raw matter into useful material
products.
On the other hand, there is the concentrated cultural
heritage, family investment in education, volunteerism and
unpaid intellectual work on the internet, exploited
sometimes by the state and sometimes by the private
sector to gather resources and manage wealth.
Increased taxation also finances activities with symbolic
value in culture. Finally, churches or simply sports teams
and fans that indirectly boost economic activity with
masses of believers and volunteers and create huge
profits.
In these fields the law of “supply and demand” does not
yield to material needs, but to the collective fantasy that is
related to the entertainment needs that have been formed
in society and become a “product” with the multiplicity that
takes place on television and on the internet.
For these reasons are of great importance the culture and
the propaganda that is carried out each time, towards
which investments will be made and which new jobs are
actually created, are of such great importance.
When the “product” is the spectacle and through it the
advertisements and not the “bread”, the health and welfare
of the people, the jobs will constantly be limited. On the
contrary, the jobs can increase as the social economy
develops, with public purposes to the real needs of the
people.
The importance of the transformation of work can be better
understood now with the global energy crisis where the
stake is the gradual production of energy by energy
communities.
In the study we need to determine what is the object of
social entrepreneurship and also the subject that mobilizes
the production processes.
The object is:
The energy sector with the aim of producing energy
by energy cooperatives.
The nutritional sector with the aim of nutritional self-
sufficiency with contractual social Agriculture.
The health sector with the aim of creating new
cooperative structures in order to make healthcare
accessible by all .
The social housing sector
The environment sector with the aim of developing
participatory green – social entrepreneurship.
The Local Government sector with the aim of
developing social entrepreneurship in local
government
The digital social entrepreneurship
The culture sector with the aim of social cultural
entrepreneurship.
The cooperative banks will also become insurance
funds.
The subject of social entrepreneurship in labor supply and
demand is determined by collective civil society
organizations and cooperatives.
Cooperation and social capital is the decisive factor in
mobilizing labor forces, against the material and human
resources that remain inactive, in the context of the supply
and demand of labor from the private sector. This
awareness approach can catalyze job creation beyond
state and private sector entrepreneurship.
The differentiation of the social economy in relation to the
market economy is not so much in the object as in the
subject of entrepreneurship which is collective and
mobilizes resources.
Therefore, when we consider the creation of jobs through
the social economy we should highlight this whole
spectrum of conditions that drive the institutional process of
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initiative by local communities.
In the field of social enterprises, many people usually talk
about the “ecosystem” of the social economy implying the
need for a relevant institutional environment. But looking at
the theory of supply and demand in the creation of new
jobs, we did not find any theory concerning supply and
demand in the social economy.
For the social economy there is no comprehensive
institutional approach to deal with as a whole. The existing
theories of supply and demand refer to neoclassical
economic theory, and the Keynesian theory of active
demand. This means that there is a theoretical gap for the
modern reality to really create an “ecosystem” of the third
sector of the economy. A theoretical and practical guide is
therefore necessary for the third pillar of the economy
which, among other things, creates new jobs.
Finally:
Bearing in mind the “technological” unemployment in a
period of transition towards the 4th industrial revolution
which shrinks small and medium enterprises and reduces
employment in the private sector.
Bearing in mind that state interventionism cannot fully
cover the needs with allowances and subsidies for the
supply of work.
Having on the other hand examples of writing at a pan-
European level that social entrepreneurship progressively
and steadily develops employment by dealing with
economic exclusion, we propose:
a business program of social entrepreneurship and
employment.
Until now, the relevant response from the Ministry of Labor
and the Regions has been pretentious.
It recognized the directives of the European Social Fund to
strengthen the social economy in Greece, but directed the
relevant resources exclusively to other sectors of the public
and private sector.
Thus, in the last 10 years, social enterprises have been
virtually excluded from community resources and have
been poorly financed.
This vicious circle will only be broken if civil society
organizations are mobilized, which are also the subject of
the social economy and social entrepreneurship.
Then it is certain that similar policies will be adopted by Governments and Local Governments
