From social economy to solidarity economy - Model change in the development of the local economy

The concept of social economy emerged around the millenium at the intersection of development and employment policies, the market, the public and civil sectors, providing an alternative, third path to capitalist development that is capable of effectively addressing economic and social problems. In Europe the concept of social economy has developed over the last 30 years, invariably changing its focus (e.g. nonprofit enterprise, cooperative, social enterprise) but keeping its economic formations that adhere to the capitalist model. Expectations related to the third path model turned out to be futile. The 'third sector' did not become a real alternative to capitalism, rather it has been integrated into the market model in many ways. Social economy, which emphasized employment and social security guaranteed by the welfare state in the 1990s, has become a model by now emphasizing the self-sustaining role of social enterprises and the individual responsibility of citizens. This performance-based element which focuses on economic sustainability has strengthened over the years, rather than the model aiming at social integration. At the same time, a 'bipolar' transformation can be observed, whereby the market sector in Western countries and the public sector in the majority of the post-socialist countries, especially in Hungary, have flown into the third sector. Over the past two decades, the concept of solidarity economy has gradually replaced social economy first in Latin American countries and later in Europe as well. The framework of solidarity economy, focuses on Polanyi's economic integration schemes and proposes a broadly interpreted model of economic activities, including the market, redistribution and the principle of reciprocity, thus questioning the general validity of the capitalist model of economy. In this framework the development of the local economy is no longer seen as a corrective or complementary element of global economy, rather as a key component of the economic and social ecosystem, strengthened by ecological, equity-based and cultural aspects that are built in local ecosystems but prevail on a global scale. The aim of the study is to analyse the economic, social and political environment of the shift from social economy to solidarity economy entailing changes to the fundamental values of social economy. Our methods draw on academic and political discourses of the past three decades about social economy. The analysis pays special attention to territorial differences in the use of key concepts related to social economy. The discussion of international trends focuses on the European model and the way the development of social / solidarity economy in Hungary adheres to European trends.