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Chapter 4 – Globalization, Entrepreneurial Cities, and the Social Economyi - page 9 / 12





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social economy also provides a basis for resisting the increasing hegemony of capital over society as a whole. For it demonstrates the possibility of organizing economic and social life in terms that challenge the taken-for-grantedness of the 'common-sense' of the capital relation. This threefold potential will not, of course, be realized without a struggle. Nor will struggle alone be sufficient to establish it. For, as with any other form of economic organization, there are complex interpersonal, organizational, institutional, and systemic preconditions necessary to its consolidation. In the case of the social economy these concern the scope for the reabsorption of the market and the state into an expanded civil societyxii. But the reabsorption of the social economy by the state (through dependence on state finance and through co-optation) and/or the logic of the market (due to integration into capitalist commodity chains and dependence on normal loans, etc.) is more likely than vice versa.

This point can be developed by considering the nature of Atlantic Fordism. In this accumulation regime, it was the 'mixed economy' that provided the centre of gravity for economic and political regulation. To the extent that markets failed to deliver the expected values of economic growth, full employment, low inflation, and a sustainable trade balance, the national state was called on to compensate as well as to generalize prosperity to all its citizens. In this context, as Carpi (1997) notes, there was little room for the social economy. On the one hand, Fordist growth based on a capital-labour compromise permitted full employment and the spread of mass consumption; and the welfare state assumed responsibility for coping with the economic and social risks (e.g., unemployment, poverty, sickness, inadequate housing) which had earlier stimulated self-help through the expansion of the social economy. And, on the other hand, the importance of economies of scale in the dominant Fordist production paradigm encouraged surviving firms in the social economy to move towards larger scale, more centralized, and hierarchical organizational forms (Carpi 1997: 243-4). The subsequent crisis of the KWNS led to the rediscovery of state failure and, among neo-liberals, to a powerful call for a return to the market mechanism. Even in the neo-liberal camp, however, there is growing recognition of the limits of the market. This is reflected in the search for new forms of public-private partnership and even in grudging admissions that there is still an important role for a 're-invented' state. More generally, there is increasing interest on all sides in new forms of 'governance' that depend neither on the anarchy of the market nor the top-down control of the state. It is in this context that the social economy has been rediscovered.

The social economy is particularly relevant to the current period of after-Fordism -- especially as the limits of neo-liberalism and the turbulence of unregulated economic globalization become more evident. Carpi has argued for a broad congruence between the dynamic of post-Fordism and the dynamic of a social economy in terms of three trends:

'The first dimension has been the emergence of an alternative movement seeking both new forms of economic organization (democratic) and new market niches (natural and ecological goods, ideologically committed bookshops, etc.). Second was the growing weight of the service sector (tertiarization of the economy), the development of flexible production and the externalization of functions on the part of firms, which has propelled the growth of small businesses and the feasibility of productive organizations in expanding activities without any great investment. Third, a restructuring of state activity and the externalization of public service management, stimulated by the fiscal crisis and conservative assault, with the aim of "rationalizing" the welfare state, has created new opportunities for the social economy to expand. At the same time, the recomposition of state action in social and economic affairs and the technological and economic transformation under way have created a growing number of problems and unsatisfied needs (unemployment, social exclusion, territorial decline) that have had an impact on civil society and local authorities. Consequently, alternatives are looked for outside the capitalist sector and the state' (Carpi 1997: 256).

This approach can be strengthened by considering the limits to strategies of economic development which rely on 'weak competition' as well as those which are oriented to boosting endogenous growth potential through 'strong competition'. For, whilst weak competition relies on essentially zero-sum attempts to secure re-allocation of existing resources at the expense of other localities, even strong competition involves the ever-present risk of any competitive advantages being competed away as the unceasing logic of the market evolves. This is particularly true for those economic spaces (such as inner cities, de-industrializing cities, or cities at the bottom of urban hierarchies) which are unable to engage in strong competition and run the greatest risk of losing out in the zero-sum competition for resources from outside. In such cases a resort to a social economy grounded in local social movements and concerned to empower the poor, deprived, and underprivileged could provide a more effective solution by developing a more self-sufficient economy which is then able to re-insert itself into the wider economy. Thus, in terms of the structural contradictions noted in the preceding section, an expanded

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