“Where Seoul leads, the country will follow”

The Dawning of a Social Economy

A social economy is beginning to take shape in South Korea. Government-certified social enterprises alone now number more than six hundred. Two thousand twelve is the UN International Year of Cooperatives, and going into business with one will be easier than ever this December after the Framework Act on Cooperatives goes into effect. Meanwhile, village enterprises organized independently by local communities continue drawing more and more attention.

Mayor Park Awakens New Hope for Seoul

Seoul Mayor Park Won-soon is one of the people who planted the seeds for this kind of social economy in South Korea. Creator of the Beautiful Store and Hope Institute, he was first to import the concepts of the recycled goods store, fair trade, and the village enterprise into the country. His election as mayor assigned him the role of clearing a field for this economy to grow. How is he approaching the social economy? We met him on February 21 to hear his thoughts.

We’re hearing a lot of talk these days about alternative economic models for addressing the problems facing the world’s economies.

“There’s been a lot of talk about capitalism in crisis, as well as various attempts to resolve it. We’re also seeing concepts like ‘philanthropic capitalism’ and ‘creative capitalism.’ The social economy is an important experiment in this area. In the United Kingdom, social enterprises are coming to represent the mainstream. The cooperatives they’ve traditionally had there are starting to look now like models of stability in the wake of the financial crisis, and are receiving renewed attention. Corporate social responsibility is being developed into international norms like the ISO 26000 guidelines. I wouldn’t say it all adds up perfectly in logical terms, but it is all part of a larger current of change. In Seoul, we’re working to create village communities where the social economy can take root and flower.”

What would people’s lives be like with such an economy in Seoul?

 “Seoul’s villages have traditionally served as bedroom communities. Also, the population that remains tethered to one place has been quite small. Relationships aren’t forming. Lives aren’t being shared. But when people all take part together in production, consumption, and culture [as in Seoul’s Seongmi Mountain village], communities naturally take shape. People can then use them as a foundation for working together to create village enterprises and cooperatives. That’s the social economy.”

Are you saying village communities can take shape even in a big city like Seoul?

 “In Seoul’s Sangdo No. 3 neighborhood, there’s a village called Seongdaegol. Around twenty families there got together to build and run a children’s library, and a community was formed. It’s gone even farther than that—people are building alternative schools and joining together on energy conservation campaigns to reduce our dependence on nuclear power. If you go to Seongmi Mountain village, you’ll find people who came together over shared child care and went on to build an alternative schools and collective theater, and even a consumer cooperative, where they’re participating together in production, consumption, and cultural activities.

 “Right now, South Korea’s communities are in a state of collapse—farming villages and cities alike. People have left the farming villages, and everyone’s lonely in the cities. But you’ll find this craving for community in people. Nobody told them to make places like Seongdaegol or Seongmi Mountain. Residents did it themselves.”

What will the central or local government’s role be in the social economy?

“Now that the social economy phenomenon is really starting to spread in Korea, a key factor will be how the public sector helps to promote it. It’s actually problematic for the government to have too big a role in the process. When you’re giving too much direct support, it starts to become something of a hothouse flower. We need to go about creating the kind of infrastructure that allows an independent social entrepreneur spirit to emerge. Since we have this thirst among people, if we can create even a small system for distributing resources, and if it inspires in people the hope and expectation of possibility, then I think it will spread very quickly.”

Government Resources, Private Ideas

What kind of relationship should there be between citizens, the central government, and the local government?

 “The crucial thing is cooperation between the government and private sector. Public institutions have the resources, while the private sector has the creative ideas. You need both of these to work together for something significant to emerge. For instance, the city of Seoul doesn’t have to monopolize public assets. It could give government assets and project commissions to private groups or village enterprises that embody the public spirit, so that we end up having a kind of competition for the public good. There are a lot of projects along these lines in the United Kingdom.”

The city of Seoul is currently planning to set up a social economy committee to provide assistance. Wouldn’t you say the social economies that emerge from village communities are too small to solve the problems of a huge city like Seoul? Can they reach a large enough scale to be called a “strategy for beating the crisis of capitalism”?

 “The beginnings certainly have been small, but I expect the ripple effect to grow. It’s been just ten years since I began my social enterprise with the Beautiful Store. And it’s only been around three years that people have really been talking about ‘social enterprises.’ But even the interest it’s drawing now has been very fast in coming. I believe Korea is a dynamic place. The social economy idea will spread rapidly. In particular, I am confident the country as a whole will change when Seoul takes the lead in changing.

“There seems to be an agreement among the people of the world that capitalism is facing a fundamental crisis. But different people are suggesting different alternatives. Some say the role of the state should be increased to control the market. Some say capitalism can be saved through straightening out the market order with strict enforcement of the rules that have already been developed. The message is, in a sense, that it is possible to break through the crisis with the functions of the state and the market, the two main actors in the global economy to date.

“The social economy represents a different approach entirely. Its aim is a value system that operates within the market economy, but is diametrically opposed to the capitalist economic paradigm where the only values are competition and profit maximization. I believe that we should be looking to increase the public presence, but that the state should be cooperating with independently formed communities rather than monopolizing that role. The driving forces behind the social economy are things like altruism, reciprocity, collaboration, social goals, reputation, and dedication—rather than the greed that has been the driving force with capitalism. Perhaps these economies can provide us with a fire brigade to smother the flames of global economic crisis.”