Department of international relations of Secours Catholique (France)

 

Workshops for Christian and Jewish social organizations

Workshops for social service organizations: «Fundraising and finding partners»

June,14

 

The State, Markets, and the “Third Sector”

We live in a time of enthusiasm for free markets. This has been the case for more than fifteen years. The breakdown of the Soviet system has contributed to this. The idea that there is no viable alternative to a free market economy is slowly being imposed upon all. It is presented as evident and “natural.” And this continues to go on despite the abuses of what many call neo-liberalism.

 

The market economy is spreading because of the considerable success of this type of organization – for instance, higher quality of life in many societies. In addition, the market has a positive image. This leads some to think that the market can do everything. We are at the point where the slogan “free the market from every type of constraint” has become a theme in politics. Allowing markets to function without hindrance has become a goal in and of itself. No one takes the trouble to think about the purposes which the market serves. It seems that its excellence as a means somehow removes the need to think about ends!

 

We need not enter here into a debate about the virtues and limitations of the market. But, examining the worldwide situation over the last twenty years, a few conclusions are easily drawn. First, it must be noted that, while market economies created impressive wealth, that wealth is very unequally distributed. While the market creates employment, it creates also precariousness, insecurity, and often exclusion. The market ignores pressing individual and collective needs if they do not appear lucrative. It is not certain that the market could take into account long-term needs, such as sustainable development, or protect us from global risks such as climate change.

 

In order to work properly, the market requires a favorable social and institutional climate. Certain conditions are necessary for its functioning – for instance, institutions that regulate this market, and realities outside the market itself, such as teaching the population and a stable institutional environment. This is the lesson we can draw from looking at many countries in which the state is weak, and the market cannot function because these basic conditions are not fulfilled. The naïve praise of markets often reflects nothing but blindness to the conditions that make possible its effective and healthy functioning.

 

We must resist such blind praise and remind ourselves of several simple truths. The market, without a doubt, provides excellent incentive to production; it can improve the conditions of life of most of our contemporaries. But there are things that escape the market; the market on its own is not enough. In order for it to work, other entities are essential.

 

Several politicians have expressed this, rather strongly, by the formula: “’yes’ to a market economy, ‘no’ to a market society.” We must protect, preserve, and develop the mechanisms that escape the market, because it is precisely those mechanisms, domains, and procedures that create society. Society – that is to say, connections, exchange, solidarities, etc., things that are not based on the exchange of money but on an exchange of relationships, on creating relationships. The market does not create society; rather, it assumes that a society already exists, one that has a common heritage of references, ideas, and ideals, a base of shared values… Without this common and implicit base, the mechanisms of the market will not work. This heritage of values, this shared point of reference – this is what creates a common base of mutual trust that allows human relations to go on and market mechanisms to become established. It is necessary to visit failing, chaotic states (such as Somalia) in order to understand this first-hand. It isn’t the market that creates society, but the opposite: society, however simple and archaic, creates the conditions in which a market is possible.

 

Along with the market there must exist a state, as highly competent as possible, which must be transparent and democratic in order to be legitimate. There must also exist independent civil society. In a wealthy society, such as France, an important sector of civil society is represented by associations, cooperatives, and mutual assistance societies. We may be far from a situation where the market is the only means of imposing order on our hyper-modern society. But civil society is often underestimated, too often considered as a nice but marginal relic of the past. Reality forces us to say that this is not at all true.

 

 

Associations and the limits of the market

 

 

It is necessary to underscore the dynamism of civil society, in particular of non-profit associations, in France – France, which is said to have bought into capitalism.

 

For some services, market theories do not apply at all – such as human services, child care, etc. Since the laws of the market do not apply in all cases, associations can insert themselves into the free spaces and provide services in accordance with the law and the economic constraints of life as usual. It is not surprising that, in American jargon, associations are called « non-profit organizations.» This emphasizes that, by their nature, associations are outside the market; or, to be more precise, associations occupy a place that is inherently critical of the market. They complement the market and correct its excesses.

 

In looking at the European Union, we can see that associations are very active in some sectors, which the market cannot or does not want to consider. The protection of persons living in poverty, the provision of many social and cultural goods and services, naturally take place outside the competitive market.

 

 

Associations and failures of the state

 

 

Associations provide so many services since the state has become incapable of doing so, even if that was originally its task. The state sometimes lacks initiative and creativity to create new needed services. Or, the state may lack finances, and fail to provide that which it ought to provide. Schools for the handicapped, care of elderly persons and small children, etc. – on these and many other fronts, the state does not provide for existing needs, and that is why organized civil society picks up the slack

 

One could argue with this way of reasoning, pointing out that the citizens of a society are not only consumers of goods and services in search of the lowest price, as classical economic theory describes them. Many people assign value to the absence of a lucrative goal, and choose services offered by the non-profit sector for reasons that are not economic, but rather reflect their preferences with regard to society.

The fact that something is not for profit may also be considered by some as a guarantee of its quality, in particular with respect to the quality of human relations. Generally speaking, the “third sector,” or non-profit sector, may attract people for a number of reasons and motivations.

 

When it comes to human services (for instance, services for the elderly), many people see as very important the quality of personal relations, rather than simply of the service provided. They consider it better to turn to a non-profit structure, which they view a priori as valuing human relations more than a commercial structure would.

 

Let us take a step back in order to have a broader view of life in the non-profit sector. From that perspective, let us examine the role of free giving and the giving of gifts in our society, which is often viewed as being guided by nothing other than love of profit.

 

 

The role of free giving and the giving of gifts

 

Modern economy tends to reject every social constraint in the name of competition. It produces impressive wealth, but distributes it unequally. It produces jobs, but also creates exclusion. It ignores non-commercial individual and collective needs.

 

Thus we must draw the conclusion: if goods and services should be produced not only for interest and profit, to be sold, then they must be given for free. Or at least they must contain an aspect of free giving. How can an economy be social and interdependent if those who live in it are not inspired, in one way or another, by the spirit of gift-giving?

 

Human relations are created by gift-giving, and confidence is built up by the renewing of gifts. Human relations are relations of giving, and not of providing services. Most of our contemporaries consider, and reasonably so, that there is no alternative to a market economy. But this economy can, and must, be limited; it must be instituted in a different way; it must be regulated and subordinated to the demands of free giving and of democratization.

 

There must be something in society to remind us that the market economy, the exchange and equilibrium between supply and demand, are insufficient to create a social link, to create a society. On the contrary, it is relations based on free giving that create society. The market does not create society, but presupposes it.

 

This is a place that Christians can and must occupy in society: they must remind all that free giving and the giving of gifts are primary to the market. The common good comes first, far ahead of the constraints of a market that concerns only some goods, and not all. For instance, the classical market excludes global public goods such as peace, suppression of epidemics, quality of the environment, and goods from which profit is acquired only in the very long term. On all these fronts and on several others, those who defend the place of free giving in society must apply their spirit of innovation.