Why we need to think about the language and identity of the ‘social’ sector

The proliferation of terms and language used to describe the “not market-driven for-profit capitalism” sector could be weakening the sector’s identity and its impact, writes Dr Andrew Curtis from The Dragonfly Collective.

Not-for-profit sector, for-purpose sector, impact economy, social enterprise sector, social businesses, ethical enterprises, conscious capitalism, social progress sector, difference-makers, changemakers, the social economy – these are all terms used to deliberately position a particular type of organisational, economic and social activity and differentiate it from the broader political-economic context of “market-driven for-profit capitalism”. 

But does this proliferation of terms, words and language for the sector, in order to define itself as not “market-driven for-profit capitalism”, matter? Does it strengthen the sector(s) and provide a clear identity, or does it confuse and disintegrate?  

One clear fact is that when it comes to “market-driven for-profit capitalism” there is no confusion about what it is or isn’t.

Whether it is Friedrich August von Hayek, Milton Friedman, Margaret Thatcher, Tony Abbott or any of the captains of capitalism, the language is clear. Free markets, small government, deregulation, privatisation and individual responsibility sum up the neoliberal ideology – the only responsibility of business is to increase its profits. As Milton Friedman proclaims: “the only responsibility business has is to its shareholders… businessmen that take seriously their responsibilities for providing employment, eliminating discrimination, avoiding pollution… are preaching pure and unadulterated socialism”.

There is no confusion in the language describing the for-profit sector. Therefore it has no difficulty identifying its purpose or intended impact. It has a clear identity.

Identity in its simplest form is widely framed by the two common questions used when we’re asked to describe ourselves – what is your name and what do you do? The reply creates an instant “identity”. Language not only expresses identities but also constructs them, argues David Evans in his work Language and Identity. 

“My name is Phil” and “I am a bus-driver” generates an almost immediate identity for Phil the bus-driver.

Imagine if in response to these two most commonly used questions to frame a person’s identity the answer given was: “My name is Mary, and Francis, and Mia and Zara, and I am a tractor-driver, nurse, sailor, window-cleaner and dentist”. Politeness would usually inhibit the observation that there may be a confusion of identity here.

It is hard to argue against the premise that a broad connection exists between language and identification. Language defines the group that we belong to, our status in the social stratification, and also determines the power we hold in our society. Our social identity is created by our language and also our future possibilities are framed by language. Language plays a major role in determining who we are and what we do.

Recently I was contacted by a person who wanted advice about how to set up a social enterprise as a “for-purpose, for-profit charity”. When I explained that perhaps the ACNC might have some issues with this description, the response was, “Well I’m new to this and I am very confused by the language used to describe what it is I think I want to do”.

This prompts the question: do the multitude of terms used to differentiate the not “market driven for-profit capitalism” sector strengthen the identification of that activity, or do they confuse, disintegrate and weaken its impact? 

One could argue that the proliferation of terms to describe the sector allows for diversity, and each of these descriptions are pieces of a bigger picture.

One might also argue that there is no problem with the terms currently in use.

While we don’t want to argue over semantics (let’s just get on with it and do the job), language and its power of identification shouldn’t be ignored. When language divides and disintegrates, when it creates confusion of identity and purpose it is worth asking the question: what language might identify the not “market driven for-profit capitalism” sector in order to consolidate its identity, both for those embedded within it, and for those who look at it with scepticism?

Let’s consider some of the terms in use. 

Take not for profit. No matter what anyone does under this identity, if they never make a profit (or more politely, a “surplus”) they don’t exist anymore. Perhaps “not-for-shareholders” might be a better but more clumsy identification?

Take for-purpose organisations. Name any for-profit company, charity, social club, farmers’ market or week-end lemonade stand that doesn’t have a purpose?

Take the impact economy. Even McDonalds has an impact – indeed a global impact. 

Take conscious capitalism, championed by John Mackey, the co-CEO of Whole Foods Market, in a book published in 2014 with the sub-title Liberating the Heroic Spirit of Business. Conscious capitalism acknowledges that while free-market capitalism is the most powerful system for social cooperation and human progress, people can aspire to achieve more – like community social responsibility and adding stakeholders to shareholders. The problem is that Pepsi & Co is identified as a company combining “performance with purpose” and an example of conscious capitalism because they are investing in drinks that are healthier for customers. Is that conscious capitalism, or a pivot to meet changing consumer demands in order to continue to maximise profits and shareholder value?

Take social enterprise/business. Now here is arguably a point of difference that clarifies identity. A social enterprise (or social business) in simple terms is a business that trades for a social purpose. Social enterprises are businesses that trade to intentionally tackle social problems, improve communities, provide people access to employment and training, or help the environment. Yet even within this bubble of clarity there are repetitive and ongoing attempts – led mostly by the peak social enterprise body in England – to water down the definition, generating further confusion of identity. The move by Social Traders in Australia to certify social enterprises and Social Enterprise Scotland to be clear on what a social enterprise is not, is to be welcomed both by those in the sector and those outside it. 

Given all this individual language to identify the sector as “not market-driven for-profit capitalism”, is there a collective integrated option that can be applied at the macro level and include all the various descriptions at the micro level? Is there a term that reduces confusion and provides a clear frame for articulating an alternative social-political-economy?

A collective term used widely in Europe, but that appears to be used in a limited way in Australia is the social economy.

The social economy is used by practitioners (and academics) to describe all the activities that collectively put people before profits. It collectively identifies those activities that invest in people, in their capacities and creativity, and empowers them, creating quality jobs and providing training as well as prioritising social objectives. 

As in the free market economy where enterprises are meant to generate a profit, this is also true for the social economy. But the point of differentiation in a social economy is that profit gained goes toward meeting social objectives, not primarily toward generating individual wealth. Wealth is more evenly distributed with direct benefit for the many, not just the few. By prioritising social objectives, the social economy contributes in an innovative way to tackling social, economic and environmental needs in society that have been overlooked or inadequately addressed by the private or public sectors. 

Most importantly the social economy includes all those actors and activities that work for an alternative economic reality to that of free market neoliberal capitalism, including all those activities that could be called “for purpose”, “impact sector” and “ethical enterprises”, along with social enterprises, cooperatives, owner-employed businesses with a social purpose, as well as self-employed women and men who use their entrepreneurial skills to lift themselves and others out of poverty. 

Importantly it is more than a description of a single activity within an economy. It seeks to collectively combine all elements of a social economy from the supply chain through to the end customer into one complete mosaic – a social economy. This is a consumer-led movement where people intentionally embrace across their business models a joined up “movement” from supply to end product. 

Engaging and participating within the social economy means purchasing with a purpose as well as selling for a purpose. A simple example is choosing to purchase from a social enterprise even though that cost might be greater than in the general market. The purchasing provides the economic stimulus to drive the social economy with its social objectives generating greater benefit for more and more people, not just the few.

More importantly the social economy provides an integrated marketplace that combines an alternative socio-economic reality with a joined up social movement and a shared language as well as rich content for all its stakeholders – creating new opportunities for dialogue, negotiation, and ideas that can improve outcomes for the social economy itself.

An integrated use of language with a single collective identity allows a range of actors across the sector to identify as one, in order to maximise the potential of their activities generating a significant impact with a purpose – a viable, collective, alternative marketplace to neoliberal capitalism and one that achieves mission and redistributes profits that benefit people and planet.

Identity is realising who we are at a personal level and also at a community level. To make such identification, language has been a salient feature of group membership and social identity. Rather than confusing those of us embedded within the “social economy”, and even as a mechanism to generate collaboration rather than silos that compete, integrating identity will make the sector stronger. It will reduce confusion for those whose scepticism is facilitated by a disintegrated use of language. Clarity will also provide a powerful identity to describe a viable alternative to market-driven capitalism.