Social Provisioning Process

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The ‘social provisioning process’ (SPP) framework promotes an understanding of economics that studies the economy primarily as a socially embedded system of the provision of goods and services with the goal to meet human needs. This perception of the economy goes beyond monetary market exchanges and takes non-monetary and informal provisioning, such as care work, into account. It is thus useful for understanding the role of community-led initiatives in the economy.

Origins and History

The SPP framework builds on an understanding of economics that is shared by most heterodox economists and has been expressed by Gruchy: “Economics is the study of the on-going economic process that provides the flow of goods and services required by society to meet the needs of those who participate in its activities. [Economics is] the science of social provisioning”[1].

SPP developed as a critique of mainstream economics (i.e. neoclassical economics), which defines economics as the study of the allocation of scarce resources among rational and selfish individuals with unlimited preferences. The study of the economy becomes thus a mathematical maximisation exercise with the individual as the prime unit of analysis. Alternative approaches to economics, often referred to as heterodox economics, have therefore emerged and argue for a consideration of the complexity, dynamics and social and biophysical embeddedness of the economy. The SPP approach is an attempt provide a common ontological, epistemological and methodological ground for such alternative approaches[2].

Definition and Main Concepts

Social provisioning processes can be understood as “a vast range of activities, including both market and non-market, paid and unpaid activities, undertaken by human agents and going-concern organizations for the sake of their survival and reproduction”[3]. According to the SPP framework, economics should thus study the economy as a system of production, distribution and consumption of goods and services.

In the SPP framework, well-being is regarded as the central goal and measure of success of an economy[4]. At the same time, it is acknowledged that economic activities are embedded in the biophysical reality and thus constrained by planetary boundaries. In its analysis of the economy, a SPP approach takes into account that decision-making and human behavior in the economy is influenced by structural forces, such as power structures, rules, social classes, values, and institutions. For example, gender relationships influence the composition of the labour market. In other words, the way in which goods and services are produced, distributed and consumed depends on the ‘material basis’ (e.g. technology or resources), ‘social basis’ (e.g. class or gender relationships), and ‘cultural basis’ (e.g. dominant values) of an economy[5].

A SPP approach allows for value judgements and normative statements in economics. Assessing whether and to which degree an economy works well needs to go beyond monetary market exchanges and measures such as GDP growth. Social provisioning aimed at meeting human needs also includes non-market and informal provisioning, for instance care work, the provision of recreational spaces such as playgrounds, and the fostering of social cohesion.

Social Provisioning Processes, the Local Economy and Community-Led Initiatives

For grasping the full potential, as well as the challenges, of local economic provisioning systems and community-led initiatives contributing to such provisioning, a mainstream economic framework is insufficient. A SPP perspective accounts for the manifold side-benefits that community-led local provisioning systems can offer, for example increased social cohesion, greater social control over production decisions, and reduced environmental impacts due to shorter transport distances.

A SPP perspective further enables a better understanding of how local community-led provisioning systems work and in what sense they differ from how global market economies work. Local economies can be understood as organized in terms of a variety of provisioning systems such as food, energy or housing that all provide satisfiers for diverse human needs[6]. Due to differences in the material, social and cultural basis of a local economy compared to the global market economy, production, distribution and consumption decisions differ. For example, “in the society where absentee ownership and its vested interests are dominant, the provisioning of goods is coordinated in favor of the vested interests of the capitalist agency. In another society where social cohesion and environmental concern are emphasized over the business principle, the production and distribution of surplus goods are coordinated following a different causal mechanism”[7].

SPP is thus not only a useful theoretical perspective for research in heterodox economics, it is also helpful for practitioners as a framing to communicate the functioning of CLIs and  their potential benefits. It offers a ‘language’ to distinguish the material, social and cultural bases of community-led provisioning from the organization of a globalized market economy. Furthermore, it helps communicating the numerous side benefits of CLIs, such as increased social cohesion and participation, as valuable outcomes beyond conventional economic measures such as cost reduction or efficiency gains.

References

  1. Gruchy, Allan G. (1987): The Reconstruction of Economics. An Analysis of the Fundamentals of Institutional Economics. New York: Greenwood Press. P. 21.
  2. Jo, Tae-Hee; Todorova, Zdravka (2017): Social Provisioning Process. A Heterodox view of the Economy. In Tae-Hee Jo, Lynne Chester, Carlo D'Ippoliti (Eds.): The Routledge Handbook of Heterodox Economics. Theorizing, Analyzing, and Transforming Capitalism. London: Routledge, pp. 29–40.
  3. Jo, Tae-Hee; Todorova, Zdravka (2017): Social Provisioning Process. A Heterodox view of the Economy. In Tae-Hee Jo, Lynne Chester, Carlo D'Ippoliti (Eds.): The Routledge Handbook of Heterodox Economics. Theorizing, Analyzing, and Transforming Capitalism. London: Routledge, pp. 29–40. P. 35.
  4. Power, Marilyn (2004): Social Provisioning as a Starting Point for Feminist Economics. In Feminist Economics 10 (3), pp. 3–19.
  5. Jo, Tae-Hee (2011): Social Provisioning Process and Socio-Economic Modeling. In American Journal of Economics and Sociology 70 (5), pp. 1094–1116.
  6. Fanning, Andrew L.; O'Neill, Daniel W.; Büchs, Milena (2020): Provisioning Systems for a Good Life within Planetary Boundaries. In Global Environmental Change 64.
  7. Jo, Tae-Hee (2011): Social Provisioning Process and Socio-Economic Modeling. In American Journal of Economics and Sociology 70 (5), pp. 1094–1116. P. 1101.