Embedding circularity: Theorizing the social economy, its potential, and its challenges

The dominant conception of the circular economy presents it as a politically neutral, technology-driven process of efficiency improvements and green market expansion. However, it does not consider the social embedding of circularity and thereby risks undermining the transition out of de facto linear economies. This paper begins with a critique of the dominant conception of the circular economy and its shortcomings in relation to allocation, justice, and sustainable scale. Second, the paper contributes toward theorizing an alternative, social economy-based embedding of circularity. We theorize how the social economy embeds circularity through: (1) business models reflecting the needs and interests of their stakeholders and, with them, a primacy of social value creation; (2) production and consumption based on active citizen involvement in deliberation and decision-making; (3) an approach to technology that seeks to empower technology users; and (4) the promotion of regional economies and circular value chains based on a sense of place. Our theory propositions are inspired by prior empirical research at the intersection of the circular economy and the social economy. We discuss the potential and the challenges of a social economy embedding of circularity against the background of vested interests and incumbents profiting from low circularity and unsustainability.