“Money is not wealth, we are!”
Social capital broadly refers to the value and integrity of social relationships. It includes things such as friendship, neighbourhood trust, social mobility, community participation, all of which make up the core economy. Whilst there is no commonly agreed upon standard, it is important to measure social capital as it gives a much better indication of social progress than any economic indicators. After all social capital is literally the glue that holds society together and without it there would be no economy, financial capital is therefore the least valuable, enduring and meaningful kind of capital. Unlike other forms of capital which are rival and depleted by use, social capital is anti-rival, it is depleted by non-use.
“In the last 30 years the state and market have destroyed civil society.”
Many of our social problems can be traced back to the fact that the core economy has been damaged by the monetary economy. A growing body research shows that social capital enables many important individual and social goods and that more stratified and less equal societies have poorer outcomes in nearly every social domain. Communities with higher levels of social capital are likely to have higher educational achievement, better performing governmental institutions, faster economic growth, less crime and violence, and happier and healthier residents and lower population growth. Unfortunately, according to research by Pamela Paxton of Ohio State Universe, social capital amongst individuals in the U.S. has approximately halved since 1970. What this generally equates to is that there has been a significant decline in all levels of community, which has to a large degree been caused by growing income inequality, corporate takeover and consumer culture.
Charles Eisenstein writes that “community is nearly impossible in a highly monetized society like our own. That is because community is woven from gifts, which is ultimately why poor people often have stronger communities than rich people. If you are financially independent, then you really don’t depend on your neighbours or indeed on any specific person for anything. You can just pay someone to do it, or pay someone else to do it.”
“Prosperity is relating, not acquiring.”
If gifts are what define community, then it might be because they encourage feelings of generosity and gratitude, which cement bonds of kinship. Studies have shown that what makes people happy is stable human relationships, sharing and cooperation can then been seen as the natural traits of psychologically healthy and morally mature human beings. Scientific results from MRI scans in fact confirm that a healthy human brain is wired for caring, cooperation, and service. When wealth is separate from accumulation but refers to a richness of relationships, each person’s wealth makes everyone wealthier.
“We cannot end the financial crisis without a new monetary system, we cannot create a new monetary system without creating long-term incentives for solving the ecological and energy crises, we cannot create long-term incentives to solve the ecological and energy crises without a low-carbon system of production and trade, we cannot create a low-carbon system of production and trade without a new multilateral system of governance, we cannot create a new multilateralism without a total redefinition of wealth.”
One of the many failures of the current system is the lack of a working and generally accepted measure of real prosperity. GDP is a very poor indicator of social progress as it only represents the total monetary value of economic activity and says nothing of real living conditions. Every car accident, felled forest, oil spill, heart attack and incarceration is counted as growth because they result in greater production and exchange of services. Whereas any acts of gifting and subsistence are invisible to GDP and any act of conservation and internalizing costs actually reduces GDP. GDP isn’t wealth, just as your salary isn’t your net worth. Accumulation isn’t wealth, just as cancer isn’t health. A clear distinction between money and real wealth is essential to any valid resource allocation decision. As GDP growth becomes an unachievable goal, it is especially important that societies re-examine their aims and measures. It stands to reason that economics should only be measured and calibrated in terms of social wellbeing and environmental health. We must abandon the illusory numerical analysis that put numbers ahead of people, capitalism ahead of democracy, and degradation ahead of sustainability.
