Posts Tagged ‘market logic’

The Irony of the Situation

May 28, 2009

You can call it greed or the logical consequences of capitalist logic, but the truth of the matter is highly ironic. Any resolution of the economic situation that both effectively and efficiently prevents future excesses of the kind we’re suffering from now must inevitably extend the free play of market forces further into the domain of social capital. Far from socializing traditional capital, what must be accomplished is much more a kind of capitalization of the stock of social resources, such as trust, commitment, loyalty, and care.

Capitalizing social resources will require that they be represented in a way that makes them fungible. So how do we create a common currency that we can use as a medium of exchange for social capital? By calibrating measures of social capital and equating them to a shared metric, that’s how.

The process is not much different from what happened in Western Europe in the late 18th and early 19th centuries, when two major systems of measurement standards were devised and implemented. Social capital today is measured and exchanged today in units of measurement that vary markedly from time to time, place to place, and person to person, much as weights and measures in Medieval markets varied. Today’s unjust social capital market traders are just as unscrupulous as the Medieval merchants and nobles who took unfair advantage of the metric confusion in the markets of their day, buying with one set of measures and selling with another at their whim, depending on who the customer or taxpayer was.

What we need, of course, are publicly available and high quality expressions of the amounts of social capital possessed at any one time by any individual, organization, firm, or government. Scientifically rigorous methods of calibrating instruments providing precision measures of social capital have been available and in use for decades. Their commercial applications have been restricted to high stakes tests, for the most part, but they are increasingly used in research in health care and the social sciences.

We use the balance scale as a symbol for justice for the simple reason that it clearly represent the values of the Golden Rule. Far from trying to destroy opportunities for personal profit, what we need to do is figure out how to extend the long experience we already have in using the profit motive to build social capital. In actual fact, social capital has always been essential to making money, and there has almost always been some kind of positive social benefits from business profits, though they’re not always easy to find. What we need to do is focus on those benefits, and make them easier to find. So easy, in fact, that any socially responsible way of making money will produce them.