A Capital Idea Part 1

I’d like to introduce Robert Warden who will be posting here from time to time on topics of economics, politics,  and whatever else ails him. I am very glad to have his contributions.

Robert is also known as “Natural Lefty,” “Mucky T. Mudskipper,” and a few other aliases. He has a Ph.D. in Psychology from the University of California, Riverside and teaches Psychology part-time at Moreno Valley College. His essays tend to focus on the application of psychology to a wide variety of topics such as politics, economics, philosophy, spirituality and all of science.  His  posts are mostly in the form of progressive series of short essays built around common themes.

Robert Warden also blogs at BoxFreeBlog.com, ThomHartmann.com, and the Thom Hartmann Bloggers Group on Facebook.

— PR

A Capital Idea Part 1

by Robert Warden, April 21 2010

It has occurred to me that the idea of financial capital has been used in the wrong way all along. This feeling has been reinforced by conversations with a number of my like-minded friends. According to my Random House Webster’s Dictionary, relevant definitions of capital include: “The wealth, as in money or property, owned or used in business,” and “pertaining to financial capital.”  The economic system based upon capital is known as capitalism, which my dictionary defines as “An economic system in which the means of production and distribution are privately owned.” I critiqued the use of capitalism as a basis for an economy in “The Immorality of Capitalism”   a few months ago. My moral critique of capitalism has its basis in academic psychology, which shows that unrestrained capitalism compels people to act at the lowest levels of morality. Basically, the pursuit of profit trumps all other concerns in capitalism, at least if it is not restrained in some way. Thus “might makes right” according to an unfettered capitalistic system, and whatever increases profits is morally justified. To use yet another platitude in the most appropriate possible manner, “The ends justifies the means.” Such a Capitalism encourages businesspeople to “rip off” their customers if they can get away with it.  As a result, business people typically operate on the lowest of the six stages of moral development described by Lawrence Kohlberg, a stage in which any outcome favorable to oneself is considered morally good, which normally applies only to young children, yet, shows a resurgence among wealthy businesspeople in adulthood due to the perverted economic system we suffer under, a system usually referred to simply as capitalism.

As a result, the question that has occurred to me is, how can we build a society with a more morally enlightened economic system? Not only would a morally enlightened economic system be far more fair, but it would also be more productive, because people would treat each other better within this system (which is the basis of morality in the first place), and be better rewarded for their efforts. Even more, since financial capitalism is basically an undemocratic system, we could build a more truly democratic society by changing our economic system. A related question is, what would be the basis for such an economic system? In order to build a more enlightened society, with a morally enlightened economic system, we must rethink its basis. An answer which I can only take partial credit for, although it occurred to me independently, is that there are different types of capital, not only financial capital. After having this idea, I discovered that some other authors have already written to some extent about certain types of capital other than financial (but not nearly as extensively as I plan to).

What follows is a non-exhaustive list of types of capital:

1. Financial capital (the current basis of our economic system and probably the only one that has really been actually fully utilized)

2. Resource capital (the valuing of our shared resources, in which a healthy environment is a wealthier one, as the basis of wealth)

3. Human capital (the valuing of our talents and skills — which innately belong to the individual and cannot be owned by others — as our actual wealth)

4. Intellectual capital (the valuing of ideas as the key to progress and as the basis for true wealth)

5. Scientific capital (the valuing of scientific knowledge and its application as the basis of true understanding and wealth)

6. Moral capital (the valuing of moral character and the nurturing of moral character as the basis for a happy, just and truly wealthy society)

7. Spiritual capital (the valuing of spiritual well-being and the quest for spiritual enlightenment as the basis of true wealth)

8. Well-being capital (the valuing of psychological happiness and well-being as the truest indicator of the health and wealth of a society)

9. Work capital (the valuing of actual work as the true basis of an economy, a bottom up approach which precludes people sitting around collecting money do to their exalted position in society)

10. Human health capital (the valuing of our health as prerequisite to any form of true happiness or wealth)

I thought of all 10 of these possibilities in about 10 minutes; there may be more to come. In any case, it is my plan to explore the possibilities for making these the basis for an economy, or at least, incorporating them into our economic system to make a more enlightened, balanced, and improved system. It is important to keep in mind that these types of capital are not mutually exclusive. The best possible economic system may well involve some combination of all of these. But at the very least, the time is long past due that we begin to recognize the reality and importance of these various sorts of wealth. It is also important to realize that some of these types of capital may already have a functional role in our economy. However, their roles need to be expanded and explicitly acknowledged. It is not just about money, which is essentially a human-constructed abstraction of the concept of value, whose acceptance as the basis of wealth means:

  • Accepting all the inequities of making inappropriate comparisons of value
  • accepting all of the human fallibility built into our monetary system
  • accepting a nondemocratic, autocratic system which has as its goal the creation of monopolies while hypocritically claiming to endorse competition
  • accepting that human beings have dominion over all life and all resources on earth, justifying the abuse of other lifeforms and our environment.

A truly healthy and sustainable economy means recognizing and appreciating the true bases of our wealth, and using a scientific approach to create a more enlightened, happy, compassionate, fair and environmentally friendly society.

Robert Warden

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