SOCIETY, THE FOUNDATION OF THE ECONOMY: A NEW PARADIGM

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SOCIETY, THE FOUNDATION OF THE ECONOMY: A NEW PARADIGM

Journal Title: European Journal of Biomedical and Pharmaceutical Sciences - Year 2019, Vol 6, Issue 1

Abstract

History in long times shows always that the social capital is foundation of economic capital and not the other way around, the aim of which was to provide empirical evidence in support of the following propositions. • Growth of social capital in society, in whatever form this takes, occurs when people coexist in harmony and, in economic terms, when there is a low level of inequality as regards distribution of income ‒ the necessary conditions for the growth of economic capital (namely, of the economy). • Impoverishment of a society’s social capital (the result of a reduced focus on sociality and an increase in inequalities among its members) leads to an impoverishment of overall economic capital. • While an increase in an individual’s (or public/private organization’s) economic capital is indeed possible in competitive situations ruled by the market system, this is to the detriment of the economic capital of other individuals. But it leads to an increase in inequalities, pursuit of individual wellbeing and permanent antagonism. Conversely, cooperative competition promotes an increase in a society or territory’s social capital and so can reduce antagonism and inequalities because of a greater focus on the common good. • When there is a prevalence of competition focused on maximizing individual economic capital, over time this leads to the erosion of collective economic capital. A durable reconstruction of the latter can only achieved by first reconstructing social capital. • Searching exclusively to maximize results at individual level doesn’t coincide with maximizing results for either the social or the economic system. In fact, it puts them at loggerheads. The strongest will always prevail when liberalism is unrestrained by moral order. Thucydides already recognized this in his History of the Peloponnesian War about 2,400 years ago: ‘We don’t establish this law [of the strongest] and neither do we distinguish ourselves in wanting to apply it – it existed before and always will, inasmuch as nature has established that the strongest men shall exercise power’. The end result of all this fuels the process of increasing the concentration of wealth and exacerbates inequalities and social issues that then lead to the collapse of societies. • Lastly, a clarification of what social capital is in technical terms: it is an intangible, qualitative value that is only partly measurable. In fact, often the most important aspects of it cannot be measured at all. Whereas economic capital is tangible, quantitative and measurable. The former is created in relational exchanges between people; the latter is the result of monetary and economic exchanges in markets. This is why methods for measuring them are different ‒ in the first case they are limited, in the second they tend to be exhaustive. Stated in accounting terms both comprise debit and credit entries and the balance can be either positive or negative. In an economy, a negative balance means an economic and/or financial loss, whereas in society such a loss equates to a breakdown of relationships and the fragmentation of society itself.

Authors and Affiliations

Dr. Fabrizio Pezzani

Keywords

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EP ID EP670121
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