Social Capitalism
Introduction which you can skip if you want
I get into debates about politics quite often. For the most part there are two groups that are eager to debate: first, the free marketeers which include anarcho-capitalists and libertarians; second, the collectivists which include socialists and communists. I don't disagree with everything each side has to say, but I disagree with most of it, which is frustrating. If either group were to gain power, I would be the immediate target for re-education or concentration camps. They would insist that they want no such thing, but I think these extreme positions can never result in a free society. I've always been arguing, criticising and defending my views in isolated conversations, and I've become tired of repeating myself. In fairness to my interlocutors they were perhaps unfairly left without a named ideology of mine that they could scrutinise.
So here it is.
The problems with capitalism and socialism as political ideology
There is an important distinction between an economic system and a political ideology. Capitalism and socialism as economic systems both have some truth to them and useful innovations. It would be foolish to throw all that wisdom out.
The error is treating them as political ideologies. Political ideology should be about abstract societal value, not about resources. Economies are about resources. Taking socialism and capitalism as political ideology is a category error. Changing how resources are managed does not fundamentally change anything politically. After the fall of the Tsars in Russia, the bolsheviks just did another flavour of the same thing with a different economic system. China became capitalist without becoming a democracy. That's because capitalism is about economic systems, not political ideology.
This category error is based on a fundamental misunderstanding of how societies function. Changing how resources are distributed does not change the internal beliefs of the polity. If people believe that there should be a supreme ruler who has massive amounts of wealth, that will happen regardless of the economic system. Economic systems are tools, not political ideology.
The answer to this should be obvious. We should focus on political ideology, and there are those. Liberalism is a political ideology. It has an explanatory framework for why there shouldn't be a king and why we should have fundamental freedoms and human rights.
Why not liberalism?
What I will propose is liberalism, but a next phase of it. I didn't invent it, there has been plenty of good work on it and there are real countries where social capitalism already exist to varying degrees. What liberalism lacks is a way to bring its moral goals into being. Liberal democracies can fall prey to democratic backsliding and despotism.
Modern liberalism is great, but it doesn't bring what I think is the central principle of future liberalism to its center. Instead it is a disjointed web of different concepts. Freedom of assembly, freedom of speech and democracy all have separate and difficult defenses and seem disconnected from each other in a fundamental way. A liberal society consists of complex checklists.
Do you have freedom of information?
Do you have free and fair elections?
Is there freedom of assembly?
Is there an independent judiciary?
Is there equal opportunity?
Do citizens have privacy?
Are there independent institutions that effectively check each others power?
The list goes on and on. Liberalism can easily start to collapse if any of the many things it requires are compromised. Wannabe despots only have to target one. They then systematically attack the others until their power is unchecked.
Finally
Social capitalism is my formulation of the political ideology we need. I hope to show that it's much simpler than contemporary liberalism, even though it is definitely liberalism. It also doesn't consider economic systems. What is social capital?
Social capital is a concept used in sociology and economics to define networks of relationships which are productive towards advancing the goals of individuals and groups.[1][2] It involves the effective functioning of social groups through interpersonal relationships, a shared sense of identity, a shared understanding, shared norms, shared values, trust, cooperation, and reciprocity. - Wikipidia
Social capitalism sees its primary goal as the accumulation and growth of social capital. From this many liberal principles flow naturally and despotism is impaled on basic principles.
All polities already have measures of social capital. You can evaluate for yourself how much social capital your society has by looking at some very simple, observable facts.
If you drop your wallet, does someone who sees it take it for themselves or do they make an effort to give it back? How much effort did they go through before they decided they could keep it? Was it even a possibility for them to keep it?
How long are the contracts in your society? Are there endless conditions that have to be met, endless clawbacks in case one party violates the contract? Do contracts often leave one party at a disadvantage. As an example, was there a loophole in your employment contract that made it impossible for you to find another job, maybe due to things like non compete clauses?
If you have a flat tire, do people stop to help or do they just drive by?
If someone is suffering, do people step in to help or do they ignore that person?
If you answered that contracts are a nightmare, you can forget about seeing your wallet again and someone can have a heart attack and people will just walk on, you live in a low social capital society.
Low Social Capital societies
In a low social capital society, people don't trust each other. Everything is based on opportunistic mutual exploitation. The reason people don't engage in pro social behaviour is not because they are evil, but because doing so would mean they would just be exploited and left destitute. The person who took that wallet for themselves were thinking of themselves and their family. They feel that if the tables were turned, you would have taken their wallet.
At a macro-political level, this becomes corruption. Everyone is in it for themselves so I will enrich myself and my family. Besides, the people nearest to me are more trustworthy and worthy of advantage than strangers.
In a low social capital society, people vote for their own benefit. If they are a pensioner, they vote for the party that will increase pensioner benefits, regardless of whether that means the budget for education is lowered. If they are property owners, they vote for the party who will lower property tax. If they are poor, they vote for sticking it to the rich and redistributing wealth. If someone else is worse off because I am better off, it is okay and rational to make choices based on that in a society with low social capital.
The principle of operation in a low social capital society is short term survival whatever it takes. Becoming a gangster, a thief, a fraudster, a corrupt politician are all good in the short term for the individuals making those choices. The result of this is a self reinforcing cycle. The pensioner who voted for their own benefit now lives in a society where education levels are dropping. This reduces the opportunities for poor communities, who then fall victim to gangs of youths that have no prospects. Meanwhile, the politicians who are supposed to fix it just steal the money earmarked for doing the fixing, which further marginalises those in need, further exacerbating poverty and crime.
These societies are extremely costly to maintain. New laws need to be introduced constantly to prevent the latest exploitation that was invented for short term gain at the expense of others. Contracts are insanely complex because they need to cover all the horrible things that happen all the time. This means legal and bureaucratic costs increase immensely. You need high walls and electric fences around anything valuable. Armed security need to patrol constantly. Corruption is the worst cost. Billions go lost, stolen from the spoons of the mouths of starving babies.
I know this society well, because I live in South Africa. If you don't put an electric fence on your wall, someone will jump over and steal your lawnmower, or much, much worse. Thieves in South Africa will steal the copper cables out of schools. They steal train tracks! We have a water mafia!
High social capital societies
In a high social capital society, people think in the long term and they consider society as a whole in a very specific sense: If my compatriots are better off, so am I. This changes the behaviour calculus from a zero sum every person for themselves mindset to a pro-social one for all and all for one mindset.
Consequently, people don't have to constantly watch their backs. Law and contracts exist but the common understanding of the spirit of the law makes it much simpler.
In a high social capital society you can leave your car running while you walk into a shop to buy something. The worst thing you can expect is someone asking you whether you know your car is still running.
In a high social capital society, people vote for the interests of the whole of society. Seniors care about children, property owners care about the fate of the poor, the poor care about macro economic conditions of the middle class, which they see as their next step.
High social capital societies are cheaper to maintain. You don't need walls and alarm systems, you don't need a Byzantine system of contracts and laws because of opportunistic exploitations, you don't need as many policemen, lawyers or prisons.
Two anecdotes
I want to drive the point home, and I think this stark contrast from my own life applies.
When I was a student, I went to the student cafeteria to eat something. I forgot my backpack there. I realised this a few minutes after leaving. I rushed back and looked for it. It was gone. Stolen.
Later in my life, I was in Europe, and being as forgetful as I am, I forgot my backpack in a park for no less than an hour. When I remembered I panicked and my heart sank. When I went back to where it was, it was still there.
So what?
If you are a socialist or a freemarketeer, you might be frothing at the mouth and screaming and your screen: WE ALL KNOW THIS, BUT WE NEED TO CHANGE THE ECONOMIC SYSTEM THEN SOCIAL CAPITAL WILL IMPROVE.
Changing economic systems doesn't do that. There is no good evidence that they do. There is ample evidence to the contrary. Letting capitalism loose with shock therapy in Russia after the fall of the USSR just created a gangster capitalism state.
Isn't it obvious?
Some other readers might think: this is obvious. We all know we should increase social capital. Nothing new here. So here is the novel part:
Social Capital as a central driving force
Social capitalism is the reconfiguration of society through reforms that increase social capital. The exact reforms are very context dependent, because each society is different.
When making policy, a social capitalist asks: "What effect does this have on social capital?". This should be studied systematically and honestly. A city that creates benches where people can't sleep is reducing social capital in the sense that residents are not trusted to use the benches in the intended way. It can improve social capital by reducing misuse and vagrancy. The question is whether there is a net gain, or whether other alternatives can be created that don't have an immediate negative effect on social capital.
A political system based on social capital requires a deep understanding of the effect of policies on social capital. Changing benches to ones people can't sleep on tells people that "we don't care about homeless people, we just want them to go away". Decreased visibility of homelessness does increase social capital, but only for some people who feel safer because they don't see the problem. However it papers over the problem and lets it simmer into something worse. Homeless people feel rightly marginalised. If society doesn't care about them, why should they care about society?
For this reason, I think that the golden road should always follow a mantra of increase only as far as possible. Providing enough sleeping facilities for homeless people can increase social capital all around. Residents can see an improvement in the lives of homeless people, and homeless people feel seen and cared for.
This is
The care principle
The care principle, or duty of care, is the guiding light for social capitalism. It is the secret ingredient. The principle is simple. We should care for others regardless of who they are.
This means caring for drug addicts, prisoners, rich people, poor people, marginalised people. All people.
Caring doesn't mean giving people what they want. A drug addict wants drugs. It means solving the underlying problems that got them in that predicament. Sometimes tough love is required. This approach is perfectly justifiable logically.
Caring for others places them in the position of understanding that people care. They no longer have to feel like their lives are based on personal and familial short term anti social behaviour to gain advantage over others.
To put this in more technical terms, all political decisions need to be based on maximum positive sum outcomes for all parties involved.
The assault example
I will use an example of an assault. The victim is severely beaten by the perpetrator. The perpetrator is arrested and the legal process begins.
The conventional wisdom is that the law should come down hard on the perpetrator and the state should do what is necessary to assist the victim. When this happens, there is no relationship between the perpetrator and the victim. The victim is given recompense and the perpetrator is punished.
The victim is given what is needed to continue their lives, and the perpetrator is thrown in prison. The victim has suffered a sever loss in trust in society. Having been violated, they now have to cope with living in a world where they can be violated. Henceforth, their social behaviour becomes defensive. The perpetrator is thrown into jail with other violent criminals and a strict punishment of isolation from participation in society. There may be some prison program that aims to change that, and there may be some programs for victims to recover, but the loss of social capital is not paid back.
Applying the care principle here can result in a situation where even though there was a terrible loss, we can compensate the victim and re-socialise the perpetrator.
Caring for victims is vitally important. Trauma can have long lasting negative effects and can result in anti social behaviour or withdrawal from society which reduces social capital. The victim may not stop if someone has a flat tire because they are afraid and traumatised. Victims of trauma who feel isolated may also turn to self treatment with drugs or alcohol. Today they were the victim of a crime, but a year from now they run someone over with their car while drunk. The victim has become a perpetrator. In this case the former victim finds themself in the same punitive prison situation as their attacker.
In prison, the punitive system is meant to show the perpetrator that being a criminal hurts so bad that you shouldn't be one. In reality though, prison is the first step in a life of crime. Prison is systematic abuse and deprivation by the prison system coupled with an anti-social prison environment where prisoners have to fend for themselves. A prisoner comes to understand the world as a prison. A place where you have to do whatever it takes to survive. Society has rejected you, so whatever you do against society is justified.
In both cases here, a different approach could be followed. In the first instance, the victim needs psychological guidance and social support to regain trust and compassion and prevent the tragic experience of trauma from destroying them. This means pro-active intensive psychological support and financial support if necessary. For victims to regain their trust in society, they need to be acknowledged and seen, then helped to discard victimhood themselves over time. This is why so many therapy programs focus on getting victims to become survivors in their own minds. Applying care in the direct aftermath of trauma reduces long term damage, but after this initial period the re establishment of self reliance makes a victim into a pro social member of society again.
After a horrendous crime is committed, society is rightfully angry. This is normal and we should as a society be honest about these feelings. Our instinct tells us that we want the perpetrator to experience the pain they inflicted on the victim or worse. This instinct is valid, but the pain that the perpetrator should feel should be that of genuine remorse. Violence begets violence. Violent punishment does not reduce violence in society, it increases it. We can look to restorative justice to make the steps to reform and re-socialise perpetrators.
This requires compassion for the perpetrator, which is extremely hard to do but by no means impossible and at the end of the day the only way to rebuild what was lost. Many perpetrators were themselves victims who were never treated, so treating their trauma is the best start. Recontextualising their misdeed as what it is: an act committed from a position of weakness and trauma, and building on that. If we treat their trauma and the trauma of the victim, we can rebuild social capital. This reduces the chances of recidivism. The perpetrator needs to understand why they did something bad and how to fix themselves based on that. The effort undertaken should enable that as far as possible. The process is still painful and punitive psychologically. It isn't about coddling criminals.
The perpetrator should be an active participant in the restoration of the victim's self. I have some ideas here, but for the sake of this post getting too long, I don't want to wade into more details. The central point is restoration of social capital. If that means the perpetrator has to polish the victim's shoes, then so be it. However it is executed, it should be in the service of restoring and building a society based on trust and mutual understanding.
What about?
You may be thinking based on the example that it is Utopian and that it will be exploited by evil people, and you are right. What you have to consider is that it will be exploited exactly because of a deficit in social capital. The very fact that you think about the various ways in which it will be exploited indicates how much you live in a low social capital society.
The truth is that this political philosophy is extremely difficult and costly and there will be many mistakes. The secret to its success is that social capital pays social interest. A small success can have a massive outsized effect. I've had conversations with some successful people in society who came from dire circumstances. When I ask them who it was who cared for them, they always have a name. Fundamentally, social capital pays out in hope. For us to believe in a better future, we must have hope, and lots of it. The wonderful thing about social capital is that the hope it generates is not false hope. Once it takes hold, people are naturally inclined to pay it forward.
This is how we really become a space faring civilisation, by caring for each other down here on earth.