GEOG 352: Days 15-16

1. Social and Human Capital; The ‘Whole Economy’ GEOG 352: Days 15-16

2. Did anyone go to the public event for the Council of Canadians conference last Friday? They had some heavy hitters: Maude Barlow, Linda McQuaig, Bill McKibben, and Grand Chief Stewart Philip. Today, after discussing social, human, and physical capital and the whole economy, I’ll show the first part of a video on co-ops. The 7th Annual Urban Issues Film Festival – to be held on November 9th – can always use more volunteers; talk to Chris, Deanna, or Eder. John Black is looking for student volunteers to be ambassadors of social science at Discovery Days for high school students on one or more of Nov. 20-22. I need volunteers to start presenting their final projects beginning next week. Housekeeping items

3. Social capital was first mentioned in 1916, but was fully developed as a concept by American sociologist, Robert Putnam, in Making Democracy Work and Bowling Alone. As Putnam says: “The basic idea of social capital is that a person’s family, friends and associates constitute an important asset, one that can be called upon in a crisis, enjoyed for its own sake, and leveraged for material gain. What is true for individuals…also holds for groups. Communities endowed with a diverse stock of social networks and civic associations are in a stronger position to confront poverty and vulnerability, resolve disputes, and take advantage of new opportunities.” Social capital

4. It can be broken into bonding capital (between community members, however defined) who are similar and bridging capital (between people who are different). Erik used the terms ‘exclusive’ and ‘inclusive.’ And some have added a third category of linking capital (between community members and representatives of ‘higher’ institutions). Some of the manifestations of high levels of social capital are: high levels of trust, high membership in civic organizations, high levels of volunteering and charitable giving, high levels of participation in politics, high levels of participation in religious organizations, and high levels of informal socializing (Porritt 2007). Where have you most experienced social capital, including in its diverse forms? Social capital

5. As Matt Hern and others have pointed out, there is a dark side to social capital. Racist organizations like the Ku Klux Klan have very high social capital! A few years ago, Putnam and his associates undertook a major study of 41 communities in the U.S. and found that social capital tended to decline with ethnic (and especially immigrant) diversity. In other words, social capital seems to work best when homogeneity is high. This has led him and Matt Hern to emphasize how important it is to create a new and broader sense of “we.” In what ways can the economy enhance or degrade social capital? Social capital

6. Jonathan Porritt (2007, pp. 163-164) defines human capital as “the physical, intellectual, emotional and spiritual capacities of any individual.” Obviously, the relationship between society and individuals is mutually conditioning. Societies can bring out the best in people and fully realized individuals can bring out the best in their societies. Can you think of particular periods of history where this ‘virtuous cycle’ seemed most obvious? In what ways does the economy and economic activity enhance or degrade human capital? human capital

7. Mark Anielski (2007, p. 76) defines physical [or built or manufactured] capital as “all things that have been made or manufactured with both human and natural capital including equipment, factories, tools, buildings and other physical infrastructure. Manufactured capital contributes to our overall economic well-being by providing the intermediate means to a good life. Manufactured capital includes private and public infrastructure: homes, household appliances, cars, factories, hospitals, schools and roads. It also includes new technology, designs, patents, processes and ideas.” What are the strengths and weaknesses of different economic systems with respect to developing, enhancing, or degrading physical capital? physical capital

8. Peter Ross and David Usher in their book From the Roots Up: Economic Development As If the Community Mattered offer up a way of dividing up what they call the social economy that's useful, and which Chris covered. • They divide the economy into two main sectors: formal and informal. • The formal sector consists of big business and the public sector. The informal sector consists of seven sub-sectors: • small business enterprises • collective and cooperative enterprises • community organizations and enterprises (e.g., EMBERS) • voluntary activity • barter and skills exchanges • mutual aid, and • household activity. The whole economy (after Ross and Usher)

11. What distinguishes the two major sectors is: the rationale for economic activity and scale. • The rationale for the formal economy is profit maximization and/or advancing the political goals of the state, which sometimes coincide closely with the objectives of the corporate sector. • The rationale in the informal sector (and also the mixed) is serving the needs of producers, consumers, communities, and also (in some cases) nature. • While the scale of the formal economy is massive, the scale of informal sector organizations is often quite small, with some organizations like VanCity straddling the line. • Going back to the list of sectors, which of these have been involved in fulfilling your needs over the past month? The whole economy (from Ross and Usher)

12. An interesting example of a highly successful region that relies on relatively small, skill-intensive enterprises and co-ops is Emilia-Romagna in northern Italy, an area centered on Bologna, as will see in the video. • The region has 4.4 million people and boasts a business ratio of one business for every 11 persons, 90% of which have fewer than 99 employees. In Capri, the knitwear capital of Europe (population: 60,000), businesses do over $2 billion in sales, and the average enterprise has five employees. • Collaboration amongst businesses is a prominent feature of economic life, as are co-ops. The social Economy

13. Emilia-Romagna

14. In Emilia-Romagna is noted for its parmesan cheese, produced by over 700 farm co-operatives: • cooperatives make up over 40% of the GDP of the E-R region • in Bologna two out of three adult citizens are members of a cooperative • in Bologna, over 85% of the city's social services are provided by social co-ops • per capita income in E-R has risen from 17th to second among Italy's 20 regions • per capital income is 50% higher than the national. The social Economy

15. Of the European regions, E-R is number 11 of 122 regions in terms of GNP per inhabitant • Bologna has the highest disposable income of any of Italy's 103 provinces • Bologna has the highest per capita expenditure on the arts of any city in Italy • The unemployment rate of 4% is virtually full employment • 70% of Bologna's households have home ownership. Source: http://www.cooperativegrocer.coop/articles/index.php?id=483 the social Economy

16. If you Google “co-ops in Emilia-Romagna,” you'll find lots of other interesting info as well. Another famous example of a co-op economy is the system of famous Mondragon co-ops centred in the Basque country of northern Spain, which was founded by a Catholic priest in resistance to the Franco regime. The idea behind the social economy is that it potentially re-embeds the economy in nature and society and enables it to serve more sustainable ends. It's even possible that we might find a way to create a “steady-state economy” in such a system. Do you think this is possible and, if so, what would it look like? the social Economy

17. Model of Society Civil Society Balancing the 3 elements of society… Private Sector The State

18. Arguably, state control of the economy has been a disaster on a number of levels. What are your views? An unregulated free market economy has also often been far less than optimal. Thoughts? Relying on the “social economy”may not be adequate in a sophisticated, highly integrated society, though Emilia-Romagna offers promise. [In truth, it is a hybrid.] Finding a “Balanced” Modelfor the Economy

19. A balanced model might involve all three elements: state, private sector, and civil society. At a micro scale, it might look like community economic development (CED), a phenomenon we haven’t had much time to explore. At a macro scale, it might look more like Sweden where individuals and corporations are heavily taxed, there is a very strong safety net, and unions and government partner with businesses on social and economic policy [see the film “Poor No More”]. Finding a “Balanced” Modelfor the Economy

20. While it has been under threat in recent years, the “Scandinavian model” emerged as various socialist parties in these countries (Sweden, Norway, Finland, and Denmark) chose to adopt neither the capitalist nor the “Bolshevik” model – i.e. refused to trade an economic ‘dictatorship’ for a political dictatorship. Scandinavians have consistently proven to have the highest levels of well-being, both physical and psychological, in the world. Finding a “Balanced” Modelfor the Economy