Friday, March 17, 2006

My comments on the
debate about Europe vs. the US in economic terms at Umair's.

Ultimately, it's about "what you can measure you can manage" or "indexes become policy targets". They're truisms. And anti-patterns. Everyone recognises them, but no-one takes them *seriously*.

So, yeah, there are some kinds of capital that you can measure, and manage, and because it has a lot of liquidity and plasticity you can do cool tricks with it. You can build civilizations; co-ordinate global process networks of thousands of suppliers; get lots of new cheap stuff.

That kind of capital is a good thing.

But there are other kinds of capital you can't measure, you can't manage, and that don't have the fungability to do these kind of tricks with. Neighbourhood, family, religion, friendship, security, freedom from stress and risk.

If you can't measure them or compare them does that mean they have no value? Not at all.

But if you start with an *axiomatic* assumption that everything must be comparable in the same unit then it looks like that.

But that assumption is wrong. It's no more sensible to assume you can recognise social capital in financial terms than it is to say that music must be translatable into colour for it to be beautiful even though, sometimes the two arts conflict with each other for the same resource. Will I spend my time / money on painting or music? Yes, I have to choose, but no, that still doesn't mean music's beauty can be represented in colour.

Nor is it meaningful to claim that the US "chooses" one way of life over another when it shops at Walmart. By definition, all financial transactions at Walmart are part of a rationality which is wholly independent and incomensurable with our preferences for social capital. (Interesting how Hernando de Soto invokes Donald Davidson at the end of "The Mystery of Capital") even though, once again, the different needs of the different kinds of capital will come into conflict.

So, to say that people are "unwillingly" subsidizing the higher quality of life in Europe, may or may not be true, but that willingness sure isn't divinable simply by looking at their shopping behavior.

If anything, only the political process offers a chance to translate between the incomensurable spheres of financial capital and social capital. When I vote for a government I *am* making a decision between one party which will put the measurable (money, jobs, growth) ahead of the unmeasurable qualities of life. Or vice-versa.

2 comments:

Kaunda said...

You find the most interesting discussions Phil!

I see a similarity in what you say in re economic and social capital and differnet balances struck and your take on "tools vs. formats" in your discussion with Danny Ayers.

You note in your comment to Ayers:

"A format without a tool is like a technology without a business model. It has no interface to the wider, user, consumer community...."

"...Because all the tools they produce are explained like this : 'this is a great tool because it uses a better format / process'. That's not a 'tool' or an 'application'. Because tools / applications have an inner-world of their technology, and an outer-world of their usage. And they have a story that mediates between the two."

About economic captial vs. social captial:

"If anything, only the political process offers a chance to translate between the incomensurable spheres of financial capital and social capital. When I vote for a government I *am* making a decision between one party which will put the measurable (money, jobs, growth) ahead of the unmeasurable qualities of life. Or vice-versa."

The similarity is "a story which mediates between the two."

I shudder to think that in the case of economic vs. social capital "only the political process offers a chance to translate between the incomensurable spheres." The political process is important to mediate the two spheres. I shudder because politcal processes are so often corrupted.

The stories we create to translate between the spheres surely involves politics of a much more general order than choosing governments. In a sense it's tools and applications which will carry the day.

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