Grant was firmly of the opinion that the ‘5 Capitals’ model represented a far more accurate and constructive way of thinking about economic power and the true nature of wealth.
The model states that wealth is comprised of 5 capitals:
1. Financial Capital
2. The Built Environment
3. Intellectual Capital
4. Social Capital
5. Natural Capital
Sustainable prosperity is created by managing all the capital flows (including financial capital, the crucial enabler) in balance.
Thinking about capitalism in this way enables us to understand that we need to invest as much in the social infrastructure of our societies as we do in the monetary aspect of the economy. We need to invest in responsible stewardship of our life-supporting planet – ‘Gaia is a stakeholder too’ was one of Grant’s favourite phrases. It is arrant nonsense to claim we ‘cannot afford’ sustainable energy; we ‘cannot afford’ to look after the disadvantaged, the sick, the elderly; we ‘cannot afford’ to raise our brother men out of poverty or support artistic endeavour or scientific exploration. We cannot afford not to. Keeping it in balance is the key.
We need to manage the huge amount of data and information available to us in the age of the internet to create, share and nurture the knowledge and wisdom to manage that balance. We need to treasure our architectural and engineering heritage, and manage our systems, infrastructure and technology to avoid incurring debts which bring all our aspirations and enterprises to a grinding halt.
If investment in the different capital flows is unbalanced, debts occur which come back on human society with a vengeance. Neglect of the natural environment – pollution, poor animal husbandry, loss of diversity – damages our future ability to harvest food and knowledge. It threatens to drastically impact the amount of the planet’s surface that is habitable by human civilisations by creating climate change and rises in ocean levels.
The impact on the global economy of natural disasters on an epic scale hardly bears thinking about – yet that is the debt we will be building if we don’t balance the books now.
Environmental damage can, and has, been caused by ignorance of the impact of mankind’s activities on the world around us. Grant was an advocate of scientific thinking – he was of the opinion that no man (or woman) has a right to believe what there is no evidence for; and conversely, that ignorance, particularly wilful ignorance, is no excuse. It matters little to say, ‘I do not believe in this tree’ when the tree falls on your head. Ask ‘why’ five times; defer commitment until you have sufficient evidence on which to base your conclusions, and continuously test your assumptions. An unpopular view in the age of the soundbite and the celebrity, but one that is gaining recognition as a sound basis for growing true prosperity.
It is our duty to treasure and grow mankind’s store of scientific knowledge, to explore for the sake of exploring, and to discover what we don’t yet know. Past generations did it for us. We need to honour the trust of our ancestors., tell their stories, listen to what they have to say to us. If life is what happens while you’re busy making plans, history is what people did while the kings and queens were grandstanding.
Despite claims to the contrary by certain politicians, human beings are social creatures. We laugh together and cry together. We sing, we celebrate. We make love and make war. Sometimes we are cruel to each other. Sometimes we commit acts of heroic altruism. But whether good or bad, we interact, communicate, criticise, create and pro-create. No man is an island, and the political regime that fails to invest in the social capital of the people it rules is ultimately doomed. It may take time, but the debt piles up and piles up until individuals have nothing to lose. Thus are suicide bombers created. Early symptoms of imbalance in social capital include industrial unrest and mass protests, escalating to civil disobedience and rioting. In the global village, we all neglect social capital at our peril.
Music, arts and crafts express the amazing power of the human spirit to reach out and beyond physical reality into the unbounded ocean of the imagination. We can imagine utopia. We will never create it. But that should not stop us trying.
I personally believe the 5 Capitals model gives us a blueprint for creating a balance sheet for a sustainable global economy. I would be most interested to investigate this thinking with others more learned and wise than I.