Social capitalism is an old idea taking on an new form in the age of social media where social capital, creative capital, and intellectual capital are deployed outside the construct of the prevailing corporations or governments.
Throughout human history, societies have reorganized themselves in response to tyranny, innovation, environment, new wisdom, etc. I believe this to be the root of what Social Capitalism is, and therefore, how it should be defined.
In The Shadows:
The dominant definition of “Social Capitalism” from Wikipedia reflects a social cause cast against the backdrop of market capitalism. This definition acknowledges that economies work better when everyone participates; specifically, the so-called tier 1 and tier 2 people. Tier 1 individuals have steady financial incomes that allow them to function without private or government support. Tier 2 individuals cannot meet the prevailing standard of living and rely on private or government support. Therefore the prevailing definition of Social Capitalism often refers to efforts to bolster tier 2 persons as a means of reinforcing the economy for everyone.
There is an inherent conflict where tier 1 is held responsible to support tier 2 as a means of protecting their tier 1 status. Traditionally tier 2 included poor families dependent on food stamps; children who depend on public education; elderly people who are no longer able to work, and low-income criminals who require police intervention, etc.
Ideally, getting more people from tier 2 into tier 1 is the desirable objective. Indeed political division is marked by the theories and practices on how exactly that objective would best be accomplished.
A worst case:
What happens when tier 2 is simply forgotten; they are simply allowed to fail in the mainstream economy? What if the government becomes too weak to bolster their economic prospects? What happens when a critical mass of tier 1 people involuntarily enter the tier 2 environment bringing along their substantial knowledge inventory. They are otherwise very productive people that had been laid-off, outsourced, underemployed, or otherwise marginalized.
The Special Case:
What happens when Tier 2 deploy new technologies that responding to their priorities, not necessarily Wall Street priorities. What happens when tier 2 people trade a social “currency” among themselves? What happens when tier 2 swells to a size and scope that they are able to bear broad political and economic influence. Many great human struggles emerged from under the hand of a Tier 1 constraint using their own manner to store and exchange value (currency) represented by their own knowledge inventory and productivity. Why would that not happen internally in American Society?
Social Capitalism is where factors of production in an economy are purely human and technological and less structural:. Specifically, social capital, creative capital, and intellectual capital deployed outside the construct of the prevailing corporations or governments. Maybe it should be called “structural capitalism” because that is what is actually changing. We are at an extraordinary time in history where an extraordinary structural reorganization is taking place.
That’s Social Capitalism as it’s always been.
Please Vote for The Ingenesist Project to present at SXSW 2011
The Ingenesist Project specifies an Innovation Economy built on a platform of social media as the next economic paradigm. 60 minute solo presentation in the advanced technical track. Your help is deeply appreciated. All comments welcome. Material based on video series here