Social Capitalism

“Social capitalism (Socio-capitalism), as a theory or political or philosophical stance, challenges the idea that socialism and capitalism are inherently antagonistic. The essence of social capitalism is that markets work best and output is maximized through sound social management of the macroeconomy. Social capitalism posits that a strong social support network for the poor enhances capital output. By decreasing poverty, capital market participation is enlarged.”

The Limitations of Social Capitalism

Today, most would agree, progressive wealth distribution promotes greater overall prosperity. However, regardless of whether or not one subscribes to the maxim of Social Capitalism, New Social Capitalism asserts that even with a concerted program of ‘Social Management’, society would still be (is being) pushed inexorably down a path of greater inequality and poverty, thus reducing capital market participation. A principal cause of this, the ascendant power of financial institutions at the heart of the free market system.

The free market system in its current form, whilst undeniably the best method of allocating resources, structurally takes no account of wealth distribution or social welfare.

A Shift in the Balance of Power

Today, the emergence of globalised marketplaces has shifted the balance of power between financial institutions and Government. Whereas Governments still operate within the confines of their nation states, financial institutions, monolithic and trans-boundary are the conduits though which the vast sums of the globalised economy flow.

The Marginalisation of Politics

The resulting capital accumulation and increased influence wielded by financial institutions today is forcing nation state and multilateral policy to the periphery in terms of their ability to steer society.

New Social Capitalism, as a path to Social Capitalism, addresses this anomaly by introducing an alternative market structure which harmonises the natural imperatives of market forces with those of society. 

For more about ‘New Social Capitalism’click here.