|
|
Musings Report 2024-25 6-22-24 The Importance of "Place" in Social Well-Being
You are receiving this email/post because you are a subscriber/patron of Of Two Minds / Charles Hugh Smith.
The Importance of "Place" in Social Well-Being
In my recent essay The Glue Binding Democracy and a Free Economy Has Melted, I drew a distinction between capital and leadership grounded in a specific place--what I referred to as "Old Money"--and the mobile capital of rootless cosmopolitan Private Equity, which gets in and gets out of places as quickly as possible to maximize "shareholder value," i.e. profits and capital gains.
I suggested that our current economic system is optimized for mobile capital and mobile labor, to the detriment of social well-being and capital, which by its very nature is embedded in a specific place with a socio-economic order and culture unique to that place.
It's self-evident that vulture capital that swoops in, buys an asset, dismembers it to sell in pieces and then vanishes, is not going to invest any of its gains in the locale's social capital. In a similar fashion, a temp worker who moves in for a few months of work and then leaves is not going to put any care or effort into the local community.
I proposed that the default economic view is that 1) the individual maximization of self-interest magically optimizes not just wealth but social well-being, and 2) therefore nobody has to pay any attention to social capital because pursuing our own narrow self-interest magically optimizes social capital to the betterment of everyone.
This narrative doesn't map reality. Somebody has to pay attention to social capital or none accumulates, and whatever has accumulated dissipates, and so social well-being dissipates, too.
I noted that unlike dictatorships, democracies with free economies rely on voluntary participation to build / maintain social capital. Nobody forces individuals to contribute to their community or locale.
What's changed? Why is social capital eroding in so many places and on so many levels? There are many causal factors at work, but one that doesn't attract much attention is the economy has changed to optimize mobile capital and labor, as mobility enables higher efficiencies and profits. If labor costs and tax credits make one place attractive, move the factory there. When conditions change, move it elsewhere. If a worker can make more money in Shanghai for a few months, then move there. When it's more profitable to work in Los Angeles, leave Shanghai and move there.
Social capital isn't mobile. The hospital, homeless shelter, music hall, county fair and leadership don't move around the world seeking the highest return in the least amount of time. When Walmart closes a store because it didn't hit its profit targets, the local community may be devastated, much like a factory closing, as Walmart was the primary source of stable employment and social entertainment.
I mentioned the role of "Old Money" in maintaining social capital, and this caused confusion because I didn't refine what I meant by that term. One reader asked if I was referring to Aristocracy. Another commented that "Old Money" was simply rapacious capital before globalization gave it mobility.
By "Old Money," I mean capital and leadership that is embedded in a specific place, bound to a place by a number of factors beyond maximizing profits: history, ownership, stewardship.
Understood in this way, "Old Money" includes a wide range of capital and leadership.
Corporations that are headquartered in a place often assume a leadership role in maintaining social capital by donating funds and providing leadership on civic boards, etc. There are many examples, for instance, Levi Strauss in San Francisco.
Large, well-funded trusts and foundations are forms of "Old Money." A community owned hospital is also a form of "Old Money," as the capital is not mobile, it's invested in an institution that is essential for the well-being of the locale. Universities are also a form of "Old Money," whether they are public or private.
Wealthy families are another source of funding and leadership. The duty of the wealthy to serve the common good in some way is known as noblesse oblige, the obligations that come with nobility / aristocracy. This commitment to the social well-being of a specific place isn't just about donating money; it's about the leadership needed to maintain and mobilize a local elite that can actually organize things getting done.
Samo Burja is one of the most insightful analysts addressing the decay of institutions and the positive role of elites. In the context of "place" and social capital, two of his many essays are particularly relevant.
Why Civilizations Collapse
Reform Is Driven by Rising Elites
Social capital includes many elements: public safety, a sense of community belonging, physical places where people can gather convivially, a functioning local government, a local media, a zone of commerce, and so on.
To Samo's point, these ultimately depend on functional institutions that require expertise, funding and leadership that is provided by a local elite, not necessarily of the wealthiest and most politically powerful, but an elites with ties to the wealthy and powerful.
Here's an example: in the 1960s, the default idea of "progress" and "development" in the San Francisco Bay Area was to gain more land for development by filling in the "worthless" bay. Typically, this was accomplished by establishing landfills along the shoreline, so the region's garbage and construction debris would effortlessly fill in the bay and create more land to eventually develop for a profit.
A relative handful of people, including wives of the administrators of the University of California at Berkeley, discerned what would be lost if this default were allowed to run unobstructed, and so they began lobbying for changes in policy.
They were of course dismissed by the elites profiting from this development and the politicians funded by those interests. But their connections to the university elite, which was interconnected with other regional elites, enabled the group to establish a toehold in the elite structure.
The group did not "buy their way to power;" they worked on a shoestring. What they provided was leadership via access to existing elites.
Mobile capital and labor provide nothing to local elites or institutions: they're in and out in the blink of an eye. The wives of UC-Berkeley bigshots looked down on the Bay from their homes in the Berkeley Hills and realized if they didn't take action, some irreplaceable part of the region's social capital would be irrevocably lost.
Their efforts took many years to bear fruit. Showing up to a meeting or two wasn't going to accomplish anything. Persuasion required time, establishing trust, etc.
What I'm describing here is an economic system that has optimized mobility in service of private greed, and this system has no other possible output but the erosion of social capital and the social well-being of everyone in actual places--communities, towns, cities and regions. Without capital and leadership committed to place, every place loses whatever social well-being it once possessed.
Optimizing mobility, finance and globalization has also optimized the erosion of the social capital that generates social well-being.
Highlights of the Blog
The Anxiety Economy 6/21/24
A Most Dangerous Assumption: Mining the Future to Spend More Today 6/19/24
The Glue Binding Democracy and a Free Economy Has Melted 6/17/24
Best Thing That Happened To Me This Week
One of the good things about a varied garden / food forest is that usually something or other ripens and can be harvested to eat (except in deep winter, of course, if you have deep winters). With enough variety, the quantities harvested don't have be large; a few sweet potatoes here, a couple of eggplant there, some taro over here, a big handful of green beans there and voila, there's more than an enough food to skip the grocery store for another week. There are a couple of tricks here: one is to experiment to find what grows easily in your terroir, and the other is to like eating what grows easily. 
I finally harvested some taro (two varieties) and mixed up a batch of poi, always welcome in our household.
I also harvested some sweet potatoes from an overgrown garden and some mountain apples (already past their prime in this photo but still crisp and delicious).
What's on the Book Shelf
No new books this week; as I've been pondering social capital and elites, I've drawn upon two books that influenced my thinking on a variety of subjects:
The Myth of Normal: Trauma, Illness, and Healing in a Toxic Culture (Gabor Mate)
The Inheritance of Rome: Illuminating the Dark Ages 400-1000 (Chris Wickham)
From Left Field
NOTE TO NEW READERS: This list is not comprised of articles I agree with or that I judge to be correct or of the highest quality. It is representative of the content I find interesting as reflections of the current zeitgeist. The list is intended to be perused with an open, critical, occasionally amused mind.
Many links are behind paywalls. Most paywalled sites allow a few free articles per month if you register. It's the New Normal.
Doctors couldn’t help. They turned to a shadow system of DIY medical tests. Buoyed by regulatory vacuums, Silicon Valley is building a booming online wellness market that aims to leave the doctor’s office behind. (via Cheryl A.)
The 17 Things Nate Hagens is 100% Certain About
Trolls are citing an ‘Oxford study’ to demean Asian women in interracial relationships. But it doesn’t actually exist.
‘We’re asking a lot of these people’: how fragile is the global supply chain? A new book looks at how the pandemic highlighted issues with the supply chain and how precarious things still are.
Globalisation is not dead, but it is fading: 'glocalisation' is becoming the new mantra
Behind the stunning job losses in Hollywood: 'The audience has moved on'
‘I don’t live extravagantly by any means’: I have $68,000 in credit-card debt and $50,000 in a 401(k). How can I dig myself out of this trap on a $55,000 salary?
China waits anxiously for economic plan as gloom reigns
I'm a private chef who loves my air fryer. Here are 8 of my favorite things to make in it. -- everything is highly processed, frozen, deep-fried... so much for "healthy air frying"....
The Principle of Diminishing Narrative Returns (via John D.)
Monopoly Round-Up: How The Jetsons Lost to Black Mirror
Pictures at an Exhibition (Modest Mussorgsky) Kazuhito Yamashita [Guitar] (32 min) (via S.T.)
"We are continually faced with a series of great opportunities brilliantly disguised as insoluble problems." John W. Gardner
Thanks for reading--
charles |
|
|
|
|
|
