Social capital is often described as a 21st century version of wealth creation. Yet the role of social capital appears uncertain in some respects. Even though knowledge use is vital, too much of it exists in a secondary role, where it can't readily contribute to marketplace formation or growth. Meanwhile, the knowledge use patterns which are associated with today's social capital, are increasingly exposed to the limitations of what are now mature general equilibrium conditions.
Imagine a garden in which knowledge provides the seeds, and time value, the soil. In the last century, skill sets were increasingly culled in ways which came to define how knowledge "should" be used. Even though many knowledge "seeds" of infinite variety have been purchased, often it is unclear, whether they can even be planted, if an institutional "plot" does not already have room for their growth potential. As a result, too much potential time value has been set aside.
Alas, this shallow skills based approach is proving detrimental to long term growth capacity. Many a well tended garden - in spite of considerable investment and attention - has been deemed unsuitable for an economically defined harvest. Even though a sizable portion of knowledge investment thrived in the "hothouse" conditions of the 20th century, there are so many more places in the world, where the soil of time potential is just waiting for a chance to generate a better harvest.
For at least a century, important facets of knowledge application have been compensated through the occasionally circumscribed terms of asymmetric compensation. Individuals who once took on intellectual challenges in their own environs, gradually became enticed to seek employment for their ambitions.
Still, there was a price to pay, for the compensation of knowledge use on asymmetric terms. Where people once managed their own time and resources to create new forms of product, employers were bound by a different investment approach. Consequently, there would be times when the costs of research and development would mean hard marketplace limits for those personal journeys of discovery. Whereas before, useful innovations remained part of a dynamic and ongoing process, of marketplace discovery and transformation.
Equally important, is that much of today's asymmetrically compensated time based product remains dependent on preexisting wealth flows. Today, policy makers need to give a green light to new platforms for knowledge based wealth, so that long term growth potential is not lost. Until more knowledge seeds can be planted, tended and harvested, future growth remains in doubt.
Meanwhile, the political backlash to welfare state redistribution, continues apace. If governments are to overcome their budgetary problems, knowledge use cannot simply be limited to the seeds that are grown in hothouse cities and regions. Today's extensive debt levels can eventually be tamed, through the growth of new knowledge based wealth. But first, those who have benefited from knowledge use limits, need the courage to plant anew, the economic gift which brought such meaning to their own lives.