Opinion

A better way out of debt

What if we could turn our social capital – like helping a neighbor – into real money?

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Can social capital redeem our financial souls?

At a time when financial markets have clearly let us down, we can't afford to breathe new life into a carcass. Social capital offers the solution we have been looking for.

What is social capital?

It refers to the worth of our social networks, individual skills, and even things like the time we invest in volunteering. For example, the time I put into helping a neighbor paint a fence (free of charge) is a form of social capital. Its value equates to the time I spent and the "worth" of an enhanced relationship.

In traditional economics, the nonfinancial contributions we make are basically worthless. Financial transactions and our monetary net worth are all that really matter. Sadly, we have sunk to measuring our individual and national value through debt, surpluses, and productivity gains.

But what if we looked beyond investments and financial capital and began taking social capital seriously?

It's really not that hard to put a quantitative value on any number of seemingly intangible assets. One hour of my volunteer time could easily be quantified as $10. And an open reputation system, similar to Amazon bookseller ratings, could help to measure and quantify our standing as social citizens.

Here's a novel idea: What if credit-card companies and financial institutions invented a system to measure social capital and include it in your monthly statements? This would provide a more comprehensive way to measure and understand our overall worth.

By combining financial and social capital we could see a more accurate picture of our true value.

With this holistic model in place, reading your financial statements wouldn't be such a painful monthly ritual. In addition, it would also offer an important incentive to give and borrow more, particularly if you and I were rewarded for such activities.

Marrying financial transactions with social transactions, in the form of a "social credit card," would undoubtedly encourage wiser spending and saving habits.

Frequent Giving Points could be exchanged for real goods and services – similar to frequent flier miles. A whole new form of exchange would emerge, redeemable by and tradable between individuals – putting us more squarely in the driver's seat of how we spend our time and money. For those in debt, social capital points could be used to pay down all or a portion of what they owe.

I'd line up to open a social credit card or social savings account. Wouldn't you?

The benefits would not only be spiritual and personal but also practical and collective. Individually, we'd pour new energy into being good neighbors. Collectively, we'd transform social capital into a lasting economic stimulus.

So let's get going on leveraging our social capital in new and exciting ways. The White House has called for social innovation and a new age of volunteerism. This radical idea offers a way to boldly promote both.

We are so much more than our credit cards and bank accounts would have us believe. And the last time I considered my worth as a human being, the stock market did not readily come to mind.

Greed is no longer the answer.

If today's economic troubles are rooted in a credit crisis, let's start digging ourselves out by giving more credit – to ourselves.

Paul Lamb is the principal of Man on a Mission Consulting.

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