Intangible wealth

Where does the wealth of our country lie? Would you say in our businesses, in our infrastructure, in financial capital, in our GNP or GDP? Nope. Would you say it is in our resources? Say the off shore or the oil sands, our mines, forests, and fisheries? Nope. In our environment? Our lakes and rivers, our air, our parks and reserves, or the arctic wilderness? Nope. Wrong again. It lies in the intangibles. Things like culture ( in the broad sense), in our people and how we relate to each other. In our knowledge and we would say not just knowledge but wisdom, and, we would add, our common sense.

Social institutions are most crucial. The World Bank
has devised a rule of law index
that measures the extent to which
people have confidence in and abide by the rules of their society. An
economy with a very efficient judicial system, clear and enforceable
property rights
, and an effective and uncorrupt government will produce
higher total wealth.
For example, Switzerland scores 99.5 out of 100 on
the rule of law index and the U.S. hits 91.8. By contrast, Nigeria gets
a score of just 5.8, while the war-torn Democratic Republic of the
Congo obtains a miserable 1 out of 100. The members of the Organisation
for Economic Co-operation and Development-30 wealthy developed
countries- have an average score of 90, while sub-Saharan Africa’s is
28. [Here is how Canada stacks up against the US . ]”Rich countries

are largely rich because of the skills of their
populations and the quality of the institutions supporting economic
activity,”
the study concludes. According to Hamilton’s figures, the
rule of law explains 57 percent of countries’ intangible capital
.
Education accounts for 36 percent.

The rule of law index was created using several hundred individual variables
measuring perceptions of governance, drawn from 25 separate data
sources constructed by 18 different organizations. The latter include
civil society groups, political and business risk-rating agencies, and
think tanks.

This new focus on the importance of
social and political institutions marks a dramatic shift away from the
World Bank’s infatuation with financing mega-projects in poor countries…

[link to source]

This attempt to measure this thing the World Bank is calling governance is laudable although probably it is a very rough measure. What is Governance?

Governance consists of the
traditions and institutions by which authority in a country is
exercised. This includes the process by which governments are selected,
monitored and replaced; the capacity of the government to effectively
formulate and implement sound policies; and the respect of citizens and
the state for the institutions that govern economic and social
interactions among them.


So we should be very careful about these institutions. In our opinion we are being robbed slowly but surely of this intangible wealth.

Our social institutions – our traditions, our family structure – the
rule of law, property rights. These are slowly, sneakily, quietly,
being taken from us. We think you can guess who are the thieves. They
are those who put criminals’ rights above those of victims, who
minimize the value of personal property and the right of the owner to
use it as he wishes within reasonable limits, those who think business
is a dirty word, who hamstring our governments and our police forces
with red tape and political correctness policies, those who think the
traditional nuclear family is not that important, that courtesy is old fashioned. These thieves can be public servants
and politicians, teachers and professors, reporters, and yes, business people who “play
the game” , taking advantage of the system, because it lines their
pockets. And they can be brainwashed citizens who “go with the flow” and are willing to be bought every election, who fear or
can’t be bothered to stand up and say “I’ve had enough of this”. Yes, we are rich in these intangibles compared to some countries, a fortune stored away for us by our ancestors, but we also see these riches being eroded every day, our wealth seeping away .

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