Sunél’s Blog | A different kind of capital is now

Most of us toil, throughout our lives to convert human and physical capital into financial capital. We derive income from our human and physical capital, and then we save enough to fund our future income through our investments, culminating in retirement.

During the COVID-19 pandemic, we have focussed on the demise of financial capital as a result of the lockdown measures implemented by most governments. The existing and potential threat to financial capital is massive. The Great Depression is the only previous experience in our modern memory that we can compare the Great Lockdown to. Millions across the world are now receiving state support and millions of others are hungry as a result of the lack of state support.

However, there is another type of capital which, like in previous pandemics and crises, is rising. Social capital. It refers to the network of relationships that exist in communities and societies. In good times, people forget about social capital. Before the lockdown, most people just toiled to build financial capital. Our lives were characterised by busyness, most of it at a frantic speed, resulting in us being over-tired or without any time for our friends and family, not to mention our communities. 

We anticipated that social distancing would damage social capital even further. However, the opposite has happened. Social capital is rising. Our friendships and connections with family are stronger. Most of us have stories about increased social contact with family and friends, work colleagues or our wider business networks. In addition, there has been a huge increase in volunteering and charitable efforts.

I don’t think it is necessary to elaborate on the extent of the challenge to feed our nation during this crisis. However, like during previous pandemics and crises, our generosity and co-operation across political divide, racial lines or wealth spheres, will be what prevents the pandemic from becoming a famine. This week I read the most extraordinary examples of such stories, from the farmers who are working with local municipalities and communities to feed hundreds of families, to the defence force teams who donated their own money to help out in a township. One big charity reported a 250% increase of people offering their support – and the same has been reported in other countries. Social capital is not only about money – it’s about volunteering talents and time. It is about connecting people who may benefit from each other’s knowledge or skills. It is sometimes just about the strength of the support derived from the connections. I highly recommend following GoodThingsGuy for a regular dose of good news like this.

Social capital is our hope in South Africa, perhaps our only hope. It is the glue that will keep this society from collapsing.

And once this is over, we should honour and continue to build social capital.

Ps. I love to hear your comments. You can comment by hitting reply. Or you can comment in the section below.

Pss. It is why, at Foundation Family Wealth, we have not only given to FoodforwardSA, and encouraged you to give, but are now also volunteering our financial planning services to our network. It’s how we can help during this time of crises. If you, or someone you know, need to make fast and important financial decisions now, we can help.

Kind regards,

Sunél

//01 MAY 2020

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