The State of the Union: Our Real Social Wealth
By Riane Eisler on January 24, 2012
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By Riane Eisler and Kimberly Otis
Today's State of the Union address offers President Obama the opportunity to talk with Americans about what our nation really needs. As we shift from a manufacturing to a knowledge and service economy, what we urgently need for both individual and national economic success is what economists call high-quality human capital. This requires investing in our most important American asset: our people. In economic terms, this translates into reversing the downward trend of U.S. international competitiveness. In human terms, it translates into ending enormous suffering.
It's essential that the president clearly state that our nation's economic success and the well-being of our people hinges on investing in the development of all our people's capacities. In other words, our real wealth is not corporate profits or business wealth. It is our social wealth: American people's capabilities.
The United States is already behind other developed countries in the measurements that reflect the real wealth of America -- not only international competitiveness but basic measures such as child mortality rates, poverty rates, our standing in educational math and science rankings, and the state of people's health and well-being. Unlike our gross domestic product (GDP), which is rising along with Wall Street, these are the social wealth measures that we should be prioritizing. As Nobel Prize-winning economist Joseph Stiglitz notes, instead of cutting health, education, and other such programs, we desperately need more public investments in education, research, and infrastructure.
A major step toward this change in national priorities is the development of more inclusive and accurate economic indicators than GDP -- social wealth indicators that assess the real state of our nation. We must show the general public and policymakers both the enormous "back-end" financial costs of failing to invest in people, such as more unemployment, poverty, crime, and despair, and the enormous social and economic benefits of investing in human capacity building so that our nation can weather the sweeping technological changes afoot.
Jan. 13, 2012 - Washington, District Of Columbia, USA - United States President Barack Obama makes remarks in the East Room of the White House in Washington, D.C. calling on Congress to return powers that would allow him to reform Executive Branch agencies of the U.S. Government..Credit: Ron Sachs / CNP (Credit Image: © Ron Sachs/DPA/ZUMAPRESS.com)
As for our national debt, as another Nobel Prize-winning economist, Paul Krugman, and many other experts point out, it's actually lower now than during WWII. Rather than increasing with big deficits, U.S. interest rates are at historic lows and U.S. bonds are still the safest investment, which is why so many foreigners also buy them.
Some people argue that foreigners who invest in the U.S. are reaping big profits, Krugman notes, but points out that "America actually earns more from its assets abroad than it pays to foreign investors." However -- and this again takes us straight to the critical need to re-examine our national priorities -- U.S. corporations with foreign subsidiaries, from General Electric to Nike and General Motors, are not America. U.S. companies may be reaping big profits by investing in other nations, but by so doing they are creating jobs overseas and not for Americans.
In short, these kinds of private investments are not the kinds of investments that will economically benefit people like you and me, or that will really benefit the American economy in the long term. What we actually need, and this is urgent given our decline in global competitiveness, is a massive national investment in the work of caring for people, starting in early childhood. This kind of public investment in our social wealth offers the greatest return in both out human and financial wealth.
As Krugman states, "the fault lies not in our debt, but in ourselves." It's up to us to demand changes to the ways in which we measure economic success by demanding more accurate indicators focusing on what really matters our social wealth. It's also up to us to demand that corporations that are doing so well pay their fair share of taxes, so we can invest in the real wealth of America: our people. And it's up to our president to level with the American people about what our nation really needs at this critical time.
Under Secretary for Economic Affairs and Performs the Duties of the Deputy Secretary, Rebecca M. Blank
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