Social Capital - Why Countries Like India Cannot Ignore It

The third edition of the World HappinessReport published on 23^rd April, 2015 emphatically mentions that the proper measure of social progress should be happiness.

Many countries have pursued GDP (Gross Domestic Product) as a measure of growth. However, a lopsided pursuit of GDP has led to neglect of social and environmental objectives resulting in a negative impact on well-being. Take for example India which has a GDP of USD 2.308 trillion (Nominal; April 2015) and is ranked 7^th in terms of GDP (Nominal). However, India is ranked 117 out of 158 countries in the World Happiness Report. Similarly, in 2014, China had a GDP (Nominal) of approximately USD 10.36 trillion with a GDP rank (Nominal) of 2. However, in happiness measures it is ranked 84^th. Apparently even with a high GDP, people in these countries do not perceive a high quality of life.

Despite the general cheer around the economy and the positive notes on the growth potential, what’s the missing happiness ingredient for India? The top five happiest countries Switzerland, Iceland, Denmark, Norway and Canada, besides economic development also have a high social capital. High level of social capital includes generalized trust, good governance, and mutual support by individuals within the society. Countries with low social capital exhibit generalized distrust, pervasive corruption, and lawless behavior.

How do countries like India with an apparent low social capital increase it? The report suggests several pathways including education, moral instruction, professional codes of conduct, public opprobrium towards violators of the public trust, more effective regulation by the state to reduce public sector corruption and dangerous anti-social behavior (e.g. financial fraud, pollution, etc.), public policies to narrow income inequalities and strong social safety nets.

With most people absorbed on increasing their financial capital as the way to happiness, I wonder at what stage people will start focusing on investing in social capital.

East India Company and the Lesson for Happiness

The East India Company (EIC) was an English trading company, which traded with the Indian subcontinent. In order to carry out commercial activities from certain areas in India, the company arranged for a treaty with the Mughal emperor Jahangir in 1612. This was accomplished in exchange for the promise of gifts and rarities from the European market to the emperor.  Once it got a foothold, the Company did not limit itself to commercial activities but embarked on territorial and military expansion in India. They were aided by the greed of some Indian rulers and the rivalries between them. The Indian rulers slowly started losing their autonomy, and by 1773 the EIC was directly involved in the governance of India. This private company with its own army and judiciary ruled India till 1858. During the Company rule, besides losing autonomy, affluent regions of India became impoverished. One will of course wonder why the Indian rulers allowed themselves to be lured into losing so much in return for something which started as gifts from the European market. Did they not know that it would have been preferable to curb their greed and rivalries?

Do you often buy stuff you don’t actually need? Are your decisions based on advertisements and what is considered the in thing to do? Do you guzzle down sweetened beverages without knowing why? You might know people who undergo surgeries to appear more fulsome. The modern day version of the company has already landed on the shores of the mind. We have been lured us into giving them a foothold in return for the prospective gift of happiness. However, we ought to know that given free control, they will only impoverish our being. If we want to be happy and maintain an affluent mind, we need to protect our territory. The first step is to recognize the traders as traders, understand their motives and not allow our greed and rivalry to hand over the governance of our thoughts to them.