From Wikipedia, the free encyclopedia
 |
This article or section is written like a personal reflection or essay and may require cleanup. Please help improve it by rewriting it in an encyclopedic style. (December 2007) |
Social-Capitalism as a theory challenges the idea that Socialism and Capitalism are mutually exclusive. Social-Capitalism posits that a strong social support network for the poor enhances capital output. By decreasing poverty, capital market participation is enlarged.
Social-Capitalism divides the concept of economy into two tiers: A participatory group of society working functionally in an upper economy (Tier-One) and an underlying economy of dependent poor communities and criminal elements(Tier-Two). Tier-One generally comprises the upper and middle classes while Tier-Two represents many low wage workers, impoverished persons, mentally ill and criminals. Social capitalism posits that providing Tier-Two with the means to participate in the market would discourage Tier Two from completely dropping out of the system, hence, causing major disruptions to the market. A larger and more inclusive market is a more efficient and more stable market.
"Social Capitalism" is not related to the idea of "social capital" as popularized by Robert Putnam and James Coleman.