13 - Toward a general theory of social overhead capital

Summary

Introduction

Social overhead capital constitutes a vital element of any society. It is generally classified into three categories: natural capital, social infrastructure, and institutional capital. These categories are neither exhaustive nor exclusive, but they illustrate the nature of the functions performed by social overhead capital and the social perspective associated with them.

Natural capital consists of natural resources such as forests, rivers, lakes, wetlands, coastal seas, oceans, water, soil, and above all the earth's atmosphere. They all share the common feature of being regenerative, subject to intricate and subtle forces of the ecological and biological mechanisms. They provide all living organisms, particularly human beings, with the environment in which it is possible to sustain their lives and to regenerate themselves. However, rapid economic development and population growth in the last several decades, with the accompanying vast changes in social conditions, have altered the delicate ecological balance of natural capital to such a significant extent that its effectiveness has been lost in many parts of the world.

Social infrastructure is another important component of social overhead capital. It consists of social capital such as roads, bridges, public mass transportation systems, water, electricity, and other public utilities, communication and postal services, sewage and fire-fighting facilities, among others. Social overhead capital may also include institutional capital, such as hospitals, educational institutions, judicial and police systems, public administrative services, financial and monetary institutions, and so forth. It provides members of society with services crucial in maintaining human and cultural life.