Can Relationship Capital Solve the World's Problems?

After reviewing the notes for an article I did back in May’s issue of TNNW on Generation Y (born between 1982 and 2002), otherwise known as the "Millennials" (see Networking with the Millennials: The End of the World as We Know It?), I realized that I may have under-emphasized one key point of Millenial behavior: their view on money. From the Millenial point of view, life is much more chaotic and money comes and goes. In documented cases, Millennials will even give up money and security of a job and rough it on principle alone until they find a more ideal situation. This is antithetical to the Baby Boomer point of view: money = security = good. But in a world where more and more Boomers are dying and Gen Xers and Yers are inheriting the earth, less value is placed upon money as it is becoming a symbol of "selling out" (selling out = mindless automaton = tool = bad) as opposed to "wealth". From a Millenial perspective, wealth is a measure of relationships, knowledge and freedom of expression.

Financial Capital

This got me thinking about the nature of our current economic system: one based upon the concept of "financial capital", profit and the like. Being caught somewhere in the middle of the two points of view as a Gen Xer, if I were to look at the "new and emerging" mindset of the future of the world’s population I can’t help but see a major shift coming. While several of my fellow Gen Xers may have accepted the old paradigm, the highly principled Millennials, clearly won’t stand for "business as usual". Why?

• The desire in the business world for profit (often at the expense of morals and ethics) only more clearly emphasizes the concept of "selling out" or "making deals with the devil"
• The current U.S. Dollar has been off the gold standard since 1973, making the value of the Dollar worth less and less with each passing year
• Adding insult to injury, financial capital is illusory as it is merely a reflection of what we know and who we know.

What We Know

When we look at the things we know and the ways that value is perceived based upon things we know, we think of Intellectual Capital (or Intellectual Property, or "IP" for short). IP typically refers to the unique and innovative ideas we have for things that do not currently exist, and can (given the proper legal protection through patents, copyrights and trademarks) can lead to monetization. The good news is that people worldwide are able to take advantage of their Intellectual Capital and turn it into Financial Capital, because given the right circumstances, it can be measured. Many wars have been won over it, mergers, acquisitions and buyouts occur because of it and careers have been attained and transformed by it.

The downside to Intellectual Capital is that it is often abused, especially in the online world. A perfect case in point has been the recent troubles of the motion picture, record, and software industries to combat piracy opportunities that the internet affords. The other major drawback is that Intellectual Capital ignores "soft skills", which include everything from communications to leadership to negotiation to sales to management to team building. Unlike the technical certifications and diplomas received from companies and universities that train in the "hard skills" like computer networking, accounting, engineering, database management and the like, certifications in management and negotiation just don’t carry the same weight.

Who We Know

But while we have made strides in valuating Intellectual Capital, we haven’t done much in the realm of Relationship Capital. Only until recently, paid members of online networking powerhouses LinkedIn and new Disney-acquired Club Penguin were valued at $250-$350/member and $1000/member, respectively. This is great for corporate M&A or buyouts, but what about personal RC?

Intuitively we know that personal Relationship Capital exists. After all, when we were young and needed the money for clothing, food and games, our families were there to provide for us – familial relationships determine RC from the start. I use the example of Donald Trump’s dramatic bounces back from bankruptcy (1991-1994 and 2004-2005) as evidence of Relationship Capital being used to gain Financial Capital. eBay and Amazon use rudimentary forms of measurement of Relationship Capital in the form of star ratings.

Yet two major questions still remain: "What if Relationship Capital could be effectively measured?" and "If Relationship Capital be tied to a dollar figure, how would our world change?"

Merging Incentive Systems

Currently, there are two major forms of incentive systems that we use. The first, and most obvious one is our current economic system. When we work harder and smarter (and get lucky) we make more money. When we make more money than we spend, we have a surplus called profit. This is the way the human race has more or less operated for centuries. Profit is good; people like it, companies like it. The only problem with profit is when it is earned illegally, immorally, or unethically, people have issues, and despite an organization’s attempts to justify or hide transgressions, today’s hyper-networked world simply won’t stand for it.

There is another incentive system that doesn’t get the same level of attention. It is based upon morality, ethics, deeds and/or compliance. It is evident when little Brianna is recognized with a plaque for not missing a single day of school this year. It is evident when Robert gets a gold watch for serving with the firm for 30 years. It is evident when people like Mother Theresa are being considered for Sainthood. It is evident when one receives the Nobel Peace Prize.

Proponents of Relationship Capital (and an ensuing Relationship Economy) are not only working to find more effective ways of measuring Relationship Capital but also championing a hybrid-incentive system as a key strategy. In doing so, such an economic system will encourage good behavior as a means to a profit. Those who are rich will be those who live in abundance and do good deeds, while those who are penniless are those who are morally bankrupt. Would people still commit certain crimes if they knew that it would negatively affect their bank accounts? Would pollution be viewed as a liability in corporate valuation? Would teachers, volunteers and social workers be the new billionaires? For the more principled Millennials (as well as other principled individuals), this could just be an economic system they can get behind.

The Challenges Ahead

The doors to utopia are not quite ready to open just yet. Opponents, criticize the concept of a Relationship Economy for two major reasons: 1.) such a radical idea would not be supported by the current establishment and can be easily defended with the "if it ain’t broke don’t fix it" mentality and 2.) widespread agreement would be needed for such an economic system to work, which will be nearly impossible. Even with overwhelming, worldwide buy-in, valuation of Relationship Capital will be subjective and would vary depending upon cultural values and norms. Who would determine it?

Still, the idea is a provocative one and quite attractive. There are rumors that particular individuals as well as some well known corporations have developed some initial rudimentary Relationship Capital systems. Many view a Relationship Economy as the crowning achievement of the Human Race to date – the ultimate synthesis of networking, behavioral science, science, economics, sociology and ethics. Time will surely tell if this is a fad or a human revolution.

To learn more about Networking Convergence, Standardized Relationship Networking Education, Networking Accreditation and a Relationship Economy, visit the Relationship Networking Industry Association (RNIA) at www.RNIA.org.

Please contact Adam at Adam@TheNationalNetworker.com.

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