Introducing the social dollar or the social rupee

Introducing the social dollar or social rupee

23 March 2015


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Ever since I can remember thinking about anything in relation to economics, there was always this sense I had that the world was currently functioning on the basis of a deep disproportion between the quality of goods and services offered and the price one was willing to and ultimately paid for them. If you take for example the field of services and considering the level of complexity reached in certain domains, certain services that are valued at a lower level of use would not be possible without the help of a specialised learning process going beyond the normal primary, secondary schools and subsequent college to further develop the mental sphere while other services that require nothing more than an existing set of physical attributes with little or almost no further development of the mental attributes are valued at ten or sometimes even a thousand times more than the complicated services.


This disparity on the level of services offered in the economics sense got me thinking about what would happen if there were no actual services offered in exchange. What would then be the value? With this thought in the backdrop in terms of volunteer contributions, a notion that had me very involved since an early age, I started reflecting more and more on the value of that which we call social services.


After the passage of adolescence and young adulthood, I had started feeling with a sense of urgency since 2010 the necessity of more recognition of the social sphere of our lives and the enacting and sustainability of social services in their actual and original sense before social services became viewed as the interrogating and alienating party which could strip a human being of his/her rights, including the right to have and ensure the raising of his/her family.


It is apparent that this has not been an isolated thought process as many in the field of what is now called social entrepreneurship have devised that there is a need to recognise the effect of certain services on the individual and through this individual on the group of individuals thereby composing a given society. There have thus emerged notions such as Corporate Social Responsibility in measuring a firm’s impact on society and its capability to give back to the community as well as, in certain other companies, the notion of impact investing where a given number of financials are taken into consideration in determining whether the result of the investments undertaken is up to the mark and commensurate with the initial goals and targets set out by the firm.


While it has become more and more obvious that there has to be a sense of a new element in the matrix of measurement which includes the financial or cultural impacts, there is an increasing difficulty in knowing how to measure more accurately the actual impact of social services. As I grew more engrossed with this notion of social impact, I realised that there would be the need to introduce a certain currency that could have an initial value set at a predetermined rate and that, like all other currencies, would fluctuate in comparison to other currencies. This fluctuation, however, would not vary based on the price of gold or the dollar but would vary according to a certain set of parameters that would depend on the field of social services examined as well as the country considered and thereby its currency. The reason I speak of social dollars or social rupees is because the dollar today is a universal currency and therefore does not call for additional adjustment other than the social impact while the rupee could also be a good measure because of the sheer quantity of social entrepreneurship required in relation to the nation and the large quantity of data available there.


It occurred to me that each set of social services has a direct impact which is the number of persons covered by the specific activity undertaken, a somewhat direct-indirect impact which would include the result on the persons immediately close to the person impacted and an indirect-indirect impact which would be the aggregate result on the community and then the larger society in which the impacted individual lived and therefore interacted in and affected. While the direct impact can be determined to an extent and measured in terms of financial consequences, the direct-indirect impact becomes a little bit harder to measure and the indirect-indirect impact is one of the hardest to determine because of the sheer number of parameters to take into account and that would make it heuristically impossible for one single organisation to measure. Therefore, such measurement would only be possible by the combined addition of all parameters and taking into account ponderation using a weighting that would vary depending on the community, the society and the nation considered.


To make my point clearer, I would take the example of education of children in the slums (I take this extreme case as usually other children do have access to education even if it is less easy than for children in privileged areas). In this case, the direct impact would be the earnings the children would be able to make once their education is finished and therefore this can be compared to the earnings they would have made without such education and the equation would be a simple subtraction where the overwhelmingly positive figure would stand out.


The direct-indirect impact would be on one side the increase of household income for a given such family, the greater possibility of having other children being able to have an education within the family given the reduced burden for the family, access to a less destitute lifestyle etc.


Where it gets really interesting is when you examine the indirect-indirect impact and this would include a vast number of items namely what has never been measured precisely and this is the negative impact removal from society as well as the savings generated not only during that time but also in future in relation to that individual and to the persons closely connected and further beyond.


Indeed, in the ideal case, a child who is going to school will not be in the streets roaming and causing trouble and will not become later on the adult who will resort to drug dealing and/or abuse, who will therefore not cost his community and the society the expenses required for maintaining security nor will he/she generate additional costs to society either by going to jail and therefore being removed from the workforce while generating a deficit or by causing the state to have to pay for his/her medical or accident bills for lack of own means. The amounts saved could then be introduced with a comparative weighting of two compared to positive impact for example as this removes a cost and turns it into a positive outflow (note that the ponderation would need to be fine-tuned depending on the activity of the social firm and the nation examined as the scalability of the effect would differ depending on the population number and density). This without starting to measure the negative impact removal for society as a whole (reduced fear and therefore increased energy levels for all the neighbourhood thereby increasing their productivity) as a result of the alleviation of the circumstances of a person who otherwise would have mainly harboured negative feelings towards society.


While this is not necessarily a linear equation as one individual could be in very good conditions yet become a criminal, it is interesting to note that most individuals who come out of negative conditions they were born into by the help of someone who aided them are usually those who would then strive to help in turn other individuals emerge out of such conditions. The examples of this positive effect are numerous and one striking example is the Chinese entrepreneur, Xiong Shuihua who, once turned millionaire, built a whole free housing project for the people in his neighbourhood who showed him kindness when he was destitute (in this case more than 72 families were impacted by one individual having been shown kindness as a growing youth).


If each organisation intervening on a specific social level of education (whether primary, secondary or college) were able to have all that data available, including the data on how much does one troubled child and subsequently troubled adult cost the society in terms of additional security, jailing time, medical expenses to the hospitals, etc, it would then be possible to add all of these to the initial measure of the positive impact on the individual, the close family and subsequently the society and the nation as a whole using the appropriate weighting depending on the level of schooling considered as well as the time to fruition of such efforts. There would remain of course additional measures to consider such as the impact of leadership that such an individual could have later on and that represents a latent/potential financial impact with its effect on one or more individuals coming into interaction with the initial individual and the diffusion effect that such interaction could have but these too could be indirectly measured in an iterative way using the initial measure for the given individual and using for this measure a weighting that would depend on a psycho-social analysis of his potential of engaging others or otherwise his social charisma.


All of this could of course sound a bit far-fetched to individuals who are used to handling hard cash and are preoccupied with absolute returns rather than with social impact but I believe that there lays the seeds of what we could generate as sustainable change in the society by giving a value to that which, today, does not have a value and therefore does not resonate with most people because they fail to see the actual impact, preoccupied as they are with evaluating most things in their lives according to restrictive criteria of the current currency that governs their lives. If a group of social entrepreneurs as well as economists, social services specialists, statisticians, police, large multinationals were to systematically examine and include within their measurement some of the above notions and more as and when the need for their inclusion in the equation unfolds, we would be moving closer to a world where actual social impact is a measurable figure in a currency that would stand in comparison with the currencies that all the world is used to and can therefore evaluate at its right value.


I dream of a time when sending one person to school or allowing an otherwise destitute woman to start her own small business can be clearly measured and the persons having invested in that venture can proudly state that their investment is rendering this many social dollars or social rupees in terms of return. Meanwhile, all we have is simply investor reports or impact reporting for donors that tends to focus only on the core items of the social work effects and not on the peripheral effects, whether close or far in terms of space and time. An optimist at heart as I remain, I raise my glass and say “To the social dollar or social rupee, when it becomes a reality someday!”

A Slum Fight

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2 thoughts on “Introducing the social dollar or the social rupee

    • Thank you MIhran. I wish that we could actually make the social currency a reality and therefore have the remaining population able to truly value the impact of social investing.


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