06 · The other side
Financial capital alone cannot build enduring economies and institutions.
Africa also needs the trust, integrity, moral conviction and shared purpose that allow people and institutions to work together over the long term. Cushland therefore considers the cultivation of spiritual capital part of its broader mission alongside the mobilisation of financial capital.
The vehicles, the projects, the assets and the returns. Measurable, structured, and accountable to those who commit it.
The trust that makes contracts cheap to write, institutions durable, and long horizons possible. Harder to measure, and no less real.
What is spiritual capital?
Spiritual capital is the accumulation of faith, trust, moral conviction and commitment within a person, institution, people or nation, grounded in shared principles, values and purpose.
It is the conviction that others will seek to do what is right, not merely what is expedient or permissible, and that we ourselves are accountable to a standard greater than our immediate interests — ultimately, to God.
The importance of spiritual capital
In 1993, Professor Douglass North, an economist and economic historian who, with Robert Fogel, was the co-recipient of the Nobel Prize in Economic Sciences, wrote about the role of institutions in structuring political, economic and social interaction.
North's work makes clear that institutions are not simply the laws, regulations and formal structures created by governments. They are also shaped by the informal constraints that govern how people behave: customs, traditions, norms and codes of conduct. As North himself explains:
“They consist of both informal constraints (sanctions, taboos, customs, traditions, and codes of conduct), and formal rules (constitutions, laws, property rights). Throughout history, institutions have been devised by human beings to create order and reduce uncertainty in exchange. Together with the standard constraints of economics, they define the choice set and therefore determine transaction and production costs and hence the profitability and feasibility of engaging in economic activity.”
Douglass C. North · Nobel Prize lecture, 1993
At Cushland, we understand spiritual capital as the moral and spiritual foundation that provides the backbone for the institutions, relationships and systems through which a society operates.
Laws may establish what people are required to do; institutions may establish the structures within which people operate; but the integrity, trust and moral conviction of the people operating within those systems determine, to a significant degree, how those institutions function in practice.
The point
When trust, integrity and confidence in the conduct of others becomes weak, institutions become more costly to operate. Contracts require greater and more costly enforcement, transactions require greater protection, capital becomes more expensive and resources that could otherwise be deployed productively are diverted towards managing risk and uncertainty.
Spiritual capital, therefore, is not merely a question of personal faith. It is part of the social and institutional infrastructure upon which productive economies and enduring societies can be built.