Pakistan Institute of Development Economics



Hello Folk: We Are Responsible for What We Will Face in 2025;Evidence from Philosophical Underpinnings of Social Capital

Social capital is a very important facet of society and hasstrong relevance to economic landscape of a country. There are differenttheories about the nature, accumulation, growth and validity of socialcapital as an instrument of economy. This paper explains thephilosophical context of social capital and validate through a modelusing Berg, Dickhaut and McCabe trust game that we all transfer a set ofvalues to our next generation, which ultimately manifest as socialcapital in the real world. The transferred values affects each agent‟decision whether to trust other members of the society and participatein a socio-economic exchange or not. If he trusts, he reaps substantialgains from exchange, and ultimately social capital will be concreted.But if he does not, he will face a major loss and overall social capitalwill be dented. A distrustful ancestor will further induce agents towithdraw from the market and not to invest. This will lead a society toan overall mistrust paradigm and eventual downfall. On the other hand,the level of cooperation in the members of society increases as the goodexperience is transferred across generations. Economic impacts of socialcapital have been elucidated using Leonhard Euler function and NewtonLeibniz integration processes. The ethical framework for society androle of literature in transfer of beliefs, values and culture from onegeneration to other has also been discussed at length. The paper is aunique study of how we all will be responsible for the kind of socialcapital will have in 2025. JEL Classification: D71, D72, Z11, Z12, Z13Keywords: Social, Capital, Model, Transfer, Generations, Values, Trust,Beliefs, Cooperation, Ethics, Literature

Gul Ejaz,

Maryum Bibi