There are seven pillars upon which capital and growth rests and thrives. As explained in previous commentaries, the Virgin Islands’ capital includes the land, human resources, technology, learning and finance that drive the economy and national prosperity.

However, capital rests upon seven well-defined foundations. These fundamental components of society are wider than the capital that drives economics, and they include geography, culture community, markets, education, banking and governance. Such elements are the foundations of society, and they decide the scope, depth and effectiveness of the VI’s capital and capital mix.

 

Geography, culture

Start with geography, which for capital purposes is about factor endowments. What human and natural resources sit within the VI’s land borders? What is the VI best at producing — whether it is specific products in tourism, finance, agriculture or other industries?

Culture, meanwhile, is the way of life of the population. Culture is sibling to history. What are the social behaviours of the community and how do these behaviors drive prosperity? On the other hand, are there limitations to economic growth based on the territory’s social behaviour and culture?

The third component — community — is the basis of everything. The objective of capital is to drive the prosperity and welfare of the community, though in the capitalist system the interests of the owners of capital appear to prevail over that honourable idea. Greater fairness may require limiting the power of the capitalist or owner of capital.

 

The markets

Then there are the markets, which decide production. The place of buyers and sellers is both visible and invisible. The market is ubiquitous and includes anything that brings consumers and producers together, whether in the public or private sector. This space could be physical or invisible and borderless.

The fifth component, education, offers the community the learning and skills that bring the vision of the economy to a desired outcome. Learning drives the national purpose and vision. Learning is foundational for capital and socioeconomic growth.

Next is finance. Banking is the subtle regulator and manager of the economy and money supply. It is no accident that banks are the most powerful economic institution. Every day, we line up in frustration to transact some banking service. Whether it is withdrawing cash to live, obtaining a mortgage or loan, or asking for a credit facility, the banks silently dominate our lives.

 

The government

Finally, government is the arbiter of all the preceding components of society. Government has the power to control all aspects of the economy and society by force of violence subject to the rule of law. Government is the final arbiter of power.

However, to carry out that role, government must truly control the tools of power, including enforcement mechanisms such as law enforcement, the military, legislation, regulation and administration.

Understanding the foundations and fundamentals of VI society cannot be guesswork. It is conscious effort that enables managers and workers to adopt the appropriate approach to drive up wealth and prosperity for the greater good.