1 Cultural capital and social capital: cultural economics perspective David Throsby Professor of Economics Macquarie University, Sydney International Summer School: Valuing Cultural Diversity in Cities: Challenges to Cultural Economics Island of Procida, Italy, 6 September 2009

2 Types of capital in economics physical capital: buildings, equipment, machinery human capital: peoples skills, talents, intellectual ability natural capital: renewable and non-renewable resources cultural capital: tangible and intangible cultural assets

3 Flow of services Stock of assets Cultural capital Heritage buildings, sites Art works and artefacts Music and literature Inherited traditions Community participation Consumption of the arts Heritage tourism

4 Natural CapitalCultural Capital Natural ecosystemsCultural ecosystems The real economy Inherited from past Created by Nature Impose a duty of care Inherited from past Created by humans Impose a duty of care

5 Cost-benefit analysis of cultural projects identify capital costs estimate time-stream of benefits and costs include non-market values calculate benefit-cost ratio, net present value (NPV) and/or internal rate of return (IRR) consider similar assessment of cultural value is there a trade-off between economic and cultural value generated by the project?

6 Economic development Preserving natural capital Sustainable development Maintaining ecosystems Human development UN World Commission on Environment and Development (WCED, 1987) The Brundtland Commission

7 Sustainability principles: 1.Provision of material and non-material wellbeing 2.Intergenerational equity 3.Intragenerational equity 4.Maintenance of diversity 5.Interdependence

8 Material wellbeing tangible benefits from rising real incomes Non-material wellbeing intangible benefits or quality of life

9 Intergenerational equity An efficiency issue Efficient intertemporal allocation of resources A moral or ethical issue Ethical responsibility to have concern for future generations

10 Intragenerational equity fairness in treatment of present generation non-discrimination equity in access to cultural participation observance of fundamental human rights

11 Social capital relationships between and within social networks cooperation, reciprocity, trust social interaction as a resource for the social good social norms or values (overlaps with intangible cultural capital)

12 Relationships with cultural economics arts and culture in urban development creative sector and economic growth culture in development