The Caux Round Table recognizes that economic development does not occur independently from social, cultural and political institutions. Wealth creation is not an isolated, autonomous, selfreferential process within communities; it is a dependent variable, subordinate to the dictates of  prior conditions. Markets are organic phenomena; they grow strong and vibrant only in facilitating environments. The Caux Round Table recognizes this dependence of wealth creation upon surrounding conditions as Kyosei, or dependent co-arising.

The institutes, values, and practices that participate in shaping wealth creation are the social capital of a society. Countries with high levels of social capital achievement are more economically prosperous and provide a higher quality of life for those who live in them. Countries with low levels of social capital are more prone to poverty, and more severe economic, political, and social inequities. High social capital achievement tracks the moral outcome noted in the Second Vatican Council pastoral Constitution, Gaudium et Spes, which holds that the common good is to be widely understood as the sum of those conditions of social life which enable groups and individuals to achieve their fulfillment more completely and readily. (p, 26)

Social capital achievement is an aggregate of three community sub-systems: 1) economic activity, 2) social/cultural variables, and 3) legal and political institutions.  

Under equilibrium conditions, we hypothesize that social/cultural patterns heavily influence legal and political institutions, which, in turn, structure incentives, risk/return functions, and pricing conditions for economic activity. Economic activity, with a certain fixed cast to its allocation of risks and returns, then tends to sustain those who embody and articulate the dominant social and cultural patterns of society.

From this point of view, wealth creation will occur most robustly under favorable legal and political conditions that reward risk and investment. These legal and political conditions stand upon and reflect appreciative cultural values and social arrangements. Those cultural values and social arrangements will, in turn, be validated and legitimated into the future by the results of wealth creation. 

Changes favorable to more robust wealth creation can be authored in the cultural/social subsystem.  But, doing so, first demands innovation or tension in that sub-system triggering a break with status quo arrangements upholding lower levels of social capital or even social capital formations that are dysfunctional from the point of view of robust economic development. Then, new activity in the economic sub-system and new relations in law and politics resulting from these innovations in the cultural/social subsystem will evidence the effectiveness of emerging new arrangements for the growth of productive output and the accumulation of financial capital. 

The Caux Round Table ethical Principles for Government and Principles for Responsible Business provide guidance for the cultural/social sub-system to bring forth sustainable wealth creating activity in the economic sub-system as supported by facilitating legal and political arrangements. 

Since there are no direct measurements of social capital, the Caux Round Table has created a Social Capital Achievement (“SCA”) score for 199 countries as an approximation of social capital achievement. The SCA for each country is computed by first ranking each country on 14 different measurements of economic activity, social/cultural variables, and legal and political institutions.  A country’s rank in each category measured is converted into a percentile reflecting its achievement in that category vis-à-vis other countries. An overall average ranking for each country is then calculated of that country’s achievement percentile in the 14 measured categories and becomes that country’s SCA score. 

The economic components for the SCA rankings embrace GDP per capital and sovereign currency ratings. Relevant cultural variables and social richness are modeled by indices of corruption, economic freedom, political freedom and human development. Legal and political institutions can be assessed through measures of the rule of law, 12 core best practice standards for management of financial institutions, and other governance indicators.

The first Caux Round Table country ranking by SCA score was issued in 2005. Click here for the country SCA rankings for 2009 (PDF).

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