40 YEARBOOK 2024 doubled and human capital per capita increased by around 13 per cent, but the value of the stock of natural capital per capita declined by nearly 40 per cent.’ (Managi and Kumar, 2018, in Dasgupta, P, 2021) Because economists have discovered ways to measure the value of human capital, not only to the individuals who acquire it but also to society at large, it is included in our economic models as a category of capital goods. Similarly, in the past decades, economists concerned with the trajectory of our natural environment have developed new theories, data and evidence. Environmental economics and ecological economics, including doughnut economics and circular economics, are multidisciplinary fields that have emerged, aiming to address the incompleteness of our prevailing economic discourse. They have developed a narrative and methods for measuring the value individuals place on natural resources, the utility they gain from nature and their willingness to pay for nature. Natural capital is now a legitimate third category of capital goods measured in national accounts. The expectation is that, as natural capital is embedded into mainstream economic discourse and economic tools are developed, a step change will occur leading to the accumulation or stability of our natural resources rather than their continued depletion. The Department for Culture, Media and Sport (DCMS), alongside partners including Historic England and the Arts Council, have set the intention to develop a similar concept of culture and heritage capital. In his seminal writings between 2001 and 2014, David Throsby first introduced the concept of cultural capital in an economic framework, differing from that of Bourdieu’s sociological perspective in 1984. Building on best practice from environmental economists and his existing seminal economic writings, Throsby differentiates between the ‘stock’ of cultural capital (the quantity of available capital) and the ‘flow’ that it creates (a stream of goods or services that may be consumed). Throsby argues that intangible cultural phenomena, such as languages and traditions, can also be counted as assets in this sense. The cultural capital that is stored in these assets gives rise to both the cultural and economic value of the cultural goods. In the past, economists reserved the term ‘capital goods’ more stringently than they do now, for they only included assets that are material (tangible) and alienable, where ownership is transferable. However, ‘extensive professional soul-searching since the global financial crisis of 2008 has focused on how economics can better integrate social sciences and elevate welfare and distributional issues.’ (Bhatt, G, 2024). Economics needs to continually evolve with the growing heterogeneous and complex ways in which society is organised if it is to provide explanatory power. Moreover, it needs to expand from current narrow definitions and measures of prosperity to include a broader range of elements of life that matter to people and that influence societal wellbeing. We need to move from narrow metrics of produced capital to broader, more complex multidisciplinary measures of individual and societal wellbeing considering multiple capitals, including culture and heritage capital. The heritage sector has a rich body of knowledge, evidence and data that demonstrates people care about heritage and it enriches their lives. It is important to our sense of belonging, community and engagement and, in economic terms, heritage increases utility. Heritage is important to people; it has value even when it is not traded in markets. We must discover, nurture and grow culture and heritage to enable a thriving and sustainable economy and society. This means including heritage in our evolving economic narratives, models and economic tools, while maintaining and supplementing the heritage sector’s current tools and the social and political debates that necessarily steer decision making. ‘Economists could benefit by greater engagement with the ideas of philosophers, historians, and sociologists, just as Adam Smith once did. The philosophers, historians, and sociologists would likely benefit too.’ Angus Deaton 2024 Adala Leeson is Head of Social and Economic Research at Historic England. Opinions expressed in this paper are those of the author and are not necessarily those of Historic England. This work on Culture and Heritage Capital is supported by DCMS and the Arts and Humanities Research Council [grant number: AH/Y000552/1]. The rich heritage and verdant landscape of Scarborough, North Yorkshire includes publicly and privately owned gardens laid out from the mid-19th century to the 1930s. The value of natural capital like this remains largely unrecognised in the prevailing economic concepts of prosperity. (Photo: Historic England)
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