Obsolete social capital

In preparing for a workshop on trust and the economy early next week, I picked up Robert Puttnam’s famous Bowling Alone: The Collapse and Revival of American Community, which I read in 2000 and not since. It isn’t too hard to supplement Puttnam’s tale of declining mutual cohesion and understanding with the additional evidence of executive/financial greed during the mid-2000s boom and its aftermath.

Bowling Alone: The Collapse and Revival of American Community

Of course, social capital has an ugly side, as Dalibor Rohac points out in an article in The Umlaut (which seems a very promising new magazine). It depends on the scope and aims of the group of people among whom there is social cohesion. In the presence of a tightly cohesive ‘in’ group, such as a mafia family, or predatory political party, or circle of corporate executives rewarding each other generously, it is just as well not to be a member of the ‘out’ group.

Still, economic policy requires ample social capital to the extent that it requires trade-offs between groups or over time between generations. People in general need to believe that even if a policy does nothing for them – or harms their interests – now, it will be worthwhile in the end. Puttnam concluded: “Over the last three decades a variety of social, economic and technological changes have rendered obsolete a significant stock of America’s social capital.” We need, he said, a new era of civic investment.

This challenge of building new institutions is a bit of an obsession of mine – it was my theme at FutureFest recently. If our stock of social capital has become obsolete, there’s nothing for it but to invest in new kinds of social institution. On optimistic days, I think there’s plenty of that going on, but it isn’t clear.

Update: Moments after posting, I read this excellent Scotsman article by John McTernan about trust in politics (lack of) and the ‘small battalions’ of party workers.

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The paradox of trust

I’m off early this morning to the OECD Forum – on Jobs, Equality, Trust – in Paris, taking part in two sessions. The organisers picked up on the themes of my book The Economics of Enough, especially the section on trust. I wrote a new essay on trust for the OECD Yearbook, focusing on the paradox that the complex, globalized economy is more dependent on trust than ever, but measures of trust in institutions of various kinds indicate that it’s rather fragile.

The Economics of Enough: How to Run the Economy as If the Future Matters

It’s going to be interesting to see what the mood of the Forum is, as it gathers policymakers, business people, unions and NGOs, as well as academics – in other words, more workmanlike and less insulated from the world by affluence than Davos. I’ll be tweeting, under the hashtag  #OECDwk as no doubt will other participants @SpeakerLab @slaughteram @tsipirikos @acraiginparis @diane1859 @LaurenceEvans @JArleRH and @yanisvaroufakis

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