How Public Welfare Enhances Social Capital

Lamenting the atomism of modern society, the decline of community, associations and other forms of “social capital,” is such a common refrain on both the left and right that one wonders why they haven’t put aside their differences to form a club! I hear there are some vacancies down at the YMCA, and I bet you rates have never been so good. Call it… the Enemies of Anomie & Toastmasters Society.

Yet theorists of social capital spend more time writing about it (in itself a highly autonomous practice) than they do actually forming new co-valent social bonds. Perhaps it’s because, for both camps, the decline is seen to have been caused by such deep and hard to resist forces that they are equally resigned to pontification.

On the right, the deep source of creeping atomism is the all-encompassing, bureaucratized welfare state. Redistribution in this view is inherently trust-reducing due to its zero-sumness (Mary robbing Peter to pay Paul). For example, its argued that universal social programs crowd-out private safety-nets, like religious organizations or the family, destroying unseen pro-social externalities. In some accounts this merely accelerates a feedback loop of eroding social norms that was initiated the second Western Civilization embraced value pluralism.

Surprisingly, many on the left have come to similar conclusions, if only in a different vocabulary. Habermas, for example, has argued that state welfare systems “colonize” more natural forms of solidarity, contributing to their “reification” — an objectifying process by which implicit social relations are made explicit and impersonal, sapping them of their moral character. Readers of Sweet Talk might know this as a re-balancing from the sacred to the profane, the inherent transcendental and instrumental duality of all social relations.

Heady stuff. But is any of it accurate? Is it an inexorable law of late capitalism that we become individuated narcissists? Is there some theorem in Public Choice that says more welfare = less social capital? The answer to both is a big fat no.

In fact, the inverse relationship between social capital and the modern welfare state has been greatly exaggerated. There are three main reasons for this tendency, which I explore below: Continue reading “How Public Welfare Enhances Social Capital”