Dhanada K Mishra
Two years ago I moved into the household of my current hosts – an Italian and Chinese husband-wife couple in Hong Kong. I found them using AirBNB – a service that allows people to host complete strangers as paying guests in their homes. They have since become very close friends and great benefactors. Trusting one another in general is an important factor for societies to function smoothly and be prosperous. In the USA, the UK and India there is a visible decline in social trust in recent decades, whereas in countries like Canada, Australia, New Zealand, Scandinavian countries and the Netherlands seem to be heading in the opposite direction. Many leading economists such as professor of Economics at Cornell University Kaushik Basu believe that the downturn in Indian economy has more to do with social disharmony caused by divisive politics than disastrous policy decisions such as demonetisation and a flawed GST implementation. Essentially social capital consists of trust among close knit units such as family and friends and social harmony among diverse ethnic, religious or racial groups.
David Halpern, head of the UK’s Behavioral Insights Team, says social trust is like the proverbial ‘dark matter’ when it comes to economics or well being. Its effect is important but it gets little attention. It has a stronger impact on future national economic growth rate than even skill level in population. Social trust can have a bigger impact on individual health than even ‘quitting smoking’ for example. Therefore, it is important to be able to measure the level of social trust and that’s what social scientists have been doing for decades by asking questions like “Do you trust others, especially strangers?” and variation of the same. There is a big difference among countries when asked “What percentage of people can be trusted?” While in countries like Brazil, it could be in the range of 10-20 per cent, in Scandinavian countries such as Norway and Sweden or the Netherlands it may be in the higher range of 60-70 per cent. Countries like the US and the UK would fall somewhere in between.
Just like physical capital (infrastructure) and financial capital (GDP), social capital also has an important role in what makes a community or country prosperous in a broad sense. Research shows that people with a larger network of friends, family members, and colleagues tend to do better financially and even in terms of their health. This applies both at the individual and community level. Prof Robert Putnam, a public policy expert at Harvard University and author of a landmark book ‘Bowling Alone’ (2000), established that presence of a healthy civic network or civil society organisations made people trust each other more and made governments function better. At the same time, in societies with high levels of social capital, children do better in school, crime rates are lower and economic growth rate is higher. Interestingly, in the USA, a correlation was found between falling levels of social trust with a decline in membership figures in civic groups like parent-teacher associations, Rotary clubs, Scout troops and even bowling leagues. In a society or community with low levels of mutual trust, people have to constantly look over their shoulders, have more lawsuits, try to avoid paying taxes or recycle. Small business owners tend to employ their relatives to work for them rather than strangers even if they are much better at the job.
There are two types of social capitals – ‘bonding social capital’ refers to your closeness to your friends, your family and those you interact with often. This is important for health outcomes and sense of personal security. ‘Bridging social capital’ on the other hand is trust between strangers, particularly among diverse groups, say whites and non-whites, Hindus and Muslims or higher castes and lower castes or the well off and the poor. This is really important for a healthy business environment leading to general well being and prosperity of the society at large.
It’s universally agreed that more ethnically and racially diverse communities do much better in terms of innovation and creativity and lead to a more vibrant social environment. In India, our diversity has always been considered a great strength. Diverse teams always do better than less diverse ones in business, sports or any other group endeavour. The world is becoming increasingly diverse with global travel and migration. Unfortunately, increase in diversity also seems to correlate with decrease in social capital. The increasing social tensions in India over inter-caste marriages or relationships across religious divides are results of such decline of trust or bridging social capital.
It is well established that the decline in social trust can be addressed in a number of ways. For example, university education that allows young people to meet and know their peers from different backgrounds helps build social trust. People connecting with one another across lines of race or economics or gender or age is helpful in increasing social capital. Some examples are sports teams, the military, college, social service like NSS/NCC, travelling, etc. Addressing rising inequality is important as illustrated by the Netherlands, which has made a conscious effort to build a more equitable society and thereby increase its social capital successfully.
Before the age of cell phones and social media, television was considered the biggest enemy of civic engagement as it made people literally couch potatoes. With the ubiquitous cell phones it was thought that people will connect with each other more and hence it will mitigate some of the negative effects of TV. Same was expected of social media. However, both seem to have caused a negative impact on social capital by all counts. This was most dramatically illustrated by the recent mob attack on the US Capitol. Let’s hope we will not allow such divisive tendencies to develop in India and Odisha by being watchful of our power hungry politicians and their machinations.
The author is a professor at KMBB College of Engineering under Biju Patnaik University of Technology currently working in Hong Kong. He can be reached at dhanadam@gmail.com.