Presented by Robert Clark MP		www.robertclark.net

Social capital - building trust, optimism and goodwill

(An unpublished article written 8th August 2003.)

Many commentators have seen Peter Costello's recent speech on social capital simply as a chance to try to score points against the Federal government.

But there are more basic and important questions to be discussed.

Is social capital a useful concept? Do we really have a lack of social capital? If so, what should each of us be doing about it?

For the past 25 years or so, our dominant national agenda has been economic reform - transforming Australia from a stagnant, inflexible, inward looking economy into one that is productive, open and vibrant.

However, other issues now increasingly need attention - people's feelings of emptiness and insecurity, our distrust of institutions, the abuse and alienation of children and young people, and the debilitating effects of crime and fear of crime.

Social capital is about our networks of contacts, our levels of trust of others and our common understandings about how to engage together in various situations.

If all these are strong, we feel more secure, we feel we have a place in the community, and we find it easier to work with others to get things done, both individually and collaboratively.

This in turn leads to a more prosperous, law abiding, democratic and caring community.

Differences in the extent and quality of social capital go a long way towards explaining why some societies are peaceful and prosperous, and others are dogged by corruption, brutality and poverty - why West Germany recovered quickly after World War 2 from years of dictatorship and destruction, yet the road to a flourishing society and economy in post-Saddam Iraq already looks a hard one.

Even allowing for the effects of changing technology and lifestyles (eg, fewer meetings, more SMS messages), it seems clear that there has been a serious decline in many forms of social capital in Australia over recent decades.

In the 1930's, despite the poverty of the Great Depression, there was strong social cohesiveness. Crime remained low, and people didn't fear to catch the last train and walk home from the station.

In the 1940s, the generation that returned from the World War 2 joined or founded key social institutions across our suburbs and towns.

Now more than 50 years later, many of that generation cannot retire from leading roles in hospital auxiliaries, meals-on-wheels or neighbourhood watch, because there are not enough new people to take their place.

If we are lacking in social capital, what are the solutions?

An approach of "we're from the Government, we're here to build your social capital" is not going to work, because social capital is essentially about people taking responsibility for the communities they live in.

Within the market economy, social capital needs to be supported by effective laws to require honesty, protect rights and regulate monopolistic conduct.

However, we need to accept that changes in markets and technologies will both destroy and create social capital.

Gaslight put candle makers out of work, but the telephone created social networks that were previously impossible.

The most important step to greater social capital is a rebuilding of trust - in governments, in other institutions, and in individuals.

Governments need to give citizens confidence that decisions are based on a proper evaluation of the arguments, rather than pre-judgement or inside influence.

As well, governments' powers of office and control over information must not be used for ulterior ends.

Trust in institutions outside of government - in corporations and in non-profit organisations - in large part requires a change in community attitudes.

Community attitudes are far more powerful than generally recognised in shaping the conduct even of boards and senior executives, not just through potential loss of business, but through social pressure at a personal level.

We can help change attitudes by pointing to the foolishness of an excessive focus on short term results at the expense of long term relationships and reputation.

We can emphasise the need for employees and employers to achieve a sustainable balance of work and family life.

We can make clear the importance we attach to decency, trustworthiness and fair dealings.

Governments can reinforce some of this, for example by ensuring that the reliability, sustainability and integrity of proponents is fully taken into account in awarding government contracts and funding, and by ensuring decent treatment and standards of service for clients of government bodies.

Greater trust in individuals requires that we are able to expect those around us, particularly those in positions of authority, to act responsibly based on standards that limit self interest and self gratification.

Again, governments can help reinforce standards of personal behaviour, for example by cracking down, as New York has done, on social irresponsibility that alienates us from our own neighbourhoods and public places.

The rebuilding of trust will in turn help renew our optimism about life's opportunities and our goodwill towards others.

Australians show great generosity in times of crisis, but we need to revive our willingness to contribute to the community in more ordinary times.

This is not a utopian ideal. Nineteenth century Britain and America were transformed by the upsurge of a spirit of mutual help and support.

Nor is this an excuse for us to shirk our collective responsibilities through governments to help those in need.

But effective community participation does require that we have a clear understanding of what governments can and will do, and what will not get done unless we get involved and help.

Robert Clark MP
Shadow Treasurer