Svendsen and Svendsen, Trust, Social Capital and the Scandinavian Welfare State

Gunnar Lind Haase Svendsen and Gert Tinggaard Svendsen, Trust, Social Capital and the Scandinavian Welfare State: Explaining the flight of the bumblebee, Edward Elgar, 2016, viii + 156 pp, hbk, 1 84844 064 7, £65

How do the Scandinavian countries do it? And, in particular, how does Denmark do it? High public expenditure, high taxes, and a robust economy, appear to function perfectly happily alongside each other. Why doesn’t free riding scupper it all?

To study this conundrum, the authors employ what they call Bourdieuconomics: economic theory constructed on the basis of Bourdieu’s insight that intangible forms of capital – social, cultural, and symbolic capital – are at least as important as the tangible sort to which we can ascribe monetary value. This theoretical decision leads the authors to their research question:

How is social capital used in practice to generate wealth in contemporary Denmark? (p. 7)

The introductory chapter is followed by a chapter on Bourdieuconomics, in which the authors find that social trust and open and inclusive social networks reduce free riding and encourage ‘hard riding’: that is, active contributions to society. Chapter 3 studies two local communities, and finds that voluntary associations and informal networks create the trust that enables social capital to be shared around formal and informal networks. Meeting places are essential to this process, as are the committed ‘hard riders’ who actively build organisations and networks. The authors’ conclusion to chapter 3 is that ‘it is trust, and the active use of this lubricator, that leads to widespread cooperation and economic success in daily life’ (p. 53). Chapter 4 studies a policy instrument – the national ‘culture house’ or ‘community centre’ movement – that acts as a facilitator of the organisations and networks that keep the cultural machine humming along. Chapter 5 finds that the public sector has an important role to play, and that public libraries in particular function as facilitators of social capital transfer. Chapter 6 studies the private sector, and finds that companies that emphasise co-operation can convert social capital into economic capital, and that this works best when the co-operation is formalised in some way.

In the concluding section of the final chapter the authors compare Denmark, with its high level of trust and its sufficient number of ‘hard riders’, with Greece, with far too few ‘hard riders’ and far too many free riders milking the State and finding ways to avoid taxation. Greece’s economic collapse was inevitable, and Denmark’s will be if it cannot maintain its current levels of social capital, trust, networks, associations, community centres, and co-operative activity. The authors don’t discuss the UK, but my suspicion is that the UK is surviving on the basis of a historic legacy of trust and social capital that is no longer being actively rebuilt, and so will eventually run out, with consequences similar to those in Greece.

This is a really worthwhile book because it takes a broad view of economics, it offers informative case studies, and it draws significant conclusions. There might be no detailed study of social security systems, but this book is still essential reading for anyone involved in the Citizen’s Income debate. The UK’s current benefits and tax system, which divides people into silos and thereby invites the stigmatisation of benefits claimants by taxpayers, destroys trust and makes almost impossible the transfer of social capital between different groups within society. A Citizen’s Income would have a very different effect. It would invite co-operation, trust, and the transfer of social capital; and by reducing the stigmatisation and anxiety experienced by so many benefits and tax credits claimants, it would make it a lot easier for a lot more people to build and employ social capital.

The Citizen’s Income debate is not just about illustrative schemes and marginal deduction rates, although of course it is about those. We also need to employ Bourdieuconomics to the Citizen’s Income debate, and to discuss the new levels of trust, social capital, and therefore economic capital, that a Citizen’s Income could generate.