The writer, an FT contributing editor, is chief executive of the Royal Society of Arts and former chief economist at the Bank of England
The world is more diverse and interwoven than ever before — economically, culturally, ethnically, generationally. This is largely the result of the postwar explosion in cross-border flows of goods and money, people and information. For much of that period, the benefits of globalisation were taken for granted and garnered widespread popular and political support.
Those days are gone. The question now being asked is whether increased economic openness and connection are a source of fragility rather than flourishing, economically and societally. This is a key point of departure between progressives (who emphasise the benefits) and populists (who emphasise the fragility). Both have a point.
There is no ecosystem on the planet that is not enriched by increased diversity. The complexity of rainforests and oceans explains their abundance. In social systems, the cross-pollination of ideas, cultures and practices in diverse communities has been a driver of innovation and dynamism for millennia.
Yet this is a double-edged sword. A rainforest or an ocean are vulnerable to antagonistic arrivals such as humans seeking timber or fish. If cultures clash rather than cohere, diverse communities exhibit similar fragility.
Every complex system faces this balancing act, but it can be improved by strengthening ties and trust — what Harvard political scientist Robert Putnam calls social capital. The depletion of social capital over the past half-century, documented by Putnam, has tilted the scales decisively towards fragility. Today’s open, connected economies are nested in brittle, disconnected societies. Neither can flourish like this.
One policy response is to reverse economic course, tightening restrictions on cross-border flows of people, goods, technologies and information. While economists (like me) tell us that doing so would diminish economic dynamism, given these policies address the insecurities felt by many at source, it is no surprise they are gaining support — especially around immigration and trade.
But there is another — arguably less costly, certainly less explored — way of achieving the same end: dialling up social policy rather than dialling back economic policy. Social capital can become a golden thread woven throughout public policy, from health to housing, education to place-making.
Many organisations already run programmes to build social cohesion and curb antisocial behaviour. US Senator Chris Murphy has proposed a national strategy for social connection. But no country has yet put in place a comprehensive, cross-cutting national programme for social cohesion with ambition commensurate with the challenge.
A better map of the territory is crucial — too often, policy action is taken in the dark and data on social capital is patchy. What is needed first is a new set of national accounts, focused on social capital. Recent research by Raj Chetty, who has developed highly granular maps of social capital, provides a glimpse of what is possible.
Social ties are best established early in life. As work by Chetty et al shows, networks forged in youth are the key to unlocking upward mobility. But our current education systems are more often a recipe for social stratification than mixing. That calls for a radical rethink of curricula and extracurricular activities, and educational access criteria, to make social connection a fore rather than afterthought.
Next, unplanned urban sprawl has contributed significantly to the Balkanisation of communities. In future, social cohesion should be at the heart of spatial planning. LSE professor Richard Sennett has proposed sociable housing, connecting disconnected communities through mixed tenure residences, communal spaces and an improved public realm. There are already examples in Japan, Scandinavia and elsewhere.
Social capital is built on strong social infrastructure — faith-based institutions, youth clubs, community centres, parks, sports and leisure facilities, libraries and museums. Yet investment in social infrastructure is meagre relative to physical and digital infrastructure. Reprioritisation and reinvestment are overdue.
If citizen trust is to be rebuilt, new models of governance are needed too. Citizen panels and juries are effective in building trust and cohesion in diverse communities. Yet they are far from the democratic mainstream. In a return to the original Greek model of democracy, community-led coalitions could play a central role locally.
In addition, mainstream and social media are a key conduit for both social connection and, increasingly, social division. Many countries are legislating to avoid online harm. But too little is being done to support online good where it nurtures social cohesion. Public service broadcasters and regulators have a vital role to play in doing so.
Finally, every revolution (even a policy one) needs leadership. An Office of the President or Prime Minister, charged with lacing social cohesion through policy, should be hard-wired into the machinery of governments.
In The Upswing, Putnam showed how social capital was built in the first half of the 20th century, before being depleted in the second. We can repeat those successes through cross-cutting national programmes of social cohesion that speak directly to the insecurities felt by so many. This would signal a decisive shift in capitalism itself — towards a “social capitalism” able to bridge disconnected communities, progressives and populists, the me and the we.