The Destruction of Social Capital

May 8, 2003

Maruja suggested I translate this very good article which appeared in today’s El Universal, she was right, it should be read:

The Destruction of Social Capital

by Axel Capriles M.

To recover from the damage produced by the Bolivarian revolution will take a few generations. We have not only regressed on all aspects of life. It is not only a matter of paralysis or being behind materially or intellectually. It is, above all, an emotional fissure that has produced the political use of resentment, the continuous attack to the fundamental emotions of society. No previous Government had spent so much time using such bad faith for the destruction of social capital.

All societies need shared values, rules and regulations that allow the interaction among individuals without too many frictions in order to subsist, work together and develop as a social group. It is what Friedrich von Hayek denominated “the extended order of human cooperation”, the set of informal values shared by people that allows them to collaborate together. If anything has been clarified by the studies of economic development is that the formation of social capital is the decisive factor for the progress and well-being of nations. And we understand as social capital “that total provision of cooperative relations based on the norms of honesty, reciprocity” and the mutual trust needed to function in an efficient manner and assume common challenges. That intangible of development can be built in a very short time, but it takes generations to be formed or reconstructed.

The trust (so stranged from hate and resentment), the reciprocity and the norms for cooperation are fundamental for rational economic behavior. They are indispensable to reduce transaction costs, negotiations costs, and the control of contracts and, as a consequence, to achieve more productivity without adding costs. Even though social order and the rules of cooperation can be created hierarchically, most of them appear in spontaneous and decentralized fashion as part of social interactions and are part of the internalized culture of individuals. When people have to continue living together in the same geographical space, when difficulties ask for cooperation and collaboration to achieve a minimum of well being, both collective and individual, the worst crime that a ruler can commit is the destruction of social capital.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: