Kaj Ilmonen SOCIAL CAPITAL and TRUST in FINLAND

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Kaj Ilmonen SOCIAL CAPITAL and TRUST in FINLAND Kaj Ilmonen SOCIAL CAPITAL AND TRUST IN FINLAND The exceptionally deep economic crisis which hit Finland at the beginning of the 90s had fundamental and long-lasting consequences for the structure and functioning of Finnish society. A substantial part of many businesses in some industries and some regions, was either swept away or hit by cut-backs, downsizing and restructuring. These economic shocks affected not only firms but also non-profit organizations and the functioning of the public sector. Therefore, there emerged a need to find out whether these changes affected the social relationships called “social capital” that is based on trust; and that relationships have been considered to be fairly well established and stable in the Nordic countries (f. ex. Eurobarometer 46/ 1996, 42) I will begin my review by defining social capital and explaining why it has become so popular in the 1990s that it could be regarded B with the AThird Sector@ B as a Awonder concept@ (Wunderbegriff), believed to be capable of solving at any rate, explaining, any current problem. Then I will say few words about Robert Putnam=s study on social capital and I will also consider the weaknesses in his frame of reference and concentrate on one of the central elements of social capital: trust. Finally, I will give a short description of trust in the Finnish context, and look at its variation between sex Finnish municipalities. The concept and topicality of social capital The concept of social capital ties in with the new interpretations now being made of the present-day changes in the visible environment. Though the concept has a multiphasic background, it has taken shape only recently. Almost magically, the concept seems to offer solutions to problems that arise when old social structures crumble. However, social capital is a tricky and complex concept, like so many other Apromising@ hybrid concepts. Typically it encompasses three elements. The first element includes a) social networks and the ways in which they are organized. They represent the formal side of the concept. Besides this, the concept has a substantial side that brings it close to the concept of institution in institutional economics (e.g. North, 1990). The networks are thought to hold together due to b) the trust that the members have in one another and c) the normative rules and reciprocal expectations connected with that trust (e.g. Putnam 1993, 167B176). A social network and the confidential 1 relations connected to it are thought to provide capital or, as Pierre Bourdieu put it, a resource for its members that can be moved around by the members, either individually or together if need be (1986). Social capital is not like economic capital, however, since it cannot be separated from its supporters and the relations that exist between them. In this respect social capital is not as easily movable as economic capital. Nor can it be invested, in the true sense of the word, to increase its value. Despite these Aflaws@ the concept of social capital attracts attention. Why is this? There are several reasons. I will only mention a few topical elements here. Without a doubt one of these is the strong comeback of economic liberalism in both economic and socio-political discourse in the 1980s. The reform of working life, and the diminishing economic leeway of the national state have both, in turn, paved the way for the return of liberalism. As part of the background to this development one can also see the processes described by the concept of post-industrial society B the erosion of traditional communities and social classes ands the consequent social philosophical discussions of exploring the characteristics of a good society (see Ilmonen, 1998). Many of these discussions date back to the fragmentation of feudal society, and are linked to names like Thomas Hobbes and John Locke.1 Robert Putnam and social capital Thus there are several ways of thinking and a variety of social situations that have made the concept of social capital increasingly topical (see Ilmonen 2000). However, they cannot be unproblematically transformed into the notion of social capital or into a scientific discourse based on this. They must first be translated into scientific language. This usually presupposes a set of concepts based on pre-existing theoretical formulations, and research carried out using that set of concepts. Robert Putman=s work Democracy is significant in this respect. Putnam=s basic question is what circumstances are best suited to support the creation of a strong representative (political) institution (1993, 6). To examine those factors, Putnam 1 It is interesting to note that during the economic liberalism of the 1980s and 1990s the same themes are topicalized as were brought up by John Locke, the central source of inspiration for liberalism, when he took a stance against a strong monarchy and state. He wanted to make sure that private ownership would have a legal position in relation to the state, and he nominated Apolitical society@, i.e. civil society, as a guarantee of this. By Apolitical society@ he meant the orderly part of civil society (Locke 1996, 117B119). 2 compares Northern Italy to Southern Italy. This comparison is historical. According to it, Northern Italy as a civil society has for long been in many ways stronger or Amore civic@ than its Southern counterpart. This observation makes the comparison meaningful and leads Putnam to two general conclusions: 1) When civil society is strong, or Acivic@, the market functions better than it otherwise would (1993, 181). In this way he managed to confirm the tenet of institutional economics that the economy is not an island apart from other social activities but instead leans on existing social structures and institutional arrangements and on the trust created by them. 2) When civil society is strong, even the state functions better (98, 173, 181). So, Putnam proposes that social capital is necessary for the smooth functioning of both government policies and the economy. These generalizations are Putnam=s answers to the politically loaded debate over the supremacy of either markets or hierarchies. According to him, neither functions well unless there is a third, Simmelian intermediary factor: a civilized civil society. The views cherished by neo-liberals and the so-called “real socialism”, which assume the antagonism of the market and the state are, therefore, false. Both must be fitted into civil society, and its nature over time will decide the form between the relationship between the market and the state will take. In other words, Putnam=s view is that it is exactly the high degree of civility in civil society that secures the smooth functioning of the market and the polis, since civility guarantees social order and the unhindered functioning of society. 2 In Putnam=s view, civic society is marked by the existence of social networks of reciprocity and trust. As an example he mentions the Apopular sociability@ that developed in 19th century France and that had become more common in Northern Italy, too, in the late 19th century. It was characterized by mutual aid organizations, trade organizations, credit institutions3 and the voluntary work institution (Aaiutarella@), etc. (1993, 139). These and other reciprocal social networks formed the welfare state of the time (ibid., 199). Their existence strengthened, in Putnam=s opinion, the mutual trust of the population. That, in turn, required not the feudal, hierarchical structures of oppression, but a strengthening of equality and common participation (ibid., 104 105). Both of these improve the moral preconditions for crossing family and other group barriers. 2 Putnam admits, naturally, that social order can be maintained even in uncivilized conditions characterized by strong hierarchical dependence and exploitation (1993, 180). 3 In mainland Europe foreign trade was already conducted through credit at the beginning of the first millenium. The word Acredit@ derives from the Latin Acredere@, which means to trust, to have faith. 3 When social capital is in motion, it feeds on itself. The strengthening of social capital takes place, according to Putnam, mainly indirectly: First, a betrayal of trust increases the potential costs in individual transactions. Second, a social network sustains the existing norm of reciprocity. Third, its existence makes communication easier and improves the flow of information. Fourth, previous successful instances of cooperation, which strengthen the members= faith in the opportunities cooperation may bring them, accumulate in the networks (Putnam 1993, 173B174). All in all, Putnam suggests that social capital is an emergent phenomenon that follows this pattern: social networks B norms of reciprocity B trust B social networks. This pattern as a whole defines a civilized community. Thus, according to Putnam, social capital does not solely support the economy and credible politics but is rather an extra-legal a counterpart of a social contract. It is based on legitimacy and morality rather than legal criteria. The concepts refer precisely to what Durkheim means when he discusses the non-contractual element in a contract (1990, 71, 255B257). A critique of social capital and Putman Putnam=s project is currently in political demand. It is connected to the tug-of-war between the neo-liberals and communitarians. Right after the publication of his book Democracy, Putnam took part in the debate and sided strongly with the communitarians (Favell 1998, 222). He stresses how fortunate those who live in a civilized community are (1993, 113). At the same time he frets about the considerable decay that has affected the social capital accumulated in American society over the past few decades (1995, 73). He believes that the current development will weaken the integration of American society on the whole. In clinging onto this belief Putnam brushes aside the Granovetter Hypothesis without a mention.
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