We previously discussed how the main factors of production are land, labor, capital, and entrepreneurship. I might have to amend that list, however, to include social capital—that is, the set of beliefs and attitudes about the world that influence how people living together cooperate to form a society, or not. (I might also end up squeezing it into an existing category such as the “culture” component of human capital; but the categorization is artificial anyway.)

The study of social capital was largely kicked off by Robert Putnam, famous most recently (I think) for Bowling Alone, his argument that the American social fabric was fraying. But the basic theory was based on over a decade of research prior to that, focused on Italy. By comparing the northern cities of Italy (which had a heritage of having become free cities some 500 years ago) with cities in the Italian south (which did not), Putnam showed not only that people in the northern cities were much more prone to social and civic involvement, were less tolerant of corruption, and had more generalized trust—he showed that these characteristics had measurable impacts on economic growth. The more social capital a society had, the more economic growth.

Luigi Zingales (in A Capitalism for the People) discusses why this is so, specifically with regard to generalized trust—that is, the predisposition to trust other people even before you know them. Generalized trust is the reason that we hand packages off to the postal worker, that we deposit money in the bank, and that we buy things from the supermarket while they are still in the package. A general belief that most people are trustworthy, absent concrete evidence otherwise, makes possible a tremendous amount of trade and exchange.

Contrast the above picture with the situation in backward villages of Sicily. Zingales describes a social milieu where no one trusts anyone else outside of his family (and even within the family, not much!), and people are chiefly concerned with not being a sucker. Moreover, that expectation is justified by experience, as government officials are corrupt, businessmen are shady, and people from other families will cheerfully exploit any momentary advantage offered by some poor sap. As one result, farmers do not cooperate with each other and end up with perennially bad yields, remaining mired in poverty.

Zingales also notes that it takes a very long time for people to develop generalized trust. Immigrant communities in the United States from low-trust countries take several generations for their level of generalized trust to rise to the level prevailing in American society. By contrast, it is very easy to lose such trust. If a government victimizes the people, or businesses do the same (for example, by the growth of crony capitalism or by violating laws with impunity), generalized trust suffers immediately and the legacy of such abused trust can echo for hundreds of years.

Depressing, certainly (especially given how cavalier our political class is acting right now in squandering the trust of the public; but I digress). But extremely useful for worldbuilders. If you characterize an invented society as having high or low levels of social capital, that has a whole host of implications for its history, its future development, the basic attitudes of the people, and its level of economic dynamism.

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(This post is part of Politics for Worldbuilders, an occasional series. Many of the previous posts in this series eventually became grist for my handbook for authors and game designers, Beyond Kings and Princesses: Governments for Worldbuilders. The topic of this post belongs in the planned second book in this series, working title Wealth [Commerce?] for Worldbuilders. No idea when it will be finished, but it should be fun!)