[MUSIC] Hi there. Welcome back. In this video we will discuss the central importance of trust to any analysis of economics, politics, or society. And we'll introduce the central concept of social capital. Now, imagine for a moment that you can trust no one, no one at all. What your life likely to be like? Would you leave the house? I mean, would you go out at all? Could you work for anyone? After all, who would pay you? Would you dare carry money? In fact, would money mean anything? Basically, you would wander around in a state of almost permanent fear and terror, and so would everyone else. Life as we know it would grind to a halt. Okay, this is utterly unrealistic. So imagine now that the only people you can trust are you immediate family, and a few very close friends. What is your life like now? Well, you could now engage socially and economically, but you'd want to keep your important activities as much as possible within your trust radius. You may form temporary alliances with other groups, but this would always be subservient to that closed trust circle. These are the people with whom you would share your knowledge, your transaction, your plans for your future and your rewards. In fact, most of your activities would be aimed at binding these people ever closer to you. Now you can probably imagine what a state like this would be like. You may even live in one. Be marked by clientelism, the favoring of regular business contacts. It'd be characterized by patronage, the favoring of family and proteges. It would be permeated by cronyism, the favoring of friends. And it would be riddled with corruption, the giving or taking of bribes to secure a deal. Although it doesn't often figure in political analysis, trust is the glue that holds societies together. Now, trust is linked to a wider more popular concept called social capital. Now, just as economists have devised a concept called human capital, which is one's raw hours of labor on a task, plus all the skills and experience that you bring to the task. So political scientists devised a concept called social capital. This covers ones human interactions plus the range and intensity of ones network of relationships. And imbedded in social capital is the idea of trust. But whereas the idea of human capital goes back to the 1950s, the idea of social capital was virtually unheard of until the 1990s. One rather unkind observer suggested it coincided with the end of the cold war. And the blow that this in forward to the specific international relations perspective that have dominated much of political scientists. Since there's no one as inventive as a political scientist who has lost his paradigm, would suggest that social capital was pressed into service to fill an intellectual vacuum. Well, I confess I secretly sympathize with this view but I don't think it conveys the whole story. Many of the components of social capital and trust rhetoric had already been bubbling slowly in a branch of economics called institutional economic. Which emphasize the role of agglomerations and networks and state holders. At a time when hyper globalization rhetoric was boasting the triumph of markets, and viewing institutions of pediments, so an alternative discourse emerged. Built around the centrality of formal and informal institutions and the conditions necessary to make them work, including trust. The main exponent of social capital was a political scientist called Robert Putnam. In 1995, he published an article for Bowling Alone, which he later expanded into a book. Central to Putnam's thesis is the membership and density of voluntary organizations, since these are the networks that are the building blocks of social capital. Like many social scientists, he also holds that personal trust is directly linked to trusting institutions or to put it in social science terminology interpersonal trust is linked to generalized trust. In addition, he distinguished between networks that provided bonding capitalism, closed groups where you met sort of your sort of person, and those providing bridging capital where you mix with others. Bowling clubs were reform of the latter and for Putnum, a jolly good thing too. Now, bowling alone contrasted the increased popularity of 10-pin bowling with a decline in the membership of bowling clubs. It was a metaphor of what he perceived was happening n the American society as a whole. Membership of civic organizations was everywhere in decline, and this undermined the formation of the social capital and the nurturing of trust. This fragmentation of society posed a threat to democracy, posed a threat to America's authority in the world, posed a threat to its economic preeminence. Well, posed a threat to just about everything. Now bowling alone, in an earlier work applying these ideas to the evolution of the Italian democracy over a period of seven centuries were both heavily criticized. But it made no difference to their popularity, especially among policy makers. I suppose this says something about the links between academia and policy-making. We academic fondly imagine that our work may perhaps, just a little, influence policy making. But policy makers usually have their own pre-conceived ideas and they, well usually their civil servants, just look for some academic work that legitimizes them. How was salary? Okay, to sum up. We established that trust was essential to society and we've distinguished between interpersonal trust and generalized trust. We've examined the rise of social capitalism, and we've explored the concepts of bonding and bridging capital. In the next video, we'll look at how to measure trust in different societies.