Social capital matters
The author, former chief economist at the Asian Development Bank and a senior adviser for international economic affairs to former President Lee Myung-bak, is a professor of economics at Korea University.
As the adage goes, “A chain is only as strong as its weakest link.” If the weakest link breaks, so does the entire chain. A football team’s performance also depends on its weakest players. To make the team strong, the coach must reinforce the weakest. Even if the club has the world’s best striker, it can lose if its defense cannot stop the opposing team from scoring. Journalist and bestselling author Malcom Gladwell likened the Covid-19 situation to a football game. The pandemic hit the weakest links in our society. The hardest-hit countries were those with poor public healthcare system, poor populations, and people who got sicker due to underlying diseases.
There are high expectations that our people’s lives will finally be normalized once the country shifts to policies being dubbed “Living with Corona.” The time has come for us to visualize the post-pandemic era to build a strategy for sustainable development. What might be the weakest link in our economy that hampers further development? Comparative data with other countries can hold some answers. Various reports from international institutions place Korea at the advanced level. According to the World Economic Forum (WEF) rankings, Korea is 13th in national competitiveness. It is among the top in categories such as infrastructure, market scale, education levels and ICT technology. Korea ranked 28th in British think tank Legatum Institute’s Prosperity Index in 2020. It scored high in investment environment, infrastructure, education, and government capability to achieve its goals.
But Korea was poorly rated in the social capital category in international comparison studies. In the WEF rankings, Korea was 78th in social capital. In Legatum’s index, it came 139th among 167 countries. Social capital may sound unfamiliar, but it is related to mutual trust, respect and cooperation among community members. It is an invisible asset that can unite members of the community or members. If more people trust one another, share common values and cooperate, social capital will increase.
Surveys about social capital ask whether you generally trust others, if others had treated you well yesterday, if you trust the judiciary system or the central government, whether you donated or participated in a volunteer activity over the last month or whether you have a relative or friend that would willingly help you in times of trouble. The more positive answers, the greater the social capital.
In the hit Korean drama “Squid Game” available on Netflix, the players deceive one another and use whatever means to win prize money. Social capital would be zero in such a community. As economists found in a study, the less social capital, the slower economic progress is. If one does not trust others in business and if legal systems are not reliable, the cost of economic activity will be greater, making long-term investment difficult.
In his book “Trust and Recognition,” Francis Fukuyama argues that the economic prosperity of a country is determined by social capital. Even if a country has excellent corporations and manpower, it cannot prosper if its people do not trust another and cooperate.
Pessimists say Korean society is turning more like the “Squid Game.” Over the last few years, division and conflict over ideology and across classes have deepened. The government has promised to create a country with no privileges or foul play. But it did not follow through. Trust in the judiciary has weakened.
The Daejang-dong development scandal involves private operators, city government officials and state law enforcement officers exchanging money in return for unjust gains. Corruption, irregularities and collusion may not be confined to the Daejang-dong case.
Social capital should not be the weakest link that weighs down our economy and our national advance. It is important to raise citizenship standards, lessen economic gaps, and build a just system. Ethical standards must be raised through education, and more people must actively participate in social and political affairs to achieve public good. Only when individual consciousness is raised can people move beyond individual interests to trust and cooperate with one another and elect a devoted leader expected to work hard for the community interests.
By helping the weaker, the inequalities in income and wealth could be narrowed and the sense of communalism could increase. Fair systems must stop power abuse and corruption by public officials and the elite to raise social trust. Leaders should be respected and relied on to unite the people and reform systems. Through a civilian awakening and participation, we can strengthen the weak link of our society, social capital.