U.S. prosperity has improved over the past decade due to the increasingly open U.S. economy and improvements in health, education, and living conditions. However, weakening personal and social relationships, and a reduction in civic participation, are undermining the American dream and holding back further growth in prosperity.
Consciously investing to improve social capital will help the United States improve its prosperity even further.
One of America’s historic strengths is that its institutions were designed so that the success of the individual would feed into the success of society and vice versa. But the relationship between the individual and wider society has broken down as social capital — the glue that holds society together and is critical to creating an environment in which every U.S. citizen can reach their full potential — has deteriorated.
It has been 20 years since Robert Putnam’s influential book Bowling Alone was published, analyzing the decline of social capital in America, and 17 years since his follow-up offering, Better Together, sought to find individuals and groups working successfully to repair the social fabric of the country. But America has continued to see increasingly fractured communities, a reduction of trust in critical institutions, and declines in civic participation.
While 6 out of 10 U.S. citizens trust others in their neighborhood, a proportion that has not changed in a decade, the percentage of U.S. citizens who frequently talk to their neighbors has fallen from 71% in 2009 to 55% in 2019. And the percentage that do favors for their neighbors has also fallen from 39% to 31%. Social media allows us to be more connected than ever before, and yet the number of close friends the public report having has not increased.
There has also been a slight decline in the number of Americans that participate in school, neighborhood, or community associations or recreational and sporting organizations. Trust in the federal government has stagnated, and the percentage of people expressing confidence in the media has fallen from 62% to 55%.
Building upon success elsewhere, reversing the decline seen in social capital will help ensure even greater prosperity across the U.S. But this will need tailored approaches in each region. The Legatum Institute’s U.S. Prosperity Index shows that there are important variations across the different states, with those in the West and Midwest performing best on social capital. Utah, which is ranked seventh for prosperity overall, is one of only 11 states that bucked the trend of declining social capital and remains first in the rankings, pointing to the potentially important role of faith and family in forging valuable social bonds. However, even here, the strength of social networks and levels of civic and social participation have deteriorated in the last 10 years.
Putnam’s work highlighted how a lack of social capital undermines the active civil engagement required for a strong democracy. But the consequences are even greater. Our research shows that economic resources are used most effectively and result in better lived experiences in places with strong institutions. And Putnam estimated that being involved in associational activities had the same effect on happiness as a 100% increase in income.
Improving social capital can have wide-ranging benefits on other aspects of prosperity. The U.S. Prosperity Index reveals that those states that perform the strongest on social capital also perform strongly on education, living conditions, and safety and security. For example, five of the top 10 states for social capital (Minnesota, Vermont, Nebraska, New Hampshire, and Iowa) are also in the top 10 for education, and four (Vermont, North Dakota, New Hampshire, and Maine) are also in the top 10 for safety and security.
To some extent, this is common sense. We feel safer when we trust those we live with; friends and family can inspire us, teach us new things, and help us at school and to get a job; and with support from the community, potential challenges around health or living conditions can be more easily overcome. But we cannot take this reality for granted.
Given the complexity of human relationships, improving social capital is unlikely to be driven by more legislation. But the issue does require deliberate attention by policymakers at both the federal and state levels. Focusing on macro or fiscal economic policy responses will not reverse the deterioration of social capital. Initiatives need to be implemented that will enable the strengthening of families and civil society and increase trust in broader institutions.
At the same time, civic institutions must rise to the challenge and grasp the opportunity. Much has changed since Putnam’s books were published, and now is the time for new organizations to find new ways to bring people together again to renew their communities and strengthen the country’s great institutions.
The U.S. has a world-leading economy, but this fact cannot be left to do the heavy lifting for the nation’s overall prosperity. Strong families and communities are vital for us to live flourishing lives and ensure future generations are also able to enjoy a life of liberty, opportunity, and the pursuit of happiness.
Stephen Brien and Shaun Flanagan are, respectively, director of policy and director of the Centre for Metrics at the Legatum Institute.
