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Developing social capital is a cause that conservatives take seriously

By Kevin Donnelly - posted Monday, 11 August 2003

The Treasurer, Peter Costello, needs to be congratulated on entering the debate about the importance of social capital. As those familiar with the thoughts of Sir Robert Menzies will know (in particular, his radio speech The Forgotten People) there is much about social capital that closely resonates with Liberal philosophy.

That social capital's natural home is on the conservative side of politics explains why many "left-leaning" commentators have been so critical of the Treasurer's recent speech at the Centre for Independent Studies.

For many years public figures and politicians like Eva Cox and Mark Latham have sought to identify social capital with their side of politics.


By demonstrating that Liberal governments are not simply about good economic management and sound fiscal policy, and that community well being is a central part of politics, the Treasurer has begun to stake the "social agenda" territory as an important part of future policy development.

As recent history has shown, especially demonstrated by the fall of the Kennett regime, voters do not simply judge governments on their economic success. Whether in England, the USA or Victoria, voters are calling for governments and policies that value social concerns and promote a strong sense of community.

This sense of working together at the local level to achieve both personal and group goals rests heavily on recent debates about "social capital".

Much has been written about the importance of financial and human capital to the success of a business organisation or to the economy as a whole. More recently, writers such as Francis Fukuyama have argued that efficient and viable economies do not simply rely on concepts like human capital.

Equally as important in explaining why particular economies are successful is the idea of "social capital". This social capital is not simply important because of its economic impact; equally as important is the way in which it facilitates a healthy and robust democratic system of government.

Robert Putnam defines social capital as: "... features of social life - networks, norms and trust - that enable participants to act together more effectively to pursue shared objectives". Fukuyama, after referring to the work of the sociologist, James Coleman, defines social capital as: "the ability of people to work together for common purposes in groups and organisations."


Closely related to the concept of social capital is its importance to the health and robustness of what is termed "civil society". Putnam uses the expression "civic engagement" in this context and defines it as: "people's connections with the life of their communities."

Fukuyama defines "civil society" as: "a complex welter of intermediate institutions, including businesses, voluntary associations, educational institutions, clubs, unions, media, charities and churches ..."

Both Putnam and Fukuyama argue that the health of a democratic society depends, in a large part, on a strong dose of social capital. The presence of intermediate voluntary organisations between the individual and the state promotes such democratic values as cooperation, collaboration and the achievement of common goals.

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About the Author

Dr Kevin Donnelly is a Senior Research Fellow at the Australian Catholic University and he recently co-chaired the review of the Australian national curriculum. He can be contacted at He is author of Australia’s Education Revolution: How Kevin Rudd Won and Lost the Education Wars available to purchase at

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