What Can Government do to Increase America’s Social Capital?

This article originally appeared in Philanthropy Daily on June 19, 2019. 

What can government do to make Americans’ lives better?

Talk to any of the Democratic presidential candidates, and you’ll find that the answer is to expand government mandates and services—such as raising the minimum wage to $15/hour and partially or completely replacing private health insurance with “Medicare for All.” Conservatives instead advocate for proposals that increase rather than decrease the role of the state.

But the Social Capital Project, associated with Congress’s Joint Economic Committee, asks a more interesting question: what can government do to increase social capital in America?

They address this question in their latest report, The Wealth of Relations. I wrote about their first report here and their second report in this piece.

The authors of the report note that President Abraham Lincoln made the best summary of what social policy should achieve in July 1861, when he was asking Congress for a substantial budget increase to fight the Civil War. The goal of government, President Lincoln declared, was “to elevate the condition of men—to lift artificial weights from all shoulders—to clear the paths of laudable pursuits for all—to afford all, an unfettered start, and a fair chance at the race of life.”

But the writers note there is an abundant amount of evidence that when government tries to make people change their behavior the policy is ineffective. The great sociologist Peter Rossi once coined “the iron law of evaluation,” which is “the expected value of any net impact assessment of any large-scale social program is zero.” He followed this with “the brass law of evaluation,” which is “the more social programs are designed to change individuals, the more likely the net impact of the program will be zero.”

Rossi made his trenchant observations in the 1980s. In 2013 David Muhlhausen, in his book Do Federal Social Programs Work? concluded that Rossi was still right in his gloomy assessments. “The evidence,” Mulhausen wrote, “overwhelmingly points to the conclusion that federal social programs are ineffective.”

The authors provide evidence to support Rossi’s laws by looking at research collected in the “What Works Clearinghouse,” a program of the Department of Education designed to affect skills acquisition and behavior. They looked at 385 programs designed to teach people new skills. Fully 41 percent of these programs had “no discernable effects”—i.e., they didn’t work. Another three percent had “negative effects,” and five percent had “mixed effects.” So half the programs failed.

But the remaining half of the studies didn’t provide positive news with only 11 percent—44 out of 385 studies—deemed to be “clearly positive” in that there was a lot of evidence that people in these programs learned and that there was no evidence that the program was ineffective.

This percentage, say the authors, is true for most social programs. Most of the time evaluation either shows that the program doesn’t work or doesn’t provide any evidence that a program does work.

Even when government isn’t trying to change people’s behavior, their programs often have unintended consequences. Programs designed to provide income security discourage people from working or having families. The welfare state largely crowded out private charity for the poor. Programs to reduce risks often increase the likelihood that people do risky things, a process economists call “moral hazard.”

But the authors argue that having a clear-headed view of government’s part in making things worse should not lead to the idea that government should do nothing. For example, in the past half-century marriage rates have fallen and families are having fewer children. In addition, there’s persuasive evidence that communities where families have two parents have more social capital than ones where single-parent households dominate.

But the question that needs to be answered is why family formation is falling. Is it because men aren’t earning as much as they used to? Is it because women spend more time in school and earn more than in previous generations? Or has the cost of childcare made it impractical for both parents to work? The authors defer answering this question in this paper and promise to address it in the future.

Another issue the Social Capital Project hopes to study is the decline in male employment. Having a job increases social capital in ways beyond simply getting a paycheck. As New York Times columnist Ross Douthat observes, working provides “a path away from crime and prison for young men, an example to children and a source of self-respect for parents.” In addition, the jobless are more likely to be depressed and socially isolated than people who are working.

The Social Capital Project promises to look at ways to get “idle able-bodied men and women” into the labor force, including at “work-discouraging federal benefits” and “economic policy that limits job creation and wage growth.” One policy they ought to look at is the job-destroying results of excessive occupational licensing requirements.

The authors don’t provide any conclusions in this paper, which is a preface to future papers in which the authors will discuss evidence-based ways in which government can build social capital by getting more people working, strengthening marriage and the family, and helping people acquire new skills. Since the authors look at the evidence that government’s power to strengthen society with gimlet eyes, I think it will be very interesting to see what solutions the Social Capital Project proposes for these pressing social problems.

Martin Morse Wooster†

Wooster was a senior fellow at the Capital Research Center. He is the author of three books: Angry Classrooms, Vacant Minds (Pacific Research Institute, 1994), The Great Philanthropists and the Problem of ‘Donor…
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