Economists have argued that social cohesion & trust are important for economies to grow. But they have often mistaken cohesion to mean the lack of differences. If capitalism in Holland is anything to go by, it’s not the lack of differences, but an acceptance of it that leads to a cohesive society.
Measuring social cohesion
Having argued that social cohesion matters for economic performance economists set out to establish it. This was “achieved” by measuring social cohesion and relating it to growth (of course, teasing out other factors). Unfortunately, misleading indices were chosen to establish if societies are cohesive. The indicator that has been used most is “Ethno-linguistic fractionalisation” – the probability that any two randomly selected individuals will speak the same language and belong to the same ethnicity. Similarly caste and other identities have been used to measure cohesion.
By measuring difference as conflict, I feel that economists and political scientists have made a mistake. It is a mistake to theorise the fact that conflicts happen over differences (fault lines) as “differences mean conflicts”. The two are significantly different. An implication of measuring difference as conflict is that a society that becomes diverse is automatically considered less likely to perform well economically.
The Dutch example
The Dutch city-states are one of the most important precursors to capitalist growth that is the end that economists have been pursing. It is important to note that the Dutch revolution came at a time of serious religious conflicts in Western Europe. This was resolved in the region not by expelling or converting all religious identities, but by creating a space for diversity. As a result of this, business people, intellectuals (and so scientific growth), and others shifted to these city states. Practicing one’s own religion privately became the norm – and this is well documented by historians.
Holland did not achieve cohesion by eliminating diversity. In fact, diversity increased in the society with people who were persecuted elsewhere moving into these cities. Cohesion was achieved by building tolerance and a set of practices that enabled people to negotiate their differences. Unfortunately, such important changes can never be captured if cohesion is measured as lack of differences.
There have been some welcome changes in measuring social cohesion in the last few years. For example, William Easterly put together a database of riots without specifying identities. This outcome based measure is more capable of negotiating shifting identities. But this too freezes the fate of a society the moment the database is in place.
I do not wish to get into a debate on the usefulness of social cohesion as an idea to understand economic performance. Even if the idea is useful, measuring it would be challenging. Measures like actual incidence of conflicts in the recent past may be useful as an indicator for the immediate future. Contrary to these, looking at difference as conflict is doubtful as a measure and useless as a episteme for change.