Introduction

The collapse of “social capital” – interpersonal relationships, networks, and the associated benefits – has created a national crisis reflected in the growing instability of contemporary American life.¹  The signs of this unraveling are ubiquitous: Between 2001 and 2020, the share of Americans with no close friends grew sixfold; during roughly the same period, drug-induced deaths rose fivefold and alcohol-induced deaths more than doubled.²  More than any other factor, social capital collapse drives or exacerbates the problems that dominate the news cycle, from plummeting public health to exploding national debt to worsening labor shortages.  Leaders in government and business should recognize America’s social capital collapse as the most serious threat to the nation’s political stability and economic strength. 

The Social Capital Crisis

Americans suffer from the astonishing disintegration of their families, friendships, and communities. Scholars term these relationships “social capital” for not only supporting individual happiness and wellbeing, but also enabling safe and productive communities, business transactions, and societal cohesion across disparate communities.  “What is at stake is not merely warm, cuddly feelings or frissons of community pride,” wrote sociologist Robert Putnam in his 2000 book, Bowling Alone.  “Our economy, our democracy, and even our health and happiness depend on adequate stocks of social capital.”³  Statistics measuring Americans’ social and interpersonal relationships suggest an accelerating decline during recent decades.  Friendship, which predicts civic engagement, is in freefall, especially among men.  Just 15 percent of men reported having 10 or more close friends, down from 40 percent in 1990.⁴  Similarly, membership in houses of worship fell from 70 percent in 1999 to 47 percent in 2020.⁵  Families have frayed: America has the world’s highest share of children living in single-parent households – 23 percent, as of 2019.⁶ 

The devastating consequences of social capital collapse affect tens of millions of Americans.  In 2021, U.S. life expectancy fell to its lowest level in more than 25 years and drug overdose deaths exceeded 106,000.⁷  The 2022 National Survey on Drug Use and Health found that, in the past year, 59.3 million adults (or 23.1 percent) suffered from any mental illness, while 48.7 million people aged 12 or older (or 17.3 percent) had substance abuse disorders.⁸  During 2022, more than 49,000 Americans committed suicide, a record high, as the national suicide rate has risen 37 percent since 1999.⁹ 

These grim statistics suggest that social capital decline, which began in the 1960s, has intensified into a condition of social capital collapse.  The lamentable state of the nation’s social capital perhaps explains the pervasive pessimism and populist politics that frustrate many elites.  In one telling example of this disconnect, CNN host and Washington Post columnist Fareed Zakaria recently wrote, “This profound sense of despair is perplexing because I don’t find much objective data to support it.”¹⁰ 

Political Impacts: 2012-2020

Despite then-President Barack Obama’s unpopularity and the sluggish economic recovery, Republican nominee Mitt Romney lost the 2012 presidential election.  Romney’s defeat appears directly related to his failure to connect with Americans on the frontlines of social capital collapse.  Shortly after the election, analyst Sean Trende observed that about seven million fewer white Americans voted in 2012 than in 2008 despite demographic growth.¹¹  Looking closely at results in Ohio, Trende found that while white-collar suburban Republicans “turned out in full force” for Romney, turnout fell among voters in areas still reeling from the Great Recession, with high unemployment and low economic growth.¹²  “One can see why they would stay home rather than vote for an urban liberal like President Obama or a severely pro-business venture capitalist like Mitt Romney,” wrote Trende.¹³  The embodiment of establishment conservatism, Romney lacked the appeal of the 2016 Republican nominee, Donald J. Trump, to the struggling white working-class.

The social capital crisis drove Trump’s rise to both the Republican nomination and the presidency. UCLA researchers found that counties with lower levels of social capital – measured in membership in civic and voluntary organizations, as well as general trust – were more likely to vote for Trump in both the 2016 primary and general elections.¹⁴  Trump appealed directly to areas where social capital decline was sharpest. From 2000 to 2016, voters in counties with the highest exposure to trade voted increasingly for Republican presidential candidates.¹⁵  In 2016, two of the top five states with the highest drug overdose deaths, Pennsylvania and Ohio, flipped to electing Trump after voting for Obama in 2012.¹⁶  Twelve of the 15 states with the sharpest declines in marriage rates from 2000 to 2018 voted for Donald Trump in the 2016 and 2020 presidential elections.¹⁷ 

The rift in American politics was not solely the product of the Trump-led populist turn in the Republican Party.  As lower social capital voters rallied around Trump, those with higher social capital shifted dramatically toward supporting Democrats.  The Pew Research Center found that 57 percent of college educated voters supported Hillary Clinton in 2016.¹⁸  Although Clinton only won 472 counties in 2016, these largely urban and suburban localities contributed 64 percent of GDP, compared to the 36 percent produced by the 2,397 counties that Trump won.¹⁹ 

The 2020 election marked the solidification of the social capital schism that rent the American electorate in 2016.  “Looking over the election results for all the races in the country’s wealthy suburbs reinforces the point. America’s rich have turned to the Democrats and they aren’t turning back,” observed political scientist Darel E. Paul in the wake of the 2020 election.²⁰  The lack of social capital bridging the Republican and Democratic bases – such as apolitical membership organizations and religious institutions, which could transcend economic and geographic divides – has intensified interparty hostility.  In 2020, 75 percent of Republicans and 64 percent of Democrats identified their opponents’ policies as posing a threat to the country.²¹  Both parties’ mutual animosity and mistrust fueled the dispute over the results of the 2020 election. With declining social capital to bridge partisan divides, political conflict – rather than conventional competition – seems likely to persist.

Policy Implications

Social capital collapse promises wide-ranging and expansive changes in US federal policy:

TAXES AND SPENDING – Rising antisocial behavior and alienation make efforts to constrain spending – especially non-defense spending – exceedingly difficult.  Higher rates of loneliness, addiction, and violence will compel more, not less, government intervention.  Cuts to entitlement programs will become even more politically improbable as millions of aging Americans without supportive family or social ties become reliant on retirement and disability benefits.²²  As a result, policy makers likely will pursue a range of tax increases.  The 2017 corporate tax rate reductions of the Tax Cuts and Jobs Act will be especially vulnerable, regardless of former and possibly future President Trump’s current enthusiasm for an additional cut in corporate rates.  Other possibilities include a financial transactions tax on major banks and other financial institutions, as well as data taxes to capture greater revenue from “Big Tech.”  Wealth taxes will be particularly attractive in a populist political environment defined by social capital collapse as fiscal pressure builds in the coming decade.²³  One opportunity for tax relief will be greater and sustained support for immediate expensing of capital expenditures to support reindustrialization.²⁴ 

LABOR – Social capital collapse has restricted labor supply, shifting the balance of power in many sectors from management to workers.  This trend will continue to be challenged by immigration and automation, which only will amplify political volatility.  A more activist National Labor Relations Board, with growing numbers of progressive appointees, has introduced pronounced regulatory uncertainty.  The Protecting the Right to Organize Act – a bill that passed the House in 2021 with five Republican votes but failed to clear the Senate – offers a preview of policies to revise organized labor’s relationship to the private sector.  Items in the bill included broader application of the Fair Labor Standards Act of 1938, provisions for faster union elections, and restrictions on employers seeking to prevent unionization.  Major enterprises may no longer be able to rely on their traditional Republicans allies to oppose pro-union legislation or rulemaking.  As the 2023 UAW strike showed, some Republicans in Congress, such as Senators J.D. Vance (R-OH) and Josh Hawley (R-MO), are mounting an effort to reconcile with organized labor as the GOP becomes the party of the working-class, non-college-educated voters most afflicted by recent declines in social capital.²⁵ 

TRADE – Revealingly, the Trump and Biden administrations have both disregarded decades of U.S. trade and industrial policy.  The U.S.-China trade relationship forged during the 1990s and early 2000s unleashed factors contributing to social capital collapse and the current political environment.  “The concentrated job loss that resulted from shifting manufacturing to China unraveled entire economic ecosystems,” especially in the middle of the country.²⁶  As a result, the political incentives likely will continue to reward reshoring, with a strong emphasis on the automotive sector.  Possible policy reactions include restrictions and even a ban on imports of vehicles made in China.  The bipartisan consensus in support of revitalizing America’s defense industrial base will alter investment flows into and out of China through the practical realities of government procurement rules and reputational risk. 

ANTITRUST – Social capital decline and the consequent rise of populism has made major corporations increasingly vulnerable to enhanced antitrust enforcement.  Sen. Hawley’s Strengthening Antitrust Enforcement for Meatpacking Act, proposed in September 2023 and cosponsored by Senator Elizabeth Warren (D-MA), is an example of an industry-specific bill that empowers regulators to challenge corporations deemed to possess excessive market power.²⁷  Moreover, broader legislation designed to undo the very foundations of the consumer welfare standard – which would raise legal barriers to mergers – should gain momentum in the coming years.

HEALTH CARE – With over half of American adults aged 18 to 34 now suffering from a chronic illness, the political pressures for further health care reform are bound to increase.²⁸  Proposals for systemic change no longer originate exclusively from the progressive Left.  For example, the populist Right is reconsidering the nature of health care amid the worrying trends in mortality and morbidity, especially as related to the nationwide addiction epidemic.  The pharmaceutical industry’s role in the still-unfolding tragedy of the opioid crisis will continue to draw populist lawmakers’ attention to prescribing practices, pharmaceutical marketing, and telehealth providers increasingly associated with the over-prescribing of medication ranging from antibiotics to amphetamines.²⁹  New treatments offering “quick fixes” – such as semaglutide (Ozempic) for obesity and ketamine for depression – are more likely to be scrutinized as exploitive than celebrated as innovations.

Outlook

Decision makers should prioritize policies that incentivize work and domestic capital investment.  In addition, aggressive action should be taken to reduce pervasive legal and illicit recreational drug use, which acts as both a cause and consequence of social capital collapse.³⁰  Electoral reform that increases competition and broadens participation to better align outcomes with the genuine concerns of voters would help create conditions necessary to productive and durable policy making on such a difficult problem.

Social capital collapse has a self-propelling and accelerating quality that seems unlikely to abate absent interventions by changes in government policy and support from business leaders.  This terrible “trend to rule them all” drives the electoral turbulence, social instability, and demographic decline that imperil not only economic growth, but the very viability of a complex and pluralistic commercial republic.

Endnotes

1 Robert Putnam, Bowling Alone: The Collapse and Revival of American Community, New York, New York: Simon & Schuster, 2000, p. 16.

2 “May 2021 American Perspectives Survey Topline Questionnaire,” Survey Center on American Life, https://www.americansurveycenter.org/wp-content/uploads/2021/06/May-APS-2021-Topline-Questionnaire.pdf, p. 9; Joseph Carroll, “Americans Satisfied with Number of Friends, Closeness of Friendships,” Gallup, March 5, 2004, https://news.gallup.com/poll/10891/americans-satisfied-number-friends-closeness-friendships.aspx; mortality data by “Drug/Alcohol Induced” and “Year.” See: “Underlying Cause of Death, 1999-2020,” Centers for Disease Control and Prevention WONDER Online Database, http://wonder.cdc.gov/ucd-icd10.html. 

3 Putnam, Bowling Alone, p. 26.

4 Daniel A. Cox, “Men’s Social Circles are Shrinking,” Survey Center on American Life, June 29, 2021, https://www.americansurveycenter.org/why-mens-social-circles-are-shrinking. 

5 Jeffrey M. Jones, “U.S. Church Membership Falls Below Majority for First Time,” Gallup, March 29, 2021, https://news.gallup.com/poll/341963/church-membership-falls-below-majority-first-time.aspx. 

6 “Religion and Living Arrangements Around the World,” Pew Research Center, December 12, 2019, https://www.pewresearch.org/religion/2019/12/12/religion-and-living-arrangements-around-the-world. 

7 Press release, “Life Expectancy in the U.S. Dropped for the Second Year in a Row in 2021,” Centers for Disease Control and Prevention, August 31, 2022, https://www.cdc.gov/nchs/pressroom/nchs_press_releases/2022/20220831.htm. 

8 “Highlights for the 2022 National Survey on Drug Use and Health,” Substance Abuse and Mental Health Services Administration, https://www.samhsa.gov/data/sites/default/files/reports/rpt42731/2022-nsduh-main-highlights.pdf. 

9 Heather Saunders and Nirmita Panchal, “A Look at the Latest Suicide Data and Change over the Last Decade,” Kaiser Family Foundation, August 4, 2023, https://www.kff.org/mental-health/issue-brief/a-look-at-the-latest-suicide-data-and-change-over-the-last-decade.

10 Fareed Zakaria, “Americans are far too pessimistic about the future,” The Washington Post, January 4, 2024, https://www.washingtonpost.com/opinions/2024/01/04/america-success-economy-power-pessimism.

11 Sean Trende, “The Case of the Missing White Voters,” RealClearPolitics, November 8, 2012, https://www.realclearpolitics.com/articles/2012/11/08/the_case_of_the_missing_white_voters_116106-full.html.

12 Ibid.

13 Sean Trende, “The Case of the Missing White Voters, Revisited,” RealClearPolitics, June 21, 2013, https://www.realclearpolitics.com/articles/2013/06/21/the_case_of_the_missing_white_voters_revisited_118893-full.html. 

14 Paola Giuliano and Romain Wacziarg, “Who Voted for Trump? Populism and Social Capital,” National Bureau of Economic Research, August 2020, https://www.nber.org/system/files/working_papers/w27651/w27651.pdf. 

15 David Autor et al., “Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure,” American Economic Review, Vol. 110, No. 10 (2020): 3139-3183, https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.20170011. 

16 “Drug Overdose Mortality by State,” Centers for Disease Control and Prevention, March 1, 2022, https://www.cdc.gov/nchs/pressroom/sosmap/drug_poisoning_mortality/drug_poisoning.htm. 

17 “U.S. Marriage Rates Hit New Recorded Low,” Joint Economic Committee, April 29, 2020, https://www.jec.senate.gov/public/index.cfm/republicans/2020/4/marriage-rate-blog-test.

18 “An examination of the 2016 electorate, based on validated voters,” Pew Research Center, August 9, 2018, https://www.pewresearch.org/politics/2018/08/09/an-examination-of-the-2016-electorate-based-on-validated-voters. 

19 Mark Muro and Sifan Liu, “Another Clinton-Trump divide: High-output America vs low-output America,” Brookings Institution, November 29, 2016, https://www.brookings.edu/articles/another-clinton-trump-divide-high-output-america-vs-low-output-america.

20 Darel E. Paul, “Democrats Win in Wealthy Suburbs,” First Things, December 7, 2020, https://www.firstthings.com/web-exclusives/2020/12/democrats-win-in-wealthy-suburbs. 

21 Daniel A. Cox, “Democrats and Republicans Believe Their Opponents’ Policies Threaten the National Interest,” Survey Center on American Life, September 30, 2020, https://www.americansurveycenter.org/democrats-and-republicans-believe-their-opponents-policies-threaten-the-national-interest.

22 Tayelor Valerio et al., “Childless Older Americans: 2018,” U.S. Census Bureau, August 2021, https://www.census.gov/content/dam/Census/library/publications/2021/demo/p70-173.pdf.

23 Mark P. Keightley and Donald J. Marples, “An Economic Perspective on Wealth Taxes,” Congressional Research Service, April 1, 2022, https://crsreports.congress.gov/product/pdf/IF/IF11823. 

24 Oren Cass, “Confronting Coin-Flip Capitalism,” American Compass, July 14, 2021, https://americancompass.org/confronting-coin-flip-capitalism.

25 Josh Kraushaar, “UAW strike scrambles political allegiances,” Axios, September 24, 2023, https://www.axios.com/2023/09/24/uaw-strike-biden-trump-republicans.

26 “The Vote that Changed the World,” Baron Public Affairs, Fall 2020, https://www.baronpa.com/library/the-vote-that-changed-the-world.

27 “S.2818 – Strengthening the Antitrust Enforcement for Meatpacking Act of 2023,” congress.gov, September 14, 2023, https://www.congress.gov/bill/118th-congress/senate-bill/2818?s=1&r=30.

28 Kathleen B. Watson et al., “Chronic Conditions Among Adults Aged 18-34 Years – United States, 2019,” Centers for Disease Control and Prevention, July 29, 2022, https://www.cdc.gov/mmwr/volumes/71/wr/mm7130a3.htm. 

29 Press release, “Physicians may overprescribe antibiotics to children during telemedicine visits,” National Institutes of Health, April 8, 2019, https://www.nih.gov/news-events/news-releases/physicians-may-overprescribe-antibiotics-children-during-telemedicine-visits; Grace Chai, Jing Xu, and Sonal Goyal, “Trends in Incident Prescriptions for Behavioral Health Medications in the US, 2018-2022,” JAMA Psychiatry, January 10, 2024, https://jamanetwork.com/journals/jamapsychiatry/fullarticle/2813980. 

30 “Unintended Consequences: Marijuana Legalization,” Baron Public Affairs, Summer 2019, https://www.baronpa.com/library/unintended-consequences-marijuana-legalization.