SOCIAL CAPITAL AND THE GLOBAL ECONOMY

Competitiveness debates have contrasted countries that have industrial policies, like Japan, with more laissez-faire countries like the Unit ed States. But the pivotal difference is the level of a people's trust . High-trust societies are interlaced with voluntary organizations-Rot ary clubs, Bible study groups, private schools-and thus have ''social capital,'' which makes for the growth of large corporations in highly technical fields. Low-trust societies-France, Italy, China-tend toward small, family-owned businesses in basic goods. Social capital is not necessary for growth, but its absence tempts governments to intervene in the economy and imperil competitiveness.