Copyright Sociological Research Online, 1998

The Social Virtues and the Creation of Prosperity

Francis Fukuyama
London: Penguin
0 14 025943 0
£12.50 (pb)
xv + 457 pp.

Order this book

This is a book about culture and economics. It is also about how to come up with a big idea to supplant the tired old state versus market, left versus right, marxist versus neoclassical debates on what makes economies succeed. Fukuyama certainly comes up with a big idea. Namely the culture of trust as the source of spontaneous sociability that allows enterprises to grow beyond family into professionally managed organisations. The notion of trust is at once arresting and parsimoninous, self evidently plausible as well as a challenging point of departure for a research agenda that spans different societies, regions, continents even.

The methodological merit of Fukuyama's work is that he tests his thesis, not only by comparing successes with failures, but by comparing successful cases, one with another. And thus, he comes up with an unorthodox grouping of 'high-trust' societies (the US, Germany, Japan) and 'low-trust' societies (Italy, France, Korea, Taiwan). He candidly admits that cultural factors like spontaneous sociability are only one of several factors that make for economic growth (after all, all in this list have succeeded) and not even the most important one. Rather 'the primary impact of spontaneous sociability is on industrial structure, that is, the number and importance of large versus small corporations in a national economy' (p. 340). Why then the interest in trust? It is because the future is the network organization and this will give a natural advantage to those societies that have a high degree of social trust.

The problem with big ideas like this one is that academic rigour makes way for flamboyance and empirical accuracy is sacrificed on the altar of the plausible story line.

There is no doubt that Fukuyama dazzles us with his broad sweep knowledge about a great many things from sectarian Protestantism in the US (a high trust culture) and the German apprenticeship system (idem ditto) to Chinese intense familism (low trust) and Japanese iemoto groups (high trust). Also, he writes with such easy dexterity and confidence, it is hard not to be swept along by the flow. There is none of this cumbersome: 'some scholars would say this, others have said the opposite'. Referencing, such as it is, is highly selective. Thus, for example, none of the literature critical of broad-sweep generalisations regarding Japanese groupiness is touched upon. Surely we should know by now that it is only a tiny fraction of Japanse workers who benefit from the paternal welfare benefits in Japanese companies? But Fukyama has no eye for factual details as his vizier remains firmly trained on the big picture.

Referencing is not only selective, it is also erratic and downright misleading. Just check out, if you will, the dates of the references cited on page 66: the 'recent' citation is from Gerschrenkon (1962) and is brought in to counter the 'old' views held in 1973 and 1991!

But enough of such nitpicking. The work is an enjoyable read and if there is a criticism to make it should be a more serious one. My serious critique of it is first that Fukuyama appears insensitive to the historical dynamism and change of capitalism as a system of production. The kind of social virtues that helped capitalism in Weber's time (and F. claims to be a neo-Weberian) may not be needed today. So what is the point in searching for all-time cultural universals? I am particularly thinking here of the informational age which gives capitalism an infrastructure enabling connectivity even without trust. There is a potential of information technology to overcome, or rather side-step the barriers of low trust.

Second, Fukuyama ignores the requirements and effects of capitalism in the age of globalisation. This is a more serious omission and one that -in hindsight - will make some of his taller statements look very foolish indeed. For example, the Japanese keiretsu (group companies) are are praised as a living example of trust and sociability (pp. 197 - 199) - yet the reality is, as we now know, that once they were fully exposed to global capitalist competition theirs was an untenable cozy arrangement of bad debts and cross-subsidies. As a consequence, Japan is now seriously in danger of falling out of the league of first class growth nations of the world. In other words, yet again; what is good in one period of capitalism, doesn't necessarily stand up in another.

On balance, I think this is a worthwhile book to read, but it needs taking with more than a grain of salt! Although the book is accessible to lay people and hence will be easily read by students in the social sciences, it cannot really pass as a student text for its grasp on relevant literature is simply not good enough. I personally would however recommend it as an extra for students in both sociology and industrial relations.

Ankie Hoogvelt
University of Sheffield

Copyright Sociological Research Online, 1998