The writer, an FT contributing editor, is chief executive of the Royal Society of Arts and former chief economist at the Bank of England
Today’s world is more interconnected and diverse than ever before, thanks to the increase in cross-border flows of goods, money, people, and information since the postwar era. Globalization was once widely supported and celebrated for its benefits, but now there is a growing concern about whether this openness is causing more fragility than prosperity, both economically and socially.
Progressives and populists have differing perspectives on this issue, with progressives highlighting the advantages of diversity and connection, while populists emphasize the vulnerabilities that come with it. Both sides have valid arguments.
Diversity enriches ecosystems, whether natural or social, by fostering innovation and dynamism. However, it also exposes them to potential threats and conflicts. Just as a rainforest can be harmed by human exploitation, diverse communities can face challenges when cultures clash instead of coexisting harmoniously.
To address this fragility, it is essential to strengthen social capital — the trust and connections within a society. The depletion of social capital over recent decades has left our societies vulnerable and disconnected, hindering their ability to thrive. Reversing this trend requires a shift towards prioritizing social policies that enhance cohesion and resilience.
This approach, focusing on building social cohesion rather than restricting economic activities, can lead to more sustainable and inclusive growth. By investing in social infrastructure, promoting community engagement, and fostering trust through innovative governance models, we can create a more resilient and interconnected society.
Ultimately, the goal is to create a new form of capitalism that prioritizes social well-being and inclusivity, bridging the divides between different groups and ideologies. By embracing a holistic approach to social cohesion, we can pave the way for a more cohesive and prosperous future for all.