Trust, Social Capital and the Scandinavian Welfare State

Trust, Social Capital and the Scandinavian Welfare State

Explaining the Flight of the Bumblebee

Gunnar L.H. Svendsen and Gert T. Svendsen

Denmark exemplifies the puzzle of socio-economic success in Scandinavia. Populations are thriving despite the world’s highest levels of tax and generous social benefits. Denmark would appear to be a land of paradise for free-riders and those who want ‘money for nothing’. However, the national personality is characterized both by cooperation in everyday life and the numerous ‘hard-riders’ who make extraordinary contributions. Applying Bourdieuconomics, the authors focus on contemporary case studies to explain how social capital and trust are used to counteract free-riding and enable the flight of the Scandinavian welfare state ‘bumblebee’.

Chapter 6: Private sector: using social capital in firms

Gunnar L.H. Svendsen and Gert T. Svendsen

Subjects: economics and finance, evolutionary economics, public choice theory, politics and public policy, public choice, public policy, social policy and sociology, comparative social policy, sociology and sociological theory, welfare states


Chapter 6 turned to the private sector and combined Bourdieuconomics with prisoner’s dilemma theory. It was demonstrated how private entrepreneurs convert – or do not convert – social capital into economic capital. Against this background, and combining sociology and microeconomics, we analyzed specific strings of capital conversion in time and space. We generally argued that people perpetually transform tangible and intangible forms of capital according to certain “laws of conversion.” More specifically, we focused on how private entrepreneurs actually behaved in everyday life. This was done by applying prisoner’s dilemma (PD) game theory to the empirical patterns from extensive in-depth interviews with private entrepreneurs in Denmark. The four Danish cases illustrated cooperation versus defection outcomes in the PD matrix. The first three games were successful win–win games. The fourth game ended up in a “conversion failure,” which landed the entrepreneur in the “wrong” PD quadrant. Overall, it is observed how entrepreneurs often succeed in actually capitalizing on beneficial bridging and bonding social capital in a Scandinavian welfare state like Denmark.

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