Lord Willetts is President of the Resolution Foundation. He is a former Minister for Universities and Science.  

Civil society is a powerful concept covering every form of association which stands between the individual and the state. It is one of the great strengths of modern liberal democracies and distinguishes them from totalitarian states or dictatorships which are hostile to it.

I myself have written about “civic conservatism”, to challenge a critique of free market economics that it was just about atomistic and selfish individuals and left no room for the institutions which are outside the market but not controlled by the state. They are the ones which often make life worthwhile.

Margaret Thatcher was often caricatured (and is again in the new series of The Crown) as just thinking of balance sheets and accountancy when she also wanted to roll back the state to create more space for civil associations.

But the breadth of the concept of civil society produces risks and difficulties too. It can become an amorphous shifting residual: what is left after more powerful forces such as market and state have done their bit. It is like that strand of theology, “the God of the gaps”, in which the divine is thought to be expressed in phenomena which are not yet explained by science.

That opens the question of what kind of relationship civil society has to other forms of social organisation. There is an ideological debate about whether the state should be seen as friend or enemy. Did the creation of the modern welfare state in the first half of the twentieth century lead to the destruction of the friendly societies, or was it partly a response to their increasing weakness in the face of the rise of those twin features of a modern industrial society – unemployment and retirement?

The relationship between civil society and the family is not straightforward either. The instinct to look after one’s own family is natural and noble. But family ties reinforced by inheritance can be bad for social mobility. Extended families can themselves act as a kind of mini-civil society serving their own kith and kin, but are those relationships benign or a kind of clan-based corruption? The rise of civil society in Great Britain was in part the product of small nuclear families and limited government leaving space in which civil society, at least of a certain sort, could thrive.

Close up, civil society proves to be a surprisingly controversial idea. But engaging with tricky issues is better than the alternative, which is to leave it just as a vague appeal to do good. Civil society then becomes a kind of social glue which we imagine we can pour over a diverse and divided society to try to hold it together. Asking for us to be good and co-operate with others is admirable, but on its own may not actually get us very far.

Instead we should start with much more limited and less favourable assumptions about human behaviour. The challenge is to try to construct policies promoting civil society with minimal prior assumptions. Instead of trying to stick us together with benign altruism, it is more like dry-stone walling where the stones are held together not because they want to be, but because of the most basic natural forces and skilled institutional design. The starting assumptions about humans should be as limited as those which lie behind modern economics.

The intellectual resources of game theory and evolutionary biology then help to show a way forward from this apparently unpropitious starting point. One of the classic puzzles in modelling human behaviour is the Prisoner’s Dilemma – two criminals are arrested with strong incentives to betray each other even though they both do best if neither of them betrays. As neither can trust the other not to betray them, they end up both betraying and therefore are both worse off.

The dilemma forces us to think through the circumstances in which humans can co-operate. A key advance was made by Robert Axelrod when he showed that if we think of this dilemma not as a one-off but as an endlessly repeated exercise, then it becomes rational not to betray until you are betrayed. This in turn helps us to understand what institutions do. They provide environments where repeated interactions promote co-operative behaviour. And we are talking here of real institutions which can do much more than the much more invertebrate concept of community.

This raises another set of other problems. Do such patterns of behaviour within institutions reward insiders versus outsiders? Indeed, one of the liveliest issues animating a lot of politics is who are the insiders, and who are the outsiders? Some feeling against immigrants comes from the fear, however unjustified, that they are freeloaders, coming to benefit from a welfare state to which they have not contributed. It is one of the paradoxes of liberalism that it embraces diversity, but that it may also reduce support for a welfare state.

And what if the insiders are the members of our own generation? Think of a local residents’ association committed to supporting the local community. Its volunteers serve as councillors or as school governors, but they are all middle-aged or older owner-occupiers and oppose new housing in their area because they are unaware or uninterested in the younger people desperate to get on the housing ladder.

Why should they care about the younger generation? Well it makes sense to look after the younger generation because as we get older we hope they will look after us. It is not just a one off decision, it will shape what they do to us later. In the wise words of the great American bumper sticker – “be nice to your kids they choose your nursing home.” And as tax payers they might be helping to finance your nursing home as well.

So if we boomers treat them fairly now they may treat us better when the boot is on the other foot. Or as Paul Samuelson put it very well: “giving goods to an older person is figuratively giving goods to yourself when old”. It is these exchanges between generations which are at the heart of society, and also the modern welfare state. It is why services from education (for the young) and health care (for the old) matter so much to us.

At any one moment they may look like transactions with someone else, but they are also exchanges with ourselves at different stages of the life cycle. It is easy to think of these people of different ages as just different – imprinted with different experiences during their formative years and familiar with different technologies. But there is another way of thinking of them: just like us but of a different age. And the more we can connect with them the more we may continue to support these exchanges between different generations which keep society together.

That is particularly true as the country faces up to both the demographic challenge associated with the big baby boomer generation growing old and the need for rebuilding and renewing associated with recovery from the pandemic. Building back better must be above all an investment in the younger generation who have had the greatest economic hit from the epidemic. We owe it to them.

The above is an extract from ‘Civil Society, Unleashed’, an essay collection published by Pro Bono Economics on December 1.