Agriculture and Human Values 20: 241–252, 2003. © 2003 Kluwer Academic Publishers. Printed in the Netherlands.

Building and destroying social capital: The case of cooperative movements in Denmark and Poland
Jarka Chloupkova,1 Gunnar Lind Haase Svendsen,2 and Gert Tinggaard Svendsen3
1 The Royal Veterinary and Agricultural University, Copenhagen, Denmark; 2 The Danish Centre for Rural Research and Development, Esbjerg, Denmark; 3 The Aarhus School of Business, Prismet, Aarhus C, Denmark

Accepted in revised form November 30, 2002

Abstract. Social capital, measured as the level of trust among people, may be regarded as a new production factor alongside the traditional ones of human and physical capital. With appropriate levels of social capital, monitoring and transaction costs can be saved and thus economic growth stimulated. Via linking social capital to rural development and comparing the cases of agricultural cooperative movements in Denmark and Poland, this paper identifies possible roots of building social capital and suggests that social capital was built through a lengthy process in both countries during the 19th century. However, the comparison of the present level of social capital indicates that the level of social capital is significantly higher in Denmark than in Poland. The paper concludes that the reason for this difference is the fact that the original accumulation of social capital in Poland was destroyed by the communist regime. Key words: Capitalism, Communism, Denmark, Poland, Rural development, Social capital Introduction Literature on social capital mentions that totalitarian regimes (e.g., communism) destroy social capital (Paldam and Svendsen, 2000). Putnam (1993) argues that there is a correlation between time of dictatorship and destruction of trust and cooperation. It is also mentioned that in post communist countries, there is a widespread tendency toward passive reliance on the state (Putnam, 1995). The heavy state intervention in centrally planned economies meant that the state made almost all decisions and coerced people into doing certain things. There was no room for entrepreneurship, experiments, and voluntary organization into social groups (see also Fukuyama, 1995). Thus, Paldam and Svendsen (2002) suggest that the level of social capital has decreased in the former communist countries of Central and Eastern Europe (CEEC). Social capital is defined as mutual trust and how effectively people work together, i.e., transaction costs are lowered because informal self-enforcement of contracts can take place without third party enforcement. Because agents in this way can save monitoring and transaction costs, social capital may also be regarded as a new production factor alongside the traditional ones of human and physical capital (Coleman, 1988). Social capital has not been measured in any satisfactory way yet (Paldam, 2000; Svendsen, 2003). Thus, the new data collections from Denmark and Poland in this paper attempt to fill this gap. The implications of this social capital analysis are preliminary suggestions only, but they do help to address the urgent need for more research into the rapidly expanding area of social capital. For example, earlier work such as Bonanno (1993) has not taken social capital into account but has rather focused on elements such as homogeneity of the agricultural sector, the role of the market, and changing social stratifications of rural regions. Thus, it is the purpose of this paper to suggest the link between social capital and rural development, rather than undertaking strict chronological comparison in cooperative movements. This is achieved via two approaches. Firstly, the paper identifies possible roots of building social capital by using the cases of Denmark and Poland. For the time being, social capital cannot be measured directly, therefore various proxies have been suggested for its conceptualization (see Paldam, 2000). Based on the fact that, during the 19th century, Denmark and Poland were both agricultural countries with strong traditions of private farming and cooperative movements encompassing a major part of the rural population, the paper utilizes the proxy of voluntary agricultural cooperatives. Thus, the paper traces how stocks of social capital in the form of peasant cooperatives initially were formed bottom-up in 19th century Europe, as a buffer against uncontrolled capitalism (section ‘Early agricultural cooperatives in Europe’); and how, specifically, social capital was built and

the paper suggests that the reason for this difference in social capital is the fact that the original accumulation of social capital in Poland was destroyed by the communist regime (section ‘Destroying social capital’). farmers also pooled their selling power. These monopoly companies kept on increasing prices. As capitalism developed. especially after 1919 (Kaser and Radice. various cooperative movements were formed as a buffer against harsh capitalism. Christensen. 1911).. prior to the upswing of a regular cooperative movement. So we see that a wide-spread counter-reaction to capitalistic exploitation entailed that farmers pooled their buying power in order to attract lower prices from suppliers. and Maliszewski (1995) support the claim that the birth of the Polish cooperative sector happened as a reaction to the transformation of social structures in early capitalism. 1844 – was established as a declared anti-capitalistic reaction against “class privileges and monopolies” (Sonne. was established in Slovakia in February 1845. Inglot (1966). the first wholesale and credit cooperative in continental Europe. It is argued that this difference can be explained by the fact that communism was introduced in Poland whereas controlled capitalism and democracy continued unhindered in Denmark. Hence. likewise. These findings are documented in a questionnaire survey in Denmark and Poland from 2000 and 2001 (section ‘Levels of social capital in Denmark and Poland’). Likewise.e. Therefore. and larger companies were selling inputs to farmers and buying their produce. such as making butter and cheese and slaughtering animals. As Putnam (1993) argues. England. Mlcoch (2000) confirms Putnam’s findings. the level of social capital in Poland has not changed significantly since 1989. established in 1922 in Voivodina. This they did by imposing a “hidden and illegal tax” on Danish peasants. as one of the pioneer cooperative leaders declared (cf. only 90 days after Rochdale (Kaser and Radice. Haagard. Finally. Capital concentration and accumulation. industrial specialization. during the years before and during World War I. Thus.. positive social capital – has been one of the crucial means by which small farmers have managed to survive. Thugutt (1937). Severin Jørgensen in Andelsbladet. Early agricultural cooperatives in Europe Historical evidence shows that inclusive network cooperation based on trust and regular face-to-face interaction – i. while at the same time exploiting the consumer. founded in the late 1920’s (Kaser and Radice. Also in the CEEC. maintained by agricultural cooperative movements in Denmark and Poland during the 19th and early 20th century (section ‘Cooperative movements in Denmark and Poland’). Lacking the immediate alternative of marketing his produce. and changes in agriculture were among macro level factors that led to wide-spread proletarianization in Europe during the 19th and early 20th century. particularly at the disadvantage of the economically less liquid. the paper illustrates that the present level of social capital in Denmark and Poland differs significantly. a cooperative movement grew strong. so that on the market one farmer could not be played off against the other. Gospodarska Sloga in Croatia (1935). And in the Czech countryside. in the country-side as well as in urban areas. the farmer with the relatively small bargaining position had to protect himself from being exploited. the farmer had to market his produce through these middlemen. The relatively poor private small-holders and farmers had no organization defending them against the upper class and from the exploitation and competition of the capitalists.242 JARKA C HLOUPKOVA ET AL . This stimulated the development of agricultural cooperatives. 1867. Farmers’ Society (Spolok Gasdovsk). 1985: 180). And. his situation would improve (Haagard. 1867: 13). 1983). if the farmer would be able to carry on all the necessary tasks. Other examples of early Eastern European agricultural cooperatives are Agraria. including Danish agricultural journals. 1985: 282). 1985: 283). At present. the influential Danish agricultural cooperative movement (Andelsbevægelsen) declared war on American inspired industrial rings. Cooperative movements in Denmark and Poland A cooperative is defined by the International Cooperative Alliance as a group of people who join together . who discouraged and often impoverished the farmer. By grouping. despite the relatively fast economic transformation. When assessing the economic and social situation in the Central and Eastern European countries (CEEC). This process is clearly evidenced in Danish sources (e. Secondly. the cooperative wholesale movement in Denmark from 1866 – inspired by the first cooperative wholesale society in Rochdale. in many European countries.g. the level of social capital is significantly higher in Denmark than in Poland. and the Bulgarian Agrarian Cooperative Bank. Danish rural population. 1904). For example. 1911. social capital takes a long time to build (see also Fukuyama. Sonne. agriculture was controlled by middlemen. However. 1995).

ultimately. members were obliged to trust each other. In particular. These consisted of agricultural as well as cultural associations. The quality of the butter was increased..B UILDING AND DESTROYING SOCIAL CAPITAL 243 in a common undertaking. Technical improvements upgraded both the quality and the quantity of the butter. 2001). (c) practical cooperative structures. Such circles of “dedicated souls” – people who met regularly. free school. In particular. one vote. The Danish cooperative movement Although agricultural co-operative movements traditionally have been strong in most Scandinavian countries. 2001). (iii) Interest on share capital is limited. the Danish cooperative movement (Andelsbevægelsen) appears to have been particularly strong and influential. And/or he had to rely on the food traders. we will show how social capital building. 2000. This process was costly. It became possible to standardize output and thus demand higher prices. such as co-operative fodder purchase associations from 1883. except from the amount they used at home. co-operative slaughterhouses from 1887. (ii) There is democratic control. the outcome of inclusive and democratic forms of network cooperation. also inherited from the past. thus increasing educational levels – a process that was enhanced by the establishment of self-organized peasant folk high schools and agricultural schools. right from the beginning. 1911). a regular Co-operative Bank with branches in provincial towns from 1914 and so on. The cooperative dairies became an immediate success. usually in proportion to transaction with or work done in the society. this movement grew strong when cooperative dairies were established from 1882. was at a disadvantaged bargaining position (Christensen. and the returns received were uncertain. and the social . 2001). Milk was delivered in good condition. the number of cooperative dairies increased rapidly from 1 in 1882 to about 700 in 1890. usually on the basis of one man. who canvassed the country. In this way. (vi) Cooperatives cooperate among themselves.” i. And soon the cooperative dairy butter surpassed the celebrated “Estate Butter” for which Denmark had been famous (Haagard. 1999): (i) Membership is open and voluntary. (v) Cooperatives devote some part of their surpluses to education. In the following. forming stable and long-lasting networks with significant overlaps of members. Furthermore. (iv) There is equitable distribution of any surplus. to a lowering of transaction costs to the benefit of all milk producing farmers (Svendsen and Svendsen. Svendsen and Svendsen. and to rural cultural movements. Prior to 1882. facilitating all kinds of self-organized activities. sharing the risk of economic disaster – a trust that. Such democratic processes led to trust and. and often as highly trusted leading board members. the Danish cooperative dairies are good examples of self-organized peasant cooperation. once established. and if the dairy made any profit. and who knew and trusted each other – often participated in numerous local and regional co- operative associations. each peasant made his own butter and sold it himself in the nearby town. Andelsbevægelsen was closely linked to a peasant political movement centered around the farmers’ party (Venstre). and (d) the institutional environment where cooperatives operate. Thus the cooperative process is basically an interaction between: (a) cooperatively committed members. written “rules of the game. until wholly voluntarily established cooperatives finally became the way of organizing all common practical matters among the Danish rural population. thus securing an important capitalistic incentive for the farmers. it was divided among the members proportionally to the amount of milk each of them had delivered. 1983). such as the free church. has taken place within agricultural cooperative movements in Denmark and Poland before World War II. The movement made farmers aware of the scientific possibilities of dairy production and of cattle breeding. 2000. Peasants bound themselves to be individually responsible for any debts that might be incurred.e. of which there were many thousands. Hence. valuable social capital was created bottom-up. and folk high school movements (Svendsen. became an important and multi-functional “glue” in the local community. including one third of all Danish milk producers. From 1882. It is clearly documented that all these peasant movements were formed bottom-up by circles of energetic entrepreneurs in the local rural communities. These were soon followed by cooperative enterprises within other agricultural sectors. enhancing economic growth and the general educational standards of the rural population in an extraordinary process of self-organization (see also Svendsen and Svendsen. and so the small farmer. institutionalized in the form of commonly agreed upon. the articles of such an association. in accord with the six principles that are as follows (ICA. (b) cooperative values inherited from the past and expressed in principles. an increasing number of Danish peasants bound themselves to deliver all their milk to their own cooperative dairy. Consequently.

The members themselves elected the board of their association. irrespectively of the number of cows he possessed. in a dynamic proliferating process that was initially inspired by the success of the dairy cooperatives. with the exception of milk needed for household use. negative social capital (Svendsen and Svendsen. horses. For example.244 JARKA C HLOUPKOVA ET AL . hail and other storms. swine. Danish farmers managed this in a characteristically independent way by forming a distributive and selling agency.. When the original loan was repaid. saved for feeding hogs. now gained greater possibility to market his produce. the cooperative way to counteract harsh 19th century capitalism can also be found in Poland. As mentioned. As cooperation was not confined only to the selling of farm products and buying of merchandise and farm supplies. there has been a long and strong tradition for private farms and mostly small-holdings. the improvement – or supportive – societies emerged. and collection of material. Another example was the maintenance of cow and swine improvement and breeding societies and seed-testing organizations (Haggard. a new loan was taken from the bank at the same rate of interest. such as cooperative fertilizer plants and canning factories. who had otherwise a negligible bargaining position at the market. which aimed at developing the dairy production industry by expositions. its content of butter fat. The main purpose of these societies was to improve breeding of farm animals by keeping accounting systems of the quantity of milk produced per cow. conferences. Thus. 1983: 175). sanitary milking. 1983). In most dairies. about 1890. Savings banks were thus directly interested in the development of the dairy cooperatives (Christensen. who was expected to be an expert within his field. A typical method of establishing a dairy cooperative was that a group of trustworthy and highly respected farmers in a locality got together and borrowed the necessary capital from a savings bank. including the CEEC. and democracy.g. in effect. and sheep was promoted by cooperative societies. particularly before World War II (Nelson. So we see that in rural Denmark. during the second part of the 19th century. Polish cooperative movements As has already been mentioned. The constitutional articles of a local dairy cooperative always obliged members to bring all their milk to the cooperative dairy. the pre-war mode of organization among Polish peasants was in many ways similar to the one prevailing among Danish peasants in the same period. which reduced the transportation cost. including a dairy manager. a single horse-drawn carriage collected the milk from every farm. as ever. Almost every need of the farmer was supplied through one or more organizations of this kind. In addition. contributed to the development of small-holdings (Christensen. Consequently. In Poland. When all the farmers in the district were members. the articles contained strict but. network cooperation spread to include nation-wide cooperation. In 1913. The breeding of cattle. the establishment of . commonly agreed upon rules relating to proper feeding of the cows. All the work in the dairy cooperative was performed with an unlimited liability. Furthermore. kept alive by circles of energetic local and regional peasant entrepreneurs and institutionalized in the constitutional articles of the cooperative association. cooperative movements have also played an important role in other parts of Europe. The original funds for construction purposes were repaid in installments. all of which received some subsidy from the state. 1983). and for the insurance of livestock (Svendsen. there were 592 such societies. At this time. civic participation. as well as in more informal traditions of generalized trust. The cooperative dairies were governed in a democratic way. there were societies for accident insurance against. as well as the relative cost of maintenance. 2000). usually ten or fifteen years. Moreover. Local cooperatives were united into a central national confederation. Such contract between the farmers and the dairy was made for a fixed period. the Danish state – however obstructive it had behaved towards these peasant initiatives – reluctantly had to admit the national economic importance of the cooperatives (Svendsen and Svendsen. 1911). Particularly the small farmer. 2001). it now became urgent to control the distribution of their produce in England. a valuable stock of social capital had been established among Danish peasants. The financial resources obtained were handed over to the original members who all alike proceeded to repay the new loan. while the working capital was supplied by a guarantee paid by each member.. Heavy fines were imposed for everyone breaking this rule. The first central society was established in 1895. Here. the Danish farmers soon found it necessary to carry cooperation a step further. fire. which consequently stimulated the bacon industry and thus brought about the opening of cooperative slaughterhouses. e. etc. This. Among the economies was the skimmed milk. which was the chief market for many Danish agricultural products. each member had one vote. thus hindering free-riding and the formation of exclusive. 2000). control mechanism of the members of a cooperative (who often participated in the same associational networks) guaranteed that none of the neighbors would cheat.

This type of cooperative had a more third-party enforcement character. 1990 for more details). dedicated souls we also find in great numbers within the Danish cooperative movement. as a protection against German colonialism (Fink. and gradually a coherent movement evolved. The main function of this cooperative was to supply private farms with agricultural inputs. that is. consumer cooperatives played a major role. Furthermore. there were several thousand weaker and generally short-lived societies. founded in Poznan in 1861 by two of the pioneers of Polish agricultural cooperatives. Wawrzyniak (Inglot.000 members. These were eager idealistic entrepreneurs and social capital builders. private farmers were cooperating under the framework of “Peasant self-aid cooperatives” (Samopomoc Chlopska). the development of cooperatives until World War I followed different patterns in the Prussian. The “Peasant Self-Aid Supply and Marketing Cooperatives” had a dominant position in purchasing the majority of agricultural products from private farms. in particular to market agricultural products from private farms. the formation of social capital by means of a cooperative form of organization served as important survival strategies. Thus. a widespread network of cooperative banks and agricultural marketing and supply cooperatives developed. In both cases. 87% of which were located in villages. e. their main role was also to organize the supply of dairy products to the urban market (OECD. The south of Poland had a higher concentration of savings and credit cooperatives. A.” namely the leaders of the nation-wide Polish Cooperative Association. During the communist time. primarily as a counter-reaction to the policy of Germanization from the side of the German state. Szamarzewski and P. the regional differences gradually became less significant as regionally developed cooperative models extended into other regions. from 1945. the system of the Raiffeisen credit was highly developed (The World Bank. 1990). and to supply the rural population with consumer commodities. Outside these unions. By 1938. Later on. So we see that. Before World War I. 1994). and performed also other services. both in the urban and rural areas. in the Russian part of Poland mainly consumer cooperatives developed. As a result. the same type of entrusted. Spolem. Russian. . before World War II. which provided savings and credit services for agricultural and household use (Hunek. since it had roots back in 1948 when a number of agricultural and marketing cooperatives were merged into the “Peasant Self-Aid Supply and Marketing Cooperatives” (Hunek. 1985: 76). In the western region under Prussian occupation. Poland had about 14. and Austrian part of Poland. a dynamic development within the Polish cooperatives took place from 1918 to 1939 (Landau and Tomaszewski. As already mentioned. 1995). the Union of Consumer Cooperatives (Zwiazek Spóldzielni Spozywców or Spolem) was established in Warsaw in 1908 by two other “dedicated souls. various cooperative enterprises were formed in other parts of Poland as well. dairy cooperatives became a common form of peasant cooperation. Here.000 viable cooperatives united in various auditing unions (Lerski. most of the twenty basic types of cooperatives were associated at the central level in nine auditing unions and 24 different trading and financing organizations (see The World Bank. Exactly the same process took place in the German-Danish border region from the beginning of World War I. Due to the specific politico-historical context of Poland. Like in Denmark. the patriotic credit institution The National Safeguard (Landeværnet) was established in 1913. such as running catering businesses (OECD. 1995). in Galicia. this number had increased to 1776 Spolem cooperatives. 1996: 562). when Poland had regained its sovereignty and unity.B UILDING AND DESTROYING SOCIAL CAPITAL 245 Hrubiewzów Agricultural Association in 1816 became a predecessor of voluntary peasant cooperatives. 1966). after 1918. As a result.600 cooperative banks. As will be shown in Section 4.g. the economic activities of these cooperatives were divided into three main groups: production. Thus. 1994).. this union had 274 consumer cooperatives with 40. not unlike the strategies applied under 19th century roaring capitalism. However. Poland had approximately 1. especially among the workers of Plock (Lódz) and Warsaw after the 1905 revolution (Inglot. while in the Russian part of Poland. at the beginning of World War II. the first cooperative was established in 1890. Although not so complexly developed as in Denmark. However. providing economic subsidies to German colonists so that they could dominate their Polish neighbors (Landau and Tomaszewski 1985: 16). to process some agricultural products for mainly local needs. and with approximately 400. Spolem was gradually overtaken by the Polish Socialist Party (Landau and Tomaszewski. In particular. Although different than the Danish ones. Another illustrative example of the fruitful interwar growth within the Polish cooperative movement is the Union of Consumer Cooperatives. various supportive cooperatives also existed in Poland. 1999). And similar to the development in Denmark.000 members (Lerski. due to the influence of Austrian rule where. this implied a dramatic shift from voluntary cooperation to state enforced cooperation. 1985: 205–206). 1966). 1996: 562). Polish cooperative banks supplied farmers with credit. The first real cooperative was a wholesale and credit cooperative association.

1993. and these networks developed negative social capital that was harmful rather than beneficial to economic growth. namely: . Possible explanations for this contemporary status quo will be discussed further in the next and penultimate sections. construction of buildings and the repair of agricultural machinery (OECD. namely network formations within various social subgroups such as communities. see also Svendsen. individuals can invoke informal networks: begging or cajoling public officials.” The objective of this type of cooperatives was similar to the “Peasant Self-Aid Supply and Marketing Cooperatives. 2000). Another body of social capital theory emphasizes another measure. 1996) cooperative relations among peasants.000 people (The World Bank.. productive social capital implying trust and civic engagement.” but their distinguishing feature was that they functioned as “Machinery Pools. the Polish cooperative movement. and purchase of products. or even by the landlords for the purpose of benefiting the practical farmers. 2000. In a response against the state. Therefore. On the other hand. Cooperatives are independent of one another and spring into existence when farmers find it necessary. transportation. occupations.000 retail stores as well as warehouses and purchase centers. Once established. the Danish cooperative movement is wholly voluntary. 2002. The other important type of Polish cooperatives was known as “Agricultural circles. and ethnic groups (see e.5 million members. the paper turns to compare the current level of social capital in Denmark and Poland. see also Fukuyama (1995). which assumes that social capital exists at a society-wide level.246 JARKA C HLOUPKOVA ET AL . 1996. In 1988. and employed 434. as local and regional peasant responses to economic threats from other social classes or from abroad. As argued by Paldam and Svendsen.e. it promotes the general cooperative idea. Although the state does not directly interfere in the cooperatives.2 In sum. a suggestion that is confirmed by a whole set of studies by Richard Rose (Rose. families. 2003). In this way. seems to have difficulties in regaining power after 1989. The reason that we do not use the network measure as a proxy for social capital here is that this measure deals with negative social capital. In this way. middlemen. In 1988. In contrast. Wacquant. Even today. In the following. Bourdieu. i. which was almost completely destroyed during the communist regime after World War II. 1990). the two case studies show that voluntary agricultural cooperatives in Denmark and Poland from the 19th century to the beginning of World War II were not established by a circle of philanthropists. However. 1986. It receives no subsidy from the state. etc. excluding farmers who are free riders or rate busters from cooperative membership.” with 3.g. using connections to “bend” rules or paying bribes that break rules. social networks compensate for organizational failure. Portes. wholesale and retails trade. This in contrast to positive social capital in the Putnam (1993) and Coleman (1988) setting that deals with the lowering of transaction costs and thereby more transactions in society that enhance economic growth. The service they offered to private farms included ploughing. the paper omits the measure of networks in the following where we focus on three other theoretical approaches to measure social capital.. Level of social capital in Denmark and Poland After having indicated how social capital was built on equal terms during the 19th century. In contrast. they paved the way for inclusive and “lubricated” (Putnam. governments use military or legal power to break the power of cooperatives and destroy their social capital (as in the Polish case). Usually one agricultural circle served farmers in one “gmina. Rose argues that social capital networks in Eastern Europe (used to produce goods and services) are distinctive in a society characterized by organizational failure and corruption of formal organizations. there were in total about 2.” and were also known by this name. the state. As argued by these network theorists.912 “Peasant self-aid cooperatives.000 agricultural circles. chemicals applications. that is.”1 Depending whether the “gmina” was located in a rural area or not. nor is it subject to regulation of any kind. withholding merchandize. strong informal networks with face-to-face interaction were developed during communism simply to survive. This can occur in various ways – increasing quality. we focus on the Putnam-style of social capital theory and measurement. the presence of social capital that is detrimental to economic growth. etc. these organizations grew up bottom-up. there were 1. these networks develop negative social capital and do not fit into a modern market economy. 1995). there were usually 10–200 farmers per circle. where it is crucial that the participants respect the rules of the game (Rose. 1998). Portes and Sensenbrenner. farmers use their social capital in order to gain higher prices from consumers and beneficial regulations from the state. Rose suggests that citizens in Russia have formed many private networks for getting things done. farmer cooperatives develop social capital among their members to compete with other actors in society – such as consumers. The activities classified as wholesale and retail trade were the most important for the existence of these cooperatives that operated over 70.

The results from this measure are listed in Table 1.5 59.2 0.7 Legal system Police Administration Government Average Source: Hjøllund et al. general trust among citizens and trust in formal organizations can be measured.4 8. 2.4 9.2 1. Also. Membership of voluntary organizations (Putnam’s instrument). is the third attribute of social capital. people were asked whether they trust other people in general.B UILDING AND DESTROYING SOCIAL CAPITAL Table 1.9% compared to 20. year 2002). (3) administration.4 53.3 15.5 1.7 3. year 2000) and Poland (1. Memberships Denmark (%) 23.3 0.7 14.4 3. The results are Quite Not very None Do not a lot much at all know 37. and (4) government. This difference should then explain the striking difference in economic wealth between the North and the South. presented as an average of citizens’ trust in four types of formal institutions. As shown. For investigating the level of social capital in different countries.8 13.6 33 31. (2001).9 10.7 12.2 59. Danes participate in twice as many civic actions as the Poles do (34.7 36.004 respondents. Denmark 73.1 0. It shows that the average Dane is a member of twelve times more voluntary organizations (1. Civic participation.1% concerning “a great deal”). The paper now turns to the empirical results in these three groupings from Denmark (1. In comparison.5 34.4 1.1%). contact with the press concerning societal problems. (Table 3). for similar purposes used the density of organizational membership in Italy.3 21.5 2. (1) membership of voluntary organizations. (2001).8 13.7) than the average Pole (0.14). Putnam.” the respondent was asked whether he/she had engaged in this particular civic action within the last three years. the agricultural cooperative proxy measures the voluntarism aspect.8 Poland A great deal 1. Second. 17.9 1. Paldam and Svendsen (2002) have produced a questionnaire for catching these above-mentioned aspects of social capital.4 29.6 9 10.1 6. .72 Poland (%) 88 10.5 63. (2) police.1%).6 6. see Hjøllund et al. 2000).1 5 Legal system Police Administration Government Average All frequencies are in percent Source: Hjøllund et al.9 – 0 1 2 3 4 5 6 7 8 9 up Average Table 3.7 0. Standard generalized trust.2 1.9 31.1 6.7 42.9 13.3 3.1 21. (2001).2 58. In a range of thirteen sub-questions covering different “civic actions. concerning membership in voluntary organizations.5 – – – – – – 0. All frequencies are in percent Denmark A great Quite Not very None Do not deal a lot much at all know 29.4 40.6 24.7% vs.2 2.4 10.14 Table 2.206 respondents. namely (1) the legal system. In the terms of this paper. First. He found that a person in North Italy on average was a member of far more organizations than a person in the South.8% vs.8 247 Poland 20.3 6. charity.3 3. roughly only one out of five Danes is not a member of any voluntary organization at all compared to five out of six Poles. Similar results are found for corruption and general trust in formal institutions.1 18.4 2. etc.3 10. and (3) civic participation (Paldam.3 1. The result is that Danes trust other Danes three and a half times more than the Poles do (73.1 35.1 79. Danes trust these four institutions ten times more than the Poles (20.” expressed in percentages. Concerning general trust among citizens.1 55.6 15.7 6. (2) trust.3 4. see Table 2 below. Frequencies in % Can trust Cannot be too careful Do not know Source: Hjøllund et al. Trust in institutions compared (rounded figures). Putnam (1993) suggested that this proxy could be used for social capital. such as participation in elections.1 2.2 20.8 3.9 21. Table 4 below simply displays the average number of “yes” and “no. (2001).

while the state farms amounted to 19% (European Commission. similarly as they restricted the church and religious movement. So we see that. These amounted to 4% of the agricultural land. the bad experiences incurred during the previous regime act as a mental block. For example.6 0.000 collectives by 1955 (Nelson. During World War II. this was revealed in 1956 when the more liberal policies of Gomulka led to a removal of obligatory membership. the first attempts to exert administrative pressure on private farmers began (Landau and Tomaszewski. approximating 10. 1998). 1983: 176). to develop a new system of large-scale economy. The program of agricultural reconstruction was started in autumn 1948. also the voluntary peasantowned. and despite continuous peasant opposition to collectivization. practically the whole cooperative movement of the country. 1985: 194). As documented above.7 65. this meant an enforced collectivization. capable of utilising all the benefits of modern technology and agricultural knowledge” (Landau and Tomaszewski. with the exception of consumer cooperatives. 2002b). Thus. However. but was usually slightly higher as few aspects of private ownership were main- . And already in 1949. state cooperatives were favored by receiving state subsidies as well as tax reductions (Landau and Tomaszewski. it would be desirable if the level of social capital was higher and farmers would trust each other more and thereby reap the gains of cooperation (Chloupkova and Bjørnskov. Civic participation. as shown by our analysis. 1985: 205). at this time. Membership in the secondary and tertiary cooperative organization was obligatory. However. who. The cooperative (collective) farms that existed during the communist regime in Poland as well as in other CEEC. essentially “collective farms. he now imagined a fruitful mixture of modernized state farms driven by enthusiastic cooperatives: “Within the socio-economic system of a people’s democracy farm co-operatives are the simplest and easiest way.3 Destroying social capital Considering the current economic conditions in CEEC. it involved a variety of economic reprisals directed against the private farmers. farmers withdrew en masse. 1990). At the same time. as had been the case in the Soviet Union under Stalin 1929–1936.” which “appeared” on the order of the communist government.248 Table 4. the cooperative farms. 1983: 176). subsistence-oriented farms. Furthermore. Denmark 34.3 That is also why Polish agriculture today continues to be dominated by small. the communist regime restricted voluntary cooperation. Having promoted the idea of big-scale nationalization of the Polish economy since 1945 (Landau and Tomaszewski. private farms were in advance obliged to sign contracts specifying the volumes of produce they would sell to the state and accept the prices set by the state. (2001). Instead. 2002a. cooperative farms were subordinated to the central economic plan and their independence limited (Nelson. they carried out the orders of the central authorities. owned 77% of the agricultural land. 1985: 193–194). The socialist reconstruction of agriculture was proclaimed at the Central Committee meeting in July 1948 by Trade and Industry minister Hilary Minc. In this way. small-scale private farming persisted even in the communist period. was abolished by the occupants (The World Bank. 1985: 193). At this time. they were an extended hand from the state. a compulsory saving system was introduced in order to hit medium-sized and better-off farms. In practice. In this process. were not based on any principles of voluntarism. In reality. the number of state cooperatives grew rapidly. although most of the Polish farmers more or less reluctantly were involved in the state cooperative structure. Thus. they purposely destroyed valuable social capital within the voluntary sector. and the number of collectives was reduced to under 2000 (Nelson.1 0. in order to avoid any rise of potential political opposition. the introduction of a socialized economy implied that the natural evolution of the cooperative movement was disturbed. Their productivity was somehow comparable to that of state-owned farms.2 JARKA C HLOUPKOVA ET AL . 1983: 206). A main objective of Communist rule in Poland was to replace the capitalist man with the new socialist man. b). within the grasp of a common peasant. never enveloped a great portion of Polish agricultural land. This in fact meant that although they were considered as private farmers. Overall. A period of somewhat more independent rebuilding of the cooperatives from war damages ended as early as 1948. 2002a). Poland 17. Consequently. % Yes No Do not know Source: Hjøllund et al. the re-installed democratic regime and free-market economies in CEEC have a tendency towards passive reliance on the state (Chloupkova and Bjørnskov.1 82. the Polish collectivization did not imply liquidation of farmers. threat of physical violence and exportations. Immediately. they were not allowed to exploit the properties of a freemarket (Chloupkova.

These cooperative (collective) farms assumed a monopolistic/monopsonistic role in the provision of inputs. each farmer owns a tractor. (b) there was no democratic control. 1995). From 1958. Collective farms had also a social element. agricultural circles went gradually into liquidation. and distribution cooperatives. an attitude that was abetted by the regular provision of subsidies to cover losses” (Nelson. For communists. and the worker’s total dependency on the workplace.. the communist regime created collective farms (and called them: “cooperatives“/“cooperative farms”). priority rates. as the value of democratic management was tolerated only as a panacea for the bureaucratic state economy. 1990). Generally. . whose advocated goal was to cater to the interests of private farmers as well as collective farms. to select their leaders. 1990). while negating the market. purchase and processing of agricultural products. A further reason for this was the above-mentioned ban on forming associations. supplies. and non-efficient.. indeed the state. Poland was fortunate in that collective farms did not evolve into a great proportion of the Polish communist agricultural sector (Chloupkova. (d) members’ influence on the collective farm operation was rather limited (e. housing. (c) members were dispossessed of any properties in favor of the collective farm. As cooperative (collective) farms grew in size. Nowadays. provision of marketing and other services. one vote (was subject to central planning). were abolished. Thus cooperatives of various kinds were assigned special tasks within the national economy. based on one man. the cooperative idea was somehow reviewed in Poland. Therefore. acting as a primary drive in the pre-communist cooperative movement. the socialist ideology led to a society that was entirely fragmented. and members adopted a wage-worker mentality in their relationship to the enterprise and its property. In this way. thereby reducing the level of social capital (The World Bank. 1995). and its replacement under the renewed democratic system is not an easy or a “short term” project. Thus. These collective (cooperative) farms were not based on any principles as we know them from the precommunist cooperative movement. there existed a range of state subordinated “cooperatives. thus eliminating the important social control mechanism. cooperative unions provided the links between the planning authorities and primary cooperatives by operating wholesale and processing enterprises (The World Bank. was substituted by third party enforcement (centrally directed orders from the communist government). dairy. considering the small plot of land they own. deposit and credit activities in rural areas. On the assumptions that cooperatives work for society as a whole. involving that local cooperatives were replaced by giant complexes. With the abolition of real cooperatives. as well as housing. the owners of land could not take any decisions regarding their land). the communist regime violated the abiding principles of cooperatives in a number of ways. it might not be efficient. cooperatives were the tool for transforming the whole society.” with a usually monopolistic market position (membership in them was explicitly obligatory). the cohesive/cementing role of social capital. led to the destruction of social capital. Table 5 illustrates the operation of cooperatives during the communist regime.5 This leads to machinery overinvestment. Furthermore. The “leader” was an assigned “apparatchik” from the communist party. as they played a major role in training and education. such as the dividend. during the communist time in Poland. By 1956. In this pattern the social capital has deteriorated over time under the totalitarian regime. The introduction of the command system into the cooperatives was destructive to self-governing functions and led to lack of involvement of the members. priority in using the cooperative services. although the machinery equipment used is usually old. technically out-dated. the latter being replaced by the peasants’ cooperatives (Samopomoc Chlopska). fictitious figures. Despite the communist doctrine proclaiming a collectivist vision of society (and thus perhaps creation of social capital). In the years 1956–1957. in organizing events in local communities. as a consequence of the restoration of the democratic regime and the free market economy. Since 1989. although it was more-or-less a semi-cooperative movement. the cooperative sector became centralized. etc. there were no more credit. and “the general ignoring of cost accounting principles by farm operators. Since (a) membership was not voluntary. all the advantages that a cooperative member had previously obtained. 2002a). the feelings of responsibility faded.g. involving corruption. This resulted in a near split of the consumer movement into an urban movement and rural peasant self-aid cooperatives. the imperative of meeting central-planning objectives effectively eliminated the right of cooperatives to make their own decisions. even though. 1983: 178). to potentially leave the cooperative. There were political and ideological reasons why the real. and in creating new jobs and rehabilitation for the disabled. where membership became obligatory (Maliszewski. Compared to many CEEC. the cooperatives lost their voluntary character.B UILDING AND DESTROYING SOCIAL CAPITAL 249 tained. democratic Polish cooperative structures were so easily abolished from 1947–1956. and became more like a state enterprise (Maliszewski.4 And soon it became evident to almost everybody that the state farming system was inefficient.

party officials.912 323 140 2.130 Members 3. The Danish cooperative movement created a “strong pillar” for various farmers’ operation. reducing the citizens’ trust in formal institutions. Likewise. The inherited low level of social capital from the communist regime still implies reluctance of cooperation among the Polish farmers today. 2000). Concerning trust among citizens.700 31. Finally.663 2.000 2.519 2. based on the lack of social capital as well as other reasons. Since cooperative movements play a crucial role in building a capitalistic and democratic society.447 791. a platform for social mingling and the exchange of other information. then communists. Agricultural Circles could benefit from assistance in adapting the German concept of agricultural machine ring to Polish conditions (FAO. bilateral cooperation with West European cooperative societies is viewed as potentially useful in assisting the renaissance of the Polish agricultural movement. Danes trust other Danes three and a half times more than the Poles do and Danes would in general trust the four most important formal institutions (legal system. Conclusion This paper highlights the well-developed cooperative movement in Denmark. it created room for corruption among bureaucrats. they argue that the relatively weak development of producer organization is rooted in the fact that the development of producers’ groups and organizations requires a longer time in which farmers will be exposed to the appropriate market stimuli (SAEPR/FAPA.319 Significance 59% of marketing of agricultural products 95% of milk processed 50% of fruit and vegetable 2. Similarly.5% of population’s savings Important share in mechanization service Source: ICA 1993. the democratic cooperative movement was not for- bidden and continued to play a crucial role in the success of agriculture. Thus.566. these voluntary organizations were brought under the control of the party and people got used to obeying orders rather than making their own decisions. a range of horizontal and vertical links between people satisfying their different needs in particular social groups existed in democratic societies. this lead to fewer voluntary organizations and less social capital. Table 5. Arbitrary use of central power frightened the citizens and taught them to trust no one. This hypothesis was also confirmed by our empirical findings. democratic path of economic development. established heavy bureaucratic systems monopolizing the right to approve all actions in society. bridging.8% of arable land 18. As Denmark. and then to infiltrate and subordinate it. existed and were supporting the idea of cooperation.959.793 55. .800 Employees 434.200 7. 1994). Polish rural co-operative movements. as well as in Poland. and state monopolies.” Politically speaking.500 1.400 372. administration. and government) ten times more than the Poles do. Our findings confirmed this hypothesis: the average Dane is a member of twelve times more voluntary organizations than the average Pole. Also.570 112.531. Thus. in both countries in the period between the wars all range of political parties (left and right). one could argue that the massive state intervention in the Polish economy during communism.006 8. prior to World War II.199. in addition to achieving the purpose of organization. Being a member of a voluntary organization gives Danes. purchase of common machinery would be justified as an efficient means of cooperation. First fascists. linking. 1988.100 113. after World War II. Considering the small and fragmented structure of private farms in Poland. The underlying objective of this political support was the fight for influence in the cooperative movement.600 177. Type Supply & marketing Dairy cooperatives Horticultural co-operatives Agricultural production co-operatives Savings & credit Agricultural circles Total Number 1. tried to fight the cooperative idea. Polish sources do not explicitly mention anything about the aspect of social capital. police. and thus also market stimuli. cooperation.250 JARKA C HLOUPKOVA ET AL . the renaissance of cooperative movement in Poland is postponed.086 1.290 154. Unlike Denmark. it is no surprise that it was one of the first targets of the communist government to liquidate it. Therefore. followed a normal. Poland was obliged to follow a communist doctrine. Most of the farmers’ operations were based on “trust.

Copenhagen.” Agriculture and Human Values 10(1): 2–10. (1986). FAO (1994). Denmark: The Royal Veterinary and Agricultural University. Connecticut: Greenwood Press. However. Geneva: International Cooperative Alliance. Acknowledgments We thank Martin Paldam and four anonymous referees for helpful comments. S. ICA Studies and Reports. Food and Agriculture Organization of the United Nations. [An outline of the history of Polish cooperatives. 4. which make them a good example to shed light on the formation and destruction of social capital. Food and Agriculture Organization of the United Nations. Fink. The central co-operative committee of Denmark” (edited by Claus Bjørn). Denmark: IFG Press. Fukuyama. As demonstrated. “Agricultural situation and prospects in the Central and Eastern countries: Summary report. “Some reflections of Eastern European agriculture. Paldam and G.. 3. Chloupkova. where entrepreneurs were persecuted as potential threats to the system due to their capability of organizing resistance. Central and Eastern Europe – Agriculture in Transition 1.” Journal of Microfinance 4(1): 17–36. L. Bjørnskov (2002a). Idczak. “Could social capital help Czech agriculture?” Zemedelska Ekonomika [Agricultural Economics] 48(6): 245–249. “Polish agriculture: Organisational structure and impacts of transition. Poland. They had 177.000 members and 2.8% of arable land and they had 177. P. J. There were 2. Inglot. Christensen. cooperatives have both an economic component and a civic component.). Denmark: The Royal Veterinary and Agricultural University. The Social Virtues and the Creation of Prosperity. R. (2002b). Working Paper 01-13. Coleman. The lack of social capital in CEEC could therefore be one explanation for the rather disappointing economic results and hardships of transition so far. and C. F. S. Central and Eastern Europe – Agriculture in Transition 5. Reorienting the Cooperative Structure in Selected Eastern European Countries: Case-Study on Poland. Hjøllund. However more research has to be undertaken to validate these suggestions. (1999). we found that Danes participate in twice as many civic actions as the Poles. we would expect more civic participation and entrepreneurship in a capitalist country than in a communist country. J. (1983). per tractor has decreased from 15 ha (beginning of 1990s) to 14 ha (1999). Also. J. Trust.” American Journal of Sociology 94: 95–120. Thus it can be argued that the capitalistic democracies (especially Scandinavian countries – see Svendsen.700 employees (ICA.000 members and 2. we are most grateful to the Danish Social Science Research Council and the Rockwool Foundation for funding this social capital research. Chloupkova. University of Poznan. (1994). 1993). Reorienting the Cooperative Structure in Selected Eastern European Countries: Summary of Case-studies. it can be documented that the number of tractors in Poland has increased since the transition. Westport.] Aabenraa. Copenhagen. Accordingly. This figure is even lower for private farms. Zarys historii polskiego ruchu spoldzielczego. European Commission (1998). Richardson (ed. Copenhagen.” Unit of Economics Working Papers 2004/4. J. International Co-operative Alliance (ICA) (1993). J.700 employees (ICA. and C. M. 2002a). where one tractor serves only 12 ha (Chloupkova. In oral communication with J. (1911). Poland: Cooperatives in Eastern and Central Europe.” Brussels: Directorate General for Agriculture. Rural Denmark and Its Lessons. [Binding Ties. “Social capital in the creation of human capital.” In J. T.] Warsaw. Denmark. Bonanno. London: Longmans Green and Co. Bjørnskov (2002b). London: Hamish Hamilton.086 agricultural production cooperatives farming 2. “European cooperative movement: Background and common denominators. we suggest that two different political systems during the 20th century led to different levels of social capital. September 2001. (2002a). (1966). T. 2003) are in general superior to the communist dictatorships in facilitating and building social capital. the authors alone are responsible for the content. Båndene bandt. “Counting in social capital when easing agricultural credit constraints. H. 2. “Social capital in Russia and Denmark: A comparative study. T. Bourdieu. Svendsen (2001). Overall. Fællesorgan for Danske Andelsforetagender [Journal of the Danish Co-operative Organisations]. A. (1993). Chloupkova. 1993). J. Vol 5. 5. Needless to say. Chloupkova. This feature pertains to all co-operative (collective) farms in the CEECs during the communist period. Handbook of Theory and Research for the Sociology of Education. the cases of cooperative movements in Denmark and Poland suggested that social capital was built to the same extent and along the same lines in both countries in the 19th century.086 agricultural production co-operatives in 1988 farming 2.” Aarhus School of Business. Although available data do not mention anything about the technical status of the machinery used in Poland. Capitalism maintained and perhaps built social capital whereas communist dictatorship destroyed it. Haagard. References Andelsbladet (1904). and the agricultural land area . Hunek. there were 2.” Unit of Economics Working Papers 2002/3. “Rural Denmark 1750–1980. In 1988. Notes 1. (1995). “The forms of capital. Poland. (1988).8% of arable land.B UILDING AND DESTROYING SOCIAL CAPITAL 251 like the case for membership of voluntary organizations.

Serageldin (eds. Kaser. T. Poland. European integration and Czech interests]. Thugutt. Connecticut: Greenwood Press. (2000). R.” Annual Review of Sociology 24: 1–24.coop. OECD (1995). A. Lerski. (2003). A. DC: The World Bank. “Bowling alone: America’s declining social capital. D. Making Democracy Work: Civic Traditions in Modern Italy.” The American Prospect 24 (Winter): 34–48. France: Centre for Co-operation with the Economies in Transition.” Sociologia Ruralis 40(1): 72–86. “Social capital: One or many? Definition and measurement. London: Croom Helm. Web page accessed at www. Prague. L. evropska integrace and ceske zajmy” [Institutionalism of /un/accountability: global world.252 JARKA C HLOUPKOVA ET AL .” European Journal of Political Economy 16. Policy and Economic Growth. New Jersey: Princeton University Press. Portes. Address for correspondence: Gert Tinggaard Svendsen. Paldam. Development and Transition 5: 21–34. D. Prismet. J. (1998). Political Economy of the European Union: Institutions. M. Paldam. T.” Netherlands Journal of Housing and the Built Environment 13(1): 25–40. A. S.] Warsaw. M. (1995). World Bank Task Force. Mlcoch. Svendsen (2000). Svendsen. Westport. L. “Missing social capital and the transition in Eastern Europe. Spoldzielczosc: zarys ideologii. H. R. (1996). “Historien anskuet som et kapitalmarked. and J. European Community. Department of Economics. Radice (1985). (2000). Denmark: Louis Kleins Bogtrykkeri. Selvorganiseringen i de danske landdistrikter 1800– 1900. “The strange disappearance of civic America. a Multifaceted Perspective. (2000). (1996). R. . The Economic History of Eastern Europe 1919–1975. “Social capital: Its origins and applications in modern sociology. Landau. T.org/ica. D. H.” American Journal of Sociology 98(6): 1320–1350. “Alleviating poverty: Entrepreneurship and social capital in rural Denmark 1800–1900. “Embeddedness and immigration: Notes on the social determinants of economic action. Nelson.” Journal for Institutional Innovation.” In P.” Fortid og Nutid 1: 23–51. C. (1983).dk International Co-operative Alliance (ICA) (1999). A. G. Wacquant. Foreign Area Studies. Paldam. Washington. Warsaw. 339–366. Sonne. L. and G. an Outline of Ideology. Putnam. D. Silkeborgvej 2. (1867). Denmark Phone: +45-89486408. An Agricultural Strategy for Poland. L. T. Princeton. and E. Svendsen. DC: The International Bank for Reconstruction and Development/The World Bank. J. [About Labour Organisations. D. C. Svendsen. M. L. Rose. Svendsen (2002). “Negative social capital: State breakdown and social destitution in America’s urban core. G.” Belgeo 1(3): 231–246. (2000). Putnam. Paris.” Journal of Economic Surveys 14(5): 629– 653 [special issue on Political Economy]. Sensenbrenner (1993). Oxford: Clarendon Press. E-mail: gts@asb. Z. SAEPR/FAPA (2000). H. Report of the Polish. Washington. [Cooperatives. “Measuring social capital: The Danish co-operative dairy movement. 8000 Aarhus C.] Copenhagen. G. DC: The American University. (1995). (1993). Portes. H. 30 November – 2 December. R. Cheltenham.” ICA Review 88(1). Czech Republic. G. Dasgupta and I. The Aarhus School of Business. Social Capital. The Polish Economy in the Twentieth Century. Svendsen (2000). and J. and G. Agricultural Policy Analysis Unit. Stereotypes in the European Union Concerning Polish agriculture. Svendsen (2001). Svendsen. Poland: Review of Agricultural Policies. Poland: Foundation of Assistance Programmes for Agriculture. Tomaszewski (1985). (1998). Historical Dictionary of Poland 966–1945. (1937).” Journal of Democracy 6: 1. The World Bank (1990). “Od institucionalizace neodpovednosti” [From the institutionalism of unaccountability to the institutionalism of accountability]. presented at the conference “Institucionalizace /ne/odpovednosti: globalni svet. “The fall of the co-operative movement in Poland: Causes and consequences. Washington. and G. Office 706. Poland – a Country Study. G. Fax: +45-89486197. Maliszewski. Om arbejderforeninger. “Getting things done in an anti-modern society: Social capital networks in Russia. T.). Organisation for Economic Co-operation and Development. M. “An essay on social capital: Looking for the fire behind the smoke. and G. UK: Edward Elgar. Til oplysning og veiledning. Putnam.

Sign up to vote on this title
UsefulNot useful