Cambridge Journal of Regions, Economy and Society 2008, 1, 115–129

doi:10.1093/cjres/rsm002

The place of ‘place’ in theories of poverty: mobility,

social capital and well-being

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Bill Jordan
School of Applied Psychosocial Studies University of Plymouth, Drake Circus, Plymouth, PL4
8AA, UK bill.jordan@plymouth.ac.uk

This article argues that theories about the spatial distribution of poverty since World War II
have always combined analyses of the impact of the built environment, of culture and of
mobility of populations. However, the form taken by these combinations has varied with the
logic of the underlying political economy adopted by governments in the USA, UK and
continental Europe. The author argues that a new version may be emerging, reflecting ideas
from theory on social capital and well-being.

Key words: poverty, mobility, social capital, well-being, community

JEL classifications: H3, H4, I3, O2

Introduction (i) As part of the welfare state tradition, in which

This article will trace how three elements in the theory
of poverty and place have been related to each other in
social science since the Second World War. These
three are the physical infrastructure (or built environ-
ment); mobility (the turnover of population, and the
social characteristics of those coming, staying and
leaving); and culture (interactions between residents,
leading to shared norms and collective practices).
These three have always been parts of social
scientific theorizing about how poverty relates to
place, but the way that they have been combined
has varied markedly over time. We may at present
be in a new transition, in which mobility is perhaps
replacing culture as the key factor in explaining
the dynamics of impoverishment in deprived dis-
tricts, and its impact on well-being is being criti-
cally assessed in the light of research on well-being.
To summarize the argument, it will be suggested
that the most influential theorists, first in the UK
and then in the USA, connected up these elements
as follows:
Squalor was one of Beveridge’s Five Giants to
be slain (Beveridge, 1942), the built environ-
ment was the primary focus of post-war theories
of poverty and place. The targets of theorizing
were slum clearance and building standards, the
age of the housing stock and its state of repair,
and ‘the problem of rent’ in income mainte-
nance policy. Mobility entered the equation
mainly in terms of the relocation of old slum
communities on new estates, and culture in
terms of the better opportunities for quality of
life in these salubrious environments.
(ii) In the 1970s the emphasis began to shift towards
the cultures of deprived communities as a factor
in their poverty, and to individual exit as a rem-
edy to the social problems of these communities.
As governments started to look to markets and
market-like solutions to what had been seen as
collective issues, mobility and choice were
regarded as features of social relations to be pro-
moted, and the culture of deprived communities

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B. Jordan
as a brake on these opportunities, which held
members back.
(iii) Thirty years on, and after countless initiatives
for ‘social inclusion’, ‘community cohesion’,
‘civil renewal’, ‘respect’ and ‘integration’,
which focused on both the regeneration of the
physical infrastructure, and attempts to trans-
form the culture of these districts, the latest
thinking is that we must re-examine the part
played by mobility in their problems.
If residents sustain a low quality of life, it is not so
much because of the absence of social capital as
the wrong kind of social capital; and the exit of
more resourceful residents is seen as a problem,
rather than a remedy. The ‘well-being turn’ in
psychology and economics had led to a critique
of mobility and choice, as undermining commu-
nity, belonging and collective action. Its potential
lies in its focus on mainstream social relations, its
challenge to the hegemony of orthodox microeco-
nomic analysis, and hence its invitation to other
social sciences to influence policies on poverty.
Each of these approaches to the spatial distribu-
tion of, and environmental factors in poverty had
a corresponding political economy–a set of inter-
linked ideas about economic development and gov-
ernment, which led to policies for housing and the
wider physical infrastructure. Although it is beyond
the scope of this article to deal in these policies in
detail, indications will be given of how theories
linking poverty to place influenced the broad out-
lines of the programmes adopted in each period.
The post-war period
It is not necessary to labour the point about the wel-
fare state’s assumption that the evils of poverty were
strongly reinforced by the physical environment of
the slum districts where poor people were concen-
trated. The assumption behind the new social hous-
ing developments of that period was explicitly that
these new, hygienic, well-appointed and potentially
convivial facilities would allow the flowering of the
kinds of democratic citizenship which social policy
promoted, and pre-war conditions blocked.
116
In other words, there was an in-built set of cultural
and political analyses, in terms of the failure of cap-
italism to supply an adequate physical infrastructure
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for working-class citizenship, and the need for state
action to enable not just the new culture of democratic
membership appropriate for the post-war world, but
also to retain the loyalty of a working class which
might otherwise cast approving glances at Soviet-
style communism in Central and Eastern Europe.
But we should also not forget that critiques of
pre-war social policy in the USA, UK and Europe
also dealt in issues of mobility and culture, as well as
the shortcomings of unmodified capitalist develop-
ment. The Chicago School’s analyses of crime and
poverty emphasized ‘interstitial districts’ in cities,
which were inhabited by successive waves of new
immigrants (from the rural south and from abroad),
the most successful of whom moved quickly on to
other neighbourhoods (Park et al., 1935).
Gang culture and gang conflict were responses to
the anomie experienced by youth in such anony-
mous districts, with few reliable community bonds.
New social housing schemes attempted to create
a social environment of security and belonging, as
well as decent physical standards. This is evoca-
tively recalled by Richard Sennett in his recent
book, Respect, in which he describes in detail
his childhood on just such a scheme in Chicago
(Sennett, 2003). These ideas were part of the theo-
retical repertoire which informed post-war social
housing policies in the UK, and also the reconstruc-
tion programmes all over Europe, where it would
have been fascism rather than crime which was seen
as a toxic by-product of the urban anomie spawned
by poverty-driven mobility.
It is too simple to characterize the political econ-
omy of the post-war era as ‘Keynesian’. It built on
an approach to public finance and the economics of
welfare that long pre-dated The General Theory of
Employment, Interest and Money (Keynes, 1936).
For instance, it is striking to come across the fol-
lowing sentence:
Provided that the dividend accruing to the poor is
not diminished, increases in the aggregate na-
tional dividend of the community, unless they

result from coercing people to work more than
they wish to do, carry with them increases in
economic welfare.
These are not the words of Rawls, nor even of
Keynes, but of A. C. Pigou (1920, ch. VII, secs
1–4, summary). In Pigou’s work, there is already
the combination of micro-analysis in terms of mar-
ginal product and cost, and macro-analysis, in
which government uses various instruments of reg-
ulation, redistribution and intervention (including
measures to establish a ‘national minimum standard
of real income’) to mediate between poverty and
GDP (Pigou, 1920, ch. XIII). So, for example, in
the UK between 1924 and 1936, two-thirds of the
new houses built were constructed by local author-
ities (Hicks, 1947, 27); in the USA, the New Deal
spawned social housing projects of the kind de-
scribed by Sennett.
The role of government, both central and local,
was therefore to plan, and usually to supply, what-
ever public goods and services were required to
achieve a Pareto-efficient distribution of resources,
under constitutional principles similar to those later
adopted by Rawls (1972) in his account of social
justice (Mueller, 1979, ch. 1). The notion of a ‘na-
tional minimum standard’ for the poor was built
into this model, and adopted in all affluent democ-
racies. In Europe and the UK, given the scale of war
damage, the first duty of government in relation
to the social environment was ‘to build houses as
fast as possible . . . with the resources available’
(Donnison and Chapman, 1965, 48), principally
on the basis of social needs, and with local author-
ities as the prime movers. As T. H. Marshall put it:
the ingredients of which housing policies were
compounded remained essentially the same as
before the war—subsidies, cheap loans, tax
relief, rent restrictions and rent allowances. No-
body came to the rescue with any new ideas,
unless one were to count as such the British ini-
tiative in the creation of New Towns. The differ-
ence between the various national policies were
[sic] caused, rather, by the different ways in
which the old devices were employed. Speaking
The place of ‘place’ in theories of poverty
very generally, one might hazard the opinion that
in Britain housing policy has been more deeply
embedded in the wrangles of party politics, that
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housing legislation is more complicated, and the
administration is more fussy and paternal than in
most of the countries of continental Europe
(Marshall, 1965, 153).
A less explicit goal of this period of construction
was its direct contribution to economic growth.
Whereas expenditure on housing for the poor had
hitherto been seen mainly in terms of redistribution
for the sake of social justice, both slum clearance
and house building programmes in the colonies of
affluent states began to be recognized as tools of
economic development. ‘The colonial powers, in-
cluding Britain and France, had formed a fairly
clear idea about the economic significance of hous-
ing by the 1950s’ (Arku and Harris, 2005, 910).
This view was deployed within a political econ-
omy of government-led intervention in housing
supply as an aspect of reconciling the principles
of the welfare states with economic growth.
These theoretical assumptions informing post-
war social housing policy persisted right into the
late 1960s: for instance, Des Wilson’s book I Know
it was the Place’s Fault (1970), used evidence of
poor housing conditions to explain the persistence
of concentrations of poverty.
Culture as crucial, mobility as exit
The culture of poverty
The post-war consensus started to crumble in the
1970s, and this was evidenced in the field of location-
based poverty by the rise of highly-politicized cultural
explanations of the persistence of poverty, and also of
policies which promoted exit from poor communities
rather than investment in their physical infra-
structures. The implication was that aspects of poor
people’s collective lives perpetuated poverty, so pub-
lic money spent on the built environment would
be wasted, and it was better to enable individuals to
escape them.
The locus classicus for the culture of poverty liter-
ature was Oscar Lewis’s two anthropological studies,
117
B. Jordan
La Vida (1969) and The Children of Sanchez (1964),
which documented the lives of Puerto Rican and
Mexican immigrants in New York and other cities,
identifying ways in which family, kinship and com-
munity reinforced practices which in turn perpetu-
ated poverty. In Lewis’s account, these included:
the absence of childhood, as a specially pro-
longed and protected stage in the life cycle, early
initiation into sex, free unions and consensual
marriages, a relatively high incidence of the
abandonment of wives and children, a trend to-
wards female or mother-centred families and
consequently a much greater knowledge of
maternal relatives (Lewis, 1969, 53).
They also included individual feelings of margin-
ality and helplessness, ‘weak ego and poor impulse
control’ and little ability to defer gratification.
This view of the culture of poverty became an
official orthodoxy in the USA and the UK, pioneered
by Sir Keith Joseph, Margaret Thatcher’s mentor, in
the UK (Jordan, 1974). It was highly consistent with
a supply-side approach to problems of unemploy-
ment (improvements in character and human capital
are necessary conditions for successful labour mar-
ket policies). But it also meshed very snugly with
developments in theoretical economics.
Mobility and consumer sovereignty
The revolution in the theory of public finance which
took place in the 1980s was initiated by the article
by Charles Tiebout in 1956, entitled ‘A pure theory
of local expenditures’, which showed that, under
a set of very demanding assumptions about full
information, costless mobility and lack of external-
ities, households could sort themselves into the op-
timal memberships of jurisdictions for the efficient
supply of collective infrastructures and services
(Tiebout, 1956).
In other words, ‘voting with the feet’, by auton-
omous, mobile citizens, was a superior alternative
to the forms of social engineering under which local
authorities had tried to supply public goods and
social services to their communities. This work
was, of course, backed up by J. M. Buchanan’s
118
(1965) analysis of exclusive clubs (as suppliers of
collective goods to fee-paying members) and on the
supply of public goods (Buchanan, 1968), all of
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which pointed to the possibilities of ‘consumer sov-
ereignty’ in what had been taken to be inescapably
government-led allocations.
These theorists were already reformulating the
analysis of public finance, by applying a strict
methodological individualism to fields in which
Pigou and Beveridge, as much as Keynes, had dealt
in ‘aggregates’ and collective interests. Instead of
a duty of the sovereign state to supply optimum
public goods (Hicks, 1947, 17–22), they substituted
the sovereignty of the citizen-consumer, shifting
between a range of providers of collective infra-
structures and services. This was argued to enable
democratic consensus around the costs and condi-
tions for such provision to members of these ‘clubs’
and jurisdictions, as well as economic efficiency in
supplying ‘local and particular’ goods to those who
opted to join them (Buchanan, 1967; Tullock, 1967;
Buchanan and Tullock, 1962; Musgrave, 1959).
This new political economy promoted the major
restructuring of government, and especially local gov-
ernment, which took place in the Anglophone coun-
tries from the mid-1970s onwards. The change which
accompanied the deregulation of labour markets, the
erosion of social protection and decline in manual
wages, involved a shift to entrepreneurial local leader-
ship, competition between localities, fiscal austerity,
privatization of public assets and the replacement of
public monopoly local services by managerialist insti-
tutions and contracting out to commercial organiza-
tions (Brenner and Theodore, 2002; Jessop, 2002;
Corry and Stoker, 2002; Geddes, 2006).
This produced the ‘neo-liberalization of urban
space’, or ‘neo-liberal localization’—a process of
institutional deregulation and intensified inter-
spatial competition (Corry and Stoker, 2002, 18–23).
In this environment, unskilled, sick, dis-
abled and minority ethnic people were multiply
disadvantaged—by their relative immobility, their
lack of access to owner occupation, their vulnera-
bility to unemployment and poverty, and the decay
of the physical environments in which they found
themselves concentrated. In an individualistic,

competitive, economic environment, they could
compensate for these disadvantages only through
local (and often deviant) solidarities of resistance
practices (Jordan, 1996, 2006a). The new political
economy, which installed markets at the centre of
social and political life (Finlayson, 2003; Gilbert,
2004), ironically made poor people more reliant on
their local cultural resources (networks of kinship
and friendship) than they had been in the post-war
era. Men especially were less likely to belong to
formal organizations (Hall, 2002; Bynner and
Parsons, 2003), but more likely to be involved in
the informal (often illegal) economy.
All these tendencies were far more marked in the
UK, USA, New Zealand and Australia than in con-
tinental European countries. In the theoretical tra-
dition within which poverty was analysed in
Germany and France, policies were more concerned
with ‘the conservation and utilization of human
beings as valued resource of the state [so that] their
end is not the positive enhancement of life but the
augmentation of the national estate’ (Dean, 1991,
34)—a mercantilist tradition which was more en-
during than the Anglophone legacy of state welfar-
ism in the twentieth century.
The scope for radicalism in applying new princi-
ples was greatest in the UK, where some 30% of the
housing stock was owned by local authorities, and
around 200,000 new homes a year were still being
built in this sector in 1970. Selling off council
houses to tenants was a flagship programme of
Margaret Thatcher’s reforms. It enabled the trans-
formation of urban spaces, and broke down the
solidarities of local politics by allowing new differ-
entiations between social groups to develop. With
larger rented sectors, continental European coun-
tries had no such sudden policy shifts.
Even so, the exclusion of poor and minority eth-
nic citizens from sought-after facilities (such as
schools) and desirable districts was identifiable,
for instance in France, by the early 1990s (Paugam,
1998). By the middle of the following decade, soci-
ologists were commenting on ‘the extraordinary se-
lectivity of residential mobility, revealing the
almost infinitive anxiety of families and the almost
existential importance of place’ (Maurin, 2004,
The place of ‘place’ in theories of poverty
24–25)—being of foreign origin was an even stron-
ger influence on the ability to live in a desirable
district than income (Maurin, 2004, 91). Meanwhile,
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government policy imposed ‘segregation from
above’ on poor and minority citizens through social
housing schemes (Begag, 2004; Nicholls, 2006).
Measuring and explaining the persistence of
poverty
At the same time, the academic sociological
and social policy analysis of poverty in the USA
and the UK had moved away from the physical
environment and housing as a major focus, and
turned towards the definition and measurement of
poverty—the so-called ‘rediscovery of poverty’ by
Harrington (1962) in the USA and Townsend and
Abel-Smith (1965) in the UK—and to the dynamics
of income maintenance programmes.
After the heavy involvement of sociologists and
anthropologists in the Great Society Antipoverty Pro-
grammes in the US, and the Community Develop-
ment projects in the UK (1965–70), the ideological
backlash against the politicization of poverty (protests
and social movements) sought to take the whole issue
off the streets, and entrust it to economists and Trea-
suries. At the same time, the more technical analysis
of poverty, embodied in the UK by the work of Peter
Townsend, and especially his Poverty in the United
Kingdom (1979), paid less attention to the social and
political relations of poverty, and more to relative
incomes. In continental Europe too, the study of
poverty shifted towards the dynamic between earn-
ings, taxes and benefits, and away from social and
environmental factors (Walker et al., 1984).
In the USA, looking back on the late 1960s and
the 1970s, Haveman (1987) wrote that ‘the War on
Poverty was conceived as an economic war: the
designs, debates, and the evaluations were all con-
ducted by economists. Economics was the central
discipline in both the notion and the research com-
ponents of the war’ (Haveman, 1987, 51–52). And it
was economists who published papers on the dam-
age to work incentives and family structures of the
income maintenance experiments conducted under
Nixon, themes taken up in the UK by the Institute
119
B. Jordan
for Economic Affairs, which became Margaret
Thatcher’s intellectual engine room in the late 1970s.
What is here being argued is that the two strands
of social scientific thought which fed Thatcherism’s
and Reaganism’s two-headed radicalism (their neo-
conservatism and neo-liberalism) were represented
respectively by the culturalists, who emphasized
cultures of poverty (which were often place-based);
and the public finance/public choice economists,
whose ideas were highly compatible with those of
Hayek (1960, 1978), Von Mises (1966) and the
anti-Keynesians (Friedman, 1975), who wanted
a social order constructed by individuals in markets,
not by governments.
These two combined to produce the new intellec-
tual orthodoxy of the 1980s, which spilled over into
the next decade. Just as it saw unemployment as
a supply-side issue of poor adaptation to the trans-
formation of labour markets, so it saw poverty as
a cultural collapse in a face of economic change,
leading to individual demoralization. Charles
Murray (1980) and his British imitators, who de-
veloped notions of ‘underclass’ and ‘dependency
culture’ were the heirs of Oscar Lewis, while those
who led the privatization of social housing schemes
and the collective facilities of poor districts, selling
off parks and school playing fields, were paying hom-
age to James Buchanan and Friedrich Von Hayek.
As early as 1978, the great social and political
theorist A. O. Hirschman identified the role of mo-
bility in generating the concentrations of poverty,
and the social problems which were exacerbated
by these phenomena. He pointed out that the en-
couragement of exit options for more resourceful
members of disadvantaged communities was apply-
ing a market mechanism to the social order. It might
seem attractive as an alternative to the democratic
mechanisms for collective decision-making—
‘‘‘more efficient’’ than the ‘‘cumbersome’’ politi-
cal process for the redress of people’s grievances or
the fulfilment of their demands’ (as he put it). But:
Unfortunately, because of differences in income
and wealth, the ability to vote with one’s feet is
unequally distributed in modern society. In the
United States, where the problem is compounded
120
because of race discrimination, inequality in ac-
cess to exit has had some appalling consequen-
ces, such as the ‘‘ghettoization’’ and partial ruin
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of our big cities’ (Hirschman, 1981, 252).
This insight gave rise to a whole stream of critical
analysis of the impact of exit strategies on the social
structures of poor districts, from Mike Davis’s City
of Quartz (1990) in Los Angeles to William Julius
Wilson’s When Work Disappears (1996) in Chicago.
Obviously, as Wilson pointed out, the de-
industrialization processes accelerated by Thatcher-
ism–Reaganism reinforced the exit of bourgeois
white and black families from the inner cities; not
only was there a depopulation of 66% in the dis-
tricts he studied between 1950 and 1990; male em-
ployment declined by 46%, as less-skilled manual
jobs disappeared (Wilson, 1996, 44).
The growth of service work accelerated in those
leafy suburbs to which more resourceful residents
retreated. At the same time, other sociologists and
social policy analysts were charting the fate of the
outer city social housing schemes which had been
built during the post-war period, and up to the
1970s—or far later in Continental Europe, and es-
pecially in the state socialist countries of Central
Europe. Ann Power’s (1996) work drew attention
to the exclusive effects of industrial decline and
social polarization all over Europe. Although social
insurance benefits could replace earnings fairly ad-
equately in countries like Germany and Finland, the
isolation and loss of work-related social organiza-
tion in the lives of these residents was deeply dam-
aging to their quality of life and their citizenship.
Theorists and researchers like Wilson, Power and
Jordan (Jordan, 1996) ran the risk of seeming to
confirm the underclass and demoralization rhetoric
of Charles Murray and the IEA. To analyse the
transformation of collective life in these districts
(in other words, to present a sociological version
of what was depicted in films and TV series like
The Boys from the Blackstuff, Aufwiedersehen Pet,
Brassed Off, Common as Muck and The Full
Monty) was to flirt with the culturalist account of
the links between poverty and place—that collec-
tive responses to unemployment and poverty,

however understandably, consolidated their effects,
and that exit was therefore the only viable option
from a self-reinforcing ghetto process.
Mobility is a systematic feature of markets, and
the cultures of poor districts were seen as a kind of
market failure. Policy might address either these
cultural features, or the housing market, or both.
This was the challenge for the next shift in policy.
The Third Way
The Clinton and Blair Third Way administrations in
the USA and UK extended the policy repertoires
of governments in relation to these districts, with
their programmes for urban regeneration, social
inclusion and above all with workfare, the New
Covenant, New Deals and tax credits. Refusing to
return to European-style social insurance-based re-
distributive measures, they relied instead on retrain-
ing and resocializing workers for menial service
employment, buttressing their low wages with tax
subsidies, and penalizing non-cooperative resisters.
But a major difficulty for the new politics of
welfare under Third Way regimes was that the
means of rule that had characterized the post-war
institutions (for solidarity, redistribution, sharing
facilities and sustaining balanced communities)
had all been dissolved, and replaced by opportuni-
ties for individuals and households to exercise
choice through mobility between suppliers and
jurisdictions. Because these governments were un-
willing to reverse this shift, they focused instead on
new ways to engage commercial interests and local
populations in the physical and social regeneration
of their districts, in order the improve the function-
ing of education, health, social services, policing
and housing agencies, and enhance the cultural
resources of residents for solving their problems of
crime, homelessness, drug and alcohol abuse, truancy
and family breakdown (Jordan with Jordan, 2000).
Unlike the neo-liberal transformation, with its
theoretical basis in public choice and micro-
economics, this approach was grounded in a politi-
cal theory of citizenship (Kymlicka and Norman,
1994) and community (Etzioni, 1993). The goal
was to stimulate the sense of mutual responsibility
The place of ‘place’ in theories of poverty
in families and neighbourhoods (Driver and Martell,
1997). In so far as it had an economic rationale, it
was one of investment in human capital (Becker,
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1964)—stimulating firms and disadvantaged peo-
ple to invest in improving the economic potential
of those previously excluded from mainstream cir-
cuits of production, through initiatives by a ‘Social
Investment State’ (Reich, 1993; Giddens, 1998).
The policy instruments created to achieve these
goals were ‘partnerships’ between local authorities,
firms and local populations (Innes, 1994; Lauria,
1997; Davies, 2001, 2002). The theory behind these
innovations first developed in the USA by Elkin
(1987) and Stone (1989) in terms of ‘regimes’ and
refined by Rhodes (1997), Davies (2001, 2002) and
Stokes (2000) in the UK in terms of ‘governance’—
‘self-organising, inter-organisational networks’
(Rhodes, 1997, 53). The goal in both countries
was to build long-term, stable relationships between
city government and local private interests in
pursuit of mutual goals (Jones and Evans, 2006,
1494), in tasks of urban regeneration, involving
local residents.
Critics have argued that the power relations in
these new institutions of governance, distanced from
local authorities, and attempting to include neigh-
bourhood organizations, have been complex and
opaque; case studies reveal wide differences between
patterns and outcomes (Jones and Evans, 2006,
1506; Geddes, 2006, 92–93). Similar conclusions
have been drawn from Danish and Irish experience
(Sorenson and Torfing 2004; Forde, 2006). Above
all, the ‘invited spaces’ (Gaventa, 2004) created by
these initiatives disadvantage local residents in re-
lation to organized business and government partic-
ipants; in France, the associational sector has failed
to influence public policy in neighbourhoods, despite
a rhetoric of partnership (Nicholls, 2006, 1798).
In so far as these partnerships for regeneration
have attempted to reverse the exclusion of residents
of disadvantaged districts, to minimize the effects
of social polarization, and to deploy new means of
rule in fragmented and disorganized communities,
the emphasis on governance in Third Way theory
represents a compromise between neo-liberal man-
agerialism and attempts at achieving consensual,
121
B. Jordan
communitarian local activity—for example, in the
UK New Deal for Communities (Lawless, 2006).
Taken in conjunction with the expansion of tax
credits, subsidising the wages of low-earning work-
ing households and with the range of other meas-
ures to enforce work and family responsibilities,
these initiatives have at least slowed down the cre-
ation of neighbourhoods with concentrations of
poverty in most parts of the USA (Cooke and
Marchant, 2006), with the important exceptions of
the Sunbelt cities, Los Angeles, California’s Cen-
tral Valley and the old industrial cities of the North-
east (Jargowsky, 2003; Jargowsky and Yang,
2005). A similar mixed picture in the UK, against
a background of Third Way interventions which
broadly mirrors that of the USA, must be set against
the fact that both countries have enjoyed relatively
rapid and stable growth of GDP during this period.
In continental Europe, the background condi-
tions were very different—higher manual wages;
higher minimum wages; higher replacement rates
of social insurance benefits, with better coverage;
but slower growth of GDP, higher social insurance
contributions and higher unemployment, in most of
the old EU members states.
An evaluation of the EU’s URBAN 1 Commu-
nity Initiative (1994–1999) for area-based urban
regeneration found that it had introduced a trans-
formed neighbourhood intervention in several
states, identifying similar districts with deprivation,
stigma, market and state failure in countries without
previous initiatives of this kind, and involving
community participation and partnership. The pro-
gramme influenced policy in 11 states, but the ac-
tual effects of interventions were again mixed. In
10% of cases, the initiative actually increased spa-
tial inequalities, by displacing problems to other
areas (Carpenter, 2006, 2158), e.g. by raising prop-
erty prices and taxes. At the end of the period, all
the target districts were still absolutely and rela-
tively disadvantaged (ibid., 2159).
Part of the problem is that it is unclear whether
housing markets should enable more overall mobil-
ity, both in and out of poor districts, (and hence that
social housing might be a barrier to more mixed or
balanced communities); or whether policy should
122
focus on the improvement of the quality of life of
long-term residents of poor communities. In the
event, the exit of more resourceful individuals and
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households seems to have continued, despite
attempts at both strategies.
Social capital and well-being
To bring this story up to date, we seem now to be
entering a new phase in the articulation between the
three elements in the theory of poverty and place.
This stems from dissatisfaction with the limited
success of communitarian analyses and regenera-
tion policies in relation to the collective life of de-
prived districts; but it also arises from alarm at the
levels of disorder, conflict and threat to security
attributed to members of some such neighbour-
hoods. Here again, the leading theoretical develop-
ments come from the Anglophone tradition, where
these fears are strongest.
As a background to the new thinking, it is impor-
tant to recognize the extent to which methodological
individualism and the economic approach to human
interactions had come to dominate the social scien-
ces, almost totally replacing the collectivist elements
in the interwar and post-war theorizing about pov-
erty, reviewed in the first section of this article. For
example, when the economist Gary Becker first
framed his theories on poverty, low wages and the
family in terms of individual underinvestment in
human capital (Becker, 1964, 1976), his ideas were
regarded as outrageous in the other social sciences.
Now the ‘supply side’ approach to unemployment,
lack of skills and low earning power underpins both
theory and policy in these fields. But the interven-
tions inspired by this approach have made little
impact on the behaviour and lives of individuals
living in intense concentrations of poverty.
Although public choice theory dealt with the
economics of groups and collective action (Olson,
1965, 1983), the ideological thrust which informed
it was anti-socialist; its advocates wanted to sub-
stitute commercial and quasi-commercial organiza-
tions for state agencies across a range of issues,
including infrastructures and the built environment
(Foldvary, 1994; Davies, 1992). The model of

a society—or more accurately a system of overlap-
ping jurisdictions and economic ‘clubs’ (Casella
and Frey, 1992)—which it promoted was one of
self-sorted groupings of highly mobile individuals,
constantly shifting between options, and seeking to
avoid sharing with those who had costly needs
(Cullis and Jones, 1994, 297–301). It gave far less
attention to such phenomena as loyalty (to family
members, neighbours, communities or country), or
the bonds which sustained long-term relationships
and affiliations. Communitarian accounts of ‘respon-
sible communities’ had proved too prescriptive and
vague to provide a basis for effective policies.
The rapid rise of social capital theory to the status
of a ‘master idea’ in the social sciences (Bjørnskov,
2006; Bowles and Gintis, 2002) can be traced to its
apparent capacity to link features of the collective
life of neighbourhoods, regions or states to the
functioning of both their economies and their polit-
ical institutions.
In this way, it seemed to connect spatial with
social dimensions of social interactions and provide
an analysis in terms of cultural and organizational
features of social units. The concept of social cap-
ital denoted an all-purpose collective good, which
was both a bonding agent and a lubricant in inter-
actions of all kinds (Putnam, 2000, 20), but which
could also function as a private good for individual
benefit (ibid., 22). The claims later made for social
capital research were enormous—that there were:
robust correlations in various countries between
vibrant social networks and important social out-
comes, such as lower crime rates, improved child
welfare, better public health, more effective gov-
ernment administration, reduced political corrup-
tion, educational performance, etc. (Helliwell
and Putnam, 2005, 438)
This seems to imply that social capital is a single
medium which facilitates communications of all
kinds, in interactions involving markets, political
systems and voluntary organizations, although
Putnam’s earlier work suggested—following de
Tocqueville (1836)—that the last of these were
crucial to its generation (Putnam, 1993).
The place of ‘place’ in theories of poverty
But subsequent critical analyses have pointed out
that some of the defining features of social capital
(social norms of reciprocity and civil associations)
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are poorly correlated with quality of governance
and subjective well-being (SWB); the remaining
component, generalized trust, is alone relevant for
these (Bjørnskov, 2006). Others have shown that
several definitions of social capital—‘bridging con-
nections yielding functional utility’ (Coleman,
1990, 302), ‘social networks and the norms of rec-
iprocity and trustworthiness’ (Putnam, 2000, 19)
and ‘informal rules or norms shared among them’
(Fukuyama, 1997, 378)—ensure that social capital
is always desirable since its presence is equated
with beneficial consequences (Durlauf and
Fafchamps, 2004, 3–5).
The attraction of social capital theory is that it
might explain how some communities come to
function in ways which make them prosperous,
well-organized and well-governed, whereas others
become poor and fragmented, falling prey to many
social problems. This implies that informal interac-
tions, informal information sources and the func-
tioning of local norms and institutions are all
alternatives, and perhaps even superior alternatives,
to geographical mobility, except for those trapped
in ‘disorganized’ neighbourhoods.
However, in relation to mobility, Putnam in
Bowling Alone (2000, 205) acknowledges that US
society has polarized into homogeneous districts,
on the basis of age, taste, income, class, race and
so on. The same phenomena have been well docu-
mented recently by geographers such as Danny
Dorling in the UK (Dorling and Thomas, 2003).
But he also acknowledges that this homogenization
of residential districts is associated with lower lev-
els of participation in civil society and civic life
(Putnam, 2000, 209–210). He (and other social cap-
ital theorists) do not deal with mobility in any sys-
tematic way as a factor in the dynamics of social
capital building.
Faced with the phenomenon of poor districts with
concentration of social problems of all kinds, and
with the La Vida phenomenon of strong informal
networks in some of these, and a kind of blood-
and-guts code of loyalty, solidarity and resistance
123
B. Jordan
to authority in all of them, Putnam (2000, 22–23)
offers a very vague distinction between ‘bonding’
social capital, built on links with others with social
characteristics like one’s own (a bit like ‘thick com-
munity’), and ‘bridging’ social capital, in the form of
links with members of other groups (‘thin’ or liberal
community). But he does not use this distinction at
all consistently in Bowling Alone, or his other work.
If mobility polarizes and homogenizes residential
districts, it must contribute to the emergence of
bonds between people with very similar social pro-
files, if it contributes to social capital at all. All the
evidence is that a great many poor people in the UK
have dropped out of formal civil society organiza-
tions since the early 1980s.
In Bynner and Parsons’ (2003, tables 10.1–10.9)
in a comparison of survey evidence of three gener-
ations since World War II in the UK, of those
Class V men born in 1946, 52% were members
of organizations when surveyed aged around 30,
and 45% were members of trade unions. Of Class
V men born in 1970, and interviewed at around
age 30, 12% were of members of organizations,
and 8% of trade unions. But 46% of them had been
arrested.
All this suggests that such networks as do exist in
poor districts are informal, and tend to reinforce
a counterculture, including practices such as work-
ing while claiming, petty crime, hustling, prostitu-
tion, drug dealing and so on. Alternatively, as
Madeleine Leonard’s researchers on informal eco-
nomic activity in Catholic West Belfast showed, it
can sustain a highly organized and brutally
enforced loyalty to an armed resistance struggle
against the mainstream (Leonard, 1993). Either
way, as again Leonard showed, in her recent article
in Sociology (2004), it implies that ‘bonding’ social
capital is very difficult stuff to handle. If you try to
replace it, as the Peace Process in Belfast has done,
by links into the mainstream economy and main-
stream social service agencies, you may leave some
individuals more poor, isolated and vulnerable than
before—more excluded, paradoxically, than when
they were living in a ghetto of armed resistance.
Thus social capital theory has proved an unreli-
able guide to policy in relation to disadvantage and
124
disaffection (van Staveren, 2003). This is illustrated
by the collective responses of Muslim youth in the
UK and Europe. In France, the street rioters of
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October–November, 2005, displayed Putnam’s
bonding social capital. They united around the slo-
gan ‘France hates us, and we hate France’, and were
veritably ‘les exclus’, poor, unemployed, living in
the outer suburbs, in special social housing
schemes, sharing a common culture of resistance,
crime and loyalty.
By contrast, the social profiles of the suicide
bombers on the London Transport system of 7 July
2005 seemed to demonstrate the hallmarks of
integration on many dimensions. They were well-
educated, had good jobs or job prospects, lived in
mainstream housing and were members of sports
clubs (the index of social capital holders). But this
kind of ‘bridging’ social capital, through college,
work and sport, was consistent with membership of
a jihadi militant group.
In tight-knit local communities, ‘social capital’
means little more than a way of doing things in-
formally which are done through markets or formal
organizations elsewhere. This may be economically
more efficient for participants, but have costs for
others, and sometimes these arise from deliberate
predation, rather than simply from exclusion. In
larger, more cosmopolitan and complex social
units, where individuals have multiple affiliations,
‘social capital’ consists of many different relation-
ships, each giving rise to different cultural resources
and restraints. It is impossible to specify in advance
which ideological, national, ethnic or faith links
will move members to take collective action at
any particular time.
So it seems that social capital theory gets us no
further than a culture of poverty theory. We there-
fore turn to the most recent new perspective on
poverty and place, well-being theory. This of
course stems from psychological research, but has
been taken up by economists, notably Richard
Layard (2005) and Avner Offer (2006), as a critique
of their own discipline’s narrow assumptions.
The relationship between well-being theory and
social capital theory is ambiguous. On the one
hand, neither Layard (2005) nor Offer (2006) make

any extensive or systematic use of the term social
capital in their analyses; on the other, Helliwell has
written with Putnam to claim that ‘social capital is
strongly linked to SWB through many independent
channels and several different forms’ (Helliwell and
Putnam, 2005, 455). The main difference in the two
approaches is that well-being theory seeks to iden-
tify the utility produced (Sugden, 2005; Jordan,
2006b) and exchanged (Offer, 2006, ch. 5) in per-
sonal, group and community interactions, rather than
claiming the presence of a possibly tautologously-
defined beneficial collective good.
But another important common ground between
the two approaches is that they focus on aspects of
interactions in affluent societies which have been
neglected by methodological individualism and
micro-economic analysis. Bowles and Gintis
(2002, F433) point out that these features, such
as ‘information-intensive team production . . .,
difficult-to-measure services . . . [and] qualities
rather than quantities’, which ‘cannot be regulated
by complete contracts or by external fiat’, hence
resist both market and governmental solutions,
and rely on multi-lateral monitoring and risk-
sharing through face-to-face interactions.
This implies an approach to political economy
which deals in informal, personal and communal
improvements in a ‘second-best world’ of multiple
Pareto equilibria, rather than the ‘first-best’ single
equilibrium criterion which governed both the
Pigou–Keynes–Beveridge welfare state model,
and the Buchanan–Tiebout–Tullock public choice
model (Durlauf and Fafchamps, 2004).
Well-being theory (Kahneman et al., 1999) starts
from people’s self-assessed overall satisfaction with
their lives (which turns out to be surprisingly ro-
bust, and comparable between cultures), and goes
on to consider the components which make up this
overall measure—those elements which add most
to levels of SWB, or subtract most if they are absent
(Argyle, 1999; Myers, 1999; Diener and Suh,
1999).
It appears to be the case that a loss of one-third of
income is markedly less damaging than the loss of
a partner through separation (four times more sig-
nificant), divorce (more than twice as damaging) or
The place of ‘place’ in theories of poverty
death (twice). Health (three times more), satisfying
work (two and a half) and participation in a social
activity (about twice), along with trust in fellow
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citizens, are all very important (Helliwell, 2003).
Above all, average levels of SWB have ceased to
rise in the affluent countries for the past 30 or
40 years (Frey and Stutzer, 2002, 8–9). Higher
incomes do not bring a better quality of life.
All this focuses attention on mainstream culture,
rather than the culture of poverty. Instead of seeing
poor districts as displaying deficits of the qualities
which sustain the mainstream order, it poses the
questions ‘What’s wrong with our collective life,
our relationships, our institutions?’ It sees poor dis-
tricts as, at worst, distorting mirrors held up to the
mainstream way of life. Richard Layard’s recent
high profile as an advocate of extended mental
health provision and ‘personal learning’ in schools
has disguised the radicalism of his critique, which
implicitly portrays current political culture in the
USA and the UK as the last gasp of the Thatcherite
revolution. He advocates:
(i) higher taxation, reduction of competition and
rivalry, less performance-related pay, espe-
cially in the public sectors;
(ii) more redistribution in favour of poor people,
in this country and abroad;
(iii) more resources for mental health services;
(iv) improving family life, through family-
friendly employment policies and better
support services;
(v) more resources for promoting active commu-
nity participation;
(vi) redistribution of work, in favour of the
unemployed;
(vii) prohibition of commercial advertising for
children’s goods;
(viii) better moral education (Layard, 2005, 232–
234).
As part of his first proposal, he urges less mobility,
on the grounds that it increases crime and weakens
families and communities. In his critique of indi-
vidualism as the basis for our social and political
culture, he deplores the consequences of mobility
125
B. Jordan
for family support systems and active communities.
He chides economists for advocating mobility for
the sake of higher productivity, but neglecting the
costs to well-being through loss of support and trust
(ibid., 233).
Layard’s focus is on geographical mobility,
which is the most obvious influence on poverty
and place. But if he were to be consistent in his
critique of the 1980’s legacy of cultural resources
and social institutions, he should consider the
whole edifice of exit-orientated systems—the reli-
ance on switching and shifting between suppliers in
education, health care, social care and the former
public utilities, as much as geographical mobility.
The rhetoric of choice, made by autonomous,
independent, self-responsible and self-realizing
citizens, is at the heart of the Third Way project
for reforming the public services and the public
infrastructure.
The ‘well-being turn’ invites a kind of theorizing
about poverty and place which deals in both the
mobility of populations and its exclusionary effects,
and the kinds of cultural resources and social insti-
tutions which are generated to deal with these
effects. Layard crudely concludes that immigration
damages community cohesion. This should be the
topic for detailed, qualitative research. How do in-
digenous and settled immigrants respond to new
waves of immigration, and how do the new immi-
grants adapt? How do they interact?
Conclusions
The recent analyses of social capital and well-being
theorists illustrate that welfarist, culturalist and mo-
bility elements are all still present in theories of the
place of ‘place’ in poverty. Layard’s (2005) empha-
sis on inequality of income and the social costs of
mobility revive some of the themes of the post-war,
welfare state understanding of how poor districts
reinforce social disadvantage. Social capital theory
endorses the importance of ‘community gover-
nance’ (Bowles and Gintis, 2002) in achieving cul-
tural and political participation which improves the
quality of life in such communities.
126
The main tension now lies between the continued
commitment to mobility and choice as the bases for
a collective life of self-selected units, and the alter-
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native claims of balanced communities, cohesion
and engagement. Public policies have, since the
1980s, encouraged exit strategies over voice and
loyalty (Hirschman, 1970); these now dominate
the search for ‘positional advantage’ (Hirsch,
1977), even in continental Europe. The extent to
which UK parents see mobility as crucial to their
achievement of such advantage could be seen in the
middle-class reaction to the decision by Brighton
Council to award school places by lottery (Guardian,
2007). The costs for children of living in highly
competitive, unequal societies was evident from
the UK’s and USA’s bottom two places in a league
table of child well-being in 21 affluent countries
(Innocenti, 2007).
This tension has most clearly been highlighted in
the UK in the Prime Minister’s speeches on order
and security. For example, in relation to ‘respect’ in
everyday social interactions, after setting the issue
in a context of political philosophy from Hobbes to
R. H. Tawney, Blair was at pains to emphasize that
the ‘vast majority’ of citizens were civil and con-
siderate; problems of disorder, drunkenness and de-
linquency were confined to a small minority of
individuals to be dealt with by criminal justice
interventions (Blair, 2006).
This conclusion justifies the individualism,
choice and mobility between options which are
central to public sector reform, but cuts across
attempts to improve cohesion and balance in
‘mixed’ communities. It also allows the increased
stigmatization and exclusion of a group of poor
people, who cannot benefit from these processes
(Harris, 2007).
The place of ‘place’ in the theory of poverty
shows that the analysis of poverty is inadequate
unless it is part of the overall analysis of social
relations. The advantage of the well-being turn is
its focus on mainstream social relations. It also
challenges the hegemony of orthodox microeco-
nomic analysis, and offers an opportunity for the
rest of the social sciences to exert a stronger influ-
ence on policy.

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