in the development of social capital on Indian Reservations in the United States will be used as
illustrations.
Indigenous Social Capital and Threats to Liberal Democratic Institutions
A pervasive theme in challenges to the legitimacy of liberal democratic institutions,
whether national or inter-national in scope, is the notion that the system that is supposed to
ensure equality of opportunity is somehow "rigged," in that some group or groups have an unfair
competitive advantage over other groups. The Great Depression in the United States during the
1930s helped to facilitate such a crisis of legitimacy as soaring rates of poverty and
unemployment highlighted the flaws in existing institutional arrangements in the marketplace.
The Supreme Court's rejection of "closed shop" collective bargaining, for example, reinforced a
competitive disadvantage of unorganized labor vis-à-vis organized giant corporations. The
resolution to this crisis of legitimacy in the New Deal was the development of new institutional
arrangements, such as the National Labor Relations Board that guaranteed workers the right to
vote to unionize and, in turn, for the first time created effective countervailing power for them in
collective bargaining.3 In the early part of the twentieth century a variety of major institutional
adjustments through government intervention in the marketplace also occurred in Western
European nations, most of them involving greater structural changes than what occurred in the
United States.4
During the post World War II period, considerable attention was given to unfair
competition that was the result of differential human capital assets, especially education, in more
versus less affluent families.5 This, in turn, prompted significant efforts to address these
inequities through increased public assistance to higher as well as lower education.