Social capital

2007 Schools Wikipedia Selection. Related subjects: Politics and government

Social capital is a core concept in business, economics, organizational behaviour, political science, and sociology, defined as the advantage created by a person's location in a structure of relationships. It explains how some people gain more success in a particular setting through their superior connections to other people. There are in fact a variety of inter-related definitions of this term, in popular literature, which has been described as "something of a cure-all" (Portes, 1998) for all the problems afflicting communities and societies today.

While various aspects of the concept have been approached by all social science fields, some trace the modern usage of the term to Jane Jacobs in the 1960s. However, she did not explicitly define a term social capital but used it in an article with a reference to the value of networks. The first cohesive exposition of the term was by Pierre Bourdieu in 1972 (though clear formulation in his work can be traced to 1984). James Coleman adopted Glenn Loury's 1977 definition in developing and popularizing the concept. Drawing on Coleman, Gary Becker (1996, ch. 1) distinguishes between individual i's personal capital and social capital, Si. Si is used analogously to the capital stock K from the neoclassical growth model in economics to explain interactions of Si with i's investment in social capital. In the late 1990s, the concept became respectable, with the World Bank devoting a research programme to it and with its currency in Robert Putnam's 2000 book, Bowling Alone.


The concept that underlies social capital is old. Philosophers who emphasized the relation between pluralistic associational life and democracy implicitly used it as early as the 19th century. These theorists include James Madison (The Federalist), Alexis de Tocqueville (Democracy in America), and many authors in the dominant, pluralist tradition in American political science. In fact, John Dewey referred to "social capital" in School & Society in 1900 but he did not offer a definition of it.

Some examples of social capital include churches, PTAs, Scouting, school boards, amateur sports leagues, fraternal organizations, internet networks, and even extreme groups like the KKK or white supremacist groups, although these groups create exclusionary social capital that can have negative effects.

All these groups can help build and break societies because of their bridging/bonding behaviour. If the amount of human interaction increases, people are more likely to help one another and later become more politically involved.

Recently there has been much discussion of email and online communities and whether they help build social capital. Some argue that they may bridge people together but do not bond them. Another interesting debate among political scientists has regarded whether email helps produce or diminish social capital within the workplace.


A problem with the term social capital is its widely differing definitions. Some political scientists use the term as identical the idea of civil society and trust. To others, social capital has a separate meaning.

In The Forms of Capital (1986) Pierre Bourdieu distinguishes between three forms of capital: economic capital, cultural capital and social capital. He defines social capital as "the aggregate of the actual or potential resources which are linked to possession of a durable network of more or less institutionalized relationships of mutual acquaintance and recognition." (Bourdieu, 1983:249)

According to Robert Putnam, author of Bowling Alone and the concept's leading proponent (though not its originator), social capital "refers to the collective value of all ' social networks' and the inclinations that arise from these networks to do things for each other,". According to Putnam and his followers, social capital is a key component to building and maintaining democracy. Putnam says that social capital is declining in the United States. This is seen in lower levels of trust in government and lower levels of civic participation. Putnam also says that television and urban sprawl have had a significant role in making America far less connected.

Nan Lin's concept of social capital has a more individualistic approach: "Investment in social relations with expected returns in the marketplace". This may subsume the concepts of some others such as Bourdieu, Coleman, Flap, Putnam and Eriksson (as noted in Lin, 2001).

Francis Fukuyama described social capital as the existence of a certain (i.e. specific) set of informal values or norms shared among members of a group that permit cooperation among them.

Patrick Hunout and The Social Capital Foundation have suggested that social capital is a set of attitudes and mental dispositions that favour cooperation within society, and that as such, it equals the spirit of community.

Nahpiet and Ghoshal in their examination of the role of social capital in the creation of intellectual capital, suggest that social capital should be considered in terms of three clusters: structural, relational and cognitive. Carlos García Timón describes that the structural dimensions of social capital relate to an individual ability to make weak and strong ties to others within a system. The differences between weak and strong ties are explained by Granovetter (1973). The relational dimension focuses on the character of the connection between individuals. This is best characterized through trust of others and their cooperation and the identification an individual has within a network. Hazleton and Kennan (2000) added a third angle, that of communication. Communication is needed to access and use social capital through exchanging information, identify problems and solutions and manage conflict. According to Boisot (1995) and Boland and Tensaki (1995), meaningful communication requires at least some sharing context between the parties to such exchange.

According to social capitalist Caira Nakasone, the ambiguity over the definition of Social Capital does not occur within the definition of “social” but in the doubt of “capital”. That is in the causal and more over “effective” nature of social networks which inhibits agreement over a concrete, measurable form of the theory

Original usage by Coleman and Bourdieu

Bourdieu has been heralded as being the origin of contemporary usage of the term (Everingham, 2001). Bourdieu places the source of social capital, not just in social structure but in social connections. Social capital is to him, “the aggregate of actual or potential resources which are linked to the possession of...membership in a group” (Everingham, 2001). His treatment of the concept is instrumental, focusing on the advantages to possessors of social capital and the “deliberate construction of sociability for the purpose of creating this resource” (Portes, 1998).

Coleman defined social capital functionally as “a variety of entities with two elements in common: they all consist of some aspect of social structure, and they facilitate certain actions of actors...within the structure” (in Portes, 1998) – that is, social capital is anything that facilitates individual or collective action. A functional definition of social capital does, however, make it impossible to separate what it is from what it does. Indeed, Portes states that Coleman included under the term the mechanisms that generated it, the consequences of possessing it and the "appropriable social organisation that provided the context for both sources and effects to materialise" (Portes, 1998). The mechanisms that generated social capital were: networks of relationships; reciprocity; trust; and social norms. In Coleman’s conception, social capital is a neutral resource that facilitates any manner of action, but whether society is better off as a result depends entirely on the individual uses to which it is put (Foley & Edwards, 1997).

Bourdieu’s use of the term is narrower than Coleman’s, seeing the effect of social capital at an individual level only. But in his work he used the term to explain particular social phenomena, such as how some people of privilege managed to gain access to powerful positions through their social connections. So while he retains Coleman’s neutrality of the resources themselves, he shows how it can be used to create inequality.

Current usage

David Halpern argues that the popularity of the term social capital with governments is because "for many policymakers the term captures the political zeitgeist of our time: it has a hard nosed economic feel while restating the importance of the social" and for researchers due to the broad range of outcomes that can be explained using social capital (Halpern 2005: 1-2)

Although Putnam was at first careful to argue that social capital was a neutral term, stating “whether or not [the] shared are praiseworthy is, of course, entirely another matter” (Edwards & Foley, 1997), his work on American society has added moral and ethical value to the concept. He sees social capital as a producer of "civic engagement" and also a broad societal measure of communal health (Alessandrini, 2002). He also transforms social capital from a resource possessed by individuals to an attribute of collectives, focusing on norms and trust as producers of social capital to the exclusion of networks. This narrows the concept, however, and one should be cautious about ignoring the effect of social capital at an individual level, and especially disregarding the importance of networks of relationships as a prominent source of social capital.

Edwards and Foley, as editors of a special edition of the American Behavioural Scientist on Social Capital, Civic Society and Contemporary Democracy note that the context dependency of social capital gives rise to at least two factors not evident in recent literature . First, social capital is not equally available to all, in much the same way that other forms of capital are differently available. Geographic and social isolation limit access to this resource. Second, not all social capital is created equal. The value of a specific source of social capital depends in no small part on the socio-economic position of the source with society. On top of this, Portes (1998) has identified four negative consequences of social capital: exclusion of outsiders; excess claims on group members; restrictions on individual freedom; and downward levelling norms. He believes that these consequences, and the unequal nature of access to social capital must be balanced against the optimistic view if social capital is to be useful as a tool for societal analysis and transformation.

Forms of capital

The term " capital" is used by analogy with other forms of economic capital, as social capital is argued to have similar (although less measurable) benefits. However, the analogy with capital is misleading to the extent that, unlike traditional forms of capital, social capital is not depleted by use, but in fact depleted by non-use ("use it or lose it"). In this respect, it is similar to the now well-established economic concept of human capital.

Sociologists Carl L. Bankston and Min Zhou point out that the concept of social capital is based on an imprecise metaphor. They observe that social capital does not consist of resources held by individuals or groups, but of processes of social interaction leading to constructive outcomes.

However, social capital has also been defined as the resources available to one through the networks that they hold.

Bonding and bridging

In his pioneering study, Bowling Alone: The Collapse and Revival of American Community (Simon & Schuster, 2000), Harvard political scientist Robert D. Putnam wrote: " Henry Ward Beecher's advice a century ago to 'multiply picnics' is not entirely ridiculous today. We should do this, ironically, not because it will be good for America — though it will be — but because it will be good for us." Putnam is not suggesting here that we must expand an already stable level of networking and civil interaction. He has found an overall decline in social capital in America over the past fifty years, a trend that may have significant implications for American society.

Putnam speaks of two main components of the concept: bonding social capital and bridging social capital, the creation of which Putnam credits to Ross Gital and Avis Vidal. Bonding refers to the value assigned to social networks between homogeneous groups of people and Bridging refers to that of social networks between socially heterogeneous groups. Typical examples are that criminal gangs create bonding social capital, while choirs and bowling clubs (hence the title, as Putnam lamented their decline) create bridging social capital. Bridging social capital is argued to have a host of other benefits for societies, governments, individuals, and communities; Putnam likes to note that joining an organization cuts in half an individual's chance of dying within the next year.

The distinction is useful in highlighting how social capital may not always be beneficial for society as a whole (though it is always an asset for those individuals and groups involved). Horizontal networks of individual citizens and groups that enhance community productivity and cohesion are said to be positive social capital assets whereas self-serving exclusive gangs and hierarchical patronage systems that operate at cross purposes to societal interests can be thought of as negative social capital burdens on society.


There is no widely held consensus on how to measure social capital, which is one of its weaknesses. One can usually intuitively sense the level/amount of social capital present in a given relationship (regardless of type or scale), but quantitatively measuring it has proven somewhat complicated. This has resulted in different metrics for different functions. In measuring political social capital, it is common to take the sum of society’s membership of its groups. Groups with higher membership (such as political parties) contribute more to the amount of capital than groups with lower membership, although many groups with low membership (such as communities) still add up to be significant. While it may seem that this is limited by population, this need not be the case as people join multiple groups. In a study done by Yankee City (1963), a community of 17,000 people was found to have over 22,000 different groups.

The level of cohesion of a group also affects its social capital. For example, while the US Army may be capable of storming the Capitol, the Kleenex corporation would have a much more difficult time, as it isn’t nearly as cohesive. However, again, there is no true quantitative way of determining the level of cohesiveness. It is entirely subjective. How a group relates to the rest of society also affects social capital, but in a different manner. Strong internal ties can in some cases weaken the group’s capital in cases where the group is geared towards crime, distrust, intolerance, violence or hatred towards other. The Ku Klux Klan and the Mafia are examples of these kinds of organizations.

Social capital and civil society

A number of authors , give definitions of civil society that refer to voluntary associations and organisations outside the market and state. This definition is very close to that of the third sector, which consists of "private organisations that are formed and sustained by groups of people acting voluntarily and without seeking personal profit to provide benefits for themselves or for others". According to such authors as Walzer, Alessandrini, Newtown, Stolle and Rochon, Foley and Edwards, and Walters, it is through civil society, or more accurately, the third sector, that individuals are able to establish and maintain relational networks. These voluntary associations also connect people with each other, build trust and reciprocity through informal, loosely structured associations, and consolidate society through altruism without obligation. It is "this range of activities, services and associations produced by... civil society" (Alessandrini, 2002) that constitutes the sources of social capital.

If civil society, then, is taken to be synonymous with the third sector then the question it seems is not 'how important is social capital to the production of a civil society?' but 'how important is civil society to the production of social capital?'. Not only have the authors above documented how civil society produces sources of social capital, but in Lyons work "Third Sector" (2001), social capital does not appear in any guise under either the factors that enable or those that stimulate the growth of the third sector, and Onyx (2000) describes how social capital depends on an already functioning community.

However, a truer definition of civil society is different though not wholly distinct from the third sector. Lyons goes some way to addressing this by introducing a somewhat Marxist interpretation of civil society, where civil society is "the space for free association, where people could meet and form groups to pursue their enthusiasm, express their values and assist others". This is a "vibrant space, full of argument and disputation about matters of greatest import to its citizens", resembling the polis of Athens more than the organisations of the third sector. This also implies "elements of the enlightenment use of the term civil society" including decency, respect, good manners and kindness to fellow beings.

The idea that creating social capital (i.e. creating networks) will strengthen civil society underlies current Australian social policy aimed at bridging deepening social divisions. The goal is to reintegrate those marginalised from the rewards of the economic system into "the community". However, according to Onyx (2000), while the explicit aim of this policy is inclusion, its effects are exclusionary:

The excluded are those who cannot keep pace with the rising standards of success: those who are having difficulty meeting the expectations that everyone should be able to look after themselves. ...the prevailing politics of community has an ideological dimension – of a bias towards social order rather than social justice — which legitimates the growing disparities in wealth and hardens public sentiment towards those most disadvantaged by the new economic conditions.

Within a social justice perspective, the character traits of the disadvantaged would not be seen as so much of a problem as would the character traits being fostered in members of the community by an increasingly competitive and unjust society.

It is not reasonable to expect those most social isolated to [connect] themselves any more than it is reasonable to expect an acutely ill person to resolve their illness with better exercise.

The community promoted through the dominant politics of community comprises isolated individuals who have to struggle harder and harder just to look after themselves. The main ‘social glue’ promoted is ‘downward envy’: negative communal sentiment directed at those who fail to match up. And as values of self-reliance and individual enterprise become more and more highly prized, the human attributes which connect us to others (especially to those less favourably positioned than ourselves) are being edged out. This is the great paradox of the politics of community. Full of rhetoric of community — of the need to cultivate "interdependence", "connectedness" and "reciprocity" — in practice it seems to have the opposite effect.

Foley and Edwards (1997) believe that "political systems...are important determinants of both the character of civil society and of the uses to which whatever social capital exists might be put". Alessandrini (2002) agrees, saying, "in Australia in particular, neo-liberalism has been recast as economic rationalism and identified by several theorists and commentators as a danger to society at large because of the use to which they are putting social capital to work".

The resurgence of interest in "social capital" as a remedy for the cause of today’s social problems draws directly on the assumption that these problems lie in the weakening of civil society. However this ignores the arguments of many theorists who believe that social capital leads to exclusion rather than to a stronger civil society. In international development, Ben Fine and John Harriss have been heavily critical of the inappropriate adoption of social capital as a supposed panacea (promoting civil society organisations and NGOs, for example, as agents of developemnt) for the inequalities generated by neoliberal economic development.

An abundance of social capital is seen as being almost a necessary condition for modern liberal democracy. A low level of social capital leads to an excessively rigid and unresponsive political system and high levels of corruption, in the political system and in the region as a whole. Formal public institutions require social capital in order to function properly, and while it is possible to have too much social capital (resulting in rapid changes and excessive regulation), it is decidedly worse to have too little.

The concept of social capital in a Chinese social context has been closely linked with the concept of guanxi.

Social capital and education

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