Social capital is a concept in business,
economics, organizational behaviour, political science, public health, sociology and natural resources management that refers to connections within and between social networks. Though there are a variety of related definitions, which have been described as
"something of a cure-all" for the problems of modern
society, they tend to share the core idea "that
social networks have
value. Just as a screwdriver (
physical capital) or a college education (
human capital) can increase productivity (both individual and collective), so too social contacts affect the productivity of individuals and groups".
The first known use of the concept was by L. J. Hanifan, state supervisor of rural schools in West Virginia. Writing in 1916 Hanifan urged the importance of community involvement for successful schools, Hanifan invoked the idea of "social capital" to explain why. For Hanifan, social capital referred to:
those tangible substances [that] count for most in the daily lives of people: namely good will, fellowship, sympathy, and social intercourse among the individuals and families who make up a social unit....The individual is helpless socially, if left to himself....If he comes into contact with his neighbor, and they with other neighbors, there will be an accumulation of social capital, which may immediately satisfy his social needs and which may bear a social potentiality sufficient to the substantial improvement of living conditions in the whole community. The community as a whole will benefit by the coöperation of all its parts, while the individual will find in his associations the advantages of the help, the sympathy, and the fellowship of his neighbors.
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. Political scientist Robert Salisbury advanced the term as a critical component of interest group formation in his 1969 article "An Exchange Theory of Interest Groups" in the Midwest Journal of Political Science. Pierre Bourdieu used the term in 1972 in his Outline of a Theory of Practice, and clarified the term some years later in contrast to cultural, economic, and symbolic capital. James Coleman adopted Glenn Loury's 1977 definition in developing and popularising the concept. In the late 1990s the concept gained popularity, serving as the focus of a World Bank research programme and the main subject of several mainstream books, including Robert Putnam's Bowling Alone.
The concept that underlies social capital has a much longer history; thinkers exploring the relation between associational life and democracy were using similar concepts regularly by the 19th century, drawing on the work of earlier writers such as James Madison (The Federalist Papers), Alexis de Tocqueville (Democracy in America) to integrate concepts of social cohesion and connectedness into the pluralist tradition in American political science. John Dewey may have made the first direct mainstream use of "social capital" in The School and Society in 1899, though he did not offer a definition.
Social capital lends itself to multiple definitions, interpretations, and uses. David Halpern argues that the popularity of social capital for policymakers is linked to the concept's duality, coming because "it has a hard nosed economic feel while restating the importance of the social." For researchers, the term is popular partly due to the broad range of outcomes it can explain; the multiplicity of uses for social capital has led to a multiplicity of definitions. Social capital has been used at various times to explain superior managerial performance, improved performance of functionally diverse groups, the value derived from strategic alliances and enhanced supply chain relations.
Early attempts to define social capital focussed on the degree to which social capital as a resource should be used for public good or for the benefit of individuals. Putnam suggested that social capital would facilitate co-operation and mutually supportive relations in communities and nations and would therefore be a valuable means of combating many of the social disorders inherent in modern societies, for example crime. In contrast to those focussing on the individual benefit derived from the web of social relationships and ties individual actors find themselves in, attribute social capital to increased personal access to information and skill sets and enhanced power. According to this view, individuals could use social capital to further their own career prospects, rather than for the good of organisations.
In The Forms of Capital 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 institutionalised relationships of mutual acquaintance and recognition". 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”.
James 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” – that is, social capital is anything that facilitates individual or collective action, generated by 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.
According to Robert Putnam, 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'. Putnam believes that social capital can be measured by the amount of trust and "reciprocity" in a community or between individuals.
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.
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.
Nahapiet 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. This dimension focusses on the advantages deverived from the configuration of an actor's, either individual or collective, network. 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[19] added a third angle, that of communication. Communication is needed to access and use social capital through exchanging information, identifying problems and solutions, and managing conflict. According to Boisot and Boland and Tensaki, meaningful communication requires at least some sharing context between the parties to such exchange. The cognitive dimension focusses on the shared meaning and understanding that individuals or groups have with one another.
