Within a community, social groups and relationships form, and those become what is called “social capital.” Social capital has value, just like economic capital, because the relationships between people impact the overall productivity of a community. Social capital is directly related to people’s inclination to lend a hand when needed.
Social capital has multiple definitions. Social capital was initially defined in the early 1900′s as a resource that should be used for the sake of the public good. Social capital was said to decrease crime in a community, because the existence of supportive relationships would improve the society as a whole.
Over time, definitions of social capital have assumed broader and more various forms. Robert Putnam, for example, claims that social capital is the value of the social networks combined with people’s instinct to help each other out. Putnam believes that social capital is one of the driving forces of democracy. In his book, “Bowling Alone: The Collapse and Revival of the American Community” (published in 2000), social capital has decreased in the United States, and club attendance is down, as well as family dinners. Apparently other western countries are also suffering from this problem, as people attend church less frequently and there are less community gatherings.
Professor Nan Lin, however, takes a very different approach from Putnam to social capital. He believes that social capital involves a slightly more self-interested approach to relationships; Lin declares that people expect reciprocation, and for that reason, they invest in social networks within the community.
The Social Capital Foundation declares that the definition of social capital should not be related to any of the manifestations of social capital. For example, the inclination to volunteer or engage with the community is not social capital, but rather a response to social capital.
Part of the problem with the term “social capital” is that the word “capital” indicates benefits. These benefits may not be measurable, though, and unlike other economic capital, social capital cannot be used up. However, social capital is comparable to human capital, which also produces economic value (indirectly).
