Rethinking Social Capital

The topic of “social capital” has been central to my work in social theory for years. In November 2021, I gave a talk to the International Social Capital Association, entitled “In What Sense is Social Capital ‘Capital’?”  A recording is available on YouTube here.

In 2022, I published the book Rethinking Social Capital. I am grateful to Min Zhou and Glenn Loury for their praise of the book. A review of the book can be found here.

I sometimes receive requests for copies of my books in pdf or other format. I would like to make all of my work freely available, but I am afraid this would violate agreements with my publishers. I have posted the introduction to Rethinking Social Capital below. If this looks interesting, readers can find electronic or hard copies available for purchase through the publisher link or request the book through institutional or public libraries.

 

Introduction: The Project of Rethinking Social Capital

More years ago than I care to recount, I returned to the United States from a half-decade working in a refugee camp, preparing refugees from Vietnam, Cambodia, and Laos for resettlement in my country. After contributing so much time and effort to this population transfer, I wanted to look at the consequences both for the country of resettlement and for the resettled. So, I went back to academia to research. There, I made various contacts, most notably my co-author Min Zhou, who helped me develop my theoretical approach.

As I looked at how Southeast Asians were adapting to life in the new homeland, I became aware of two points. First, a study of adaptation had to be future-oriented. Fitting in happens over time and understanding how any set of people fit in means looking at how past and present circumstances lead toward future circumstances. For a group of people, a future orientation meant a focus on the younger members of the group. Second, the study had to incorporate both individuals as members of groups and groups as assemblages of individuals. Neither a purely individual-level approach nor a purely aggregate-level approach would work. People form their lives in collaboration with other people.

Following these two points, I came to concentrate my study on young people in a Vietnamese community and on their relations to their community affected their adaptation to American society through schooling, the primary avenue for entry into modern life. The study of schooling and of how social settings outside of schools affect educational results led me to James S. Coleman, one of the leading lights of the sociology of education and a pioneer in social capital theory. At the same time, I had the privilege of working with one of Coleman’s students, the brilliant theorist of social networks Scott Feld. Collaborating with Min Zhou, I was heavily influenced by her work on the role of ethnic niches in enabling survival and mobility for members of new immigrant groups and by the work of her mentor, Alejandro Portes.  In developing the ideas of segmented assimilation and ethnic economies, Portes had analyzed, incorporated, and refined the concept of social capital.

Moving beyond the study of immigrants alone, I became interested in social capital more generally. Robert S. Putnam’s views on social capital as associational engagement appeared on the scene in the second half of the 1990s. In some respects, these views were similar to those I had employed in the examination of an immigrant community, but in other respects, such as the emphasis on social capital as a resource for a nation, these views seemed different. I also encountered mainly normative formulations of social capital, such as the equation with the value of trust.

I became aware that at some points financial capital seemed not to serve as an exact model of how social relations could work as assets. This did not seem to me to completely invalidate treating interpersonal relations as resources for investment. But in what way did they serve as resources? How might connections among people be understood as “capital?”

As the term “social capital” has come into wide use, it has become common for researchers and theorists to observe that the term is applied in so many different ways and to so many different situations that it is often difficult to say precisely what this term means (Portes 1998; Sandefur and Laumann 1998; Sampson, Morenoff, and Earls 1999).  While social scientists have struggled to define the concept theoretically, they have also engaged in debates over how to operationalize and measure it.  Level of analysis has posed a particular problem.  Social capital has been located at the level of the individual, the informal social group, the formal organization, the community, the ethnic group, and even the nation (Coleman, 1988; Portes 1998; Putnam, 1995; Sampson, Morenoff, and Earls 1999).

As I have considered all of the different ways in which social capital has been defined, I have often fallen back on the ancient Hindu or Jain fable about the blind men and the elephant. The one who touched the animal’s trunk exclaimed that it was like a tree. The one who touched its side remarked that it was like a wall. The one who held its tail asserted that it resembled a rope. All of these, of course, were parts of a larger entity. Similarly, the different ways of conceptualizing social capital; as norms and values, as efficient structures of community relations, as support and direction, or as associational memberships; might be effectively understood as parts of an encompassing conceptual entity. This implies that the task of re-thinking social capital consists of precisely identifying those different parts and specifying how they fit together.

Pursuing this task of identification and integration, in this book I have tried to address the most notable and pressing questions in social capital research. What does the term mean, taking into consideration the different ways in which it has been used? In what sense is it a coherent causal explanation? Given the different meanings, how can it be operationalized? What are the major difficulties with the concept? How can it be applied to different fields of inquiry?

Plan and Summary of the Book

I have divided this book into two parts. Part 1 deals with clarifying the theoretical issues involved in social capital. The chapters in the first part attempt to define social capital within the more general idea of “capital” as resources for investment in future outcomes, to examine how social relationships can function as investments to produce possible results, to discuss the problems and complications involved in thinking about social relations as investments on the analogy of financial resources, and to consider how social capital and social structure are interconnected.

Part 2 turns from social capital theory to the applications of the idea of social capital to research in major areas of social science. It explores applications of social capital ideas to families, communities, and education; to understanding the relationships between formal organizations and informal relations; to issues of various forms of stratification; and to questions concerning nation-states.

Chapter 1 opens the theoretical part by describing the idea of “capital” more broadly and considering in what way social relationships can be considered as investments. The chapter begins by discussing how resources become investments when directed toward future profits, instead of current enjoyment. The core idea of an investment is that it consists of financial resources that are stored to be put into an enterprise, rather than consumed.  Delayed gratification and a future orientation are the most basic characteristics of any kind of capital.

The phrase “human capital” developed as economists and other social scientists realized that the use of financial resources to realize future results depends on the existence of knowledge, skills, and abilities needed to exploit those resources. I discuss the different forms of human capital and the distinction between individual and collective human capital. This distinction will appear again in the examination of social capital. Because both financial capital and human capital are based on a future orientation, cultural traits lie behind both forms. I discuss the two main ways in which cultural capital has been defined, as values and habits that lead to profitable outcomes and as cultural markers that provide access to privileged groups.

The line between cultural capital and social capital is often indistinct, so the consideration of culture as a source of assets leads to the ways in which the word “capital” has been applied to social relations. A final section of the chapter develops the previous discussions of different forms of capital to clarify just what is meant by social capital. It identifies three main ways of presenting social capital in the literature. The first, essentially overlaps with cultural capital. The second involves patterns of interconnections among individuals. The third is a matter of engagement in social relations and institutions. The section then proceeds to examine how these three ways of conceptualizing social capital may be connected through a discussion of the pay-off of social relations.

Chapter 2 proceeds from the discussion of the main forms of social capital to a an examination of how social capital works. The chapter begins by describing how researchers have treated the functioning of social capital as a matter of network structures. The fundamental idea of social capital is that relationships among sets of people can constitute assets. These assets can be seen as generated by the internal organization, or network structure, that exists among some set of people. The chapter briefly goes over the properties of networks relevant to social capital, setting the stage for a more schematic discussion in the chapter dealing with social structures.

 The chapter proceeds to detail how social capital often works through the phenomenon of “opportunity hoarding.”  A section of the chapter examines the “non-zero sum” and “zero sum” aspects of social relations as investments. Social capital can be considered non-zero sum when the resources generated by connections within a group of people produce benefits for others outside the group, as well as for group members. Zero-sum social capital is essentially competitive and exists when members of a group compete with outsiders for benefits or opportunities. Connections among those in the group enable them to hoard those benefits or opportunities for members and to exclude outsiders.

The chapter points out that capital; whether financial, human, or social; is competitive in nature. Classic approaches to competition in societies tend to present this as a matter of individuals competing with other individuals. However, connections are frequently essential to the ability of individuals to get outcomes. A subsection discusses how group membership shapes individual-level competition and how group use access to goods and opportunities to direct benefits to their own members and exclude outsiders.

Going on to consider solidarity and efficiency, I point out that solidarity is one of the core concepts of sociological theory, rooted in the work of Emile Durkheim. This subsection is concerned with how variations in solidarity promote or hinder group efficiency and enable members to achieve individual and group goals. Competition between sets of individuals depends not only on their access to resources, but also on how solidarity encourages efficient action.

Moving from enabling group competition as a way in which social capital works, I consider the dynamics of interpersonal relations as assets. L begin by looking at connections among people as information channels. Structural perspectives tend to stress network form as the way in which social capital works. Cultural perspectives tend to stress values and knowledge as social resources. Here, I argue that these two perspectives can be combined by considering networks as channels of information to group members. Under the designation “information,” I include both material information about opportunities and resources and immaterial information such as expectations and cultural orientations.

Social capital also functions through constraints and direction. Groups enable productive action by constraining unproductive behavior and directing individuals toward desired outcomes, The book here connects enabling and constraining relations to social network characteristics.

I conclude the analysis of how social capital works by discussing an essential aspect of the situational relativity of interpersonal relations as resources for investment. The social capital that functions through information channels and constraints / direction can be either compensatory or complementary. It is compensatory when the connections among people enable them to compensate for a disadvantaged social setting. It is complementary when these connections enable them to capitalize on an advantaged setting.

Chapter 3 details the main problems and contradictions within social capital theory. This chapter begins by considering the imperfect analogy of financial, human, and social capital. In particular, I point out here that financial capital is a clearly identifiable quantity of resources for investment. It is “capital,” regardless of whether the investment succeeds in yielding the intended profit. Human capital comes in a variety of forms, but one can usually consider it in measure terms of amount of education or training or in terms of identifiable skills. Social capital, by contrast, is a process that emerges across levels of interaction.

Following the idea that social capital is a kind of capital because it results in benefits, it may be suspected of being a tautology. Why can social relations be described as a form of social capital? Because they lead to desirable outcomes. Why do they lead to desirable outcomes? Because they are social capital. Conversely, if arrangement of people has less desirable outcomes, we describe it as having a low social capital endowment on the basis of the outcome. I suggest that bringing in some element of specific predictability can help address the problem of logical circularity.

The problem of intentionality is another potential difficulty with social capital theory. Financial and human capital consist of assets invest in order to achieve results. Investments may have externalities, or unintended consequences, but their goals are intentional. From the perspective of intentionality, the problem with social capital is that it most often consists almost entirely of externalities. People do form relationships with each other in order to realize goals. Most often when we speak of social capital we are referring to benefits inherent in the interpersonal relations themselves, rather than goals of the interpersonal relations.

Next, the chapter considers the question of who benefits from interpersonal relations. This is a difficulty that we can also find with both financial and human capital. What constitutes a benefit for some groups may constitute a disadvantage for others. Even within groups of people, social relations can pay off for some at the expense of others. This problem leads to the thorny issue of “negative social capital.”

To look at the different ways in which social capital can be considered negative, I draw heavily on Alejandro Portes’s clear and succinct statement of this issue. Ultimately, I argue that If social relations really can be a liability in some relevant regard, then I suggest that it makes no sense to refer to them as somehow assets. From this point of view, “negative social capital” is a contradiction in terms and cannot exist. The most reasonable approach, in my view, would be to recognize that interpersonal relations are not always assets for investment and that even when they are they may be invested in many different ways and that they have a range of externalities and unintended consequences.

The Durheimian assumptions behind concepts of social capital do support the argument that some social situations may not be profitable. Social capital theory is at core a version of order theory, of how the ordering of human relations enables collaboration.  A lack of cooperation or the absence of connections among people or connections that are too loose to provide control and direction to individuals can result in conflict or anomie. Here, though, the problem is not a kind of social capital that is negative, but a lack of social capital.

Part 1 ends by considering social capital and social structure. This is the part of the book that ties together the previously expressed concepts and develops these into a schematic portrayal of the whole “elephant” of social capital. Chapter 4 is both the center of the book and the core of the book’s project of rethinking social capital.

The first section of this chapter considers the micro-macro problem in the social sciences and how this relates to social capital. Macrosociology involves the study of large-scale structures in societies, while microsociology focuses on small groups and relationships among individuals. Integrating these two levels is a continual challenge in social theory. This section argues that looking at networks as facilitators of social action through the production of resources for individuals and at individuals as constituents of networks at different levels can help bridge the micro-macro gap and also address the related problem of social structure and individual agency. 

The chapter follows the micro-macro issue with an ecological argument that social structures are environments within which interpersonal relations take place. Although social capital perspectives have a tendency to concentrate on how connections between actors produce outcomes, this section points out that those connections never take place in a vacuum. Historical, political, socioeconomic, and legal setting always constitute an environment within which interpersonal relations operate.

Earlier I maintained that one of the distinctions between financial capital and social capital is that the former is a quantity while the latter is an emergent process In the section devoted to drawing up a model of the social capital process, I bring together the different pieces of the puzzle and to describe the process in a precise and schematic fashion. In a general model of social capital, I introduce the shared historical background of any set of people as an exogenous factor, although history is in reality recursive and always in media res. The discussion of the model describes how group images and self-images, levels of financial and human capital, and locational tendencies result from historical backgrounds and affect social capital components. These influences on social capital components take place within the labor market demand and political and legal structures existing at any point in time.

I identify the components of social capital as community forms, household structures, and organizational foci, and I describe these in some detail. These components of social capital, I argue, operate through social control and support and through providing information channels. By these mechanisms, social relations result in pay-offs in future financial and human capital.

Following the point that social capital pays off in future financial and human capital, I end Part 1 with an autobiographically based discussion of intergenerational looping in the production and reproduction of social capital. This final section provides a bridge from the theoretical matters of Part I to the applications of social capital theory in Part 2.

This second section goes over some of the applications of social capital theory in order to clarify what its uses may be and what it can tell us about our world. Chapter 5 deals with the connections among families, communities, and education, a common topic in the social capital literature. The first section of this chapter gives examples of how families serve both as constraining and enabling types of social capital for their members. It considers ways in which families bring resources to their members and affect the behavior and expectations of their members. It looks in particular at child-parent relations, at family forms as investments, at the relationship of maternal employment to social capital, and at sibling relations as possible sources of interpersonal assets.

One of the common topics in social capital research concerns social capital in the creation of human capital. Chapter 5 ends with a discussion of the relevance of families and communities for education. Drawing on my own previous work, as well as on that of other researchers, I look at how the social resources produced by families and communities result in varying outcomes in schooling. Based on this discussion, this final section of the chapter raises questions about the extent to which to which educational outcomes can be determined by policymakers. Through the topic of schooling, this section provides a transition to the next chapter on informal networks and formal organizations.

Chapter 6 deals with how informal networks and formal organizations are connected. It presents evidence from the literature on how patterns of social relations outside of schools, workplaces, and religious institutions affect how those organizations function and how networks function within organizations. It then considers formal organizations as focal points for social networks.

Schools, religious institutions, and corporations exist within surrounding environments. More concretely, this means that how they work is not just a matter of what the organizations themselves do, but even more importantly how they connect with the patterns of relationships that students and teachers, congregants or parishioners, and employees bring into the organizations. The first section of this chapter lays out the evidence in the research literature on how informal networks can promote or inhibit organizational goals.

The second section borrows the term “network foci” from the work of sociologist Scott Feld. This term is based on the idea that formal organizations are centers for creating and maintaining networks. This section provides examples of situations in which formal organizations serve as focal points for family and community relations.

Chapter 7 extends the application of the social capital model to various forms of inequality, including class, race, and ethnicity. Here, the book moves to large-scale uses of social capital theory, applying the structure-social capital discussion in the previous section. It illustrates how patterns of interpersonal relations both result from historically produced structured inequality and perpetuate it based on the model of social capital developed by the end of Part I.

The chapter opens with a general discussion of social capital and stratification. It employs a specific example, drawn from the classic work of Melvin Kohn and his associates to demonstrate how this book’s proposed model of social capital can provide a way of understanding class stratification over the course of generations. The chapter focuses on another example, in the work of William Julius Wilson, to then apply the social capital model to racial inequality.

Two final sections of Chapter 7 consider ethnic inequality, based on my own work on new immigrant ethnicities in the United States. First, the chapter applies the social capital model to an ethnic group at the lower levels of ethnic stratification, Mexican Americans. Then, the last section of the chapter turns to the ethnic group at the top of the American system of ethnic stratification, Asian Indian Americans.

Chapter 8 examines how the social capital model is relevant at the level of the nation-state, as well as at the levels of individuals, groups, and organizations.  It first presents the relevance of social capital for the nation-state by looking first at how demography is associated with solidarity, and at how demographic heterogeneity or homogeneity may produce different kinds of social resources. It then turns to the matter of civic culture as a product of social network relations. It then looks at a specific example of social capital at the nation-state level, examining this in terms of the proposed general model of social capital. Finally, this chapter address the difficult matter of proposed strategies for building or re-building social capital at the level of the nation-state.

In the section on diversity vs. solidarity, I discuss the circumstances in which either homogeneity-based solidarity or demographic heterogeneity may constitute social capital Suggesting that this is a version of Durkheimian views on mechanical and organic solidarity, I indicate that a social capital interpretation of national life leads to the conclusion that even the most demographically diverse nation must be based on some foundation of uniformity of belief and commitment. This point about a national foundation of belief and commitment then leads to a section on the famous “bowling alone” thesis and civic culture.

For a specific application of the social capital model to the nation-state, I bring in Denmark, a country that is often reported to be uniquely successful in achieving political and social goals. This example raises the question of how social capital may be developed at the level of the nation. The chapter ends by looking at a number of policy proposals for building national social capital.

The conclusion provides a brief summary of the two sections of the book. In terms of theory, the conclusion suggests that social capital is a widely used but often poorly defined concept that is an imperfect metaphor based on the idea of financial investment. It maintains, though, that interpersonal networks can be seen as assets that can be invested in outcomes and discusses the ways in which patterns of connections can produce desirable outcomes. Although the networks as capital idea can help us understand social action, though, it is not a complete explanation and must be put into a broader model of environmental influences, such as the one proposed at the end of Part 1.  By giving applications of social capital theory to major sociological topics, Part 2 has demonstrated some of the ways in which social capital theory can make practical contributions to social research.