Evolution of Social Capital

Social capital is a term that is commonly used; however the concept is often poorly defined and conceptualized. Social capital is an old concept but the term has only been coined fairly recently (Bankston and Zhou 2002^[1]; Labonte 1999^[2]; Lazega and Pattison 2001^[3]; Portes and Sensenbrenner 1993^[4]; Putnam 1995^[5]). Social capital is linked to concepts such as civil society and social connectedness (Adam and Roncevic 2003)^[6]. It is also linked to historical authors such as Durkheim, Simmel, Marx and Weber among others and to theories such as social exchange theory and psychological contract theory (Watson and Papamarcos 2002)^[7]. The modern development of the concept came from three key authors, Bourdieu, Coleman and Putnam with many other authors contributing to the current multidisciplinary theory. Very broadly, social capital refers to the social relationships between people that enable productive outcomes (Szreter 2000)^[8]. The term social capital refers to those stocks of social trust, norms, and networks that people can draw upon to solve common problems. Social capital represents a very important conceptual innovation for inter and trans disciplinary theoretical integration, especially between sociology and economics (Adam and Roncevic 2003)^[6]. The creation of social capital has been embraced as a solution for social problems as diverse as urban poverty and crime, economic underdevelopment and inefficient government (Boix and Posner 1998)^[9].

There has been exponential growth in references to social capital in academic literature in the last 15 years (Aldridge et al. 2002^[10]; Halpern 2001^[11]) (refer to figure 3). This growth in research and application to diverse areas represents an unprecedented acceptance, study and application of this single concept (Adam and Roncevic 2003)^[6]. Fine and Green (2000) suggested that social theory is being rewritten through the lens of social capital. The concept of social capital lends itself to diverse application as it is very broad and one may approach practically any social entity or situation through the conceptual framework of social capital (Grootaert and Van Bastelaer 2002b)^[12].

The concept of social capital is not new. Its intellectual history has deep and diverse roots which can be traced to the eighteenth and nineteenth centuries (Adam and Roncevic 2003)^[6]. The idea is connected with thinkers such as Tocqueville, J.S. Mill, Toennies, Durkheim, Weber, Locke, Rousseau and Simmel (Bankston and Zhou 2002^[1]; Brewer 2003^[13]; Lazega and Pattison 2001^[3]; Portes and Sensenbrenner 1993^[4]; Putnam 1995^[5]). Bankston and Zhou (2002)^[1] made a particular reference to the connections between Durkheimian normative sociology and Coleman’s thinking on the topic. This is supported by Portes and Landolt (1996)^[14] who believed that the origins of the concept lie in the nineteenth century classics of sociology. Portes pointed out Durkheims’ emphasis on group life as an antidote to anomie and self-destruction, and to Marx’s distinction between an atomized class-in-itself and a mobilized and effective class-for-itself (Portes 1998)^[15]. Heffron (2000)^[16] made a tenuous link to the earliest human societies which attempted to accumulate productive assets, thereby creating social capital. Brewer (2003)^[13] identified the link between the discussions of Aristotle and other early Greek philosophers on civic society and social capital theory.

Although authors seem to agree on the historical origins of the concept, there is debate in the literature over the first use of the term social capital. Most authors agree that the first use was by Hanifan in 1916 however others have identified Jacobs (1961)^[17] (Felkins 2002)^[18], Loury (1977)^[19] (Lappe et al. 1997^[20]; Leeder and Dominello 1999^[21]), and the Royal Commission on Canada’s Economic Prospects (Schuller et al. 2000)^[22]. L.J. Hanifan, a social reformer, in 1916 chose the term social capital to refer to ‘goodwill, fellowship, mutual sympathy, and social intercourse among a group of individuals and families’ (MacGillivray and Walker 2000^[23]; Smith and Kulynych 2002^[24]; Winter 2000a^[25]; Woolcock and Narayan 2000^[26]). Routledge and von Amsberg (2003)^[27] identified that Hanifan used the term ‘capital’ specifically to highlight the importance of the social structure to people with a business and economics perspective. Woolcock and Narayan (2000)^[26] provided a more detailed description of Hanifan’s work identifying that the term was used in explaining the importance of community participation in enhancing school performance, describing it as:

‘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 .. If [an individual 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’ (cited in Woolcock and Narayan 2000, p. 227)^[26].

Smith and Kulynych (2002)^[24] identified that the next use of the term was by Jane Jacobs (1961)^[17] in a discussion of urban vitality. Woolcock and Narayan (2000)^[26] however, have identified a team of Canadian urban sociologists, Seely, Sim, and Loosely (1956)^[28] and an exchange theorist, Homans (1961)^[29] that predate Jacobs. Jacobs stated that ‘networks are cities’ irreplaceable social capital’ (cited in Woolcock 1998, p. 192)^[30]. It seems that the next use of the term was by Loury (1977)^[19] (Portes 1998^[15]; Woolcock and Narayan 2000^[26]) which is commonly cited in the literature. It is interesting to note that in each of these early uses of the term social capital the author did not cite earlier work on the subject (Woolcock and Narayan 2000^[26]). Hofsteed (1980) is another author who studied the concept although did not use the term social capital but did demonstrate the relevance of such modern values as individualism, equality of opportunity, and ‘uncertainty avoidance’ for the generation of what we call social capital (Heffron 2000)^[16].

As identified above the term social capital has only been used since the early twentieth century but its traditions are much older, rooted in economics, sociology, anthropology and political science literature (Grootaert and Van Bastelaer 2002a^[31]; Healy and Hampshire 2002^[32]). The concept is similar or equivalent to civic tradition, civicness and civic involvement (Adam and Roncevic 2003)^[6]. Some authors point out the similarity between social capital theory and moral philosophy due to the normative, goal-directed character of the process of production (Favell 1993^[33]; Sampson et al. 1999^[34]). Boix and Posner (1998)^[9] posited theories of social capital as an equilibrium concept; repeated cooperation increases the available stock of social capital, high stocks of social capital, in turn, make it possible to sustain social cooperation.

Economists point to the origin of social capital theory being in the formative period of economic sociology with Max Weber (Trigilia 2001)^[35], and others draw links to Adam Smith (Portes and Landolt 1996^[14]; Winter 2000a^[25]; Winter 2000b^[36]). Winter (2000a) found commonality between social capital theory and the questions posed by Adam Smith in The Theory of Moral Sentiments (1976 [1759]). Knack (2002)^[37] identified Adam Smiths discussion of the potential negative spillovers of group activities as an aspect of social capital debate. Adam Smith states that when ‘people of the same trade’ meet ‘even for merriment and diversion’ the result is often ‘a conspiracy against the public’ or ‘some contrivance to raise prices’ (cited in Knack 2002, p. 773).

From this discussion it can be seen that the concept of social capital is not new, although the term is. The origins of the concept can be traced to thinkers of the eighteenth and nineteenth centuries and is rooted in economics, sociology, anthropology and political science literature. Since its original use, the term has received unprecedented acceptance and application to diverse areas. A discussion of the contemporary authors on social capital will follow in the next section.