Ep 2. While there are wide differences in how social capital has been defined, there is general agreement that it has to do with relationships–how we are connected. In our previous podcast we noted that the nature and intensity of our relationships can be inferred from the level and kinds of goods we exchange. At one extreme our relationships can be described as commodity exchanges that promote one’s selfish ends. Richard Thaler described modern economics as the study of selfish strangers trading things–persons he calls econs. In contrast, social capital seems to focus on relationships in which something intangible, something more than commodities is being exchanged, although these intangible goods may be embedded in things that can be exchanged or shared. We believe that the production and exchange of these intangible goods require connecting emotions that enable us to internalize each other’s well-being or at least our perception of each other’s well being. Emotions that enable us to internalize each other’s well-being and produce exchangeable socio-emotional goods include empathy, sympathy, trust, regard, and compassion. These connecting emotions seem to be at the center of what many social scientists define as social capital precisely because it makes our relationships social. That social capital has become such an important concept, we believe, is because we have come to recognize that our economic, social, and emotional well-being depends on our relationships. In addition, it may be linked to work by behavioral economists who point out that selfish strangers trading things can’t explain what has come to be called predictably irrational choices. Finally, social capital’s popularity may be linked to the success of social capital models that analyze and explain important social outcomes including economic exchanges and the formation of various social groups.
The episode begins with Tristan highlighting the differing perspectives on social capital due to the varied disciplinary backgrounds of scholars. Lindon explains that his interest in social capital stemmed from observing how relationships impact the terms and levels of exchanges in economic transactions, such as the sale of used cars or farmland. This led him to explore beyond the traditional neoclassical economic framework, which often emphasizes self-interest and utility maximization.
Tristan and Lindon discuss the importance of relationships in defining social capital. Lindon shares an early study where the social capital within student teams, measured by their willingness to provide free transportation to each other, significantly influenced their project performance. This underscores the practical implications of social capital in enhancing group effectiveness.
Tristan mentions his literature review, which found 125 different definitions of social capital across 250 peer-reviewed articles, highlighting the significant diversity and lack of consensus in the field. Both agree that relationships are a fundamental aspect of social capital, though definitions vary widely in how they address this.
The conversation also touches on the “capital” aspect of social capital. Lindon suggests that social capital should represent a potential to provide something valuable, residing in people and their relationships. Tristan and Lindon discuss how many definitions of social capital focus on its outcomes, such as facilitating cooperation or enabling resource mobilization, rather than clearly defining what it is.
Lindon and Tristan acknowledge the challenge of defining social capital in a way that produces testable hypotheses and meaningful research. They question whether social capital is always necessary or if other concepts like trust or informal norms might suffice in some studies.
In conclusion, both emphasize the need for a rigorous definition of social capital that captures its social nature and potential as a form of capital. They agree to explore the capital aspect further in the next episode to narrow down a more precise definition. The discussion highlights the complexities and interdisciplinary nature of social capital, setting the stage for deeper exploration in future episodes.
