1 OECD Insights: Human Capital What is social capital? came fashionable only relatively The concept of social capital be recently, but the term has been in use for almost a century while the ll. “Social capital” may first have ideas behind it go back further sti appeared in a book published in 1916 in the United States that dis- cussed how neighbours could work together to oversee schools. social capital as “those tangible Author Lyda Hanifan referred to assets [that] count for most in the daily lives of people: namely goodwill, fellowship, sympathy, an d social intercourse among the individuals and families who make up a social unit”. That gives some sense of what’s meant by social capital, although with a single definition that sat- today it would be hard to come up mplicity, however, we can think of isfied everyone. For the sake of si ared values and understandings in social capital as the links, sh society that enable individuals and groups to trust each other and so work together. In recent years, the term entered the popula r imagination with the publication in 2000 of Robert Putnam’s bestseller, Bowling Alone: The Collapse and Revival of American Community . Putnam argued wealthier their sense of commu- that while Americans have become ities and traditional subu rbs have given way to nity has withered. C rbs” – vast, anonymous places where people “edge cities” and “exu As people spend more and more sleep and work and do little else. time in the office, commuting to work and watching TV alone, there’s less time for joining commun ity groups and voluntary organ- isations, and socialising with neig hbours, friends and even family. To demonstrate this decline, Pu tnam looked at the way Ameri- cans play 10-pin bowling, a spor t with a big following in the United States. He found that alth ough bowling has never been big- ger, Americans are no longer comp eting against each other in the once-popular local leagu es. Instead, they are – literally – bowling alone. Putnam argued that the decline of the community networks that once led Americans to bowl to gether represents a loss of social capital. 102

2 6. A Bigger Picture Varieties of social capital... rious forms that social capital There’s much debate over the va straightforward approach divides it into three takes, but one fairly main categories: h : Links to people based on a sense of common identity Bonds (“people like us”) – such as fam ily, close friends and people who share our culture or ethnicity. h : Links that stretch beyond a shared sense of identity, for Bridges example to distant friends, colleagues and associates. h Linkages : Links to people or groups further up or lower down the social ladder. The potential benefits of social ca pital can be seen by looking at social bonds. Friends and families can help us in lots of ways – emotionally, socially and economic ally. In the United Kingdom, for example, a government survey found that more people secure jobs through personal contacts than through advertisements. Such sup- countries where the rule of law port can be even more important in Social capital is defined by the OECD as “networks together with shared norms, values and understandings that facilitate co-operation nition, we can think of networks as within or among groups”. In this defi real-world links between groups or individuals. Think of networks of friends, family networks, networks of former colleagues, and so on. Our shared norms, values and understand ings are less concrete than our social networks. Sociologists sometimes speak of norms as society’s rules. Norms and understandings unspoken and largely unquestioned may not become apparent until they’re broken. If adults attack a child, for example, they breach the norms that protect children from harm. Values may be more open to question; indeed societies often debate whether their values are changing. And yet values – such as respect for people’s safety and security – are an essential linchpin in every social group. Put together, these networks and understandings engender trust and so enable people to work together. 103

3 OECD Insights: Human Capital is weak or where the state offers few social services: clans can fund the education of relatives and find them work, and look after orphans and the elderly. “... Access to information and influence through social nefits on individuals and in networks also confers private be dividuals or groups to exclude some cases can be used by in others and reinforce dominance or privilege.” The Well-being of Nations Almost by defi But bonds can hinder people, too. nition, tightly immigrant groups, have strong knit communities, such as some , with individuals relying he avily for support on rela- social bonds hnicity. Simultaneously, their lack tives or people who share their et can turn them into eternal outsiders from wider bridges of social society, sometimes hindering thei r economic progress. Of course, social exclusion works both ways: tightly knit groups may exclude excluded by the wider commu- themselves, but they may also be nity. social capital can also be put to Like almost any form of capital, ks and trust that allow drug car- ends that harm other people. The lin gangs to operate are a form of social capital, albeit tels and criminal one that the rest of us could do without. Companies and organisa- tions can also suffer if they have the wrong sort of social capital – that are too inward-looking and relationships between colleagues fail to take account of what’s go ing on in the wider world. Con- versely, social capital can Bowling Alone , also help businesses. In the success of Silicon Valley in the Putnam attributes a large part of between start-up al co-operation United States to formal and inform companies in the area. the glue which facilitates “... Social capital provides co-operation, exchange and innovation.” The New Economy: Beyond the Hype ... and criticisms The concept of social capital has its critics. One argument that’s when he said social engagement is made is that Putnam got it wrong just be evolving. Rath er than joining groups eroding. Instead, it may ling leagues, we’re now joining in our neighbourhoods, like bow fs – fighting for envi- groups made up of pe ople who share our belie 104

4 6. A Bigger Picture , for instance – rather than our ronmental protection or gay rights locality. These groups – such as a br anch of Greenpeace or Amnesty International – can exist in the “rea l” world. But they may also exist only virtually on the Internet, wh ich is arguably creating whole new “communities” of peop le who may never physically meet but who share common values and interests. Not everyone, however, is con- vinced that these new forms of community have the same value as more traditional forms. “In many countries there would seem merely to have been a shift from support of traditional organisations and institutions ... to newer forms of voluntary association...” . et al Barrie Stevens The Creative Society of the 21st Century in Critics also argue that the term “s ocial capital” is vague, hard to s not even a form of capital at measure, poorly defined and perhap all. (Economists often argue that capital involves making some form studying in school to raise your of sacrifice in the present – like human capital when you could be playing outside – to produce capital is a concept gains in the future.) De spite the debate, social rest among politicians and policy makers. One that’s attracting inte reason for this is the increasing concern over margin alisation in our societies. As we’ve seen repeatedly, the knowledge economy puts a pre- en the job prospects of people mium on human capital and can wors with limited education, who are also often the least well off in our societies. Some analysts speak of the emergence of an “underclass” in developed countries, a group th at is outside the mainstream of ntering it, both because of a lack society and has little chance of re-e of human capital and, arguably, the “right” sort of social capital. Indeed, that twin absence may not be a coincidence. A case can be capital are inextricably linked. made that human capital and social Are human and social capital linked? t in isolation from each other. Human and social capital don’t exis and, to some extent, feed into The two are linked in complex ways capital promotes the development each other. In other words, social 105

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