Colemans concept of social capital

Table of Contents

1. Introduction

2. Coleman’s concept of social capital
2.1 Forms of capital
2.2 Forms of Social Capital
2.3 Realtive quantity of social capital
2.3 Bridging versus Bonding

3. The dark side of social capital
3.1 Direct and indirect negative externalities
3.2 Bonding forms of social capital
3.3 Social capital and inequality
3.4 Restrictions inside a network

4. Fazit

Bibliography

1. Introduction

Since the term social capital emerged for the first time in the nineteen-twenties it has become extraordinary popular until today. The exponential growth of “social capital” as a buzzword in the international press gets obvious in the following numbers: Whereas the term appeared before 1981 totalled 20 times, it already was 109 between 1991 and 1995. Between 1996 and March 1999 the total was 1003, and the growth shows no sign of abating (q.v. John Field 2003, p.2).

When one takes into account different articles about social capital it is striking that the definition of the term varies partially from author to author. Haug even states that it isn’t possible at present time to give a clear, distinct definition of the concept (Haug 1997) due to a lack of a embedding in a clear deductive theory.

Because “social capital” acts more or less as a placeholder or an “umbrella concept”, as Adler/Kwon (2000) call it, it is essential to pay attention to the definition first if one takes a look at surveys concerning social capital. A comparison of different empirical studies gets especially difficult due to the absence of a universal theory. In this term paper I am going to stick mostly to Coleman’s concept of social capital (except for few additions from Robert Putnam) due to his extraordinary influence to the discussion of social capital^[1].

A peculiar point is that social capital is in Coleman’s as well as in the majority of books a term which has a throughout positive connotation.

My aim is to show that social capital can also have bad externalities, especially for those who are left outside of social relations.

First of all I want to give an introduction to Colman’s concept of social capital. The introduction includes the different forms of capital (physical capital - human capital - social capital) and a summary of the different appearances of social capital. Furthermore a closer look at the relative quantity of social capital is being made before dealing with the basic distinction between bridging and bonding forms of social capital.

After the introduction I want to focus on the dark side of social capital, starting with a basic differentiation of direct and indirect effects, this leads to the issue about networks keeping their social capital inclusive. The following sections are concerned with inequality caused by social capital and restrictions that can also appear inside of networks.

2. Coleman’s concept of social capital

Coleman’s Theory of action is based on the Rational Choice Theory (RCT) which implies the existence of rational acting actors who act to maximize their profit (q.v. the RREEMM model). Actors are seen as persons who have (possibly total) control over certain resources. Due to the fact that people do not have access to all resources in which they are interested in - resources over which they have control are being exchanged to gain resources over which other persons are in control of - with the idea of maximizing utility. Coleman distinguishes between four types of resources: private goods which are divisible, incidents (also actions and special skills), information and social capital (Q.v. Mark Euler 2006, p.34).

Coleman defines the concept of social capital as follows:

“Social Capital is defined by its function. It is not a single entity, but a variety of different entities having two characteristics in common: They all consist of some aspect of social structure, and they facilitate certain actions for individuals who are within the structure.” (Coleman 1990, p.302)

As indicated by Coleman, social capital has a characteristic which distinguishes it from the other forms of capital, namely the feature of being a private and a public good at the same time.

2.1 Forms of capital

Social capital is more complex than the other forms of capital due to its dichotomic character. It differs from them but also has several points of intersection and in some cases it is the basis for creating human or physical capital.

A striking difference is the amount of tangibility. Whereas physical capital is wholly tangible, “being embodied in observable material form” (Coleman 1988, p.100), human capital is embodied in the skills and knowledge acquired by a person and thus less tangible, social capital is even less tangible in being located “in the relations among persons” (Coleman 1988, p.101).

As the tangibility decreases from social capital to physical capital the public-good aspect does what influences the property of being a by-product.

A characteristic feature in respect to the other forms of capital is the public good character of social capital due to its inalienability: “Although it is a resource that has value in use, it cannot be easily exchanged” (Coleman 1990, p.315). Physical capital can be assigned a private-good character - because of property rights is the person who invests in physical capital the one who gains the benefits it produces. In respect to human capital it is not so clear (q.v. “authority relations”) but in certain cases, e.g. human capital in school, it can be also seen as a private good because the beneficiary is the one who invests in it.

The differences in the public-good aspect of the forms of capital have effects on the purposive creation of them.

Due to the fact that “many of the benefits of action that bring social capital into being are experienced by persons other than the person” (Coleman 1990, p.317) who originally created the capital, the person often is also not interested in building up social capital. This is why Coleman argues that rational acting persons rather invest in physical or human capital than in social capital.

In other words social capital is created quasi-coincidental as a by-product of rational acting actors and does not come into existence by conscious investments (q.v. Coleman 1991, p.409).

2.2 Forms of Social Capital

Social Capital comes into being in five different forms (Coleman 1990, p.306 et seq.): Obligations and expectations, information potential, norms and effective sanctions, authority relations, appropriable social organizations and intentional organizations.

“ Obligations and expectations ”: When A does something for B and trusts B to reciprocate in the future, this establishes an expectation in A and an obligation in B. Coleman also calls this obligation a “credit slip” held by A.

Two elements are critical to this form of social capital: The level of trustworthiness of the social environment and the actual extend of obligations held.

“ Information potential ”: Information can be attained through social relations. With a lack of social relations the information could not be attained ore only at a higher cost. An example: A woman who has a interest in being in style but not at the leading edge of fashion can use certain friends, who do stay on the leading edge, as source of information (Coleman 1990, p.310).

“ norms and effective sanctions ”: The social capital exists here in the compliance of a certain norm and thus in the foresee ability of actions of other people. A contribution to public goods is made even if the sense of it isn’t rational in the near time. The reason why an individual obeys the norm notwithstanding the irrational character is because of a possible sanction caused by a violation of a norm.

“ authority relation ” : If several people transfer rights of control of certain actions to a person A, A has an extensive body of social capital but also the group that transferred the rights increase the available social capital “by overcoming the free-rider problem” (Coleman 1990, p.311).

“ appropriable social organizations ”: Founded organizations which also provide social capital to attain goals which are not subject of the organization. An example are members of a football club who help each other also in other issues (getting information of how to deal with women…)

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^[1] For a profound discourse see: Forsman, Maria (2005): Development of research networks - the case of social capital