Social Capital

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Social Capital

By: Steven Eagle
Posted on May 11, 2011 Bozeman Daily Chronicle Topics:

“Social capital” consists of social relationships that have beneficial effects. Such norms as trust, affection, and feelings of empathy make our society more secure for individuals. Social capital increases the supply of goods and services available to us. It also increases our store of pecuniary wealth, which we often narrowly define as “capital.” Material goods are valuable, however, social capital may be our most valuable form of capital.

After the implosion of the Soviet Union, many experts went to Russia with the idea of installing efficient market economies. They were not particularly successful. During the Communist era, Russians developed deep suspicion that their acquaintances might be spies. They regarded government officials as thieves and thugs, and labor as a cynical endeavor (“they pretend to pay us and we pretend to work”). These habits of mind did not suddenly die when the Soviet Union fell. If basic trust and empathy are missing, there never can be enough police to keep people safe, or enough courts to enforce contracts.

We observe that, in areas such as Sicily, distrust of both strangers and the State is endemic. Trash accumulates in public streets while the areas within walled family compounds are immaculate. Businesses necessarily are small, for who other than close kin could be trusted? In Japan, by contrast, strangers quickly organize to provide relief in recent moments of natural disaster.

Some societies are more cohesive than others. In societies with high levels of trust, we expect business contracts to be honored, and workers and employers to be solicitous of the other’s needs. People are honest in their personal relationships, too. Informal obligations to family and friends are faithfully discharged. None of this requires much conscious planning or thought.

We readily can understand how politicians, employers and workers, are led to undermine social capital, in the quest for reelection, profits, or shirking. However, religious leaders can undermine social capital, too. While it might seem incongruous that those who eschew the primacy of material wealth can forget the importance of social capital, it happens all the time.

If some economists see people as machines efficiently turning inputs into monetary wealth, some religious leaders see people as altruists who do—or should—maximize love of humankind. But the rich tapestry of human life cannot be reduced to a single metric.

There are indeed people who place the lives and happiness of others, both near and far, ahead of their own. We venerate them as saints, precisely because they are so rare. In a memorable political address in 1984, Governor Mario Cuomo declared: “We must be the family of America.” But the correlative of treating millions of people we do not know as if they were our family is that we must treat our intimates no better than we do strangers. This flies against human nature. As Adam Smith famously observed, almost everyone contemplates the severance of his or her little finger as more important that the ruin of millions.

In a well-functioning society, people are not overwhelmed with a lust for material wealth, but are not saints, either. That is why the late economist and theologian Paul Heyne called for public life to be governed realistically by the “silver rule” of fair dealing and reciprocity, rather than by the golden rule of treasuring our neighbors as much as ourselves.

Turning the other cheek against tyrants and bullies cannot always be the best policy, which is why our society has an army and police instead of sheltering in pacifism. An unconditional welcome for prodigal sons and daughters encourages more of them, which is why welfare payments to those able to work ultimately benefit neither donors nor recipients.

Practices and demands that disturb the traditional role of families and close friendships harm what, for most people, are the underpinnings of a decent life and satisfactory “moral career.” This concept, enunciated by sociologist Erving Goffman, relates to a life trajectory that incorporates events that affect a person’s standing in a group, organization, or culture.

More generally, most people understand that the urge to do good cannot be the basis of public policy, although it should inform it. We like to feel good about ourselves, which makes us subscribe readily to apparent worthy causes. Often, however, worthy goals are not furthered by insufficiently considered policies. In some areas, notably environmentalism, preaching sacrifice for symbolic ends results in real deprivation far greater than the benefits to be derived. Ethanol is a prime example, resulting in higher food prices for the world’s poor, while requiring more energy to produce than is saved. The cost of recycling many materials, such as paper and glass, often exceeds the value that industries using these goods are willing to pay. Without value added from recycling, we are left mostly with symbolism.

Displays of environmental piety that don’t benefit the environment are a form of self-indulgence. As economist Dwight Lee says, our store of altruism is limited, and reciprocal transactions, in which both parties benefit, is a sturdier foundation upon which to increase the amount of good in the world.

Demands for the uncritical acceptance of others asserted “freedoms,” what Professor Mary Ann Glendon called “rights talk,” might detract from the majority’s store of empathy. While we ought not to be too quick to judge, a nation placing primacy on self-expression is a nation founded more on forbearance than on brotherhood. That, too, places a heavy toll on social capital.

Finding the golden mean is not easy. Ultimately, however, altruism, as well as markets, must be tempered by human nature.

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