You read here a basic outline of the definition of social capital. Below is some more information about the history, benefits, recent trends, and other important points of consideration on this topic.

Three Important Things to Keep in Mind

1) The most powerful contributions to our social capital come from repeated social interactions, especially horizontal relationships (among those of roughly equal social status) and those based on mutual respect.   Anonymous social interactions do not provide the same opportunity for learning that leads to the emergence of trust among people working, trading, meeting, playing, performing, or socializing together.   

2) Not all ties, and thus not all social capital, are good. Ties, in and of themselves, can be mobilized for destructive or constructive purposes.  Strong ethnic, religious, or kinship ties can provide comfort and personal support and may even be mobilized to provide seed capital for new businesses. But ties expressed through other groups, such as the KKK or the Michigan Militia may constrain the choices of individuals, limit their access to the resources of the larger society and even foster distrust between groups.  If these strong ties bind people to criminal gangs or groups involved in drugs or other destructive behavior, the bonds will help reproduce rather than suppress these social ills.

3) Finally, social capital is a complex thing that takes multiple, sometimes conflicting, forms.  Weak ties can link individuals to opportunities and information but may not provide the simple feeling of membership or ensure that a local community will function well.  And individuals’ weak ties may not help them get social help and personal support in times of crisis.  We need varied forms of social capital to be happy, successful, and well-functioning individuals.  As a result, we seek not to maximize social capital but to optimize it by finding the right balance for our communities and ourselves.

A Very Brief History of Social Capital

The idea of social capital has been around for some time but has only recently begun to attract the systematic attention of scholars and practitioners.  That the term has been independently invented by six 20th century scholars in six different disciplines is testament to its broad explanatory power.

The wisdom of the concept reflects time-honored ideas ranging from, “It's not what you know, it's who you know” to, “It takes a village to raise a child.”  The earliest use of the term social capital in its modern sense, to the best of our knowledge, dates back to 1919 when the Superintendent of Schools for West Virginia, Lyda Hannifan, proposed using schools as community centers.  Hannifan defined social capital as the “good will, fellowship, sympathy and social intercourse among the individuals and families who make up a social unit.” [John Dewey in The Elementary School Record in 1900 used "social capital" in a related way to emphasize the important benefits to children of socializing.] Since that time researchers have found that social capital facilitates not just good government but economic development, effective education, improvements in public health, and improved performance in a wide variety of other fields. 

The Diverse Benefits of Social Capital

In communities with large reservoirs of social capital people spend more time participating in community organizations, they volunteer more often, and they are more likely to vote.  They are also likely to spend more time socializing with family, friends, and neighbors.  They are more likely to trust, not just these intimates, but people in general.  The evidence is mounting that such communities—whether they be neighborhoods, schools, or workplaces—function better in a wide variety of ways, some of which are listed below:

Children’s Welfare.  States that score high on the measures of social capital (voluntary association, political participation, voluntarism, sociability, and trust) also score well on the Annie E. Casey Foundation’s Kids Count Index, which tracks ten indicators of child welfare, ranging from infant mortality and low birth weight to teen birth rates, drop-outs, and violence. Children are much less likely to engage in risky behaviors in neighborhoods where adult social institutions are strong and those in which adults are willing and able to intervene when they see children misbehaving are much less likely to engage in risky behaviors. These so-called “neighborhood effects” work by enforcing positive behaviors, by providing role models, and by facilitating community action.

Education.  States with more social capital perform better on a wide variety of educational measures, including standardized test scores. Individual schools that have developed strong social capital, as indicated by shared norms, diverse student-teacher contacts, and relationships of cooperation and trust among parents, teachers and students, consistently outperform their peers.

Safety.  States with higher levels of social capital tend to have lower rates of murder and violent crime.

Economic Prosperity.  At the individual level, social connections improve life chances.  We use our social connections to help us find jobs and identify other opportunities.  Research has shown that ties that form bridges to other neighborhoods are especially valuable in job searches; often these are the “weak ties” of acquaintanceship rather than the “strong ties” of family and friendship. At a community level, tightly knit ethnic communities often provide their members with significant economic benefits, most notably seed capital for business start-ups raised in ethnically based rotating credit associations.  At a larger scale, cooperation and communication enables business leaders to take on community leadership roles.  Also, regular interactions of employees from different firms in the same industry greatly facilitate innovation and flexible adaptation to changing market conditions.

Public Health and Individual Well-being.  Evidence is mounting that socially connected citizens are happier and healthier.  This is at least partly due to the informational benefits of strong social capital—people are more likely to be aware of and seek out the medical assistance they need and others are more likely to monitor their use of heath resources (e.g., whether they kept a doctor’s appointment).  Social capital also provides social support (e.g., chicken soup when you are sick) that helps in recovery, and it is believed that meeting in groups reduces stress and thus makes us more resistant to disease.  A general reduction in stress associated with high levels of community social capital may also contribute to these health benefits.

Democracy.  As Putnam’s initial work on democracy in Italy suggested, large stocks of community social capital are associated with effective governance and a healthy participatory democracy. A vibrant associational life, whether organized around “private” ends like entertainment, socializing, or worship, or organized for narrow or local public purposes like erecting a playground, creates a community resource. This organizational resource can be mobilized to meet unforeseen problems or to represent the beliefs and interests of community members to governmental bodies. The broader the web of associations, the more likely that all members of the community have access to government, not just the few “well connected.” Also, small local associations give many citizens the chance to assume leadership roles and learn the vital democratic skills of coalition building, organizing and cooperation. These skills in turn make our governments stronger.

How Does Social Capital Produce These Benefits?

The benefits of social capital fall into three general categories—information, trust, and collective action—that affect virtually every aspect of community life: education and child care, public safety, economic development, health and well-being, and the democratic process.

Information.  The most basic and universal benefit of social capital is an improved flow of information to individuals in social networks.  Well-connected persons are more likely to hear about a job or other economic opportunity, get important consumer news, or get good information about health issues.  Through casual and formal interactions, they can learn about community issues and learn new practices in a variety of areas, ranging from their occupation to car repair to home care.  Furthermore, when a group of people with similar problems comes together they can pool information and share experiences: support groups formed around specific health problems are such an example.

Trust.  Trust may be the most central concept to social capital. Trust is the level of confidence one has that others will do what they say they will do.  There is nothing romantic or naïve about the idea of trust; it is not the same as gullibility, but is instead a prediction of others’ trustworthiness forged through experience.  I trust a business colleague to deliver a product or service because he or she has done so in the past, either for me or for others. I share a secret with a friend because she has guarded smaller secrets well before.  In other cases, we trust someone because others we trust vouch for their trustworthiness.

Trust is an essential element of all human interactions—social, political, or economic—that take place either over time or are too complex to specify fully in advance.  For example, I do not need much trust to give the clerk at the donut shop a dollar for my coffee—the transaction is simple and completed immediately.  If I don’t get my coffee, or don’t like it, I can go elsewhere next time; the dollar is not a great loss, and my remedy is a strong incentive for the shopkeeper to behave in a trustworthy manner.  If I hire a contractor to build a house, on the other hand, I am entering a relatively long-term relationship that is likely to be complicated in the future by as yet unforeseen complications.  I have a great deal at stake.  If I don’t trust the contractor, I will then need a contract that tries to anticipate all of these contingencies, and will have to pay a lawyer to write and help me enforce it.  We don’t (usually) write contracts to cover our social relationships: if we do not trust others, we keep them at a safe distance  This may protect us from being cheated, but makes many simple social interactions, like borrowing a tool, or telling a neighbor that their child misbehaved, much more difficult.  It is easy to see how a high level of trust makes all sorts of relationships work better. 

Networks with high levels of trust typically stem from repeated interactions and good information flow.  The promise of future contact also provides an important incentive to behave in a trustworthy manner.  If I value your business tomorrow, I won’t try to cheat you today.  Moreover, when I have to see you tomorrow, I am more likely to act pleasantly today.  More generally, in a well-networked community, my reputation is more valuable to me.  I can assume that others will learn that I treated someone badly.  This, more than the threat of losing my repeat business, is what keeps my hypothetical contractor in line.

The highest level of social capital formation occurs when people are able to begin social and economic relationships with others on the assumption of trust.  That is, they come to believe that most people can be trusted and act accordingly. Typically this trust is not naïve, but has been justified by experience.   The development of this generalized trust, still not well understood, marks the transition from small groups and networks of people who know one another to the aggregate phenomenon of social capital, or from a well working group to a well functioning society. 

The level of generalized trust is the best single barometer of the level of social capital in a community.  Where generalized trust is low, economic prosperity is unlikely, crime rates tend to be high, and political corruption more common.

Collective Action.  Strong and well-articulated social networks and broad participation in community life permit groups of people to more easily solve collective problems.  Norms of participation make it easier to encourage every member of the community to make his or her fair contribution to the collective good, to not shirk neighborhood responsibilities, or to simply respect his or her neighbors.   The community is not only more pleasant and safer as a result; it is also better able to resolve real conflicts over the character of the community, such as land use issues or transportation matters.  Improved local democratic processes also pay off when the community needs to speak in a single voice, for example a neighborhood needing to represent their views to a city government.

Recent Trends in Social Capital

Since Robert Putnam published his 1995 article, "Bowling Alone," a spirited academic debate has raged concerning the accuracy of his claim that America was in the midst of an alarming decline in the level of civic engagement. As Putnam did additional research on this topic, the crisis in America's social capital has only become more evident. These data are presented in Putnam’s Bowling Alone: Collapse and Revival of American Community. Some of the indicators traced include:

Declines across all these areas, began in the 1960s. The causes of these declines are complex, but they appear to have two root explanations. First, the passing of the very engaged generation born and raised before World War II, which Putnam calls “America's long civic generation,” and second the dramatic transformation of American society after World War II, which includes the rise of television as the dominant form of entertainment and the spread of suburban sprawl.

However, not all the trends since 1960 are bad.  Since 1960, America has become a more open society and one much more tolerant of diversity; great strides toward racial and gender equality have been made; political and civil rights are more secure; and speech and other forms of expression are less restricted. Also, preliminary evidence suggests that civic engagement among the youngest American generations is higher than that of their elders. Alternative forms of connectedness have emerged as well, including the rise of evangelical Christian organizations, dramatic increases in membership in national lobbying organizations that represent particular political views and interests (but which rarely build on social capital) as well as local self-help and mutual support groups, (some of which do). The internet, for better or worse, will change the way Americans connect with one another in ways that we cannot yet imagine. 

However, so far, none of these shifts is large enough to offset the declines created by the passing of the long civic generation. If nothing changes, the decline in social capital will have devastating social and political ramifications in the years to come.  We hope that people will continue to search for new ways of connecting to their society.  

It is extremely important to point out that the drive to rebuild social capital is not a nostalgia movement.  The social structures and institutions that will connect Americans with each other in the next century may be very different from those that were created in the Progressive Era and prevailed during most of this century.  The mission of the Saguaro Seminar at the Kennedy School is to:

This guide is offered in that spirit.

Suggestions for Further Reading

For a fuller discussion of what is social capital and why it is valuable, please see Robert D. Putnam, Bowling Alone: Collapse and Revival of American Community (Simon & Schuster, New York, 2000), pp. 18-26 (What is social capital?) and Section IV ("So What?") on why it is valuable. Section IV also includes a discussion of the health effects of social capital (as well as the connection between social capital and democracy, safety, economic productivity, education, etc.)

The six 20th Century scholars mentioned above:

John R. Seeley, Alexander R. Sim, and Elizabeth W. Loosley, Crestwood Heights: A Study of Culture of Suburban Life (New York: Basic Books, 1956)

Jane Jacobs, The Death and Life of Great American Cities (New York, Random House, 1961)

Glenn Loury, “A Dynamic Theory of Racial Income Differences,” in Women, Minorities and Employment Discrimination, ed P.A. Wallace and A. LeMund (Lexington, Mass.: Lexington Books, 1977)

Pierre Bourdieu, “Forms of Capital,” in Handbook of Theory and Research for the Sociology of Education, ed. John Richardson (New York: Greenwood Press, 1983)

Ekkehart Schlict, “Cognitive Dissonance in Economics,” in Normengeleitetes Verhalten in den Sozialwissenschaften (Berlin: Duncker and Humblot, 1984)

James S. Coleman, Foundation of Social Theory (Cambridge, Mass.: Harvard University Press, 1990)

For more information regarding Political Values and Civic Engagement, plus the Social Capital Debate, the following sources should be of interest:

Bellah, Robert N. et al., Habits of the Heart: Individualism and Commitment in Everyday Life. Berkeley: University of California Press, 1985.

Etzioni, Amitai, ed., New Communitarian Thinking: Persons, Virtues, Institutions and Communities . Charlottesville, VA: University Press of Virginia, 1995.

Kretzmann, John P. and John L McKnight. Building Communities from the Inside Out: A Path Toward Finding and Mobilizing a Community’s Assets . Evanston, IL: Center for Urban Affairs and Policy Research, 1993.

Nicholas Lemann, "Kicking in Groups." Atlantic Monthly (April 1996): 22-24.

Loury, Glenn "The Social Capital Deficit." The New Democrat (May-June 1995): 28-29.

Potapchuk, William R., Jarle P. Crocker and William H. Schecter, Jr. "Building Community with Social Capital: Chits and Chums or Chats with Change." National Civic Review 86, No. 2 (Summer 1997): 129-140.

Portes, Alejandro & Patricia Landolt, "The Downside of Social Capital." The American Prospect 26 (May-June 1996): 18-21, 94.

Putnam, Robert D. "Bowling Alone Revisited." The Responsive Community, v5, issue 2, (Spring 1995): 18-33.

Putnam, Robert D. Making Democracy Work. Princeton, NJ: Princeton University Press, 1993.

Putnam, Robert D. "The Prosperous Community: Social Capital and Public Life." The American Prospect 13 (Spring 1993) 35-42.

Putnam, Robert D. "The Strange Disappearance of Civic America." The American Prospect (Winter 1996): 34-48.

Schambra, William and Michael S. Joyce. "A New Citizenship, A New Civic Life." The Hudson Institute: 139-163.

Skocpol, Theda. "The Tocqueville Problem." Address to Annual Meeting of the Social Science History Association, New Orleans, October 12, 1996.

Vanourek, Gregg, Scott Hamilton, and Chester Finn. "Is There Life After Big Government?: The Potential of Civil Society." The Hudson Institute.

Walzer, Michael, "Civility and Civic Virtue in Contemporary America." In Radical Principles: Reflections of an Unreconstructed Democrat. New York: Basic Books, 1980.

Walzer, Michael. "Idea of Civil Society." Dissent (Spring 1991): 293-304.

For more information regarding Civic Engagement and Urban Issues:

Briggs, Xavier de Souza. "Social Capital and the Cities: Advice to Change Agents." National Civic Review 86, No. 2 (Summer 1997): 111-118.

Berry, Jeffrey M., Kent E. Portney, and Ken Thomson. The Rebirth of Urban Democracy. Washington, DC: Brookings Institution, 1993.

Wilson, William Julius. When Work Disappears: The World of the New Urban Poor. New York: Knopf, 1996.

For more information regarding Civic Engagement and American Democracy:

Boyte, Harry, and Nancy Kari. Building America: The Democratic Promise of Public Work. Philadelphia: Temple University Press, 1996.

Elshtain, Jean Bethke, Democracy on Trial. New York: Basic Books, 1995.

Loury, Glenn, "The Divided Society and the Democratic Ideal." Boston University’s University Lecture, 1996.

Sandel, Michael. Democracy’s Discontent: America in Search of a Public Philosophy. Cambridge, MA: Belknap Press of Harvard University, 1996.

Verba, Sidney, Kay Lehman Schlozman, and Henry E. Brady. Voice and Equality: Civic Voluntarism in American Politics. Cambridge, MA: Harvard University Press, 1995.

For more information regarding Civic Engagement in American History:

Ehrenhalt, Alan. The Lost City: Discovering the Forgotten Virtues of Community in the Chicago of the 1950s. New York: BasicBooks, 1995.

Husock, Howard. "Elks Clubs, Settlement Houses, Labor Unions and the Anti-Saloon League." Cambridge, MA: Kennedy School of Government Case Study Program.

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