As part of my work on capital, which in turn contributes to my thinking on the politics of care, and how it must be defined, I have posted this new glossary entry on social capital, which is an addition to the entries already made on capital and capital maintenance concepts.
Social capital is the stock of institutions, relationships, norms and shared understandings that enable cooperation, trust and collective economic activity.
It includes:
- public institutions,
- democratic systems,
- legal frameworks,
- administrative competence,
- social cohesion, and
- shared expectations of fairness and reciprocity.
Social capital underpins all economic activity.
Markets require trust, enforceable contracts and legitimate authority.
Money requires collective belief and institutional backing.
Investment requires stability, predictability and social consent.
Where social capital is strong, economies are more resilient, adaptive and inclusive.
Social capital is depleted by:
- inequality,
- corruption,
- exclusion,
- privatisation of public purpose, and
- the erosion of democratic accountability.
These processes weaken economic coordination and legitimacy, even when they appear to increase short-term efficiency or profitability.
Maintaining social capital requires sustained investment in:
- public institutions,
- representation,
- transparency,
- fairness,
- and shared purpose.
When social capital is run down, economic activity becomes increasingly extractive, coercive and unstable, relying on enforcement rather than consent and producing diminishing returns over time.
Related posts:
- Capital
- Capital maintenance concepts
- Financial capital
- Physical capital
- Human capital
- Social capital
- Sustainable cost accounting
- Income
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As part of my work on inequality I’m asking economics commentators to define which part of inequality that they are referring to. After all an increase in income and wealth inequality does not diminish social capital based on the revisit to the work of Wilkinson and Pickett. However an increase in inequality of opportunity or of freedom undoubtedly will diminish social capital.
Hence my reason for defining multiple forms of capital
I think the distinction you’re drawing is useful, but it’s only part of the picture. Inequality doesn’t automatically erode social capital — that much is true. But it does erode social capital when the institutions responsible for maintaining fairness, opportunity and trust are weak, hollowed‑out or under‑resourced.
That’s the missing link.
Social capital isn’t just about distributional outcomes. It’s about the capability of the state to mediate those outcomes in a way that feels legitimate, predictable and fair. When public institutions are strong — professionally staffed, stable, competent, and accountable — societies can absorb quite high levels of income inequality without losing cohesion. When institutions are weak, even modest inequality becomes corrosive.
So the real driver of social capital depletion is not inequality per se, but institutional fragility.
That’s why investment in the public workforce matters so much. Professionalising the civil service, maintaining administrative competence, and treating public administration as a form of capital maintenance are essential if we want to preserve opportunity, fairness and trust. Without that institutional backbone, inequality of any kind quickly turns into inequality of freedom and capability.
In other words:
Strong institutions turn inequality into a policy challenge.
Weak institutions turn it into a legitimacy crisis.
That’s where the politics of care, and the politics of capability, really begin.
My interpetation is this: institutional capacity can buffer inequality for a time, sometimes a long time, but it cannot indefinitely neutralise it. Inequality is not just a stress applied to institutions from outside; it slowly reconfigures them from within.
That is why investment in the public workforce matters, as you say — but it also explains why such investment becomes politically difficult in unequal societies. Those with surplus resources can opt out, and once they do, the constituency for maintaining universal, high-quality institutions weakens.
So I agree that weak institutions turn inequality into a legitimacy crisis. I would add that unchecked inequality tends, over time, to weaken institutions, turning what begins as a policy challenge into exactly that crisis.
In that sense, the politics of care and the politics of capability have to address both together. Treating either as primary on its own risks missing the feedback loop between them. These feedback loops are an issue I intend to address. They are vital.
Well explained Richard. A modern state must maintain its social capital. That means investing continuously in the competence, professionalism, and stability of the public workforce. Without that, nothing else works — not markets, not public services, not democracy
Richard,
Your definition of social capital seems very broad.
Perhaps I am being too narrow minded but to me social capital meant community relationships eg family, friends, colleagues. Your networks if you like and the associated levels of trust and the norms, etc that govern how these work.
Your much broader definition shifts away from family, community networks, etc to national institutions, politics and markets.
With this broader definition we “handover” something as important as social capital to the 3 realms/areas of our national life that in recent years have performed lamentably for many.
To me the resilience of family, kinship, and community networks has been one the rays of hope for us all.
I suppose I am wary/nervous about a definition that if widely accepted encourages active policymaking in something that has resided in the “commons” to coin a phrase.
Happy New Year to you and yours btw.
But, do we lose anything by my definition and would we just require another definition if we went your way?
Richard
Another definition would be.
So what was I thinking. I was explicitly anchoring social capital to our communities our “commons” and through narrowing the definition keep social capital free, away from state control, national politics and global/national markets.
While writing I feel like I need a Venn diagram or systems/mind map that shows how these types of capital link, overlap etc.
That might be on its way – give me time.
One observation that could be made is that when many people say “social capital”, the value they have in mind can be defined entirely non-institutionally, and as precisely those things that are most important when there is a breakdown of the things that you outline.
So you could say in a sense that it is precisely wrong, to the same extent as saying that a liquid asset is the same as a capacity to borrow are both available assets. You can have recourse to one when you do not have the other, but this overlap in use with different consequences makes the distinction more rather than less important; you want to know when you are out of available assets such that you are forced into a position of having to borrow, and so it is important to be able to distinguish them.
Public goods of general mutual trust, widely recognised qualifications and so on, which are not specific to your participation in particular social networks, provide a kind of civic foundation that renders social capital less liable to determine outcomes, and in the early modern period, the ideal of a rational bureaucracy that appoints people to professional roles according to their assessed capabilities was considered an explicit alternative to allowing people to hold positions according to their capacity to amass recommendations and build alliances.
Social capital can be considered as capital most directly due to informal lending providing a way to transform mutual trust and favours into a quasi-financial instrument, but we can also consider corruption and nepotism operating in the form of building social capital at the expense of institutional or public goods – you can build a reputation as someone who can help others “get around the system”, in a sense transferring from a public asset to a private one, as the system operates less effectively, and its supposed rules of operation take a back seat to personal trust.
I think you have seriously misjudged what I mean – although what precisely you do mean is hard to determine. As far as I can see you seem to think human capital societal capital and parts of societal capiutal to be financial capital. I am genuinely confused.
It’s also worth pointing out here I think that social capital may actually be defined in an unhelpful way, even in an academic context, as both that wealth of connections which an individual is able to draw on to their benefit in order to overcome deficits in social trust, and sometimes also as those things that make such connections unnecessary by rendering connections ie. just as a capacity to lend and a surplus liquid asset are sources of liquidity, but have different consequences that should be distinguished, it may be that the definition of social capital unhelpfully conflates things that can have compounding negative effects with things that indicate taking advantage of a surplus.
A useful conceptual distinction then might be on splitting discussion of the two (as in “Social capital meets guanxi: Social networks and income inequality in China” – Tianyu Yang , Tianfang Zhang ) but by going further than they do to recognise that the “western” concept of social capital is in practice already used in a way that includes the sharper concept of guanxi with which the narrower definition that they use for social capital is being contrasted.
Bordieu explicitly talks about social capital in the form of the connections and the advantages that confer to people able to maintain networks of favours, and references the advantages of the relational social position of the nobility, in other words, he talks about what those authors distinguish as characteristics of Guanxi, while naming it as social capital, and then further developments make social capital about a larger spread of public goods that sustain social cohesion in the way that you outlined.
However, this kind of transformation, the conflation of capital that can be privately appropriated with wealth that may be intrinsically held in common, in a way that obscures the transitions between them, is not exactly new.
Do we have natural capital from which we can withdraw? Or do we have an ecological commons operating according to its own scientific laws in which extractive practices are embedded?
Again, I think you have seriously misjudged what I mean – although what precisely you do mean is hard to determine. As far as I can see you seem to think human capital societal capital and parts of societal capiutal to be financial capital. I am genuinely confused.
I’m surprised you don’t know what I mean, to be honest. I’m writing this quickly, but if you have another look at The Forms of Capital by Pierre Bourdieu, the degree of reference I’ve made to indirect convertibility between these different forms of capital is not exceptional in any way, there’s a reason we call it “social capital”, and it relates to this, so if you think that the way I am talking about it means that I am confusing it with financial capital, then these terms have been confused from their definition.. to the extent that you could quite happily say that there is no such thing as social capital at all!
Now it’s possible that there’s something else that is confusing in what I’m saying, but that should not be the issue.
Note the most recent comment by Paul Hume.
He addresses the issue better than I am inclined to given the tone of your comment.
It is capital alright, that trust etc. But it might not be real. How about looking at social capital being organisations with registration numbers. Here in Sweden at least, all registered organisations get a number. You have to have that to get a bank account. Churches, allotment groups, political parties, Ltd companies, coops. They surely make up the backbone of the structure?
By the way I have several diagrams how the capitals hang together.
Here is one https://www.patreon.com/posts/tale-of-two-146779076?utm_medium=clipboard_copy&utm_source=copyLink&utm_campaign=postshare_creator&utm_content=join_link
Thanks.
That would be useful, but let’s be clear, social captial is much, much more than that.
I think the confusion here comes from the fact that “social capital” has been used in at least three different ways in the literature — and each commenter is implicitly using a different one.
Bourdieu/Putnam version:
Social capital as networks, reciprocity, and trust — the informal ties that help individuals navigate society.
Institutional version (the one Richard is using):
Social capital as the public infrastructure of trust — competent institutions, predictable rules, democratic legitimacy, and administrative capability.
Guanxi/favour‑trading version:
Social capital as informal access routes that compensate for weak institutions — often a sign of institutional decay rather than strength.
These aren’t competing definitions. They’re layers of the same system.
When institutions are strong, informal networks matter less, because people can rely on rules, rights and competent administration.
When institutions weaken, informal networks matter more, because people need workarounds to survive.
When institutions collapse, social capital becomes privatised — access, favours and connections replace fairness and capability.
That’s why Richard’s broader definition is essential.
If we only define social capital as “community ties”, we miss the fact that those ties become most important precisely when the state is failing.
Strong institutional social capital reduces the need for private social capital.
Weak institutional social capital forces people to rely on private networks.
And extreme inequality accelerates that shift by hollowing out the universal systems that make trust possible.
So the real question isn’t which definition is “correct”.
It’s how these forms interact — and how institutional strength determines whether social capital is a public good or a private survival strategy.
Thanks.
I clearly have more to do…
I agree with this to some extent, though I also think that the extent to which trust and legitimacy appears as a form of capital is an indication of its decay.
As with many other forms of capital, building a stock of something and improving the quality of a public good may be tasks that are diametrically opposed, as just as making the intellectual property associated with an innovation public can utterly destroy its commercial value even as it improves general welfare, so you can make it impossible to measure particular forms of social capital, in the sense of people being no longer meaningfully being able to draw on their connections to achieve benefits relative to others, for example if a healthcare system is improved so that appointments are widely available and knowing the right people is no longer important to access healthcare.
The same applies in the job market, where a tight market in which people to prove their employability via being employed, on a trial basis, and so on, makes recommendation networks far less relevant, as they clog up with too many people already in positions they are happy with, and another pattern of social organisation becomes necessary to meet demand.
Now if this kind of framework is correct, that means that concepts like social capital or natural capital are extremely useful in a transitory way, they have their force and particular importance when social “connection” in general and social norms are decaying and transforming into “connections”, or where the ecosystem is not valued in its own right but must be calculated in terms of the costs of replacement with artificial clean air, and so on.
You could even possibly say that talking about a public good or a commons is still only a further step towards understanding the nature of the problem, because we’re actually talking about measures of the self-integration of systems which then secondarily form preconditions of human existence, ie. they are not even “goods” for us first and foremost, they are systems with which we have a symbiotic relationship (and I would also include our institutions as symbiotic systems in that sense, which is a little strange, but I think true given how our logistical networks have developed their own particular properties and requirements, even as they sustain global supplies of food, medicine etc.).
The ideal definition would reveal that continuum, if possible.
I am sure you must think there is benefit in your nihilistic thinking. If I read you correctly (and opacity would appear to be your aim) then you are suggesting that calling something “capital” is usually a sign that its health is already breaking down and that the language itself is a stop-gap, not a solution.
Politely, I have read some absurd arguments in my time, but that takes some beating, not just for its, I presume, contrarian nature that adds no value, but also because it seeks to deny benefit unless measured by absence, in the process denying the virtue of the matter – in this case, capital – being discussed. That makes it a form of linguistic playfulness, and I presume that is your goal, but it adds nothing to understanding, let alone value – when the whole point is that capital is acknowledged because it does add value, which suggestion you seem to wish to invert.
You may think yourself clever. My guess is you are an academic. My suggestion is you look at the real world. Your analysis is meaningless in it, and so is of precisely no interest to me. Sorry, but how you can consider it of use to post such a comment defeats me.
Another team member described your comment as “masturbatory”. I think that fair.
I suggest you study Richard Feynmam’s pedagogy. It would suggest you have not the slightest understanding of this issue.
Josh,
The problem here isn’t that you’re invoking Bourdieu or guanxi — it’s that you’re treating “social capital” as if it must collapse into a single, universal definition, and then criticising Richard for not using that definition. But the term has always been plural, context‑dependent, and layered. That’s why the literature distinguishes between:
individual social capital (networks, reciprocity, favours)
community social capital (norms, cohesion, shared expectations)
institutional social capital (competent public systems that make trust possible)
These aren’t contradictions. They’re different levels of the same system.
Your argument seems to imply that calling something “capital” is only meaningful when it is failing — but that’s simply not how capital maintenance works. We name forms of capital precisely so we can protect them before they decay. That’s true for natural capital, human capital, and social capital alike.
Richard’s definition isn’t “broad” for the sake of it. It’s broad because modern economies depend on institutional trust, administrative capability, and democratic legitimacy every bit as much as they depend on private networks. If anything, the institutional layer is the one that prevents social capital from degenerating into the favour‑trading you describe.
In short:
your critique only makes sense if you collapse all forms of social capital into one. Richard’s framework works because it doesn’t.
Thanks
You have more patience than me
I think we’re being trolled
Hi Paul, I think you’re misinterpreting my analysis slightly, I never actually criticised Richard’s definition as being overly broad, on the contrary, he asked someone else what the value is in including something in the definition different from his, and I talked about what other definitions cover that his does not, and then pointed out some of the complexities there are in how social capital is defined, referring to different kinds of things etc. which you then followed up on.
And in doing so, you and me have been able to lay out a whole series of different definitions.
Insofar as I referred to Bourdieu as an authority, it was in two ways, firstly to point out how definitions have shifted – that the distinction that paper I referenced makes about what the “Western” perspective is vs the Chinese one seems to actually put one of the original people theorising this on the Chinese side..
I don’t think this is surprising, because I don’t treat these as rival definitions, but rather connected ones, talking about different kinds of solutions to the same sort of problem, which is social alienation, atomisation etc. I tend to treat social capital as the personal capacity to appropriate an underlying commons built on relationships to gain benefits from it, but I don’t require others to stick to my mine.
The second way I used him as an authority was just to point out that Richard seemed to be jumping a little rapidly to diagnosing confusion in people rather than asking questions, and on evidence of fairly normal use of language too. Something to the effect of “you seem to be using capital in a way that confuses both money and fixed machinery”, well perhaps that is a confusion, but if it is, it wouldn’t be me making it alone!
There’s always a risk when making definitions of going Humpty Dumpty or Putin, “I define war thus, therefore this is merely a special operation” etc. and so engaging with previous usage is pretty important, but I don’t think you have to stick specifically to previous definitions, I think it’s enough to just construct definitions with a rough understanding of why previous versions were made.
Paul,
A very helpful comment.
Thankyou.
Josh,
thanks for clarifying — I understand the distinction you’re drawing between different traditions of social‑capital theory. But I think this actually reinforces the point I was making earlier.
The term has always carried multiple meanings because it describes different layers of the same system:
individual social capital (Bourdieu’s networks and reciprocity)
community social capital (norms, cohesion, shared expectations)
institutional social capital (the public infrastructure of trust and capability)
These aren’t rival definitions that need to be collapsed into one. They’re complementary perspectives that only make sense when held together. When institutions are strong, private networks matter less. When institutions weaken, private networks matter more. When institutions collapse, social capital becomes privatised and transactional.
That’s why Richard’s definition sits at the institutional level: it’s the layer that determines whether the other forms of social capital function as public goods or as survival strategies.
So I don’t think the issue is definitional disagreement. It’s simply that we’re talking about different layers of the same concept — and the institutional layer is the one that explains why social capital matters for economic coordination, legitimacy and democratic capability.
Agreed