Social capital only came to fruition in the late 1990s as a widely used term, having been used sporadically since the 1890s. Sociologist Pierre Bourdieu advanced social capital theory throughout his career in contrast to cultural, economic, and symbolic capital (Bourdieu, 1986). Sociologists James Coleman and Alejandro Portes also both contributed significantly to social capital. The 1990s saw social capital grow in popularity, becoming the focus of several mainstream literatures such as Robert Putnam’s ‘Bowling Alone’ works.

Evaluation of Social Capital

Bourdieu concurred with Coleman that social capital theoretically is a neutral resource. However his work often highlighted how social capital is used practically to create or reproduce inequality (Bourdieu, 1986). For Bourdieu individuals use social capital to gain powerful positions through the direct and indirect employment of social connections.

Robert Putnam has highlighted social capital in a far more positive light. He was at first careful to argue that social capital was a neutral term, but his work on American society shows social capital as a producer of ‘civic engagement’ and as a broad societal measure of communal health (Putnam, 1995). Putnam remodels social capital from a resource held by individuals to a feature of collectives, concentrating on norms and trust as producers of social capital.

Edwards and Foley in ‘Social Capital, Civil Society and Contemporary Democracy’ (1997), highlighted two key issues in social capital. Firstly, social capital is not equally available to all, much like other forms of capital availability, as geographic and social isolation limits the accessibility of social capital as a resource. Secondly, not all social capital is created equally. The value of a specific source of social capital depends significantly on the socio-economic position of the source within society. Furthermore, Portes has identified four negative consequences of social capital; exclusion of outsiders, excess claims on group members, restrictions on individual freedom and downward levelling norms (Portes, 1998).

Finally, social capital is regularly linked to the success of democracy and political involvement. Putnam makes the argument that social capital is related to the current decline in American political participation (Putnam, 1995).

Defining, Forming and Measuring Social Capital

There are multiple definitions, uses and interpretations of social capital. Policymakers often use the term due to its duality, hard nosed-economic feel and focus on social significance (Halpern, 2005). The phrase is often used by researchers as it explains a large range of outcomes (Halpern, 2005). The term is also used to explain strong managerial performance improved performances of functionally diverse groups, the value determined from strategic alliances and improved supply chain relations (Halpern, 2005). Baker sees social capital as a resource that actors acquire through specific social structures before utilizing to pursue their interests (Baker, 1990).

Earlier studies focused on the degree to which social capital as a resource should be used for public good or for the benefit of individuals. Putnam claims social capital promotes co-operation and mutually supportive relations in communities, making social capital a beneficial tool for fighting many of the social disorders in modern society such as crime (Putnam, 1995). Social capital leads to increased individual access to information, skill and power, meaning actors can also use social capital to further their own professional careers, instead of the interests of the organisation.

Pierre Bourdieu in the ‘Forms of Capital’ highlights three forms of capital; economic capital, cultural capital and social capital (Bourdieu, 1986). He sees social capital as a collection of actual or potential resources that are connected to the possession of a network of institutionalized relationships of mutual recognition and acquaintance (Bourdieu, 1986). According to Portes his work on social capital is instrumental as it focuses on the advantages to holders of social capital and the purposeful creation of sociability for the purpose of creating social capital as a resource (Portes, 1998). His work on social capital has a more individualistic approach with the view that individuals invest in social relations with the aim of a return in the marketplace, which actually incorporates the concepts Lin, Flap and Eriksson (Portes, 1998).

James Coleman has defined social capital functionally as an array of entities with two factors in common (Portes, 1998). They all hold an aspect of social structure, and they all facilitate certain actions of actors within the structure (Portes, 1998). Therefore for him, social capital is anything that facilitates collective of individual action generated by networks, relationships, reciprocity, trust, and social norms. Coleman states that social capital is a neutral resource that facilitates any kind of action, however it depends on the individuals who possess it as to whether society is benefits from it (Portes, 1998).

Robert Putnam sees social capital as a collective value of all social networks and the inclinations that derive from these networks to do things for one another (Putnam, 2000). Putnam states that social capital is a key constituent to strengthening and maintaining democracy. According to Putnam social capital is declining in the United States which is shown through decreased levels of trust in the government and decreased levels of civic participation, with television and the urban sprawl phenomenon playing a big role in a less connected America. He believes that social capital can be measured by the amount of trust and reciprocity in a community or between individuals (Putnam, 2000).

Francis Fukuyama in ‘Social Capital and Development: The Coming Agenda’ defines social capital as shared norms and values that promote social cooperation through social relationships (Fukuyama, 2002). Fukuyama states that social capital is important for successful development, but a strong rule of law and solid political institutions are necessary to build social capital, meaning strong social capital is needed for strong democracy and economic growth (Fukuyama, 2002). Familism is seen as a major issue of trust because it creates a two-tiered moral system from which a person must support family members. Fukuyama claims that bridging social capital (Putnam’s term) is necessary for a strong social capital because a broader radius of trust enables connections across borders and serves as a basis for organizations (Fukuyama, 2002). Fukuyama highlights many problems and possible solutions in his paper, but admits that there is still much work needed to build strong social capital.

There appears to be no agreed method of measurement on social capital. While it is often possible to intuitively sense the level of social capital there is in a relationship, quantitative measurement is much more difficult to establish. Hence qualitative methods are perhaps the most sensible and manageable to use when measuring social capital

Different Types

Putman writing before the rise of the internet claims to have found an overall decline in social capital (civic engagement) in America over the past 50 years, meaning significant effects on American society (Putnam, 1995). Putnam identifies two components of the concept; bonding social capital and bridging social capital, Bonding refers to the value given to social networks between homogeneous groups of people and Bridging refers to that of social networks between socially heterogeneous groups (Putnam, 1995).

This distinction is helpful in showing how social capital is not always beneficial to the whole of society, but it is always an asset for those individuals and groups involved (Portes, 1998). Social capital development via the internet through social networking sites (Facebook, Myspace) can be seen as bridging capital. There are also two other sub-sources of social capital. The first is consummatory, which is behaviour made up of actions that fulfil a basis of doing what is inherent, and instrumental, behaviour that is taught through an individuals surroundings over time (Portes, 1998).

Gaps in Research

Putnam is probably the biggest contributor to the topic of social capital. His conclusions have been both hailed and critiqued. Criticism has focused on his significant lacking in awareness of the structural socio-economic conditions in society, mainly from the likes of Skocpol (1996) and Thomson (2005). Putnam’s excessive determinism of historical analysis has also been criticised (Tarrow, 1996). Ferragina integrated the awareness of these 2 major issues and proposed a cross-regional analysis of 85 European regions, linking together socio-economic and historic- institutional analyses to determine the causations of social capital (Ferragina, 2012).

Negative aspects of Social Capital

Coleman has claimed that social capital will eventually lead to the creation of human capital in future generations (Coleman, 1988). Human capital, a private resource, would then be accessed through what previous generations accumulated through social capital. Field suggests that a process like this will lead to inequality, something that social capital attempts to account for (Coleman, 1988). Coleman does view social capital as a neutral resource, however he does not deny that class reproduction could result from accessing this capital, with individuals working toward their personal benefit. Coleman’s argument actually corresponds with Bourdieu’s argument in ‘Reproduction in Education, Society and Culture’. Coleman and Bourdieu differed fundamentally in their theoretical analysis (Bourdieu believed the actions of individuals were rarely ever conscious, instead were a result of their habitus), but this conclusion by both connects their sociological understanding of the more concealed aspects in social capital.

The Internets effect on Social Capital

Virtual social capital is certainly a new area of research in sociology. The use of the Internet overall can have a positive effect on peoples social capital, much like watching the news and keeping up to date with current affairs (Shah et al. 2001). The dramatic growth rate of social networking sites such as Facebook and Myspace means that individuals are developing a virtual-network containing both bonding and bridging social capital. Unlike traditional social interactions, individuals now connect with each other in a targeted way by placing specific parameters within internet usage. Facebook is the most popular social networking site and has many advantages to its user such as acting as a ‘social lubricant’ for people who would usually find it hard to form and maintain both strong and weak ties with others (Steinfield et al. 2009).

The majority of research points to a positive link between social capital and the internet. Critics of social networking claim the Internet has replaced our strong traditional bonds with online weak-ties or even with empty social interaction with technology itself (Nie, 2001). Some critics are in fear of how the Internet in their view will form a world of ‘narcissism of similarity’, where socialising becomes interaction between those of similar in views in ideology, race and gender (Fernback, 1997). Other critics have suggested that technologically-based interactions are bad for social capital since they use up time that would otherwise be spent engaging in traditional (face to face, in-person) social activities (Nie, 2001).

LinkedIn relationship with Social Capital

Bonding and bridging social capital are affected via the use of the social networking site LinkedIn. ‘Maintained social capital’ describes the way in which LinkedIn can recover users lost bridging social capital, examples being old friends and classmates who they have lost contact with (Ellison et al. 2007).  However, it is LinkedIn’s ability to grow both bridging capital, as well as convert ‘latent ties to weak ties’, which has the most significant impact when it comes to increasing a user’s social capital (Ellison et al. 2007).

Bonding social capital is generally not formed in a social networking site setting, however LinkedIn can help sustain distance real life bonding social capital, in the form of low-cost ‘maintained’ social capital.  Having said this, the majority of growth potential for users’ social capital occurs in the bridging variety as LinkedIn is designed specifically for professional networking (Steinfield et al. 2009).  User have the huge advantage of expanding their professional social networks by identifying ‘latent ties’, converting them to weak ties, and therefore growing their bridging social capital (Steinfield et al. 2009).