Eight Criticisms of Social Capital

Criticism 1: Social capital is a concept based on a misleading metaphor – it isn’t capital

Social capital seems to be different from other types of capital as described by economists. While this need not be a problem for the concept if it is coherently explained in relation to other forms of capital, or as a complementary part of the family of capitals, its difference to the convention notion of capital has been acknowledged but rarely interrogated. One example of such an interrogation is found in economist Kenneth Arrow’s work (Arrow 1999). Arrow argues that the word “capital” implies three elements: extension in time; an intended sacrifice for deferred benefit; alienability. Arrow concludes that the concept of social capital lacks each of the three elements required to be a genuine example of capital and therefore found no reason for “adding something called ‘social capital’ to other forms of capital” (Arrow 1999: 4). Further to this, those outside economics recognise that the difference with other forms of capital weaken the explanatory power of the concept through confusion with the functions of other forms of capital. For example Samuel Bowles argues that while the concept “social capital” might describe important relationships, the term itself and the way it is conceptualised in the literature, is so unlike other forms of capital that the term “social capital” should be abandoned:

“Capital” refers to a thing possessed by individuals; even a social isolate like Robinson Crusoe had an axe and a fishing net. By contrast, the attributes said to make up social capital—such as trust, commitment to others, adhering to social norms and punishing those who violate them—describe relationships among people (Bowles 1999: 6)

Similarly, Robert Solow argues that the term social capital is an attempt to build on a bad analogy. He illustrates this in a powerful way by stressing that even by asking simple questions to develop the analogy (eg. what it is social capital a stock of? What is its rate of return?), it breaks down, a simple strategy that Solow demonstrates: “is the quickest way to explain why I doubt that ‘social capital’ is the right concept to use” (Solow 2000: 7). Solow concludes:

I do not see how dressing this set of issues in the language and apparatus of capital theory helps much one way or the other (Solow 2000: 9)

Claude Fischer argues that the term “social capital” is unnecessary as other clearer and simpler terms, such as membership, trust and sociability, serve perfectly well on their own. Indeed, even the supporting concepts of social capital, such as “bridging” and “bonding” fit better with a different metaphor, such as ties or association, while many of the reasons for using the term are based on conjecture, for example that trust norms are closely related to networks. A further danger is that the argument becomes susceptible to a slippery slope argument, i.e. that other features able to alter productivity are also a form of “capital”. Even before the content of the concept is examined, then, the use of the word “capital” is a hindrance that must be addressed and its meaning fully unpacked:

the phrase itself is a problem. It is a metaphor that misleads: Where can I borrow social capital? What is the going interest rate? Can I move some of my social capital off-shore? (Fischer 2005: 157)

With criticism coming from a variety of perspectives, the phrase, though, remains appealing to the degree that there is a reluctance to concede the concept just on the basis of a stretched metaphor. This is because the use of the term “social capital” has been strategically useful, identifying its function as a factor of production by associating the term with other (contested) concepts, such as human capital and intellectual capital. Indeed, Joel Sobel argues that even though “the strengths of the analogy are not persuasive enough to justify the terminology” (Sobel 2002: 145) the use of the term “social capital” can be justified because existing literature builds on this strategy and provides:

convincing evidence that the topics under the social capital umbrella are worthy of study, and application of economic principles can provide important insights. A vague keyword is not sufficient reason to condemn a promising line of research (Sobel 2002: 145)

So while the flaw in identifying the concept too closely with functionally different notions has been acknowledged, scholars are persuaded that applying the economic principles from which the (flawed) concept is derived will be beneficial, though the keyword is not to be pushed too far, even though that is the very point of using this particular keyword in the first place. Nevertheless, the paper will turn to the other keyword in order to examine how such economic principles relate to the “social” dimension of the concept, and the criticism it has received.