Unsolved Mysteries: The Tocqueville Files II

In their search for new ideas, intellectuals and
policymakers across the political spectrum have recently become enchanted with
the concept of social capital. Liberals and conservatives alike now celebrate
social capital as the key to success in a myriad of domestic issues—from
public education, aging, and mental health to the battle against inner-city
crime and the rejuvenation of America's small towns. In the international arena,
strong social capital supposedly explains East Asia's economic success, while
inadequate social capital explains the failure of the former Soviet Republics.
In his latest volume, Trust: The Social Virtues and the Creation of
Prosperity
, Francis Fukuyama argues that the most successful nations in the
new free-market world will be those with religious and cultural underpinnings
that promote voluntary associations and help prepare people to work
cooperatively in large organizations. And in two articles in The American
Prospect
, Robert Putnam argues that what residents in American ghettos, poor
farmers in the Third World, and parents everywhere need is a healthy dose of
social capital ["The Prosperous Community," TAP, Spring 1993],
and that social capital in America is dangerously on the decline [" HREF="../24/24putn.html">The Strange Disappearance of Civic America,"
TAP, Winter 1996].

In these discussions, social capital has come to mean the ability to create
and sustain voluntary associations, or the idea that a healthy community is
essential to prosperity. The popular view now portrays social capital as wholly
beneficial with no significant downside. The implicit consensus is that social
capital is important because it allows people to work together by resolving the
dilemmas of collective action. Why this is actually so, however, is obscure.
Indeed, the more social capital is celebrated for a growing list of wonderful
effects, the less it has any distinct meaning. Social capital now appears poised
to repeat the experience suffered by other promising social science concepts in
the past: from intellectual insight appropriated by policy pundits, to
journalistic cliché, to eventual oblivion. It deserves better. Any rescue
effort requires examining what has gone wrong with the idea and its use in
recent public debate.

Although its origins lie in the nineteenth-century
classics of sociology, the concept of social capital owes its currency chiefly
to the more recent work of two sociologists, Pierre Bourdieu and the late James
Coleman. Bourdieu first used the term in the 1970s to refer to the advantages
and opportunities accruing to people through membership in certain communities.
Coleman, while defining social capital without precision, also used it to
describe a resource of individuals that emerges from their social ties. Coleman
cites the example of Jewish diamond merchants in New York, who save a great deal
in lawyers' fees by conducting their transactions informally. Sacks of jewels
worth thousands of dollars are lent for examination overnight without any paper
signed. What makes these expeditious exchanges possible is the trust that
associates will not shirk their obligations because they belong to the same
tight social circles. Anyone found guilty of malfeasance can kiss good-bye his
future chances for taking part in this lucrative market. Similarly, pupils in
Catholic schools fare better than those in public schools because a teaching
staff imbued with a religious ideology sees the school as a closely integrated
community rather than a set of bureaucratic structures.

As an individual resource, social capital is roughly analogous to other
individual assets. For Coleman, it differs from the financial capital found in
bank accounts and the human capital inside people's heads; instead, social
capital inheres in interpersonal relations. This analogy should not be carried
too far, however, because social capital has certain characteristics, such as
the expectation of reciprocity, that distinguish it from the capital that
appears on balance sheets.

When a sociological concept catches on, it is commonly applied in contexts
quite different from those in which it emerged. Unfortunately, Coleman's concept
has been stretched in at least three questionable ways. First, in Putnam's
hands, social capital has become a property of groups and even nations, rather
than of individuals. Collective social capital, however, cannot simply be the
sum of individual social capital. If social capital is a resource available
through social networks, the resources that some individuals claim come at the
expense of others.

The second conceptual stretch consists in confusing the sources of social
capital with the benefits derived from them. This leads to circular reasoning
because the presence of social capital is often inferred from the assets that an
individual or group acquires. Thus, a student who obtains the money necessary to
pay for college tuition from her parents or relatives is thought to have social
capital; no tuition, no social capital. Such an inference does not take into
account the possibility that the unsuccessful student also may have highly
supportive social networks that simply lack the economic means to meet such an
expense. For social capital to mean something, the ability to command
resources through social networks must be separate from the level or the quality
of such resources. When social capital and the benefits derived from it are
confused, the term merely says that the successful succeed.

The third stretch is to focus exclusively on the positive effects of
community participation without considering its possible negative implications.
Coleman is partly responsible for this one-sided view because his two essays on
the topic treated social capital as an unmixed blessing. The bias has since
become stronger as Putnam and others have recommended social capital and its
twin, social trust, as a solution for current problems, as if social capital had
no downside. Yet there are several distinctly negative aspects of social capital
that these analyses miss.

Conspiracies against the public. The same strong ties that help
members of a group often enable it to exclude outsiders. Consider how ethnic
groups dominate certain occupations or industries. The sociologist Roger
Waldinger describes, for example, the tight control exercised by white ethnics—descendants
of Italian, Irish, and Polish immigrants—over the construction trades and
the fire and police unions in New York. Similar cases include the growing
control of the produce business by Koreans in East Coast cities and the
dominance of Cubans over numerous sectors of the Miami economy. The groups'
success seems to have depended more on the social capital available to job
seekers and entrepreneurs than on initial financial resources or technical
skills. But, as Waldinger notes, "the same social relations that . . .
enhance the ease and efficiency of economic exchanges among community members
implicitly restrict outsiders."




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Ethnic groups are, of course, not the only ones that use social capital for
economic advantage. Adam Smith complained that assemblages of merchants
inevitably end up as "conspiracies against the public." The "public"
are all those excluded from the networks and mutual support linking insiders. In
place of "merchants" in Smith's phrase, substitute white building
contractors, ethnic union bosses, or immigrant entrepreneurs and you get the
picture.

In industries with strong social ties, newcomers often find themselves
unable to compete, no matter how good their skills and qualifications. A
particularly poignant example is that of African American contractors attempting
to carve a niche in the white- and immigrant-dominated construction industry. As
one such entrepreneur in New York City put it: "I think that the reason I
haven't taken the next step—to having steady big contracts . . . is because
I'm not in the social circles where those kinds of deals are made. . . . I can't
play golf or go on boats with people." Lacking the requisite social
connections, African American contractors depend mostly on the public sector.

Restrictions on individual freedom and business initiative.
Membership in a community also brings demands for conformity. In small towns,
all your neighbors may know you, and you can get supplies on credit at the
corner store. The claustrophobia, however, may be asphyxiating to the individual
spirit, which is why the more independent-minded have always sought to escape
from these conditions and so much modern thought has celebrated the freedom of
urban life. Now the pendulum has swung back and Putnam, Fukuyama, and many
others argue for the urgent need of reinventing community.

American society may have moved too much in the direction of individualism
and freedom, but a return to tightly integrated communities would bring its own
problems. San Francisco's Chinatown provides a good example. On the positive
side, the community is a closely knit enclave that protects the Chinese from
outside discrimination and helps them launch successful enterprises and careers.
In a study of Chinatown, however, sociologists Victor Nee and Brett Nee describe
how Chinatown's inhabitants were closely controlled, until a few years ago, by
family clans and the Chinese Six Companies or tongs. What put teeth in the
clans' demand for conformity was their control of business opportunities and
their ready willingness to ostracize anyone who violated the norms. One of the
Nees' informants put the matter bluntly: "And not only the Moon Family
Association, all the family associations . . . any young person who wants to
make some changes, they call him a communist right away. He's redcapped right
away. They use all kinds of tricks to run him out."

Tight social networks can also undermine business initiatives. Often, family
and friends beseech initially successful entrepreneurs for support. The social
capital of the petitioners consists precisely in their right to demand and
receive assistance from fellow group members. But in the process, as
anthropologist Clifford Geertz has shown in his studies of Bali, promising
economic initiatives fail to accumulate capital and turn into welfare hotels.
Similar stories have been commonly reported among impoverished urban and rural
communities in the United States, where the press of obligations to family and
friends routinely undermines business success.

Downward leveling pressures. While Putnam echoes the common view
that the inner city is short on sociability, careful studies show the opposite.
In poor areas, many people rely on their social and family ties for economic
survival. From Carol Stack's classic analysis of kinship and fictive kinship in
the inner city to Patricia Fernández-Kelly's study of adolescent
pregnancy in Baltimore's ghetto, social anthropologists have exhaustively
documented these realities. There is considerable social capital in ghetto
areas, but the assets obtainable through it seldom allow participants to rise
above their poverty.

For all their negative connotations, inner-city youth gangs are also social
networks that provide access to resources and enforce conformity. The same kinds
of ties that sometimes yield public goods also produce "public bads":
mafia families, prostitution rings, and youth gangs, to cite a few. For a ghetto
teenager, membership in a gang may be the only way to obtain self-respect and
material goods. In the long run, however, the pressures from these groups may
hold him down rather than raise him up.

Those who want to make it on the outside on the basis of orthodox means may
need to break their ties with their community. "Wannabes"—the
latest lexical contribution of inner-city youth to mainstream culture—are
those who imitate the ways and lifestyles of the majority in search of success.
Often, these efforts meet only scorn from fellow members of their community, who
see them as a threat to solidarity and their own sense of self-respect. Here,
social capital creates downward-leveling pressures in opposition to attempted
entry into the mainstream. The product of a long history of discrimination,
these pressures ironically perpetuate the very conditions that the groups decry.
In these instances, social capital does not increase human capital but prevents
acquiring it.

The one-sided picture of social capital produces a
series of tautologies, truisms, and stereotypes. A tautology is saying the same
thing twice. At the collective level, a tautology occurs when the success or
failure of a particular community is identified a posteriori with the presence
or absence of social trust or social capital. In the celebratory view of social
capital, if an agricultural cooperative advances economically or a city
effectively carries out a reform program, it is because they had high levels of
social capital to begin with; if they fail, they did not. This circularity of
reasoning is facilitated by the identification of the same traits as
determinants and consequences. In his analysis of the well-governed cities of
northern Italy versus the poorly governed cities of the Italian South, Putnam
provides a good example. In his words, "'Civic' communities value
solidarity, civic participation, and integrity, and here democracy works. At the
other pole are 'uncivic' regions like Calabria and Sicily, aptly characterized
by the French term incivisme. The very concept of citizenship is stunted
here." If your town is "civic," it does civic things; if it is "uncivic,"
it does not.

A weaker version of the tautology is the truism that dresses up commonplace
facts as an original idea. Saying, for example, that high levels of interest in
civic affairs and voting facilitate the governance of cities is not saying the
same twice, but the conceptual "space" between antecedent and
consequent is so small as to make the assertion commonplace. Several years ago,
Edward D. Banfield picked yet again on the unfortunate Italian South, labeling
these provinces examples of "amoral familism" (the tendency for
solidarity to extend only as far as the family and exclude the broader
community). Opposed to it was the moral civism found in northern Italy and
presumably New England. Labels vary, but the point remains the same: Communities
that are poorly integrated (low in "social capital," low in "trust,"
high in "amoral familism") are more problem ridden and less well
governed than those where the opposite conditions prevail.

The intellectual exercise of dressing up common knowledge in fancy language
tends to end up as a sermon. The policy prescriptions that follow consist of
exhortations to the authorities or the communities in question to bring about
the requisite public good. Consistent with his conservative bent, Fukuyama is
more of a do-it-yourselfer, focusing on the communities themselves. Putnam, on
the other hand, wants to bend the ear of the authorities to enact policies that
increase the "stock" of social capital. No one, however, has come up
with a reliable formula to produce social solidarity and trust in communities
lacking them, although exhortations are heard from pulpits every Sunday.

In the Andean highlands of Ecuador, many successful
businessmen are Protestant (or "Evangelical," as they are known
locally) rather than Catholic. The reason is not that the Protestant ethic
spurred them to greater achievement or that they found Evangelical doctrine to
be more compatible with their own beliefs. Rather, by shifting religions, these
entrepreneurs removed themselves from the host of obligations for male family
heads associated with the Catholic Church. The Evangelical convert becomes, in a
sense, a "stranger" in his own community, which insulates him from
demands for support from others on the strength of Catholic norms. For these
men, social capital comes at too high a cost.


Originally, the concept of social capital was nothing more than an elegant term
to call attention to the possible individual and family benefits of sociability.
That usage is entirely compatible with a nuanced understanding of the pros and
cons of groups and communities. Unfortunately, that understanding is absent from
the spate of recent articles that seek to popularize the idea and make it a
basis of policy. Stretching the concept does not only lead to circular or banal
statements, harmless in their own way, but to policy recommendations that can be
dangerous.

For instance, the call for higher social capital as a solution to the
problems of the inner city misdiagnoses the problem and can lead to both a waste
of resources and new frustrations. It is not the lack of social capital, but the
lack of objective economic resources—beginning with decent jobs—that
underlies the plight of impoverished urban groups. Even if strengthened social
networks and community participation could help overcome the traumas of poverty,
no one knows how to bring about these results. Undoubtedly, individuals and
communities can benefit greatly from social participation and mutual trust, but
the outcomes will vary depending on what resources are obtained, who is excluded
from them, and what is demanded in exchange. As the examples of African American
construction contractors in New York show, solidarity among some groups can
create impassable barriers for others that only deliberate government
intervention can overcome. As the example of Evangelical converts in the Andes
suggest, the benefits of community may come at too high a cost in terms of human
freedom or the suppression of the individual entrepreneurial spirit.
Sociability, in every sense, cuts both ways.

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