Module 2: Philosophical History of Core Terms

Ever since the early nineteenth century, rigorous academic exploration of the notion of “social capital” has revealed society’s desire to better understand the determinants of and detriments to community development. It is widely accepted that L. J. Hanifan, a rural education reformer, first coined the term in 1916.(1) His definition referred to the “goodwill, fellowship, mutual sympathy, and social intercourse among a group of individuals and families.” Hanifan speculated that when an individual productively socializes with his or her neighbor, and then they associate with other neighbors, “there will be an accumulation of social capital … which may bear a social potentiality sufficient to the substantial improvement of living conditions in the whole community.”(2) He goes further to analogize the construction of social capital to that of business capital. In order to achieve constructive corporate enterprise, a group of individuals under effective management must commit themselves to providing personal conveniences to their business recipients. Likewise, in the making of social capital, individuals organized by the ethical pillars of camaraderie and support will naturally feel compelled to contribute to a more enjoyable existence for their fellow human beings.(3)

Since Hanifan’s inauguration of the term, numerous social theorists have modified its meaning, enthroning “social capital” as a primary consideration for best practices in economic and social evolution. One of the next reformers who sought to install “social capital” in mainstream lexicon was Jane Jacobs, an “urban visionary” who campaigned for cultural sensitivity in city-planning endeavors.(4) Her suggestions are founded upon reflections about the patterns of regeneration and dissolution in impoverished New York shantytowns. In addition to asking the fundamental questions of, “What is a slum? How do you define the concept of a neighborhood?”, Jacobs also articulated the paramount importance of social networking in community stability.(5) Thus, Jacobs, like Hanifan, saw the creation of public spaces favorable to fruitful association as an essential investment. 

The next academic to philosophize about social capital was economist Glenn C. Loury, in 1977.(6) He intensified Jacobs’s city-design discussion by highlighting the effects of logistical and ideological barriers—racial segregation, inequality, and stigmatization—to community development. These obstacles “[inhibit] the development of … full human potential,” an aim that can only be fulfilled if valuable social unions are nurtured.(7) Loury’s focus, however, was characteristically individual-oriented—his theory examined how “family and community backgrounds … play an important role, alongside factors like individual ability and human capital investments, in determining individual achievement.”(8) As social capital was further studied throughout the 1980s and beyond, the distinction between social networking for individual good and social networking for social good was clarified. Sociologist James Coleman abolished any assumption that humans either rationally choose to create social capital or, alternatively, pursue individual interest. He rejected the idea that social capital was a calculation, but rather “a by-product of activities engaged in for other purposes.”(9) He thus defined social capital by its function—as a resource “that can be used by the actors to realize their interests.”(10) It follows that individual agents seeking to promote their own success are incentivized to underwrite and utilize social structures for personal good, which indirectly yet dynamically contributes to the mutually beneficial common good.  

Fukuyama presents a slightly different definition of social capital in Trust: The Social Virtues and the Creation of Prosperity. He states that while individuals often make decisions based on computation of personal benefit, “all cultures seek to constrain the raw selfishness of human nature in some fashion through the establishment of unwritten moral rules.”(11) Communities are intrinsically cultural in nature, carrying a “set of ethical habits and reciprocal moral obligations internalized by each of the community’s members.”(12) The ability to associate is highly dependent on the magnitude of value internalization, as well as the degree to which communities are inclined to “subordinate individual interests to those of larger groups.”(13) This statement illuminates a perceivable difference between Fukuyama’s understanding of social capital and Coleman’s. Fukuyama proposes that a proportionately stronger commitment to the interests of the majority is a prerequisite to productive association, whereas Coleman depicts social capital as the culmination of individuals’ efforts to most effectively achieve their personal aspirations.  

In his analysis, Fukuyama also draws on the moral philosophies of pioneering political economist Adam Smith. He buys into the awareness that economic life is intimately interconnected with social life, and that a void of “proclivity for community” limits economic empowerment, thus inhibiting development.(14) The existence of this proclivity, inextricably tied to the “stability and prosperity” of the community, is most heavily influenced by the single ingredient of trust.(15) Fukuyama goes further to say that social capital is the “crucible of trust and critical to the health of an economy.”(16) Thus, Fukuyama makes clear the correlation between social capital, trust, and development. He makes this correlation even clearer when he states that social capital protects against authoritarian “atomization” by spawning collectivism and democracy.(17)

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(1) Claridge, T. “Social Capital and Natural Resource Management.” Unpublished Thesis. University of Queensland (Brisbane, Australia, 2004). Accessed on 1 May 2010.

(2) Hanifan, L.J. “The Rural School Community Center.” Annals of the American Academy of Political and Social Science. 67 (1916): 130.

(3) Ibid, 130-131.

(4) Alexiou, A.S. Jane Jacobs, Urban Visionary. (USA: Rutgers University Press, 2006): 76.

(5) Ibid.

(6) Claridge (2004).

(7) Loury, G.C. The Anatomy of Racial Inequality. (Cambridge: Harvard University Press, 2002): 103.

(8) Ibid, 102.

(9) Field, J. (2008). Social Capital. (New York: Routledge): 28.

(10) Coleman, J.S. Foundations of Social Theory. (Cambridge: Harvard University Press, 1990): 300.

(11) Fukuyama (1996): 35.

(12) Ibid, 9.

(13) Ibid, 10.

(14) Ibid.

(15) Ibid, 11.

(16) Ibid, 33.

(17) Fukuyama, F. (2002). “Social Capital and Development: The Coming Agenda.” SAIS Review. 22.1, 23-37: page 26.