On Social Capital

Capital is different from Social Capital.

Capital is productive wealth. It’s the manufacturing process that leads to the creation of goods and services that people buy.

Social capital shapes the way people behave at work. It’s a system that includes all the behavioral patterns that live in our heads. It’s the human coding the governs the flow of information.

  • The impact that social capital is having on modern economies is equally important to the impact that capital had on 19th centuries economies.

  • In the industrial revolution, the capital was the enabler. It made workers vastly more productive contributing to an abundance of work. Return on capital was high. In modern economies, social capital is the enabler.

  • Capital belongs to a firm. Human capital belongs to workers. Social capital belongs to a multitude of people that are capable of acting collectively within the same social context.

  • Social capital is the individual knowledge that only has value in a particular social context. It provides its best value when it is held in like-minded communities.

  • Social capital increases its values in those economies that dematerialize their production. In those economies where the combination of what to do and how to do matters more than doing itself.

  • All modern companies are built on a different form of social capital. In those companies, the norms that govern interactions between ppl are what determines the behavior of a company and, what enables/inhibits its success.