Social capital has been declining in the United States for over 50 years, and with it has come a breakdown of our trust in each other.1 How can we rebuild our trust in each other and our reserves of social capital?
First, we must define what social capital is. In general, social capital has been defined as the value of human connections and how we mutually support one another. In particular, it is a structural feature of social networks that helps facilitate resource distribution.2
Second, we must be able to meaningfully measure social capital. Social capital measurements that are based on outcomes, such as generalized trust, are generally ineffective in guiding decisions. Instead, we need measurements that are functional, based on the inputs that create social capital.
Finally, we must craft policies and procedures that emphasize the value of social capital and that provide a model for investment, so that it can be factored into business accounting. This is critical, because without proper accounting of social capital, attempts to promote teamwork and collaboration in organizations will inevitably be undercut by the bottom line.3 This is because labor is considered a liability and not an asset. This needs to change so that employers will be more invested in the long-term well-being of their employees.
There is a problem though. Treating employees as assets implies ownership. So, while employers may like to say that their people are their greatest asset, they are not on the books as assets. Human capital, the skills and training that a person possesses, cannot be owned by a corporation. Employees are free to leave and take their skills and labor elsewhere.
However, social capital is mutually owned by the company and the employee. If the employee leaves, they lose their social capital at the company, and vice-versa. Therefore, social capital, rather than human capital, could be used as an ethical employee investment model, because it is a shared investment.
- Robert D Putnam, Bowling Alone: Revised and Updated: The Collapse and Revival of American Community (Simon & Schuster, 2020). ↩︎
- Julia Häuberer, Social Capital Theory: Towards a Methodological Foundation, 1st ed. (VS Verlag für Sozialwissenschaften, 2011). ↩︎
- Peter Cappelli, Our Least Important Asset: Why the Relentless Focus on Finance and Accounting Is Bad for Business and Employees (Oxford University Press, USA, 2023). ↩︎