Money can’t buy you love. But in some places, it can buy the trappings of family. In Japan today, actors for hire can play not only lovers but also family and friends. Companies market freelance surrogates for all manner of situations—a friend for a party, a grandparent for a reunion, and so on. Feeling lonely? There’s an app for that.
The renting of family—the kin economy—has yet to penetrate Western societies at any significant scale. Lord willing it never will. But a mode of considering relationships in economic terms certainly has. We see this in euphemisms such as “dating markets” and “sex work” to describe the selling of human bodies for others’ pleasure. In some ways, this is not a surprise; much economic activity is inherently social and always has been. What distinguishes our current mode of thinking from these realities, however, is that it elevates the importance of the economic to a place of primacy. Perhaps the most notable example is the popular conception of social life in terms of wealth, as its own form of capital.
“Social capital” is, with apologies to Milan, so hot right now. Tocquevillians left and right laud its benefits and lament its depreciation in already vulnerable communities. Journalists use it to explain political divides and the rise of Trump. Leading think tanks dedicate reports to social-capital approaches to domestic policy issues. Even a congressional committee has set up a multi-year research project to study it.
Much like so-called human capital, the concept of social capital captures a basic truth: relationships afford greater or lesser value to people. But as a formal concept, it has been inconsistently and imprecisely defined in ways that reflect the topical preoccupations and ideological commitments of their authors and thus obscures as much as it makes clear. Here are but three examples. The first, from L.J. Hanifan, sees social capital as “tangible substances [that] count for most in the daily lives of a people.” James Coleman defines it as “the ability of people to work together for common purposes.” And Francis Fukuyama describes it as “a set of informal values or norms.” How does this help us?
Such things are understandably difficult to define, let alone quantify. Yet it was arguably the effort to do so that brought popular attention to an otherwise obscure concept. Harvard sociologist Robert Putnam developed and popularized the concept of social capital perhaps more than any other American scholar. In his bestselling book Bowling Alone, Putnam traced the devolution of American associational life, documenting measurable declines in religious attendance, civic association, and informal social activity. His book marshalled public data into a set of “social capital indicators.”
Between its crude formulation, malleable definition, and virtual immeasurability, “social capital” is ultimately emblematic of the struggle of social scientists to quantify—which is to say, properly value—the benefits that accrue from relationships and membership within a community. A cynical observer might plausibly claim that the use of “social capital” in public discourse betrays a need to give basic social observations a patina of scientific authority, or, conversely, a longing for communitarian language in a technocratic field.
Too Much Capital, Not Enough Social
Increasingly, the invocation of “social capital” seems to perform both functions in the peculiarly liberal and American discourse about economic opportunity and mobility. The American Enterprise Institute’s Ryan Streeter claims that public policy needs more social-capital-based approaches, complaining that “it is astonishing how absent the notions of place and community are from our discussions about upward mobility and inequality.” The Brookings Institution’s Stuart Butler stresses that “social capital complements and helps develop another forms of capital required for mobility.” Sometimes the connection is made even more explicit. The Social Capital Project, for instance, has approached “social capital as a means to opportunity” when formulating policy proposals.
The trend goes back at least as far as Putnam, who focused on the salutary effects of social capital and transformed it into a kind of public good, defined as “connections among individuals—social networks and the norms of reciprocity and trustworthiness that arise from them.” Social-capital theory offers a useful analytical framework for understanding the role of relationships in social and economic systems. Theorists commonly identify two forms. There is “bonding” social capital created within existing social groups and “bridging” social capital created by relationships between existing social groups or across conventional lines of social segregation. But Putnam imbued each with the language of individual striving and advancement. “Bonding” social capital was associated with “getting by,” whereas “bridging” social capital was associated with “getting ahead.”
The connection to mobility itself isn’t arbitrary. Harvard economist Raj Chetty and his colleagues at the Equal Opportunity Project and Opportunity Insights have published groundbreaking research on the root causes of intergenerational mobility, the likelihood that children will out-earn their parents. In their seminal paper, “Where Is the Land of Opportunity?,” Chetty and his co-authors explore rates of intergenerational mobility by geography to identify the common features of places with higher rates of mobility. Of the variables studied, among the most strongly correlated with intergenerational mobility were the prevalence of single motherhood, religiosity, stable marriages, and a “social capital index” measuring civic participation. “The main lesson,” they concluded, “is that intergenerational mobility is a local problem.”
The suggestion that a child’s social environment can implicate his or her life outcomes is so intuitive as to be self-evident. But it’s a view that had heretofore been uncorroborated, its discrete effects unmeasured by econometric analysis. That alone is surely valuable and underscores the significance of place and social life for public policy. Indeed, Chetty and his co-authors suggest that waning intergenerational mobility “could potentially be tackled using place-based policies.”
But though it provides some limited insight into the human condition, this approach to social capital betrays a misplaced focus. It transforms social relationships into instruments of economic advancement. It risks reducing policy reform to merely “prescribing community to the poor,” as Marilyn Taylor has argued.
It also overlooks, as Patrick T. Brown has observed, a “dark side” of social capital, in which cohesion of the group is premised on the exclusion of individuals. Indeed, the value of membership and belonging to a particular community is, by definition, exclusive to its members. Friends are not entitled to be treated as family members; not just any worker can have the same privileges as dues-paying union members; non-citizens do not have the same political rights as citizens. Such dynamics, peculiar to particular social forms, are papered over when social capital is reduceable to “connections among individuals.” But it is inherent in the very idea of social relations as a form of capital, as a store of wealth to be redistributed or otherwise built up. Not everyone can—nor should—have an equal claim to it.
It is this exclusionary dark side that thwarts the very goals of mobility-minded policy advocates. “Dream hoarders,” as the Brookings Institution’s Richard Reeves calls them, retain the privileges of wealth and status to themselves and their children—ensuring that they do not fall behind in the race of life or slip down a rung in the social ladder. Credentialing serves a similar function, conferring recognition and connection to a select few who stand to lose if too many others are admitted. Think, for instance, of Harvard University, which could easily afford to educate many more students but prefers to keep its numbers down to maintain its position as the luxury handbag of higher education.
When viewed narrowly as a means for economic advancement, social capital replicates the worst of this credentialist doom loop. Relationships are leveraged to gain access and privileges that enhance the well-being and social status of an individual. Scarce social resources chase after scarce material resources. It risks treating membership as a totem for unique privileges. It reinforces the notion that we are self-selected members of, rather than unchosen participants in, communities, that our claim to the value of relationships and membership is—like much that conventionally counts as capital—something earned.
Advocates and analysts of social capital may never have intended this. Yet that is the upshot of thinking of relationships, membership, belonging, and their benefits in materialist terms. Perhaps their view better captures how our social life has come to be organized.
Relationships and Communities as Social Gifts
A much more humane, and ultimately more appropriate, approach would be to treat our relationships and communities, as well as the benefits we receive from them, not as a form of wealth, but as gifts. They are received, not chosen; valued but not earned; given but not traded; appreciated but not capitalized. They have an inherent, unquantifiable value themselves, and their benefits redound to giver and receiver alike. They are not meant to be stored up and saved or invested elsewhere; rather, they are to be given freely and enjoyed gratefully. They are governed by a different logic of exchange, not merely of self-interest—however enlightened it may be—but of goodwill and solidarity.
Thinking of social life as an undeserved gift, rather than a form of capital, also forces us to think about the social order as particular and interpersonal, rather than abstract. We relate, as the sociologist Robert Nisbet writes, “not with the imaginary, abstract individual but with the personalities of human beings as they are actually given to us in association.”
Our social life furnishes all sorts of goods that cannot be purchased or saved or traded away. These gifts include emotional and material support, trust and affection, and so on. This much is obvious. But a less recognized gift of our social life is the set of inherited institutional forms—schools, churches, clubs, and more—that give shape to and organize our associational life and that direct our individual efforts into common purposes. There are also less formal forms, including neighbourhoods (only some of which have associations), various arts scenes, groups of people who share an interest in birdwatching, and the like. It is within these associations that we secure spaces for participation, membership, recognition, and belonging within the vast expanse of society and that we transmit particular habits, values, and norms that form the basis of our common life together.
These are the myriad gifts of social life. Should we ever think of them as our earned possessions or inheritance, we would do well to recall the words of the apostle Paul to the Corinthians: “What do you have that you did not receive?”
Balancing the Market and Gift Exchange
Though neither the institutional forms nor the benefits of social life are governed by anything resembling a capitalist logic of exchange, each plays an indispensable role in upholding a well-functioning market economy. As noted above, social-capital theorists are not wrong to identify the role that relationships and social environments play in economic advancement. A stable home, a safe neighbourhood, and a thick community doubtless benefit those seeking a better life for themselves and their children. But the narrow focus on individual mobility arguably does not go far enough.
A functioning market economy crucially depends on the “gift economy” of social life. It is there that relationships and common trust—the social infrastructure of the market economy, as it were—are developed and where the virtues of honesty and of generosity, on which economic behaviour draws, are cultivated. Without the well-formed, well-habituated, and well-connected individuals that our social life creates, the market economy could not function well. The realm of capital, of market exchange, ultimately rests on the realm of social life, of gift exchange.
The dynamic between economic and social life ought to be symbiotic, in which broadly shared prosperity supplies a secure material basis for social life just as social institutions. But even as our economy draws on the resources of social life, it can erode that material basis. This is perhaps most obvious in the instability created by the business cycle or the disruptions posed by creative destruction. Market dynamism, for all its economic returns in the long run, can disrupt communities in the short run—from the closure of a factory or offshoring of an industry to the hardship created by periodic economic recessions.
But even in the very generation of prosperity, market economies can attenuate social bonds. Indeed, the very institutions of civil society, which organize so much of social life, once attracted and retained members by offering valuable material benefits to help its members weather hardship. Charity and mutual aid were—and in some cases still are—pillars of core social institutions. But mutual aid is also a product of necessity; once the need is satisfied elsewhere, only interest can keep a person attached. The remarkable ability of free enterprise to develop cheaper or more efficient alternatives to mutual aid allows us to outsource the obligations we might otherwise feel toward one another and fill in the social sphere.
In this way, the proper balancing of the market and gift exchange has been subverted. Just as the discourse of “social capital” elevates social life but in the service of economic goals, so does our market economy routinely draw on the resources of social life only to undermine it in the long run.
Flipping “Social Capitalism” On Its Head
Understanding social life as a distinct “gift economy” that is essential, but also susceptible, to the capital economy calls for a different approach to our social and economic challenges. It calls for a public policy that treats associations as they are rather than shoehorn ideology-laden goals and frameworks into them—much less employ them in the service of economic objectives. We should seek, in some respects, to flip the prescriptions of “social capitalism” on their head.
Rather than rescue economic advancement from social dysfunction, we should secure social institutions from the vicissitudes of the market. Families, for instance, face unique economic pressures not from any particular underperformance of the market but from the awkward relationship between childrearing itself and the demands of developed economies. The years during which parents are most likely to be raising children are also among those when parents can least afford it. Shortly after setting out on their own, having had little time to accumulate savings, they must embark on a course that can constrain their earnings and raise their expenses all at once. Public policy could seek to relieve families of some of these pressures by supplementing families’ regular incomes with a system of contributory social insurance.
Rather than enlist social relations in the cause of economic mobility, we should restore the material functions of a generous social order. Organized labour, for example, once promised workers a means not only of achieving solidarity but also of securing material support—after all, its origins lay in the guilds and mutual-aid societies of old. But today’s labour movement finds itself both historically weak and functionally atrophied. Unions focus heavily on political activism and policy advocacy but relatively little on meeting workers’ material needs and immediate interests; workers are understandably nonplussed. Public policy could seek to restore the material function of organized labour by securing them a role in administering unemployment benefits, providing portable benefits, and offering skills training.
The purpose of such an approach is not to banish economic considerations from social life—that is impossible. Rather, it is to restrain the economic to its proper, enabling place within social institutions, to re-create the material conditions that make intermediary institutions necessary and social life possible. Just as Christians we must order our personal loves, so too must we order our common commitments—with an eye toward what is properly highest. We must restrain and relegate, but not eliminate, the place of economics in our social life.
Perhaps this ordering inefficiently sorts and misallocates capital—social or otherwise—to its most productive use. But it may offer the surest way of generating human flourishing.