Definition of ‘Social Capital’
In capitalist society there exists the phenomenon that the accumulated labor of many people in a social process may become the property of one or a group of individuals who are other than or only a part of said process. The holders or “owners” of these forms of capital may act as regards their holding with relative impunity despite the fact that their “property” is in reality the product of the labor, activity and resources of a broad section of society.
A corporation, such as IBM or Ford Motor amasses significant holdings of land, physical structures, intellectual capital of various forms. It employs many tens or even some hundreds of thousands of individuals. It’s impact is significant to the entire society. Decisions made to hire or fire employees affect whole communities, real estate values, tax levels, demographics in the school system etc. It uses materials mined or produced the world over. It’s activities affect the environment potentially on a world scale. It consumes massive quantities of energy and other resources.
Major corporations and other institutions of this type are holders of significant social capital.
There is another and more common use of the term ‘social capital’ with a different meaning. This use of the term is to distinguish from other types of capital such as “intellectual capital” or “money capital” as the capital that is developed through business connections and social relationships” This is not my meaning in the context given above. Rather I am using this term to distinguish from the modest acquisitions of capital which are possible through the labor of an individual, family or small group or enterprise in which the primary acquisition of capital in various forms; land, fixed capital equipment, or cash or investment reserves is primarily derived from the directly accumulated labors of said individual or group.
The relevance of my distinction here is connected to my conviction that an effective movement of the working class in the present historical period must not threaten the sense of security of the self employed, individually employed or entrepreneurial class. A political alliance with these elements is essential for the following reasons.
- Firstly the working class in the US is deeply intertwined with these these aforesaid social elements. Workers own small businesses or are part of families which do so. They freelance after their day jobs and it is a part of the culture that members of the working class seek entrepreneurial opportunities of various kinds.
- Secondly a political movement which does not recognize the value of personal ambition and appreciate the desire of people to be rewarded for commitment, hard work and ingenuity will not draw toward it talented and ambitious individuals and it will not be taken seriously by large numbers of people who value these traits.
- Thirdly, It seems clear to me that economic liberty is an element of civil society which is necessary to the healthy development of any progressive future.
The state or any centralized or planned economy operating from the “commanding heights” can not be expected to sustain the creative process of development of new technology, new organizational forms and the other social benefits of entrepreneurial activity. The state also can not be expected to manage the day to day activities of many forms of small enterprise effectively.Every sector of economic activity has varied economies of scale. As with the small independent farm many types of industry or enterprise are best managed by small independent units
Thus the distinction drawn here is that between organizations and enterprises which are effectively mass social institutions and those which are the results and product of the efforts of one or a small number of individuals. The former in my assessment must be treated and approached quite differently from a political and economic perspective than ought to be the case with the latter.