SEOUL, KOREA - Another viewpoint on Social Capital
K. Marx saw Capital as part of the surplus value, created through the processes of commodities production and exchange by establishing an exchange relation with low-skilled and interchangeable laborers and captured by capitalists or bourgeoisie, who are bestowed with resources (capital) to begin with and control production.
But now laborers have become capitalists, not from a diffusion of the ownership of corporation stocks, but from the acquisition of knowledge and skills that have economic value. It means that capital is calculated as the added value to the laborers, not to labor or the commodity, and is seen as the investment or production of individual actors but as independent, atomized elements randomly located in society. There has been a clear shift from macro-level to micro-level capitalization. There appears Social Capital, the interplay between structure and action. We could define Capital as an investment of resources with expected returns in the marketplace, and in pursuit of a profit, as a goal in action.
As mentioned in another column, Adam Smith said, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." In addition, a human being as Homo Economicus is so "rational", that he seeks to attain very specific and predetermined goals to the greatest extent with the least possible cost which involves the hardship-avoiding predisposition of the moment. How can we overcome the predicament of the farmers?
The premise behind Social Capital is “investment in social relations with expected returns in the marketplace”. Why do embedded resources in social networks or relations enhance the outcomes of action? There are four elements, that is, information, influence, social credentials and reinforcement. Firstly, the flow of information is facilitated. Such information would reduce the transaction cost for the organization to recruit better individuals and for individuals to find better organizations that can use their capital and provide appropriate rewards. Secondly, these social ties may exert influence on the agents, who are recruiters of supervisors of the organizations, and play a critical role in decisions involving the actor. Thirdly, social ties and their acknowledged relationships to the individual may be conceived by the organization or its agents as certifications of the individual’s social credentials, some of which reflect the individual’s accessibility to resources through social networks and relations. Lastly, social relations are expected to reinforce identity and recognition. Being assured of and recognized for one’s worthiness as an individual and a member of a social group sharing similar interests and resources not only provides emotional support but also public acknowledgement of one’s claim to certain resources.
Is it possible that the profit is accrued for the group or the individuals? The individuals access and use resources embedded in social networks to gain returns in instrumental actions, finding better jobs, or to preserve gains in expressive actions. Aggregation of individual returns benefits the collective. The group develops and more or less maintains the profit as a collective asset, which enhances group members’ life chance.
Social Capital is investment in social relationships through which resources of other actors, embedded in social networks, can be accessed, used and borrowed by actors for actions.