Is Social Capital Really Capital

There is considerable controversy in the literature over the use of the term 'capital'; (Falk and Kilpatrick 1999; Hofferth et al. 1999; Inkeles 2000; Lake and Huckfeldt 1998; Schmid 2000; Smith and Kulynych 2002). Portes (1998) elegantly posited the location of capital in relation to other forms of capital:
whereas economic capital is in people's bank accounts and human capital is inside their heads, social capital inheres in the structure of their relationships (Portes 1998, p. 7).

Social capital is similar to other forms of capital in that it can be invested with the expectation of future returns (Adler and Kwon 1999), is appropriable (Coleman 1988), is convertible (Bourdieu 1986), and requires maintenance (Gant et al. 2002). Social capital is different from other forms of capital in that it resides in social relationships whereas other forms of capital can reside in the individual (Robison et al. 2002). Further, social capital cannot be traded by individuals on an open market like other forms of capital, but is instead embedded within a group (Gant et al. 2002; Glaeser et al. 2002). It is clear from the literature that social capital has both similarities and dissimilarities with neocapital theories and is certainly quite dissimilar from classical theory of capital.

To discuss this in more detail it is necessary to further identify the characteristics of 'capital'. Schmid (2000) identified that capital is not immediately used up in production but rather its services extend over time. The capital stock is subject to investment for future production and depreciation and decay from both use and non-use. Piazza-Georgi (2002) states that capital produces income and encompasses the non-consumable, but depreciating, inputs into the production process. The author supported Schmid (2000a) stating that capital is a productive resource that is the result of investment (Piazza-Georgi 2002). Castle (2002) adds that other characteristics of capital are usefulness and durability.

Many authors have questioned and even attacked the appropriateness of the term capital in social capital. If social capital is adherence to a norm and not affected by individual action as Fukuyama (1995) suggests, then it is not capital in the above sense. The main difference is that more than one person benefits from social capital (Schmid 2002; Schmid 2000). Smith and Kulynych (2002) believed that the word capital has a too broad, pervasive and honorific meaning and that the term blurs many distinctions which adversely affects the scholarly inquiry, whatever its implicit or explicit normative concerns. Inkeles (2000, p. 20) suggested that the term capital is too limiting and would rather use the term social or communal resources. The author argued this on the basis of:
capital being an element of production, in particular the production of goods, but also services. We want not only goods and serves but also social support, physical and social security, freedom of expression, opportunities to develop ourselves and a host of these outcomes not captured by the idea of goods and services.

Hofferth, Boisjoly et al (1999) suggested that social capital is the result of altruism and therefore not capital as capital is a resource that is built up through investment and can be drawn upon when needed. Lin, Cook et al (2001) disagreed by identifying that social capital shares commonalities with other forms of capital, notably human capital. SCIG (2000) supported Lin, concluding that the consequences of social capital are capital in nature because capital suggests something that is durable or long lasting and suggests something that retains its identity even after repeated use, something that can be used up, destroyed, maintained, or improved.

Many authors identify that both forms of social capital, structural and cognitive, qualify as capital because they both require some investment of time and effort if not always of money (Grootaert 2001; Grootaert and Van Bastelaer 2002b; Krishna and Uphoff 2002). It can be concluded that social capital is unlike other forms of capital but also not sufficiently dissimilar to warrant a different term. Certainly it is the use of the term capital that makes the concept attractive to such a wide range of people given the bringing together of sociology and economics (Adam and Roncevic 2003). Perhaps a more appropriate term may be social solidarity as the notion connotes relations of trust, co-operation and reciprocity just as much as social capital and might be used in place of it to overcome the problem identified above with using the term capital.

It is interesting that the term capital should be used with social, considering capital is already a social relation. In the original sense of the word capital, an object is only capital under particular social conditions. In the same way the sources of social capital are only capital under particular social conditions. For example, a favor owed is only capital under certain, not necessarily favorable conditions. This idea brings in the notion of negative or perverse social capital (see negative social capital section).