As a frugal Prosumer I believe my most important investment is social capital. Which is created by practicing Allélón  (Greek word for one another)

Social capital isn’t a new idea, although the term itself is relatively recent. In the past we’ve called it other things: goodwill, fellowship, community. The concept existed in ancient cultures as “the golden rule”, or the Biblical admonition to do unto others as you’d have them do unto you (practicing Allelon).

“The core idea of social capital theory is that social networks have value,” writes Robert Putnam in Bowling Alone. “Just as a screwdriver (physical capital) or a college education (human capital) can increase productivity (both individual and collective), so too social contacts affect the productivity of individuals and groups…Social capital refers to the connections among individuals — social networks and the norms of reciprocity and trustworthiness that arise from them.

You create social capital when you do volunteer work, help your neighbor start their car, have your group of people over for a picnic, or join a softball league. Any time you participate in your community, you’re generating social capital, both for yourself and for the other people involved.

Social capital differs from other forms of capital in that it has both an individual and a collective aspect. When you generate social capital, you benefit — but so does your community. (Not always, of course, but generally so.) The more connected you (and your community) are, the more social capital you can produce.

“A well-connected individual in a poorly connected society is not as productive as a well-connected individual in a well-connected society,” Putnam writes.

In a well-connected community, even loners profit from the high level of social capital. According to Putnam, “If the crime rate in my neighborhood is lowered by neighbors keeping an eye on one another’s homes, I benefit even if I personally spend most of my time on the road and never even nod to another resident on the street.”

“Social capital turns out to have forceful, even quantifiable effects on many different aspects of our lives,” writes Putnam. What is at stake is not merely warm, cuddly feeling or [community pride]…Our schools and neighborhoods don’t work so well when community bonds slacken…Our economy, our democracy, and even our health and happiness depend on adequate stocks of social capital.”

When we don’t interact with each other, when we isolate ourselves inside our homes, we have less motive to help our neighbors and improve our communities.

Putnam differentiates between bonding social capital and bridging social capital. “Bonding social capital constitutes a kind of sociological superglue,” he writes, “whereas bridging social capital provides a sociological WD-40.”

Bonding social capital creates strong in-group loyalty. (And thus may create strong out-group antagonism.) Examples of this sort of inward-directed networking include church groups, country clubs, and college fraternities and sororities. Think of bonding social capital as “strong ties with intimate friends”.

Bridging social capital creates connections across societal boundaries. Examples of this outward-facing form of networking include bowling leagues, national organizations…and my  pemaculture group. Think of bridging social capital as weak ties with acquaintances.

In short, bonding social capital is built in homogeneous groups (where people are similar) and bridging social capital is built in between heterogenous groups (of dissimilar folks). Both types are great. The latter is more difficult to build and maintain, but tends to provide the most value to individuals and society.

“The ebbing of community over the last several decades has been silent and deceptive,” writes Putnam. “Weakened social capital is manifest in the things that have vanished almost unnoticed — neighborhood parties and get-togethers with friends, the unreflective kindness of strangers, the shared pursuit of the public good rather than a solidary quest for private goods.” 

Boosting social capital will benefit you and your community. “Trustworthiness lubricates social life,” says Putnam.

When I think of social capital, I’m always reminded of my neighborhood. It’s easy for homeowners to stay inside and not interact with neighbors. But doing so creates barriers rather than build bonds. So, we have made a conscious effort to foster fellowship, to get to know each other. As a result, we’re much more likely to lend a hand when a neighbor needs assistance.

People with lots of social capital can find help when they need it; those with little social capital tend to spend a lot of time frustrated and alone.

The classic Christmas film It’s a Wonderful Life is a great illustration of social capital in action. Jimmy Stewart plays George Bailey, a man who repeatedly goes out of his way to help friends and neighbors. When disaster strikes, everyone he’s helped before comes to his aid. It’s a fine example of social capital in action. When his brother declares that George is “the richest man in town”, he’s not too far off the mark. He might not have much financial capital, but he’s flush with social capital.

 Although George Bailey repeatedly sacrifices his own interests to create social capital, you can often create win-win situations in which everyone profits. But the best way to build social capital is to help others without expecting anything in return.

 What concrete steps can I take to increase social capital, for myself and for my community?

  • Share my knowledge and experience liberally and often. ( like sharing on this blog)
  • Participate in my local community.
  • Support friends, family, and colleagues in their various endeavors.
  • Be nice to people — all people.
  • Give without the expectation of return.
  • Practice being a Frugal Prosumer  so I have more time to build social capital. 

“We should do this,” Putnam writes at the end of Bowling Alone, “not because it will be good for America — thought it will be — but because it will be good for us.”


 This article is adapted from: Money Bo$$: Master Your Money- And Your Life

 Lots more good information on his blog.

AuthorJohn Johnston