Investments that Gain Social Capital

In “Beyond Bowling Together,” Paul Resnick analyzes the condition of social capital in the United States. From his perspective social capital is on the decline, and in an analog sense, it is. Resnick’s point of reference is the structured social group. Bowling leagues, Boy Scouts, gardening societies, etc. Groups like these used to be one of the main components of daily life for the average American, but the advent of the Internet has changed our hobbies. Quite literally in the case of Jenna Hartel’s study on gourmet cooking. A hobby that started in the 1950’s, gourmet cooking was centered on reading materials and cooking classes. Now, it is almost exclusively an individual hobby and the Internet is its most heavily used resource. The point is not to socialize, but to gain as much information and as much skill as possible. As such, our new hobbies seem to have increasingly diminished social capital as Resnick feared was the case.

To counteract the decline of social capital, Resnick pushes for research into new forms of communication, and new ways of building that capital. When his paper was printed, in 2000, Facebook had yet to launch and the idea of social media was nonexistent. Now, however, there are floods of these digital, social platforms. But interactions on these platforms don’t seem to be worth as much social capital because they don’t occur in a physical space, and therefore don’t encourage the kind of emotional and cultural bonds that are developed in face-to-face interactions. Instead, these new forms of interaction are almost entirely information based. Hard data such as photos, addresses, journals, and location updates are exchanged rather than more nebulous concepts such as communal sentiment or group cooperation. This exchange of information, however, does fit in with Resnick’s understanding of the systems we employ to generate and use social capital. We have appropriated these systems for use with informational capital and hence, create pathways and resource exchanges similar to those that were formed in the exchange of social capital.

But does this mean that social capital is being replaced by informational capital? And if so, do we need to adapt the current systems in order to help them produce social capital again? From the evidence in Hartel’s study, it would seem that the former is true, that information is the new currency being exchanged and used to create consistent pathways between people. After all, gourmet cooking has become a solitary hobby, and yet social media platforms such as Twitter and epicurious.com are used to exchange recipes and techniques. People gain value in this exchange depending on the quantity, quality, and consistency of the information they provide. In other words, they have informational value not social value. It even seeps into physical, social interactions such as going to a restaurant on a date. The outing takes on a secondary importance as a fact-finding mission for the hobbyist thus slightly reducing the energy that is invested in the social connection.

Even though informational exchanges are on the rise, there appears to be a new movement in the production of social capital. Robert J. Shiller’s article “Democratize Wall Street, for Social Good” addresses a new investment technique that is developing both monetary and social capital. The concept is called crowdfunding and essentially, it allows for multiple investors to contribute small amounts of capital to startups via websites in order to distribute the risk. It has even been included in the recent JOBS Act passed by Congress. It’s still a very nascent concept and therefore the outcome is unknown, but from a cultural perspective it’s incredibly like social capital. Multiple investors mean a distribution of risk but also a distribution of interest and responsibility. Investing in startups is always risky, especially in the current economic climate, but if the cost is distributed, people might feel more comfortable making investments in ideas and companies in which they have a personal interest.

This system is similar to the development of LLCs in the 1800’s. They distributed the risk of investment so that no investors could be held liable for mishaps, only the company itself. An exchange takes place here that is not merely monetary. A sense of trust is established because the possibility of one party taking advantage of the other is reduced, and the development of trust links directly to Resnick’s model for social capital. Conveniently, trust is strictly a social concept, not an informational one, which makes it a good indicator of the status of social capital. If these sort of social bonds can be formed for financial purposes, surely they can extend to daily interactions on the Internet.

Even though we are separated by distance and sometimes culture on the Internet, new communities emerge regularly and something similar to a value system arises within them via forum rules and moderators. Much like the idea of crowdfunding, however, trust and emotional bonding are still nascent within these communities. People are invested in subject mater and information and not necessarily in the emotional support that can be gained from such interactions. So the question still remains: is it possible to cultivate social capital in the age of the Internet? The economic effect of crowdfunding will likely be a good indicator. If enough trust can be cultivated to make the system work, then there are likely to be similar changes occurring in other areas of the Internet. As these changes occur, we will be able to see if the worth of social capital has survived the technological revolution. But for now, information is still the currency of choice.

Resources:

Hartel, Jenna. Information in the Hobby of Gourmet Cooking: Four Contexts. Everyday Information, ed. William Aspray, Barbara Hays. (MIT Press, 2011). p.217-248

Resnick, Paul. Beyond Bowling Together: SocioTechnical Capital. HCI in the New Millenium , ed. John Carrol, Addison Wesly. (2000). p.247-272

Shiller, Robert J. “Democratize Wall Street, for Social Good.” The New York Times, April 7, 2012, sec. Business Day. http://www.nytimes.com/2012/04/08/business/democratize-wall-street-for-social-good.html.