Coverage of social capital and utility function of actors involved: Toward a clearer understanding of functions of social capital

Social capital is an attractive, but confusing concept. Although scholars as well as policy makers and practitioners refer to the concept expecting that it will perform some functions for the improvement of society. However, there are some arguments on social capital that are seemingly contradictory to each other. James Coleman, for example, argues that closed networks among parents of high school students enhance their social capital, while Ronald Burt points out that open networks (networks rich in structural holes, borrowing his terminology) increase return of investment of entrepreneurs. Another example of contradictory arguments on social capital is that Alejandro Portes and his colleagues study negative effect of social capital on members of ethnic community, while social capital in general is highly appraised for its positive functions for society.

Why do we witness these contradictions and confusions in the conceptualization of social capital? I would argue that utility function of actors involved and coverage of social capital should be clearly defined to avoid the confusions. Parents of high school students have a different utility function that that of entrepreneurs. Social capital of an ethnic community does not extend beyond its borders, while other types of social capital such as generalized trust cover the whole society. In my presentation I will elaborate this idea referring to empirical findings in Japan as well as in other societies, which would contribute to the clarification of the concept of social capital and the clearer linkage between social capital and rational choice.