In a post titled “Social Capital and Cultural Capital” last year, I talked about the British class survey which measured a specific type of social capital – “the number and importance of social contacts”. This type of social capital is referred to by social scientists as linking social capital – the connections we have to people of importance, influence, who can get things done.
There are various other types of social capital used by sociologists. One type generally recognised today is bonding social capital. Bonding social capital is that which exists within a social group, and consists of shared norms and values, reciprocity, trust, expectations and obligations. Social “group” seems akin to the social identity model used by social psychologists – an “in-group” formed through categorisation, identification and comparison (here is a good primer on Social Identity Theory which explains this). We all belong to various social identities – based on gender, ethnicity, wealth, nationality and caste for example. Bonding social capital is the capital we get by virtue of being part of the in-group. Note that like social capital in general, bonding social capital is an asset – a resource that you can use (consciously or not) to your benefit. Secondly, it comes from social structure and processes – the social mechanisms described by sociologists and also the social-psychological processes described by social psychologists.
The sociologist James Coleman used the example of the wholesale diamond market in New York while describing social capital (though he did not use the term bonding):
The wholesale diamond market in New York City, for example, is Jewish, with a high degree of intermarriage, living in the same community in Brooklyn, and going to the same synagogues. It is essentially a closed community. […]These close ties, through family, community, and religious affiliation, provide the insurance that is necessary to facilitate transactions in the market.
A similar example of bonding social capital closer to home is the diamond industry in India. It’s estimated that about 90% of the world’s diamond cutting and polishing occurs in Surat in Gujarat. Most of the business is run by specific regional and caste-based communities – Palanpuri Jains and Saurashtrian Patels. These businesses are tight-knit communities with high bonding capital. The communities appear to marry within the group – as this article on the competition between Gujarati and Jewish trader in Antwerp says, most of the 300 Indian families in Antwerp are related. They are essentially male-dominated clans, with businesses being passed down by fathers to their sons.
A business largely controlled by your own family is always far superior to competitors, Jahwery says. The other diamond dealers from Gujarat would probably agree. They rely on their worldwide family networks to build and maintain headquarters on every continent. That’s what distinguishes them from the Jewish businesses that used to dominate the market. The Indian clans are true global players. Ashwin Jahwery has branches in Taiwan, Thailand, China, Australia, Great Britain and Spain, all of them run by his nephews. His two sons are still studying at Antwerp University. One of them is studying business and the other diamond polishing. They already have positions waiting for them in their father’s diamond trade empire.
The angadia courier-and-banking system used by these businesses too shows a high degree of trust and highly-coordinated social mechanisms. So if you’re born into these communities (and if you’re a boy), you have access to the bonding social capital this family and community structure provides. If you’re an outsider however, there is less chance of you succeeding in the business, because you do not have access to this capital. There is no law stopping you, possibly not much explicit discrimination either – but the lack of social capital is the invisible quicksand that will hamper your progress. This is one of the downsides of bonding social capital: it elevates certain social identities – the in-group – and marginalises others – the out-groups.
– Types of Social Capital (socialcapitalresearch.com)
– Social Capital and Social Well-being: Discussion Paper (Australian Bureau of Statistics/OECD)
– What is Social Capital? (World Bank)
– Health by association? Social capital, social theory, and the political economy of public health (Szreter and Woolcock)
– Commentary: Reconciling the three accounts of social capital (Kawachi, Kim, Coutts and Subramanian)
– Social Capital: Theory and Research (Lin, Cook, Burt)
– Social Capital in the Creation of Human Capital (Coleman)