Social capital in changing capitalism

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Social capital in changing capitalismArnaldo Bagnasco aa Via Morgan 11, 10/25 Torino, ItalyPublished online: 24 Jun 2010.

To cite this article: Arnaldo Bagnasco (2003) Social capital in changing capitalism,Social Epistemology: A Journal of Knowledge, Culture and Policy, 17:4, 359-380, DOI:10.1080/0269172032000151812

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DOI: 10.1080/0269172032000151812

SOCIAL EPISTEMOLOGY, 2003, VOL. 17, NO. 4, 359–380

Author: Arnaldo Bagnasco, Via Morgan 11, 10/25 Torino, Italy.

Social capital in changing capitalism

ARNALDO BAGNASCO

1. A thumbnail sketch of social capital

I could say the same thing about social capital that St Augustine of Hippo saidabout time: I know exactly what it is, but if I start thinking about it I don’t know anymore. The use of the new term has spread through social research and manypeople use it without posing themselves too many problems. They reckon they aresufficiently clear about what they mean and that other people are too, but that’s notexactly the way things stand. Besides, attempts at conceptual clarification andtheoretical arrangement constantly raise new problems. In the past, other termswere often used to refer to phenomena that today we classify under the definition‘social capital’. The theoretical scale comprises somewhat allusive uses of theconcept, a sort of middle-range theory after the style of R.K. Merton, and theintroduction of the concept into a general theory of society by scholars such as J.Coleman. As Coleman himself acknowledges, it is easier to cite examples of socialcapital than to specify what the concept actually means.

Here I have no intention of entering into a detailed discussion of the concept, ofits history and of its use. I confine myself merely to a few minimal clarifications ofhow I understand it.

In this article I show how the concept of social capital can be used in analyses ofongoing changes in the real world of the economy. I seek to demonstrate that today’sdebate is taking place in a social context different from the one in which theconcept was originally developed. At the end, I return to the concept and to thepractical significance that Coleman assigned to this type of analysis.

First of all, I consider an alternative, present in the literature, between an idea ofthe social capital concept that we might describe as systemic (or even culturalist) anda relational (or interactive) one. In the first perspective, social capital is the aptitudefor cooperation that results from a shared cooperative culture, capable ofgenerating diffuse interpersonal trust. A culture of this kind certainly facilitatescongruent individual behaviour and is at the origin of social capital in a populationthat shares in it. Nonetheless, this is a point of view that limits our field ofobservation and underestimates the effects that emerge from individual inter-action. Following J. Coleman’s proposal, I opt for the second possibility.1 ForColeman (1990), social capital encompasses the resources for action that resultfrom the fabric of cooperative relations of which a person is part. The relational

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360 ARNALDO BAGNASCO

fabrics that combine to form social capital are marked by a certain closure andcontinuity of relations which imply reciprocal recognition on the part of the actors.Viewed in this way, social capital is a datum of social organisation; it is the cooperativeinteraction potential the latter makes available to the people in a social network.

The network of relations may be activated by a single actor, and in this senseconstitutes a resource for his or her action. At the same time, however, thispossibility is based on a specific property of the network as a context of interaction.In this sense, social capital is a structural phenomenon. Various specifications havebeen proposed for the nature of relations that we can consider generators of socialcapital as a structural phenomenon. Portes and Sensenbrenner (1993) identifyfour major sources of social capital: interiorisation of values, exchanges ofreciprocity, forms of collective solidarity (class consciousness, for example) andtrust imposed through positive and negative sanctions. To explain which relationscan be considered bearers of social capital, Pizzorno (1999) makes the distinctionbetween social capital of cooperation, characterised by strong ties, and social capitalof reciprocity, characterised by weak ties. He thus posits a very broad idea of socialcapital; that is to say, all the forms of interaction that constitute processes ofsociation in the sense G. Simmel attributed to the term.2 Encounters, spot economicexchange and conflict that fail to imply recognition and respect for identity are notrelations that constitute social capital.

The idea of social capital also has to comprise not only the base of trust of a fabricof relations—especially in view of the two contributions mentioned above—butalso its form or structure. For example, in certain markets, the family may be socialcapital as a social structure appropriable for other purposes only if it has a certaindimension and a certain structure (i.e. a certain organisation). Or else, socialcapital is possessed by those who occupy a position that corresponds to a ‘structuralhole’ (see Burt 1992). If we group together formal characteristics and the base oftrust in relational fabrics of relations, we can consider social capital as a componentof social organisation.

Significantly, some of the most influential proposals for the use of the concepthave been introduced with reference to a loss. This is evident in R. Putnam’s bowlingalone image (see Putnam 1995) and the ensuing debate, which nonetheless echoedColeman’s question: how can we replace primordial social capital? As a result, specialattention is attached to certain types of social capital as opposed to others: this is aquestion that needs to be clarified. This is possible by considering that social capitalis a datum of social organisation, and bearing in mind how the latter has changedsubstantially in modern society.

Modern society has introduced formal purposive organisations as an essentialcomponent of social organisation. The relational fabrics which allow the efficientinteraction that underlies development are organisations. A new patrimony ofsocial capital (of Portes’s fourth type and of reciprocity in Pizzorno’s sense) hasbeen established in this form. Alongside people, new artificial collective actors thusappear: relational structures referring to positions that endure in time, despite thefact that people change, designed, planned and organised for limited specificpurposes. Students of organisational phenomena have always stressed theimportance of the informal aspects of organisations that either facilitate or hindertheir functioning, stressing the importance of external factors which influenceparticipation in professional positions. More generally, it is necessary to recall thatformal organisations are part of but do not monopolise the broader field of social

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SOCIAL CAPITAL IN CHANGING CAPITALISM 361

organisation; that is to say, relatively stable models of cooperative social relationspresent in a society.

Modern societies have also differentiated two fundamental specialised institu-tional ambits of relation and interaction with functions of regulation and control:economics and politics. It is in the political ambit that rules are established for theorganisation of society in general and control of respect is assured. The economyis largely regulated by the market, but also partly by politics, within the ambit ofgeneral rules fixed by laws. Systems of respected rules are a base of social capital;that is to say, they establish relations that facilitate the action of actors who are partof them. The economic development we are acquainted with, for example, resultsfrom effective actions and interactions in the ambit of specific institutional systems;that is, of rules. To trigger a development process, it is often necessary to break oldinstitutional patterns of interaction, but, as it establishes itself permanently, it givesrise to new institutionalisation.

These points may be obvious but they should not be forgotten. Social capital inmodern societies is typically deposited in formal purposive organisations and in therules fixed in new constructed institutions. Using old-fashioned vocabulary, it ispossible to say that, from this point of view, typical social capital actually belongs togesellschaft.

The question posed by Coleman—how can we replace primordial social capital?—returns to one of the original, variously expressed themes of sociology. Classicsociology posed the problem of what got lost in the passage from traditional tomodern society. From this point of view, the concept of social capital turns out tobe a distant relation of the old themes of gemeinschaft. It shifts away from them,however, in so far as it concerns the modes, the significance and the importance ofinteraction in a highly differentiated society. Coleman belongs to a movement incontemporary sociology sensitive to the micro-foundation of macro-phenomena, tothe need for sociological explanation to lend analytical attention to concretesituations in which actors act and the emerging effects of their interaction. Thequestion, therefore, is whether in a world of formal organisations other importantambits of social organisation—that is to say other useful and perhaps crucial formsof social capital—are being sacrificed. This is why the question of social capital hasde facto constituted fertile terrain for analysis of the hidden resources of society, ofnew possibilities or resources for action (the by-products of a fabric of pre-existingrelations oriented towards other purposes), of the relations that anthropologistsidentify with the term multiplexity (more contents and meanings for actors) and,more generally, of the embeddedness of the economy in society. The renewedimportance of these types of relations in contemporary society together with aconsequent increased in attention on the part of researchers mean that the conceptof social capital is often used in a narrow sense, only to refer to these phenomena.But, more specifically, what are these types of more traditional types of socialcapital—which we might term, more in general, as informal—precious for?

This question prompts valuational responses, but it is also possible to replyanalytically. The fact is that these forms of social capital need to be considered inrelation to systemic integration (relations among different parts of society) and socialintegration (the ways in which people are tied one to another: see Lockwood 1964).We thus specify the idea of the loss in the same way that authors such as Habermas(1973) did in the past. Contemporary society lives on supplementary resourceswhose origins lie in the past; it consumes them but it struggles to reconstitute them.

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All of which immediately raises another question. Why does the idea of socialcapital—especially the focus on the hidden or informal types I have mentionedabove—exert such a strong appeal today?

The influential factors may be many and various, but as far as economic relationsare concerned, the most immediately evident are connected with changes in the realworld. These have typically triggered reactions and consequences in socialorganisation that can be addressed analytically using the theory of social capital.They have also opened up new opportunities and problems of systemic and socialintegration. Analysis may refer to social capital to identify these areas of opportunityand problems and see how they are defined and elaborated by the actors in socialinteraction in specific situations and with aggregate systemic effects.

The idea of social capital has been used increasingly to verify major problems ofintegration that have arisen in the meantime, and to evidence ‘losses’ in the sensementioned above. A question symmetrical to the first is: how can we exploit new orrenewed informal social capital as a decisive supplementary resource in the newconditions? The attention dedicated to this type of social capital risks making thatafforded to the more general problem of social capital—especially relationsbetween informal and formal social capital and the effects that economic andpolitical institutions induce on social capital—either reductive or simply wrong.These are the connections that are decisive for analysis of contemporary society.

Underlying the processes considered is the passage from one capitalism,characterised by large-scale organisations for mass industrial production withimportant forms of political regulation of the economy and systems of distributivewelfare, to another of flexible production and a more market-regulated neweconomy. The context we are speaking about is thus already modified and, in thesense I outline below, radicalised with respect to the one in which the idea of socialcapital was originally introduced and developed, echoing Weber’s concerns aboutthe risks of bureaucratic rationalisation. The analytical applications of the conceptwe are about to see refer precisely to emerging problems of systemic and socialintegration.

2. After industrial society: new capitalism and production networks

From my standpoint, capitalism is addressing an organisational crisis caused by theinefficiency of large formal organisations for mass production in a changedenvironment. The reasons for this are bound up in many factors, some of whichmanifested themselves earlier, others later. The changes in progress are changingentirely the overall characteristics of what once was industrial society.

The international opening of markets, more unstable markets, cultural changestowards less standardised consumption, resistance to labour parcelled out in largefactories, the increased strength of the unions, and new production technologieshave highlighted the rigidities and costs of the old ‘fordist’ organisation andprompted strategies and decentralised organisational structures. Two crucialterms—flexibility and network—have entered organisational terminology. Subse-quently, the growing trends of economic globalisation, deregulated markets, thegrowing application of ICTs to productive processes and the new sectors ofintangible goods tend to spread and radicalise the new philosophy of flexibility andnetworks throughout the economy.

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A precocious reaction to the crisis is the small enterprise’s return to theeconomic scene, both with the decentralisation of activities by large-scalecomplexes and with the setting up of small–medium enterprise productionnetworks. This second possibility manifested itself with the rapid diffusion ofterritorial forms of coordination of production that Alfred Marshall calledindustrial districts. This was typical of some regions of Italy which I speak aboutbelow, but different variants of the phenomenon have spread all over theworld.

I just mention here the well known characteristics of these economic forms: birthby imitation of enterprises with similar small volume productions (in the simplestsystems), subdivision among independent enterprises of the phases of productionwith assembly by an end producer (in the more complex systems). The economicliterature on the subject is vast3 and has clarified the organisational variants, theworking of the labour market, inter-enterprise coordination mechanisms (lowtransaction costs, for example, easy circulation of information, mechanisms for thedissemination of local technical innovation throughout the system, and so on).These are local contexts of competition/collaboration among independententerprises, essentially regulated by the market and by a fluid labour market, butalso relatively stabilised by contracts that coordinate activities, cross-shareholdingsand other similar mechanisms. It is important, instead, to note that industrialdistricts have become a sort of archetype of the new embeddedness of the economy,the working of which involved types of social capital that were neglected in theprevious phase. The phenomenon is a precocious one and, as such, has beenstudied without any initial reference to the as yet undeveloped concept of socialcapital. The results of the analyses available, however, are perfectly translatable intothe language of the theory.

I do not explore in detail the characteristics of the local societies that have beentransformed into industrial districts. These are areas with a close-knit urban fabricof major and minor centres with artisan and commercial traditions, diffusebanking, education, services, communication infrastructure and surroundingcountrysides where agricultural production was traditionally based on largeindependent families.

Restricted local context, family and friendly relations and direct knowledge havemade available what Coleman calls appropriable social organisation; that is to say theshifting of pre-existing relational fabrics in new directions, the introduction ofmarket relations in multiplex relations, the easy circulation of information, thebroadening of possibilities for joint initiatives and the exercising of reciprocity. Thecase of family relations may serve as an example. These often lay the pattern foreconomic interactions: more than one member of the family may work in theenterprise; in some cases brothers are entrepreneurs in different firms; the unitarymanagement of family resources underlies the strategies and combinations offamily members on the labour market for the accumulation of capital to invest inproduction activities, and for the production for self-consumption in farmingfamilies. All this allows for an elastic and initially economical labour market.

In the background is a culture of strong local identity and a rich tradition ofcooperative relations. Albeit important, it would be wrong to stress this aspectalone, since what is really decisive is the way in which, through interaction in theoverall institutional and relational context, this tradition reproduces and conservesitself in the course of time. It is at once a cause and a consequence.

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The case of Italian industrial districts has produced an optimistic vision ofinformal social capital, raising hopes for its activation in the context of as yetundeveloped economies. Here I do not speak about this point; I prefer instead tomake a series of specifications which seem to me important and of more generalscope for the theory of social capital in relation to the economy. I do soschematically.

– One of the main risks in this analysis is to exaggerate the scope of informal socialcapital for economic action and development. Even in the paradigmatic case Iconsider here, social capital has not been the cause of development. Withoutchanges in the context of old capitalism, there would have been no room forthese new economic forms, just as, for example, no resource would have beenavailable to generate the increase in productivity suitable for small plants withoutthe invention of modern numeric control technologies. Having said that, it istrue that the social characteristics that generate social capital mentioned abovewere decisive in setting the ball rolling. Yet if we look at the endogenousresources that favoured development, it is easy to see that some of them do notstem from social capital at all, unless we dilute the concept until it contains toomany things: from the town and city network and diffuse service infrastructuresto a social class of independent country farmers, pre-existing artisan know-how,and so on.

– The risk also exists of reducing mobilised (or ‘mobilisable’) social capital to thetypes we call informal, without properly assessing the new organisational forms ofeconomic relations; that is to say, the new formal organisational social capital thatis appropriate to the situation: long-term agreements between enterprises, cross-shareholdings, consortia and other forms of relations between market andorganisation. These are all decisive for the functioning of a system of enterprisesin which different units have to plan convergent activities in a longer-termperspective, while still staying elastic. When they work well, their effect is toreproduce the mutual trust previously based solely on traditional sources ofsocial capital. A development process thus tends to generate new, appropriateforms of formal and informal social capital, suitable for new circumstances.

– One problem is the relationship between informal social capital and economicefficiency. That this may be a virtuous relationship is evident from empiricalchecks, but it is by no means banal to explain why. In principle, the marketrequires strategic action motivated solely by economic viability, and bound by noforms of persisting multiple ties and loyalty. In the case in point, exchangerelations between enterprises and labour relations are effectively regulated by thefree market, a conditio sine qua non for the efficiency and for the very survival ofthe enterprise. But the market is compensated, activated and stabilised byinterpersonal relations. Workers may agree to be temporarily jobless or, incertain periods, to earn a lower wage, if they have a peasant family to supportthem through the period in which they wait to ‘go back onto the field’. Multiplerelations facilitate the action agreed upon by entrepreneurs for long-terminvestments: a highly competitive market does not necessarily boil down to spotrelations. Transaction costs are lowered by social capital, which also transmitsmore information than the market for reciprocal adjustments. Mechanisms suchas these explain the efficient combination of market and social capital, but theproblem may crop up again in a variety of ways.

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– The problem may reappear in a slightly different way in relation to theconsumption of social capital. Closely-knit networks, multiplexity and tight socialcontrol constitute forms (or, better still, sources) of social capital which, inprinciple, withstand change and development in traditional communities. As wehave seen, the activation and efficiency of economic behaviour demand a certainbalance between instrumental market action and social capital. However, thisdoes not take away the fact that market efficiency tends, in principle, to bringabout the ‘creative destruction’ that Schumpeter speaks about, and that socialcapital deposited in community relations is continuously challenged by changeand the strategic use of multiple social relations. Balancing these needs is theprincipal functional problem of informal social capital in relation to theeconomy, which probably presents itself in different forms and requires differentsolutions according to each individual case. Framed in this way, the question is,precisely, one of consumption and reproduction of social capital. There are onlya few observations to make about this relatively unexplored problem. One mightrefer, in general, to the fact that the combination achieved has ensureduninterrupted, long-term development, broad income distribution across thepopulation, high rates of employment and a great deal of social mobility withoutradical changes in the organisation of society. In synthesis, it is possible to say thatthe economic model may be seen by the population of districts as anenhancement of their traditional characteristics. The fact remains that societychanges and we simply do not know what might happen in the event of economiccrises in which exit behaviour and particularistic solutions might be preferred tovoice commitments and collectively constructed actions. More specifically,irrespective of crisis situations, we lack systematic observations to tell us whetherand how much family relations, for example, are stressful in so far as theircontents are by definition multiple as a consequence of years in which theyincorporated economic market relations. The same could be said of many kindsof friendly and cooperative relations.

The fact is that, for a long time, industrial districts pursued development,ensuring systemic integration and social integration. Here I do not follow some ofthe recent developments of these economies (sub supply relations in the countriesof Eastern Europe or the integration of local systems with a larger industry) withpresumable social consequences that still have to be evaluated. It is necessary,rather, point out that the conditions that presented themselves in this case wereparticular and not easily repeatable. Major and premature economic success hasprompted the imitation of the model. Two necessities have arisen: to source andexploit resources of traditional social capital present in poor local societies toactivate small enterprise-based development, and, for the same purpose, to makesocial capital grow where a traditional pool already exists. The district model is anideal type for comparison in cases such as this. It confirms the utility of an idea ofsocial capital comprising appropriate formal capital and inherited renewedinformal capital that lends itself to considerations on the subsequent, more generaland important changes in capitalism.

The industrial districts for the production of consumer goods that I havedescribed are only a taste of the new globalised economy, the driving sectors ofwhich are ICTs and intangible goods. Economic globalisation, deregulatedmarkets, new information and communication technologies and intangible goods

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markets tend to disseminate and radicalise the new flexibility and networkphilosophy throughout the economy. New technologies allow the dispersion ofproductive activities, the concentration of management and remote control ofcomplex networks. The network-enterprise—working in the ICT sector or using newtechnologies to reorganise more traditional productions of tangible goods—is thetypical structure of the large contemporary enterprise, which coordinatesnumerous production and service enterprises, sometimes situated a long distanceaway. The organisational variety of networked decentralisation is very high, but ingeneral the network-enterprise responds better to the need for continuous andrapid adaptability. We thus have to ask ourselves what the relationship is betweenthese new economy networks and social capital.

We have seen how the district economy typically uses informal social capitalinherited from the social history of these local societies, but also that thecombinations achieved generate new informal social capital (for example, trust ina model that works) and appropriate formal organisational social capital.

As to the new economy, I use it to introduce the question of the formula—‘Valleyresidents network, but don’t connect’—adopted by a study in Silicon Valley todescribe social relations in the new conditions of the economy (see Boudreau andRombeck 2001) the formula conjures up two basic points:

– The variability of links through the market is higher and faster than in theprevious economy.

– These connections tend to have a more specific and non-multiple content.

If we roughly assume that these are generalised trends in the new conditions,given the success of this type of economy, it is possible to say that, as far as theirsystemic integration is concerned, the new networks appear to have no great needfor traditional informal social capital based on the family and close-knit networks,like the industrial networks I spoke of above. The consequences appear moreevident for the social fabric than for the working of the economy (for socialintegration rather than for systemic integration). People go to work in the valleybecause they can find jobs there and because the climate is good, not because thequality of social life is good (this is what emerges from the study cited). This is apoint I return to later. So much for traditional informal social capital. The questionnow is: are new types of informal social capital coming into being in the newconditions?

Bearing in mind other checks, it would appear improper to imagine the socialworld of the new economy being made up of actors who interact only with spotmarket relations. Rather, the social organisation of this economy would appear tobe based mainly on weak ties (in the sense of Granovetter 1973); that is, on relationsof reciprocity in the meaning attributed to the term by Pizzorno. Weak ties are aform of freer and more adaptive social capital in changing circumstances. Forrelations that do not require particular personalised resources of trust, simplenetworks of contact and knowledge (weaker than those of kinship or friendship, forexample) permit broader access to information and widen the horizons forpossibilities of combination. If relations among people are only superficial, theformal credentials displayed have to be recognised and reliable. If the marketworks—in the sense that, in the long term, it continues to create development andemployment by maintaining trust in the model—and if institutional control

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systems, such as that of credentials (control is easier and gratuitous in traditionalclose-knit networks) also work and are not too expensive, we are led to think that,overall, the social capital is appropriate to the integration of the systems inquestion. Free riding is always a possibility, but also sufficiently reduced byreputation in the network.

All of which means that the networks of the new economy ‘do not connect’ theeconomic actors involved, in that they neither typically use nor reproducetraditional social capital, but develop an appropriate social capital. This could be astarting hypothesis for analysis of social capital in the processes of the neweconomy.

I would like to ask two more basic general questions: the first concerns the typeof social capital involved, the second the form of relational networks:

(1) Does the new economy really require only weak ties as appropriate informalsocial capital?

(2) With their new technological possibilities, the networks of the new economycoordinate in a very centralised way actors that tend to be highly dispersedand not physically close to one another, as in the case of Silicon Valley. Atleast above a certain ceiling, should they possess the typical trait of internallack of homogeneity? Ought they tend, that is, to be close-knit at their peaksdespite a generally low density (the coordinated entities are not inconnection with one another)? What are the typical consequences that wecan imagine?

The answer to the first question is negative. In the new market conditions,enterprises must of course be elastic, meaning that they have to be able to adaptrapidly to changing conditions. Hence outsourcing, the success of the small-scaledimension and remote coordination. It would, however, be imprecise to stress theneed for elasticity alone. In reality, the network-enterprise requires not onlyelasticity but also stability. Maintaining reliable and tried-and-tested specialisedsuppliers in the network may be just as (or even more) important as having easyaccess to the market to free oneself of previous, no longer suitable relations.Moreover, in decisive ambits such as research and development, excessive costsmake it necessary to establish agreements among enterprises with differentiatedcompetences to allow them to ‘grow together’ as part of a long-term strategy, andso on. In reality, what is needed is at once, more market and more organisation innew, decentralised but relatively stabilised forms. This also explains the persistenceof territorial systems in the new economy.

What happens is that it is ultimately possible in networks to distinguish nuclei ofmore stable relations and a broader periphery of more unstable relations? Moreand less stable relations thus live side by side in a scenario of diffuse relations thatare, in any case, generally more fluid, calculated, and subject to specific functionalneeds. In this sense, they are weak and cold ties, though their temperature is, so tospeak, graduated along a continuum. As P. Veltz concludes, ‘If it is true thattransaction often has the better over the lasting relationship, the latter is still a longway from disappearing from the contemporary technical-economic universe. Themore or less instrumental “cold” networks coexist in this way with “hot ties”, inwhich lasting ties of trust established among people constitute a decisive success,factor in an unstable, relatively uncontrollable environment’ (Veltz 2000, p. 224).

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The second question develops the point of the internal lack of homogeneity ofnetworks, already touched upon, in a different direction. The configuration of ahigh density of networks at the centre and a low density of the broader fabrictends to favour the formation of cliques that behave opportunistically withpartners in the broader network, whose scant bargaining power is confirmed bytheir inability to form a coalition or even only to access control throughinformation and reputation. Close-knit networks of traditional social capitalensure reciprocal control but they hinder adaptability and impose resistance tochange: the social capital of weak tie networks makes such ties appropriate assources of social capital in the new conditions, provided specific control institu-tions exist. This is a second example (we saw another above) of how new andspecific control systems have to be established to check for possible deviantbehaviour, which might have dire consequences on the resistance of networks byrapidly consuming mutual trust. The importance of the question raised herebecomes all the more evident, if we consider those networks that link productiveand financial aspects of the new economy and that may, basically, be consideredin much the same way in the age of the economy of intangible goods. The Enroncase is paradigmatic in this respect. The bankruptcy of America’s seventh largestcompany, which operated using the most typical new economy technologies andphilosophy, lends itself to many considerations. What is important to point outhere, though, is that financial trickery, the complicated setting up of subsidiariesand the silence of accountants that were used to conceal losses but ultimately ledto disaster, have also left ways-out for those executives who were capable ofsensing the collapse coming. Instead, the masses of people who bought sharesthrough investment funds found themselves vulnerable and employees saw theirpension funds evaporate. Pathologies of this kind are not new, but there arereasons to believe that the new, fast, complex intangible economy, with itstechnologies for the centralised management of a network of dispersed con-nected actors, is particularly vulnerable to them. The system of control throughauditing companies has failed to work, as have the strategies of investment fundsand pension funds. Furthermore, the complexity of jurisdictional procedures issuch that they do not appear to serve as decisive deterrents. As a New York Timescommentator observed, a robber in a wine and spirits shop is more likely to goto jail than someone who, as in this case, has defrauded the equivalent of thepopulation of a middle-sized city. The loss of social capital as generalised trust inthe economic system is evident, whereas the idea that social capital in thecontemporary economy is invariably a delicate interweave of appropriate infor-mal, formal organisational and institutionally generated social capital is oncemore confirmed.

3. Social capital in regulation mechanisms

Industrial capitalism enjoyed its moment of greatest development in the post WorldWar II years. For about 30 years, growth was vigorous in the most industrialisedcountries. Systemic integration and social integration were ensured by regulatoryarrangements that combined market and politics in doses that varied according tocountry. The upshot was that the economy continued to grow, together with diffusewell-being throughout society.

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In the English-speaking world, especially in the United States, systems entrustedthe activation and regulation of the economy largely to the market, whereas incontinental Europe and Japan political intervention tended to be greater. In itsEuropean version, what is often called the Fordist–Keynesian model takes theshape of an economic system based on the mass production of large-scaleenterprises, high levels of employment and growing consumption as in America,but also regulated by policies oriented towards the full deployment of resourcesand labour—negotiated with the representatives of interest organisations—andaccompanied by the development of important welfare-state systems.

Over the last decades of the last century, Fordism, standardised mass production,was no longer the driving sector of the economy. Into crisis with it went themechanisms that regulated the economy and relations between economy andsociety. The new economy has different organisational arrangements, as we saw inthe section above, and modes of regulation are also changing. In thesecircumstances, the topic of social capital is applied to interpret processes and comeup with new recipes. As an instrument, it is prone to misunderstandings, but mayprove useful if handled properly. Before going ahead let us return for a moment tothe relative differences between the American and the continental Europeanmodels, leaving aside internal differences.

In the middle of World War II, the British philosopher R.G. Collingwood (1942,rev. edn. 1997) spoke of the need to stipulate a new social contract at the end of theconflict to marry freedom and equality and refound societies worn down by thechallenges of totalitarianisms. This was a shared sentiment and, once peace arrived,the different social histories and political cultures on either side of the Atlantictriggered the formulation of ‘social contracts’ that were similar in intentions, albeitdifferent in modes. The social contract idea expresses a shared consensus on apattern of linked systemic integration and social integration. The contract’s keygoals are to ensure economic growth and to distribute advantages in a generalisedway.

In America, more laissez-faire economic traditions and a culture of volunteerismbrought to the contract greater trust in the activating and regulatory capacities ofthe free market and, at once, trust in the supplementary capacities of thegeneralised growth in consumption. These were the conditions for the construc-tion of a society of middle classes capable of countering the radicalisation of classconflict. The model was to encounter problems that were harder to solve, such asracial inequality or the persistence of poverty among sizable sections of thepopulation. Conflicts and only partly successful strategies of broader inclusionappeared, but an extended middle class, largely of employed workers, defined bystandard of living and including sizeable sections of the working class continues toconstitute the economically and culturally compact base of American society.

Many years ago Werner Sombart (1906) asked a question—why, unlike inEurope, is there no socialism in the United States?—That prompted a variety ofreplies. I am not interested here in recalling them all (Sombart’s own included, forexample: the idea of the importance of the frontier in America; going westwards,the individualistic solution being the one that avoided personal investment in thelong, drawn-out construction of collective political interest representation). It ismore important here to remember that, in the countries of Europe, the classcleavage was the fundamental criterion for the organisation of competing politicalparties and, more generally, in the definition of the political arena. Class belonging

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and conflict may, effectively, be considered typical forms of social integration in thesocieties of industrial capitalism; that is to say, of the ways in which people are tiedto one other. In the American contract, behind which lay a tradition of poorpolitical organisation of classes, the problem of social integration triggered thedevelopment of a large, inclusive middle class, one to identify with, cemented byparticipation in improving standards of living and growing consumption. Americahas experienced class conflicts, but the arena and the organisation of politicalparties have not been typically structured according to class cleavage.

If this has been the American way to deradicalise class conflict, in Europe the sameproblem of social integration may instead be defined in terms of institutionalisationof class conflict, through the differentiated and legitimated organisation of interestsdefined on a class basis, which clash and mediate as such in the union and politicalarena. Again, in this case confirming pre-existing institutional roots, the morepolitical approach of the European contract was to comprise a greater activepresence of politics in the regulation of the economy, forms of concentration ofinterests in the overall management of the economy, hefty state intervention in theorganisation of health, pension systems, assistance and, in general, the building ofwelfare-state systems. In Europe, the middle classes and consumption were to growby degrees and the social structure was to change, but the combination of freedomand equality (maybe solidarity is a better word) was achieved in different ways andin different ‘doses’. Throughout the 30 years of postwar development, all thecountries of continental Europe saw their GDPs grew at faster rates than America’s.The effects of redistributive equity were also significant. Albeit accompanied bysocial conflict, sharper in countries where the institutionalisation of the model wasslowest, the fixed management of the principal parameters of the economy andwelfare compensation ensured both systemic integration and overall socialintegration.

At the end of the last century the globalisation of markets, new technologies andthe production of intangible goods led to a deregulation of the economy andgreater trust in automatic market mechanisms. The flexible network economyupset old integrative arrangements, and the pressing demands of today aregenerally connected precisely with the problem of new equilibria in systemic andsocial Integration. The disorders of the financial system are a good example of badsystemic integration, whereas currently popular expressions such as ‘the socialconsequences of the new economy’ refer to the fact that social integration is anopen problem, the result of little understood processes whose consequences areunintended and uncontrolled. The society to come to terms with to establish newcontracts has changed. It is in this situation, in an attempt to record the changesthat have taken place and new experiments on integration that the idea of socialcapital has also been applied to problems of regulation.

To understand this possibility, first developed in the United States, theambiguities that may ensue and the fine-tuning of the instrument, it is a good ideato consider some other aspects of the cultural climate of the last few years. In viewof its affinities with the matter in hand, especially worthy of mention is the currentof thought described as communitarianism. As is well known, communitarianism is asomewhat heterogeneous current whose development began in the 1980s andcontinued in the subsequent decade thanks to philosophers such as A. McIntyre,M.J. Sandel, R. Taylor, and M. Walzer, and leading sociologists such as AmitaiEtzioni. What their contributions have in common is the rediscovery of the

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community; that is to say, the importance of the cultural and affective ties andmutual responsibility which bind individuals together, seen as preceding singleindividuals, on whom they are imposed, and which ought to be revitalised since inthe long run they enter into crisis as a result of individualism and a procedural ideaof democracy. For these analysts of the present, it is not a question of reviving old,oppressive communities for individuals, though, in fact, much of the discussioninside communitarianism and vis-a-vis communitarianists revolves round questionsof rights and duties and the borderline between them and individual freedom. Thisorientation has deep roots in the American tradition. To a certain degree, it alsoidentifies an idea of the American model of society and its regulation mechanisms,which might be summed up as trust in the self-organisational capacity of society andcaution towards unnecessary political action. Divergences and discussion deriveprecisely from the difficulty involved in defining this non-necessity.

Comparable trust in the self-organisational capacity of society and cautiontowards political action are also to be found among some sociologists and politicalscientists with a strong influence on public opinion, who have used the newconcept ‘social capital’ for macro-applications; namely, for analysis of theintegration and regulation mechanisms of society.

In an major study, R. Putnam (1993) examined the reasons for the differentadministrative performances of the Italian regions, documenting the glaringdifferences between the north and south of the country and attributing theinefficiency of the south to lack of civic culture, in turn related to lack of socialcapital—in his judgment, of a fabric of values, norms and associations that facilitatecooperative relations between people. Without going into detail, and consideringthe criticism that has been levelled at this interpretation, what interests me here isto point out that Putnam subsequently attempted to view America from Italy, so tospeak, launching a major debate on the risk America runs of losing its traditionalsocial capital or, more precisely, the diffuse capacity to cooperate for the mostdiverse purposes that so fascinated Tocqueville in his journey there on the first halfof the nineteenth century.

More explicitly, in a book entitled Trust, F. Fukuyama (1995) drew a picture ofthe contemporary world in which he identified the major or minor capacity ofdifferent societies to enter into market competition on the basis of the social capitalthey have inherited with their culture, and the importance the state has had inshaping society. Social capital here is seen principally as a trust-based cultureproduced by religion and reproduced, above all, by the family; hence differentingredients in different cultural traditions. The less the state has intervened tomodify social dynamics, the more it has developed a capacity to adapt to themarket. Without naming the heroes and the villains, all I wish to say at this pointis that Fukuyama imagines the American tradition as being based historically on agreat heritage of social capital, corroborated by a low level of state invasiveness. Inhis opinion, politics wears down the organisational capacity of society; bydistributing rights and resources, it lowers the capacity of people to get by on theirown, weakens community ties and challenges the traditional family.

The analyses mentioned are or lend themselves to be used for the constructionof simplified ideological images of American specificity for practical and politicalends. Maybe the case recalled by Fukuyama can show better what I mean. In hismodel, after the ‘end of history’, entry into a world standardised by the marketeconomy, which he spoke about in another book, the recipe is that the basic

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characteristics of an adaptive social model have to be laissez-faire, compensated forand activated by social capital, that is to say by the self-organisational capacities ofsociety, with politics being left in a corner. This may also be imagined as a historicaloutline of the American model, whose past successes would appear to confirm itseffectiveness. Societies may be ordered into an international division of labour onthe basis of their greater or lesser availability of suitable inherited culturalresources. In so far as it is a recipe, a rudimentary simplification of this kind maythus be seen as an ideological ingredient in support of globalisation by laissez-faire,and as such has probably worked. What interests me most here, though, is that theinterpretative model may also serve to oppose the American model to theEuropean one, traditionally based on a greater regulatory action of politics andimportant welfare-state systems. Today the European model has problems butcomparison might raise embarrassing questions for Fukuyama. For example, hasthe extension of the market in America contributed more than politics to destroytraditional informal social capital? Conversely, albeit with induced inefficienciesand distortions, how far have European welfare systems helped conserve informalsocial capital with political action?

The social capital theory applied to problems of macro-regulation confirms theidea that the self-organisational capacities of society (another way of saying socialcapital) are crucial resources for the management and regulation of thecontemporary economy—resources that need to be conserved and fortified. Thegreat regulatory systems have to be designed as a mix of market mechanisms,political regulation and social self-organisation. The most delicate questions areassigning the proper importance to the various ingredients without exaggeratingthe integrative virtues of the market, and the possibilities of traditional informalsocial capital, and, above all, finding the right role in political action.

4. Two linked syndromes: corrosion of character and consumption of socialcapital

In the previous sections I was mainly concerned with problems of systemic andsocial integration. I now move on to another aspect of social integration: thequestion of the motivations of people to adopt cooperative behaviour orientedtowards, or at least compatible with demands for systemic integration in the newconditions. This too is a problem that has important analytical connections with thetheory of social capital. As we shall see, it is in fact possible to find a connectionbetween the idea of the loss of social capital and the ongoing phenomenon thatRichard Sennett (1999) has called the ‘corrosion of character’. Similar questionsare to be found in the works of authors such as Zygmunt Bauman, Ulrich Beck andAnthony Giddens, and may be included in the general topic of the ‘socialconsequences’ of the new economy and globalisation. This latter expression isBauman’s (1998) and refers changes with loss of control and prediction as a‘consequence’ precisely of economic processes. Here, however, I refer mainly toSennett because the topics and subjects he speaks about are more directlyconnected with the question of social capital.

Character, as Sennett uses the term, ‘. . . focuses upon the long-term aspects ofour emotional experience. Character is expressed by loyalty and mutual commit-ment, or through the pursuit of long-term goals, or by the practice of delayed

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gratification fort the sake of a future end’ (p. 10). We attribute value to theseacquired personal traits and, on the basis of these, we seek to be recognised andvalued by others. The question posed is thus whether, in rapidly changingcontemporary capitalism, it is possible to maintain a character which, by its verynature, is tied to long-term objectives and implies more than solely instrumentalrecognition of the people one enters into contact with. This is precisely the pointthat establishes a connection between the theme of social capital and the theme ofcharacter. In the meaning of social capital adopted above, I refer to relations andinteraction that imply recognition of others at different degrees of intensity, thetheme of corrosion of character thus borders on that of the loss of social capital.Sennett’s thesis is that the variability and fragmentary nature of the typical relationsof what he calls ‘short-term capitalism’ corrodes character; more specifically, ‘. . .those qualities of character which bind human beings to one another and furnisheseach with a sense of sustainable self’ (p. 27).

What is interesting for us is that the phenomena and trends that may beimagined as conditions of loss of character are also the ones that may be identifiedas conditions of loss of social capital. In so far as this fact has the same structuralroots as problems of systemic and social integration, it opens up more complexpossibilities of systematic analysis.

The challenges posed by the social integration I speak of are the most serious ofall for a social system, since they involve possible crises of motivation among theactors. The questions raised in society in the event of crises of motivation are: whycooperate in institutionally envisaged patterns? Why, in principle behave fairlytowards others? Why be true to one’s word? Why think of one’s own interests in thecontext of a more general public interest? The moral dispositions these questionsmay cast doubts upon are also components of a cooperative culture that is oftenimagined as a possible source of social capital, produced and reproduced in theinteraction. But here enter into play the direct effects of the new economy onpeople, associating the hypothesis that a diffuse loss of motivation would cause agrave crisis of social integration, which, in turn, would have effects on systemicintegration, on society’s chances of working. ‘. . . a regime which provides humanbeings no deep reasons to care about one another cannot long preserve itslegitimacy’ (p. 148).

The analysis of Sennett and the other authors cited above lists a set of conditionsand effects on character that confirms this interpretation as a possible trend. I wishto sum up these analyses by concentrating on three subjects in particular: theconsequences of the new type of labor on personality; changes in careers and theirconsequences; and the slackening of ties of reciprocal dependence.

The scenario is the one I have already spoken about of capitalism organised withnew centralised control technologies and production dispersed in minor units, ofnetworks that change in time and space and work faster. This flexible capitalismalso requires a new figure: ‘flexible man’. The increased flexibility and adaptabilityrequired can be imagined as a possible over-riding of constrictions and passiveparticipation in the old labour organisation, and as gratifying active participation ina continuous innovation process. The first question is thus whether the flexibilityrequired really does permit personality enhancement.

The personality traits involved are ‘the capacity to let go one’s past, theconfidence to accept fragmentation’ (p. 63). This is a condition in which thecards—namely, rules, job descriptions, reengineering, restructurings (generally in

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the sense of downsizing with prospects of at least temporary unemployment for theworkers involved) are constantly being reshuffled. In principle, it is also reasonableto assume that the barter between stability and active participation may begratifying for people, though Sennett cites significant data that question theeasiness of structuring such an adaptive character. A United States Congressdocument has estimated the income of workers in the 1980s, from 1 to 3 years afterchanging jobs. Out of 100 employees, 27 were unemployed, 27 had a salary 80%lower than their previous one, 10% a slightly lower one, 10% between 105 and120% of their previous salary and, finally, 18% over 120% of their previous salary.Salary is an indirect rough indicator of the possible effects of labour on personality,but the data say at least three things that have an influence: uncertainty in the newconditions is high (more than a quarter of the sample are unemployed); a clearmajority finds itself in worse conditions; the polarisation between those who haveworsened and those who have improved their positions increases.

The data cited are also indicators of the difficulties involved in imaginingconsistent, reasonably progressive careers, for which previous experiences are acultural capital that can be reinvested. This leads to a second significant questionposed within the context of flexible capitalism: in what conditions can a career thatrequires continuous risky adaptations be acceptable without affecting a person’scharacter? If acceptance of risk is an imperative of any type of innovation, thepossession of resources to risk with an acceptable likelihood of success and, if needbe, to cope with failure is a condition for rational risk behaviour. These areprecisely the conditions that appear to be lacking in the majority of cases, in whichexperiences would appear to be relatively hard to accumulate, in which courses areconfused and uncertain because the opportunities that arise are random orpassively accepted, and in which it is often necessary to forget rather thanremember. The outcome of all this may be the one described in a New York Timesbook, which asserts that ‘. . . job apprehension has intruded everywhere, dilutingself-worth, splintering families, fragmenting communities, altering the chemistry ofworkplaces’ (p. 97).

Is this diagnosis over the top, especially with a view to the future? The factremains that today it may be formulated as a hypothesis with a certain amount ofempirical justification. It is, nonetheless, a point that leads me on to the aspects ofthe social effects of corrosion of character that—insofar as they are the mostdirectly tied to the question of social capital—interest me here.

By definition, social capital implies ties of mutual dependence. These may eitherbe deep, personalised, emotionally charged ties, or they may be colder and morefunctional, albeit lasting, recognised and respected. Here a brief digression is inorder.

At the origins of sociology, Emile Durkheim’s theory of society was based on theidea that the advent of modern society is characterised by the process he callsdivision of labour, the functional specialisation of activities (Durkheim 1893). Theprocess was evident to him in industry, where activities are specialised bothinternally and from sector to sector. The same applies to commerce andagriculture. Likewise, political, administrative, judicial, artistic, and scientificfunctions are also specialised. In these circumstances, people also differentiatedone from another, precisely because they are specialised in different functions, aprocess which Durkheim called ‘individuation’. Functionalist sociology was toresume this original theme, using the role concept to establish the connection

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between people and society: role serves to indicate the behavioural expectations thatare typically tied to a specific social position. A role establishes a person’spermanent positioning in a group and in society, specifying what others typicallyexpect from them and what they can expect from others. This creates self-awarenessas a member of society. A role is learnt during the process of socialisation and aperson is motivated to follow it by social control mechanisms.

In roughly the same years, Georg Simmel also introduced the idea ofindividuation as a component of the process of modernisation, but in a significantlydifferent way. Simmel does not look at man at work, but at the experience of life ingreat cities. He then observes that, passing from traditional to modern society;people belong to a number of ‘social circles’: the families of origin, the new family,professional activity, which may, in turn, establish a contact with different ambits,various types of association, political groups and so on. In principle, any person inmodern society can take part in an indefinite number of groups, in a combinationall of their own. This is the individuation Simmel speaks of, and it seems to me thatthe concept of social ‘circle’ is the precursor of the social ‘network’. The individualhe speaks to us about is the mobile, autonomous, individualist networker, whomanages fragmented interactions with others across a spectrum of attitudes thatrange from friendship to reserve to hostility in nuances and combinations thatenable him to be psychologically balanced (see Simmel 1908).

Sennett does not refer explicitly to the theme of individuation (Beck does in acertain way), but the reference establishes the best point of view for fullyunderstanding the relations that exist between loss of character and the question ofsocial capital. Sennett’s point is that the conditions of flexible capitalism, networkcapitalism in which individuals adapt flexibly, lower stable mutual dependence,which also means reducing resources of social capital. The perspective I haveadopted allows us, however, to see that this is by no means a new process but it istied to modernity. The novelty, which may also be thought of in terms of aradicalisation, consists of an extension of the network logic to professional activity,the world which Durkheim saw as being more stable, one to which socialintegration could be anchored. The ties established with networks are amongindividuals who remain substantially isolated, not well-framed by a role in the socialsystem. The image of Silicon Valley—people ‘network but don’t connect’—springsto mind once more. The new organisation does not make individuals stablydependent upon one another, and this has broader consequences for relationallife.

The idea that the mutual dependence of people generates social capital isalready explicitly asserted by Coleman, though the economic world he has in mindis still that of large bureaucratic, Taylorist organisations, in which people havestable roles, interrelated by an organisational pattern. It is in reference to a worldpopulated by these formal organisations, where people enter into specialisedpositions that he speaks of consumption of primordial social capital. I might add,however, that even if such ties are cold and functional, they are nonetheless lasting,recognised and respected, thus constituting a social capital. Instead, the loss ofcharacter Sennett speaks about touches on labour relations in new networkedorganisations, where such relations are volatile and fail to ensure the security ofacquired recognition. In the new conditions, those who drop out of the game (a lotof people, in Sennett’s view) will find themselves devoid of social capital and thiswill generally provide incentives for opportunistic free-riding.

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The problem of character corrosion, the consequence of the new organisationof labour which generates the need for a ‘flexible man’, thus confirms andradicalises the question of social capital. If social capital is, in essence, aphenomenon of relations and interactions among people, character too isformed and maintained in the context of relations and interactions with others.The flexible man no longer seems to possess resources of social capital that allowhim satisfactory relational adaptation. This may lead to a crisis of motivationwhich, if diffuse, generates profound problems of social integration within thesystem. In this way, the two problems of the loss of social capital and charactercorrosion are interlinked.

So are the diagnoses and forecasts that the literature puts forward on corrosionof character exaggerated? The existing data on the risks of unemployment andconfused careers suggest as much. Some argue that, in the past, the greattechnological revolutions generated their full effects in terms of development onlyyears after they were first introduced, and that the same is to be expected of theinformation and communication technologies underlying the new economy.Analysis of the economy and the labour market has to monitor these processescarefully, furnishing more precise data about trends. As far as I am concerned here,attention to character loss stresses the need to supplement assessment of the neweconomy with the production of social capital necessary for interaction in the socialorganisation of modernity from a new point of view. Important questions onmotivation in modernity present themselves in a new way and, driven by the neweconomy, are hypothetically radicalised.

5. The rational reconstruction of society

This article has assessed the use of the social capital concept in analysis of givenchanges in contemporary capitalism. I began with a thumbnail sketch thatembraced a very broad interpretation of the concept. On more than one occasion,it has emerged that the new. Organisation of labour appears to radicalise the trendsof modernity already grasped by Simmel. And it is precisely this reference toSimmel that allows us to return to the more general meaning of social capital incontemporary society and to an observation that is also a word of caution abouttrends in the loss of social capital.

Simmel recognises the ambivalence of the processes of modernity, which bothlink and separate people, opening spaces of freedom and continuously closingthem in new, crystallised forms of culture. Within this framework, in complex,modern, no longer close-knit societies, complex combinations of warmer andcolder relations are the only possible forms of social organisation. The course Ihave followed shows that a non-banal use of the social capital perspective brings tolight, on different levels, the relational complexity of the new social organisationand the problems posed, in this respect, by changes in the economy. Themanagement of this glimpsed-at relational complexity is the practical motive which,right from the outset, gave rise to research on social capital. The ambivalence of theprocesses of modernity I have highlighted has caused shifts in ways of under-standing and adopting the concept. Some of the more conservative have beenattentive only to the more traditional forms of social capital jeopardised, withoutrecognising different forms and combinations, shifting the emphasis to hidden and

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irrational dimensions of relational life. This was not Coleman’s original project, towhich I would now like to return.

The title Coleman chose in 1992 for his presidential address to the AmericanSociological Society—‘The Rational Reconstruction of Society’—explicitly reflectshis idea of the tasks of sociology and the significance of his own research. In hiscontributions he arguably fails to fully clarify the social capital concept and leavesroom for misunderstandings. But, as I understand it, the general idea thatunderlies his theoretical construction is pretty clear, and from it he draws clearconsequences. The general basic idea to which it is worth returning is thattraditional social organisation, the organisation of traditional communities, hasprogressively disappeared and this is what has produced a loss of the informal socialcapital at the basis of social control in such societies. The adjective used to describethese old forms of social organisation and social capital is primordial, a term whichintroduces the evocative ambiguity with which Coleman plays, and in which he issometimes imprisoned. Primordial, in fact, means ‘existing at the beginning’, butalso ‘elementary’, ‘fundamental’, and ‘primary’ (see Webster’s New InternationalDictionary). In the first meaning, the reference to social capital is univocal,referring to social capital typical of those traditional communities, the only socialcapital existing in that form of social organisation. In other meanings, the adjectiveidentifies the original form as one type of social capital, whose decisive importanceis also recognised for subsequent forms of social organisation. The loss of socialcapital is the consequence of the organisation of modern societies, which havedeveloped purposive organisations as a source of social capital for growing relationalambits. In reality, ambivalence emerges here: if the development of the formalsocial organisation erodes primordial social capital, at the same time the creation ofa new formal social organisation compensates for the losses during the historicalprocess. The point is that the rules of specialised organisations and laws issued andenforced by the state never completely replace the social norms formed andtransmitted within the interaction, not to mention correlated control factors suchas status, reputation and moral force. This is, as I anticipated at the beginning,Coleman’s personal approach to the contemporary rediscovery of the world ofinteraction (not of the suffocating and constrictive primordial community) as ‘themost intimate mechanics of social reproduction’ (Giddens 1984), within whichmutual monitoring is constant, mutual adaptations are tested, faults in the socialfabric are repaired and coherent self-images are recomposed, and trust isconserved among people. On account of the problems we have seen, systemicintegration and social integration require a complex interplay of these differentforms of formal and informal control in institutional contexts that explicitlyenvisage this possibility.

The expression ‘rational reconstruction of society’ thus assumes a doublemeaning: it is used both to identify the historical process of the shift to socialorganisation that has overridden primordial organisation and a prospective projectthat maintains elementary social capital’s chances in the new, rational socialorganisation. All this means that particular sensitivity and care has to be devoted tothe design of formal organisations and the elaboration of laws and provisions forthe political organisation of society. I refer to the possible informal incentivesgenerated by the formal organisation itself, which establishes relational fabrics inwhich individuals recognise each other and connect their respective strategies byreproducing conditions for long-term on new different planes if necessary. Here

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the interplay is complex: the above-mentioned radicalised conditions of theeconomy demand delicate equilibria in terms of elasticity and coherence, mobilityand persistence, flows and structures. It is precisely because of this that the rationalreconstruction of society and the maintenance of systemic and social integrationare inevitably an explicit process of institutional design. Coleman sees the term‘design’, used by architects, as being appropriate here. As to social researchers, heconcludes that they need to seek to ensure,

. . . their contribution to optimal design of the constructed social organization of the future. Thisinvolves, of course, social theory . . . (but) it also involves a great deal of social policy research.It involves training sociologists . . . to be the architects and architectural aids in the design ofsocial institutions. (Coleman 1993, p. 14)

This is undoubtedly a consequent and optimistic practical approach. HereColeman asks us to take a different look at accounts of the past to be able torecognise the presence and effects of institutional designs of the kind described (attimes underestimated and unacknowledged in the first rational reconstruction ofsociety), to find lessons that are still useful today, and, of course, to find the way tonew rational institutional architectures in the non-banal sense indicated.

The most evident examples of projects for the rational reconstruction of society—ofthe institutional design of devices to generate social capital and attentive to formaland informal social capital—which spring to the mind of an Italian researcher,influenced by the industrial district experience mentioned above, are ‘territorialpacts’ and other comparable forms of concerted development tested in Italy inthose years (see Trigilia 1999). I prefer, though, to end with a different referenceto which the vocabulary and grammar of social capital can be applied. The one Ihave in mind is a highly paradigmatic example of the institutional design ofrational social organisation architectures in Coleman’s sense; insofar as it does notinvolve limited territorial contexts, it better reflects the general strategic scope ofthe theory of social capital today. The example regards the past, but a past thatcontinues to exert influence and still has a lot to teach us.

My theme is the explanation of the reasons for the great economic growth of theUnited States in the last century. The social historian Olivier Zunz (1998) proposedan analytical model for this which includes an explicit rational reconstruction of societyin Coleman’s sense.

Zunz is well aware of the importance for the formation of America of the age ofvolunteerism and variegated local communities. He also knows that, to a certainextent, the legacy of that culture is still active, but feels free of the somewhatnostalgic interpretations that exaggerate the importance of certain ingredients andhide other more decisive ones. He thus looks in other directions: for him, theAmerican growth model is in fact the fruit of impressive institutional engineering,made up of parts that fit together, pragmatically designed to build and run a massdemocratic society. In particular, I refer here only to the part of the institutionalproject reconstructed in Zunz’s analysis most apt to the questions I am asking.

A mainstay of the model is what Zunz calls the ‘institutional matrix of inquiry’,a new way of producing and distributing knowledge through close collaborationamong enterprises, universities, public and private research institutes, foundationsand government agencies. The term ‘matrix’ refers to a stabilised pattern ofinteraction in which ideas and people circulate easily, and which is elastic andcapable of growing to leave room for new elements. The device, which was

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operating on a permanent basis by the 1920s, created direct interaction amongproducers, mediators and users of knowledge, who were thus able to combine todevelop research and training strategies effectively applicable to the economy andto social organisation. The matrix was the driving force of economic growth and Ihave no difficulty in defining it as a clear example of rational reconstruction ofsociety, an example of institutional design which allowed formal and informalinteractions among the actors who combined to make up the network, with macroeffects of activation and systemic regulation. In this sense, it was a formidablegenerator of social capital, and Zunz shows how social scientists took an active partin building and managing it. Comparison between this pattern and Fukuyama’s,described above, brings to light the former’s poor, schematic, reductive andculturalist use of the social capital concept, and enables us to recognise Zunz’s‘matrix’ as a relational pattern with a high potential of cooperative interactioncreated by an action of institutional engineering. Hence the design of a complexinstitutional architecture, the particulars of which may not have been immediatelyevident, but which was clearly an outline project from the outset: a mission ofobservers sent to the then progressive old continent to learn how to developscience and technology for development purposes had convinced Americanpolitical and business elites that something was not working properly in Europeancountries, where science and production were institutionally separate but neededto be connected. Developing his model, Zunz sees the matrix of knowledge in amore overall institutional design, which, as a whole, corresponds to the project fora society of middle-classes centered round economic growth and the diffusion ofconsumption, the basic ingredients for the social contract I spoke about above. Wecan conclude that the construction of the American model was a process that testednew forms of political governance, new equilibria between public and privateaction and pragmatic combinations of formal and informal social organisationproducing social capital for envisaged goals. Coleman would have had nodifficulties in seeing this model as a successful example of what he meant by rationalreconstruction of society.

Notes

1. Which would also appear to be the one most favoured by Italian researchers.2. Sociation is the development of stable patterns of relationships among individuals through social

interaction and communication: see Simmel (1950).3. For an essential bibliography, see Becattini (1998).

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Social capital in changing capitalism

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