Social Capital
Social capital is analogous to the notions of physical and human capital. Social capital
enhances individual productivity just like tools and training do. The key notion is that social networks have value. The norms of reciprocity and trustworthiness arise from
social connections and they positively affect the productivity of individuals and groups.
There are individual and collective benefits from building social capital. Individuals reap
the private goods of finding jobs and getting help. Groups benefit from increased
productivity and the security of neighbors watching out for each other. These are public
goods