The research literature on social capital strongly emphasizes its positive consequences.
Indeed it is our sociological bias to see good things emerging out of
sociability; bad things are more commonly associated with the behavior of
homo economicus. However, the same mechanisms appropriable by individuals
and groups as social capital can have other, less desirable consequences. It
is important to emphasize them for two reasons: first, to avoid the trap of presenting
community networks, social control, and collective sanctions as unmixed
blessings; second, to keep the analysis within the bounds of serious sociological
analysis rather than moralizing statements. Recent studies have
identified at least four negative consequences of social capital: exclusion of
outsiders, excess claims on group members, restrictions on individual freedoms,
and downward leveling norms. I summarize them next.
First, the same strong ties that bring benefits to members of a group commonly
enable it to bar others from access. Waldinger (1995) describes the tight
control exercised by white ethnicsdescendants of Italian, Irish, and Polish
immigrantsover the construction trades and the fire and police unions of
New York. Other cases include the growing control of the produce business by
Korean immigrants in several East Coast cities, the traditional monopoly of
Jewish merchants over the New York diamond trade, and the dominance of
Cubans over numerous sectors of the Miami economy. In each instance, social
capital generated by bounded solidarity and trust are at the core of the groups
economic advance. But, as Waldinger (1995, p. 557) points out, the same social
relations that
enhance the ease and efficiency of economic exchanges
among community members implicitly restrict outsiders.
Ethnic groups are not the only ones that use social capital for economic advantage.
Two centuries ago, Adam Smith ([1776] 1979, p. 232) complained
that meetings of merchants inevitably ended up as a conspiracy against the
public. The public, of course, are all those excluded from the networks and mutual knowledge linking the colluding groups. Substitute for merchants white
building contractors, ethnic union bosses, or immigrant entrepreneurs, and the
contemporary relevance of Smiths point becomes evident.
The second negative effect of social capital is the obverse of the first because
group or community closure may, under certain circumstances, prevent
the success of business initiatives by their members. In his study of the rise of
commercial enterprises in Bali, Geertz observed how successful entrepreneurs
were constantly assaulted by job and loan-seeking kinsmen. These claims
were buttressed by strong norms enjoining mutual assistance within the extended
family and among community members in general (Geertz 1963). The
result was to turn promising enterprises into welfare hotels, checking their economic
expansion.
Granovetter (1995), who calls attention to this example, notes that it is an
instance of the problem that classic economic development theory identified
among traditional enterprises. Weber ([1922] 1965) made the same point when
he stressed the importance of impersonal economic transactions guided by the
principle of universalism as one of the major reasons for Puritan entrepreneurial
success. Thus, cozy intergroup relations of the kind found in highly solidary
communities can give rise to a gigantic free-riding problem, as less diligent
members enforce on the more successful all kinds of demands backed by a
shared normative structure. For claimants, their social capital consists precisely
of privileged access to the resources of fellow members. In the process,
opportunities for entrepreneurial accumulation and success are dissipated.5
Third, community or group participation necessarily creates demands for
conformity. In a small town or village, all neighbors know each other, one can
get supplies on credit at the corner store, and children play freely in the streets
under the watchful eyes of other adults. The level of social control in such settings
is strong and also quite restrictive of personal freedoms, which is the reason
why the young and the more independent-minded have always left. Boissevain
(1974) reports such a situation in his study of village life in the island of
Malta. Dense, multiplex6 networks tying inhabitants together created the ground for an intense community life and strong enforcement of local norms.
The privacy and autonomy of individuals were reduced accordingly.
This is an expression of the age-old dilemma between community solidarity
and individual freedom analyzed by Simmel ([1902] 1964) in his classic essay
on The Metropolis and Mental Life. In that essay, Simmel came out in favor
of personal autonomy and responsibility. At present, the pendulum has swung
back, and a number of authors are calling for stronger community networks
and norm observance in order to re-establish social control. This may be desirable
in many instances, but the downside of this function of social capital must
also be kept in mind.
Constraints on individual freedom may be responsible for Rumbauts findings
that high levels of familistic solidarity among recent immigrant students
are negatively related to four different educational outcomes, including grades
and standardized test scores. According to this author, family ties bind, but
sometimes these bonds constrain rather than facilitate particular outcomes
(Rumbaut 1977, p. 39).
Fourth, there are situations in which group solidarity is cemented by a common
experience of adversity and opposition to mainstream society. In these instances,
individual success stories undermine group cohesion because the latter
is precisely grounded on the alleged impossibility of such occurrences. The
result is downward leveling norms that operate to keep members of a downtrodden
group in place and force the more ambitious to escape from it. In his
ethnographic research among Puerto Rican crack dealers in the Bronx, Bourgois
(1991, 1995) calls attention to the local version of this process, which singles
out for attack individuals seeking to join the middle-class mainstream. He
reports the views of one of his informants: