The CAPITAL in Social Capital: An Austrian Perspective |
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| Authors: | Pavel Chalupnicek |
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| Institution: | 1. Department of Institutional Economics, University of Economics in Prague;2. The author is an Assistant Professor at the Department of Institutional Economics, University of Economics in Prague, Nam. W. Churchilla 4, 13067 Prague 3, Czech Republic. E‐mail address: . Dr. Chalupnicek's interests include the study of altruism in economics, economics of religion, and spontaneous social institutions based on trust. He has recently co‐authored an article in the Independent Review (USA) on private provision of sick insurance by so‐called Friendly Societies in 19th‐century England. He would like to thank Prof. Peter J. Boettke (George Mason University, USA), David Lipka (University of Economics in Prague), Lukas Dvorak, participants of Association for Private Enterprise Education (USA) 2008 Annual Meeting, and two referees of this journal for their comments on earlier versions of this article. All the usual caveats apply. Financial support by the Grant Agency of the Czech Republic (grant no. GA402/07/0137) is also acknowledged. |
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| Abstract: | In recent decades economists started discovering the importance of the social dimension of economic interactions. Contemporary economics has borrowed several sociological concepts for its own use, among the most important being the concept of social capital. However, this transfer within disciplines did not occur without a loss—the nature of social capital in economics remains confused and obscure. The purpose of this article is to clarify it, specify the possibilities for its use, and discuss their limits. It is argued that economics once also possessed a view of human beings that was more “socialized” than the modern neoclassical Homo oeconomicus, and that this more “socialized” view still exists in the Austrian school of economics. Because this tradition of economic thought has also developed an elaborate capital theory, it can serve as an ideal source where we can look for inspiration in the current social capital debate. First, social capital is (re)defined along these lines as an individual's asset connected with recognized reciprocity (as opposed to interactions usually classified as “altruistic”). Then major critical claims about the relation between social and physical capital are answered and the connection between social capital, trust, and social norms is described. |
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