Measuring Prosperity: What Is Social Capital?

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

There are many forms of capital. Besides the usual definition of business capital (money), there is physical capital (a car, house, or other useful tool), human capital (your skills and education), and also social capital. According to Wikipedia, this describes the value held within our relationships with other individuals and larger social networks.

One of the books I am currently reading is Simple Prosperity by David Wann (co-author of Affluenza). Inside, there is a nice quote about social capital:

It is inevitable that our society will once again give higher priority to belonging and lower priority to belongings.

Look at the results of a study by the National Science Foundation, which found that one-fourth of all Americans say that they have no one that they can discuss personal problems with. Not one person. This number has doubled since 1985. One in 32 people is either in prison or on parole. If our ultimate goal is to be happy and fulfilled, then this can’t be a good trend.

Sociologist Robert Putnam believes the following are indicators of social capital:

  • How many of your neighbor’s first names do you know?
  • How often do you attend parades or festivals?
  • Do you volunteer at your kid’s school? Or help out senior citizens?
  • Do you trust your local police?
  • Do you know who your U.S. senators are?
  • Do you attend religious services? Or go to the theater?
  • Do you sign petitions? Or attend neighborhood meetings?
  • Do you think the people running your community care about you?
  • Can you make a difference?
  • How often do you visit with friends or family?

It has been argued that growing social capital can keep you healthy, make schools more productive, reduce crime, and even raise home prices in a neighborhood. Perhaps the best thing about social capital is that “the more you spend, the more you have”.

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

User Generated Content Disclosure: Comments and/or responses are not provided or commissioned by any advertiser. Comments and/or responses have not been reviewed, approved or otherwise endorsed by any advertiser. It is not any advertiser's responsibility to ensure all posts and/or questions are answered.


  1. I think a good way to sum up social capital is to ask this question: are you part of a community? It seems that fewer people can answer yes to Putnam’s list of question today. Why is community so scarce, especially in larger cities? I think part of the answer has to do with virtual communication having the ability to replace face to face communication.

  2. I might have to check this book out. I am currently reading The Ten Roads To Riches, I am loving it right now. I do agree though, there are different kinds of capital in life. The key to establishing a great life is to work towards coming into balance with all the capitals that you deem important to you. For me it’s Finance, Family, Faith and Friends.

  3. Thats terrible, when i looked at the list and thuoght about it, i actually answered none and no on all of them, not good at all..

  4. I don’t do most of the things in that list, but I also don’t feel like where I live is my “community.” A lot of people might argue that the Internet’s communities and networks are taking away from social capital, but I feel like it’s providing mine where I can’t get it locally.

    I rent an apartment in a place I don’t feel like I can stay forever. House and condo prices are too expensive to ever be realistic (well, maybe not depending on how the economy goes), so it feels like a burden to try to put down roots that I’m just going to pull out like weeds later on when I move somewhere else. The same goes for a job in an environment where you have to constantly be looking around for something better, lest you be caught unaware and find yourself fired. I have very few friends who feel like their job is the same one they’ll have in 10 years.

    I don’t think social capital can grow in many of the larger US cities unless there’s a big change in my (and everyone else’s) economic capital to allow for a path to neighborhoodship. Let me work my way up from a studio to a one bedroom to a condo or house and the family that I can build with it and find a job that isn’t hours away from all of it and then I’ll be happy to want to meet and spend time with my neighbors. Until then, I’ll stick with the mix of physical friendships and virtual ones which allow me to have some long term guarantees.

  5. I would tend to agree in that I think today there are new ways to build social capital, but it is also sad that we are losing the old ways. I used to live in a much more community-oriented neighborhood – they even used to have “block parties”, which I never heard of while living in suburbia or in the urban city.

    On the other hand, I also don’t like the idea of living in really small towns where “everyone knows your business”.

  6. The only problem with social capital is that it is non-transferable. For the most part it is limited to one locality, and you can not take it with your like other types of capital if you move. That’s not to say one should not pursue it, just something to think about. Maybe that is why online communities are becoming more popular, as people become more mobile, they seek ways to preserve their “social wealth” and do so by keeping contact via internet and social neworking sites.

  7. Hmm, so the nonreligious equivalent of going to church is the theater. What’s a poor atheist (who can’t afford theater tickets) to do?

  8. I find this topic very interesting. I grew up on a family dairy farm (100 years in the same family). My parents had a lot of social capital. My dad would help his less fortunate neighbor bale the hay once in a while and there were plenty of other instances of the neighboring farmers helping each other out.

    a few years back, after I had moved away my Dad broke his ankle and couldn’t work. I came home and found that the neighbors, his brother and even our priest were at the farm putting his hay up. I’m not religious but I can see the advantage of a connection with the Church and/or community.

    Now, for my community. My subdivision in the ‘burbs has annual meetings with about 10% attendance and frequent animosity between neighbors. However, because of my upbringing I try to offer help whenever I can but it’s not going to go with me when I move as someone else has stated. People move pretty often these days.


    I do have some online communities but the people online don’t really know me, they know my avatar, if anything. I don’t feel like that is a good substitute.

  9. These are distinguishing factors between big cities and small towns. There are so many people in big cities that they start to ignore and often annoy each other. This lead to dependence on government services to provide some organization and oversight. Not the case in small towns where people are unavoidable. Rural America learns to survive as a community, with much less government help, and thus their political leanings tend to be more conservative.

  10. I am extremely conservative fiscally. Socially, I could not care less what people do with their time. When my wife and I get home, we enter the house and either spend time there or in the backyard. Our home is in our neighborhood but our neighbors are irrelevant to us (thankfully).

    The idea that people behave differently in small towns v. large is a myth. I spent 18 miserable years in a small town – Granite Bay, Ca – and 16 in San Diego. I would rather hang myself than live in a small town again. No ethnic food, no fun, long drives to everything, nothing but hills, trees and quiet. The only advantage – the lot sizes meant that we didn’t have to see our neighbors ever.

  11. very timely.
    i am helping a few neighbors start a homeowners association – to deal with things left to rot after the builder went belly up.
    along the way i have met a lot of people and we are talking about starting up block parties, etc.
    at 4 units/ac, single family housing, we have 200 homes in our subdivision – and there are even 3 distinct communities within that – which tend to not like eachother all that much…
    its amazing how few people readily come to meetings or get involved even when it directly impacts their home value.

  12. Interesting post.

    When I was building my house, I got to learn many of my neighbors first names. In my case, knowing their name wasnt some idealistic experience whereby I can later talk to them about the weather, bock parties, etc. Rather, many neighbors stopped by to complain about this or that, to threaten to call the building department (for irrational reasons), and one neighbor thought I was responsible for re-paving the entire street which was old and decrepit after not being maintained for 20-yrs. My point is, many people are a-holes that you probably dont even want to get to know. From my experience, “property owners” are often times crazy and have a bunch of irrational ideals about their property.

  13. “the more you spend, the more you have”… hahahahaaaa hahaha

  14. “the more you spend, the more you have”… hahahahaaaa hahahaaa

  15. I see where your going with this .. but I think the measures of social capital listed aren’t necessarily the best ones.

  16. I’ve never been a big fan of Robert Putnam. He’s got a book called “bowling alone,” where he points to decline in bowling league participation as signs that we’re losing social capital… I say bowling never was that amazing of a sport, more of an anomaly really.

    I’ve lived in small rural towns and big cities, and I’ve found social capital in both places. It all depends on you and your situation. I lived in a building with my landlord and 3 other tenants. We had a community garden and talked with each other regularly. I think the landlord had a big part in creating that atmosphere. My sister lived in Oakland and had a great little neighborhood group of friends. Her’s existed because of a shared parking lot/patio. In that case, it was a geographical feature.

    The suburban subdivision comments are interesting. Seems like these developments lack character and important community infrastructure while also attracting people with certain values/expectations and prove to be a recipe for bad community.

    to Dave:
    I’d say, you never know what will happen, so you should try to make friends where you are because its fulfilling, and given the virtual connections and ease of travel today, you may remain friends with people even after you move away. It seems silly to only work towards one thing at a time. i.e. first I’ll get a nice house, then I’ll meet someone, then I’ll have a family. You can’t always control those things, and sometimes spend forever on the first thing.

  17. I beieve the problem lies in your own words “our goal is to be happy and fulfilled”. It’s not all about us! When we forget about our own selfish ambitions and serve others we are surprised at our blessings! We can learn alot from our creator.

  18. Taylor Davidson says

    “Inevitable”? Really?

  19. This is the first time I come accross the term ‘social capital’. Bussiness capital is the source of wealth, social capital is the source of happiness :).

    Thanks for the entry.

Speak Your Mind