ABSTRACT
Important social capital definitions focus on relationships, how people
are connected. Relationships depend on commonalities, what people share.
Commonalities may be earned or inherited and include shared emotions. Empathy
is an important shared emotion because it enables us to
internalize each other’s well-being, the motivation for important economic
outcomes. This article supports the definition of social capital as the empathy
one person or group has another person or group, the object(s) of their social
capital. Because Adam Smith emphasized the importance of sympathy (what we now
call empathy), we recognize him as contributing to the social capital
definition supported here. Members of social capital-rich networks, compared to nonmembers, are more
likely to produce and exchange relational goods (intangible signals that
satisfy our socio-emotional needs). They are also more likely to exchange
commodities (things that satisfy our physical needs) on preferential terms,
more likely to cooperate, more likely to invest in public goods, more likely to
support institutions, more likely to enjoy equal commodities incomes, more
likely to limit negative externalities, and more likely to be happy. Social
capital, however, has a dark side. It is that the benefits enjoyed by members
of social capital-rich
networks are often denied or not available to network nonmembers. The
disadvantages of being excluded from social capital networks can sometimes lead
nonmembers to develop antipathy toward social capital network members. The
antipathy one person or group has for another person or group is defined here
as negative social capital. Negative social capital working alone is of little
consequence. However, when nonmembers of social capital network share negative
social capital toward the same object, they may develop cheap social capital
relationships and cheap social capital networks that have influence. Motivations
for creating cheap social capital networks include resentment, envy, real or
imagined threats, and lack of commonalities. We call cheap social capital
networks cheap because they are inexpensive to create, inexpensive to maintain,
and produce inferior (cheap) products compared to those produced in social
capital networks. Finally, cheap social capital networks are ubiquitous They
can be found in social, business, sports, entertainment, religious, and
science. Future investigations should also focus on discovering the conditions
that lead to the formation of cheap social capital networks and what measures
can be adopted to impede and mitigate their costly consequences.