Social Capital and the Economy

John Cornwall has consistently argued that investment holds the key to economic growth. With the development of the so-called endogenous theories of growth, this has become a fashionable view and many governments are freshly concerned with how to encourage investment. In this chapter, I am concerned with how governments might encourage investment in a particular kind of what I call social capital: the beliefs that tie a group of people together. These beliefs are what anthropologists refer to as a group’s ‘culture’ (see Douglas, 1978) and I explain in the next section why and when it makes sense to refer to these beliefs as a type of social capital. In particular I argue that these beliefs, like plant and equipment, can contribute to production, but they can only do so when they are jointly owned — hence the designation ‘social capital’.1 In the following section, I consider the origins of these beliefs. Unlike the recent ‘communitarian’ discussion of the contribution that the family and parenting make to the production of social capital (see Etzioni, 1995), I focus on the part played by people’s shared experiences of consuming the products of the cultural industries: the mélange of sporting, arts and media goods like film and television which comprise modern entertainment. This analysis suggests that contrary to the current trend towards deregulation of these (and other) industries, a concern with the social capital of a common culture provides powerful reasons for regulating the market in these goods. The final section concludes.