Social capital is the network of relationships between individuals, groups, and entities. This term is used in several different ways in fields like economics, sociology, and anthropology. In all cases, the use of this concept boils down to the idea that people create connections with each other, and those connections are used in a variety of ways. Studying this subject can be a way to learn about how a society functions.
In a classic example of social capital, people who attend the same university tend to feel connected with each other, both because they may have interacted on the campus and created friendships, and because they have an institution in common with each other. Two graduates of the same university are more likely to connect with each other because they share social capital, and this can translate into advantages for one or both parties.
Social capital can take many other forms. Residents of the same neighborhood, people who work for the same company, and groups of friends all have networks of relationships. In addition to being personally and psychologically rewarding, these connections can also confer additional advantages. People in the same network will be more inclined to rely on each other when they need services, and if an individual lacks a connection to a particular service, he or she may be able to find one by exploiting social capital.
Many people use social capital on a daily basis, in a variety of ways, as in the case of a person who has a toothache and asks a friend to recommend a dentist. Likewise, a person seeking a job who asks a friend to put in a good word is also using his or her network of connections to achieve an end. This concept may even be formalized in some interactions, as in the case of letters of recommendation which students request from instructors when they apply to institutions of higher education.
Theories about social capital first began to be developed in the 20th century, by several different researchers. Some researchers believe that a social network is beneficial, because it creates a strong series of connections which can be used to support individuals and endeavors. Others suggest that it can be harmful, because it can establish situations in which negative activities are accepted and pushed through as a result of social capital. For example, many genocides spread through social networks, starting out as small fringe movements which eventually mushroom into huge events as people and institutions pass the concept along to each other.