Social Capital Quadrants

The relationship between social capital and capital

We want all Americans to be able to accumulate both social capital and capital. Both are needed to escape and stay out of poverty, and to achieve the American Dream. Our research aims to identify problems—clear impediments to the accumulation of social capital. With the problem defined, we can offer a federal government policy solution to help achieve this goal.

When considering impediments to accumulation of social capital, it is helpful to recognize that different individuals are in different contexts. We use a simple illustration to give some clarity to the complex issues associated with social capital and capital accumulation: the four quadrants.

In this simple chart, the x axis shows capital from low to high: from poor to rich. The y-axis shows social capital from low to high: from low levels of relationships to high. This gives us four quadrants.

1. Low capital and low social capital
2. Low capital and high social capital
3. High capital and high social capital
4. High capital and low social capital

1. The bottom left: low social capital, low capital

CONTEXT: People in the bottom left quadrant have low levels of both social capital and capital. They do not have the network of deep and trusted relationships social science shows as critical in childhood development for best life outcomes, nor the relationships required for optimal personal and professional lives in adulthood. Neither do those in this quadrant have significant financial or capital assets such as income, savings, investments, retirement funds, or home ownership.

PROBLEM: An individual who finds themselves here is in a significant environment of distress—likely trapped in intergenerational poverty, surrounded by and perpetuating higher than normal levels of antisocial behavior or dysfunction, with few opportunities, or resources required to escape poverty. Aspirations for stable family life and affluence are significantly difficult to achieve.

POLICY SOLUTIONS here must have as much emphasis on supporting the creation of social capital as they do in federal assistance to provide capital resources.

2. The top left: high social capital, low capital

CONTEXT: People in the top left quadrant are low in capital but high in social capital. That is, they have a network of deep, trusted relationships in childhood and those required for enjoyable and successful personal and professional lives in adulthood. However, they may not have high income, significant savings, a retirement pot, or be able to own a house.

PROBLEM: People in this quadrant are likely to be part of relatively well functioning extended family and wider community, perhaps connected to a religious institution that transmits values across the community of which they are part. Evidence shows that individuals in this situation are more likely to escape the bottom quintile, perhaps more able to avail themselves of the opportunities around them, and to temporarily weather low capital assets’ hardships through other forms of support. They are well placed to achieve capital accumulation but may have difficulty in accessing better paid jobs or opportunities to accumulate capital.

POLICY SOLUTIONS here need to ensure strong social capital assets are not eroded. Capital accumulation achieved through education, training, employment, tax regime, and associational life policies should mutually support accumulation of both sets of assets.

3. The top right: high social capital, high capital

CONTEXT: In the above table, people who are in the top right quadrant are high in social capital and high in capital. They enjoy a network of deep, trusted relationships in childhood and those required for enjoyable and successful personal and professional lives in adulthood. They are able to role-model relationships to their children. They have capital assets too which benefit themselves but also their children: perhaps savings, a house, investments, a private pension, and savings for their children’s college tuition.

PROBLEM: Those in this quadrant embody the American dream of a middle to upper middle-class life. Problems here relate to social capital collapse through breakdown of relationships, capital loss through job loss, or federal policy that penalizes them.

POLICY SOLUTIONS: Federal policy needs to support and reward pro-social capital assets. Policy solutions intended to help others should not unfairly impede the sustainability of their experience.

4. The bottom right: low social capital, high capital

CONTEXT: Individuals in the bottom right quadrant are low in social capital but high in capital. They may have accumulated wealth, perhaps even enviable levels of it. Yet they do not have a rich network of trusted relationships in either child development or to sustain them across the life course.

PROBLEMS: Such individuals may be few in number, but their capital assets maybe significant enough to compensate for a lack of social capital.

POLICY SOLUTIONS here are to help those with high levels of capital to benefit those with low levels of capital through philanthropy and job creation, in a manner that also supports social capital creation.

The Social Capital Campaign works to promote policy solutions for all four quadrants. We recognize that social capital is critical for those with less capital. Boosting childhood development and the network of relationships that sustain an adult professionally and personally, are essential to growing social capital assets at the root of capital accumulation. Boosting social capital is therefore essential for the growth of the economy and vibrancy of American society.