Theories of Human, Social and Identity Capital
Human capital refers to individual skills and qualifications, which have been built up mainly
through formal education and training, although informal learning also plays a role. Human
capital is deployed in the workplace, as well as in social and community contexts.
Social
capital refers to participation in networks, shared values and the contribution to common
goals.
Identity capital is much less used in social contexts, but it is also very important.
Identity capital refers to the ability to maintain healthy self-esteem.
Although this sort of
capital is often ignored in analyses, or otherwise taken for granted, it is extremely important
and its role as a co-determining factor in shaping behaviour and either facilitating or
obstructing behavioural change cannot be stressed highly enough.
Identity capital may be one of the most under-theoretised, yet one of the most important
concepts in social science. While there is a long-running debate about each of these concepts,
as we explain below, the key issue is the interdependence of human, social and identity
capital. The main insight is simple enough to formulate, although it may not be an easy task
to accomplish in practice: desirable and permanent behavioural change only takes place if
certain conditions referring to all three forms of capital are fulfilled.
Let’s see what these
conditions are.
This insight is of particular interest for businesses.
People bring human capital as well as
social and identity capital with them, the sum total of which forms the substrate of the culture
in the company.
In any organisation, there will be mechanisms which either facilitate or
hinder people working together.
demotivating.
Organisational structures will be either motivating or
They will be conservative or innovative.
Teams will work together
constructively or not so constructively and cliques (very small groups) always form. These are
the factors which determine the way, the pace and the degree to which organisational learning
can occur.
Human capital
Human capital can be simply seen as the sum total of competences.
According to Keeley,
human capital refers to '(…) the stock of competencies, knowledge, social and personality
attributes, including cognitive abilities, embodied in the ability to perform labour so as to
produce economic value' (Keeley, 2007: 2). Most theories of human capital attempt to break
down human capital into several components for analysis.
These components are called
intangibles. Most often, social capital, the sum of social bonds and relationships, has come to
be recognized, along with social cohesion or social resilience. Individual characteristics such as
educational attainment (also called instructional capital), work experience, unique talents and
knowledge management are considered to be parts of human capital. It is clear that human
capital increases through education and work experience.
The best-known application of the idea of human capital in economics is that of Gary Becker, a
neoclassical economist of the Chicago school. According to Becker, human capital is similar to
the physical means of production, e.g., factories and machines: one can invest in human capital
(mainly through education) and one's outputs depends in part on the rate of return on the
human capital one owns. Thus, human capital is a means of production into which additional
investment yields additional output.
Human capital is substitutable, but not transferable like
land, labour or fixed capital. According to Becker, unlike physical labour (and other factors of
production), human capital is:
●
Expandable and self-generating with use: as workers get more experience, their
competence base will increase, as will their endowment of human capital. The economics
of scarcity is replaced by the economics of self-generation.
●
Transportable and shareable, but not transferable: competence, especially knowledge,
can be moved and shared. Human Capital is inherent in people and cannot be owned by
an organization.
Following Becker, the human capital literature often distinguishes between "specific" and
‘general’ human capital. Specific human capital refers to skills or knowledge that is useful only
to a single employer or industry, whereas general human capital (such as literacy) is useful to
all employers.
Although human capital is a central concept in economics, management studies, development
studies and so on, it is also an extremely contested one. It is clear that human capital means
different things to different people. The concept has been criticized by Spence and Stiglitz in
economics and by Bourdieu in sociology.
Bourdieu offers a more nuanced conceptual
alternative that includes cultural capital, social capital, economic capital, and symbolic capital.
Concepts are often open to debate, so this is not the issue. The issue is that many scholars
consider both the term and its conceptualisation as inappropriate and inhumane, as it degrades
individuals and classifies their abilities exclusively according to economically relevant quantities
(it for this reason that the German Social Council chose to no longer use the concept in their
publications).
Perhaps more importantly, increases in human capital are often confused with human
development. The United Nations suggests that human development denotes both the process
of widening people's choices and improving their well-being and it emphasises that the UN
Human Development indices suggest that human capital is merely a means to the end of
human development.
Not only is human development much more than increasing human
capital, but the emphasis on exclusively economic indices and human capital can in fact be
detrimental to human development, as the UN has recognised in several reports.
Another critique is that human capital is amoral: human capital is disembedded from society
and community (concepts which are not popular in neoclassical economics anyway).
Individuals which have competences, abilities, talents and know-how that can readily be
commodified on labour markets are considered to possess high levels of human capital. In this
view, both Beethoven and Van Gogh were poor in human capital. Home-makers who perform
the difficult tasks of raising children and making a home are considered to be poor in human
capital, although they perform essential tasks.
In development studies, the Human Development Index (HDI) is an indicator of a positive
correlation between human capital formation and economic development.
If HDI increases,
there is higher rate of human capital formation in response to higher standard of education and
health. Similarly, if HDI increases, per capita income of the nation also increases. Implicitly,
HDI reveals that the higher the human capital formation is, due to good standard of health and
education, the higher the per capita income of the nation will be.
This process of human
development is a strong foundation of a continuous process of economic development of the
nation for a long period of time. However, what is true for developing nations – countries with
high labour-surplus and low levels of educational attainment - is not necessarily true for
developed nations, as Picket and Wilkinson have forcefully explained in The Spirit Level.
Perhaps we can agree that human capital theory has evident explanatory power, but that its
explanation is incomplete and too economical.
Identity capital
Identity capital is very different from human capital.
It does not deal with competences,
although without identity capital no competences can be acquired. It also does not deal with
group formation and social life in general, although, again, without identity capital no formation
of social capital is possible. Identity capital is therefore an absolutely essential phenomenon.
Identity capital is closely related to identity formation or individuation, the development of the
distinct personality. Identity formation leads to a number of issues of personal identity where
the individual has comprehension of him or herself as a discrete and separate entity.
process defines individuals to others and themselves.
This
Pieces of the person's actual identity
include a sense of continuity, a sense of uniqueness from others and a sense of affiliation.
Identity is often described as finite and consisting of separate and distinct parts (family,
cultural, personal, professional, etc.), yet according to modern theory, it is an ever evolving
core within where our genetics, culture, loved ones, lived experiences and choices made come
together to form who we are at this moment.
Self-identity is the sum of a being's knowledge and understanding of his or her self. The selfconcept is different from self-consciousness, which is an awareness of one's self. Components
of the self-concept include physical, psychological, and social attributes, which can be
influenced by the individual's attitudes, habits, beliefs and ideas.
Interpersonal identity
development allows an individual to question and examine various personality elements, such
as ideas, beliefs, and behaviours.
The actions or thoughts of others create social influences
that change an individual. Examples of social influence can be seen in socialisation and peer
pressure. This is the effect of other people on a person's behaviour, thinking about one's self,
and subsequent acceptance or rejection of how other people attempt to influence the individual.
Interpersonal identity development occurs during exploratory self-analysis and self-evaluation,
ending at various times with the establishment of an easy-to-understand and 'consolidative'
sense of self or identity. As such, identity capital, identity formation and interpersonal identity
development are all closely related to self-esteem.
Self-esteem:
Self-esteem refers to a person's overall emotional evaluation of his or her own worth.
Self-
esteem can be implicit or explicit and it can be secure (i.e. stable) or defensive (i.e. under
threat). It is a judgment of oneself as well as an attitude toward the self. Smith and Mackie
define it by saying ‘the self-concept is what we think about the self; self-esteem, is the positive
or negative evaluations of the self, as in how we feel about it.’ Self-esteem is also known as
the evaluative dimension of the self that includes feelings of worthiness, prides and
discouragement.
social
One's Self-esteem is also closely associated with self-consciousness.
psychological
construct,
self-esteem
is
attractive
because
researchers
As a
have
conceptualized it as an influential predictor of relevant outcomes, such as academic
achievement.
Self-esteem has also been treated as an important outcome due to its close
relation with psychological well-being.
Many theories suggest that self-esteem is a basic human need or motivation.
Maslow included self-esteem in his hierarchy of needs.
Famously,
He described two different forms of
esteem: the need for respect from others, and the need for self-respect, or inner self-esteem.
Respect from others entails recognition, acceptance, status, and appreciation, and was believed
to be more fragile and easily lost than inner self-esteem.
According to Maslow, without the fulfillment of the self-esteem need, individuals will be driven
to seek it and unable to grow and obtain what he calls self-actualisation. Maslow divided selfesteem into two aspects, the esteem for oneself self-love, self-confidence, skill, aptitude, and
respect receives from other people recognition, success, etc. The healthiest expression of selfesteem, according to Maslow, 'is the one which manifests in respect we reserve for others,
more than renowned, fame and flattery’.
The importance of self-esteem lies in the fact that it concerns ourselves, the way we are and
the sense of our personal value. Thus, it affects the way we are and act in the world and the
way we relate to everybody else. Nothing in the way we think, feel, decide and act escapes the
influence of self-esteem.
It is clear that people who have low self-esteem have low identity
capital and vice versa.
The development of self-esteem:
The development of self-esteem depends on a person’s experiences. The positive or negative
life experiences one has, create attitudes toward the self which can be favourable and develop
positive feelings of self-worth, or can be unfavourable and develop negative feelings of selfworth. In the early years of a child's life, parents are the most significant influence on selfesteem and the main source of positive and/or negative experiences a child will have.
During the school years, academic achievement is a significant contributor to self-esteem
development. A student consistently achieving success or consistently failing, strongly affects
their individual self-esteem. Social experiences are another important contributor. As children
go through school they begin to understand and recognize differences between themselves and
their classmates. Using social comparisons, children assess whether they did better or worse
than classmates in different activities. These comparisons play an important role in shaping the
child's self-esteem.
As children go through adolescence peer influence becomes much more important, as
adolescents make appraisals of themselves based on their relationships with close friends.
Successful relationships among friends are very important to the development of high selfesteem for children.
Social acceptance brings about confidence and produces high self-esteem, whereas rejection
from peers and loneliness brings about self-doubts and produces low self-esteem.
Childhood experiences that contribute to healthy self-esteem include being listened to, being
spoken
to
respectfully,
receiving
appropriate
attention
and
affection
and
having
accomplishments recognized and mistakes or failures acknowledged and accepted. Experiences
that contribute to low self-esteem include being harshly criticized, being physically, sexually or
emotionally abused, being ignored, ridiculed or teased.
Characteristics of Self Esteem:
People with a healthy level of self-esteem:
●
Firmly believe in certain values and principles and are ready to defend them even when
finding opposition, feeling secure enough to modify them in light of experience.
●
Are able to act according to what they think to be the best choice, trusting their own
judgment, and not feeling guilty when others do not like their choice.
●
Do not lose time worrying excessively about what happened in the past, nor about what
could happen in the future. They learn from the past and plan for the future, but live in
the present intensely.
●
Fully trust in their capacity to solve problems, not hesitating after failures and difficulties.
They ask others for help when they need it.
●
Consider themselves equal in dignity to others, rather than inferior or superior, while
accepting differences in certain talents, personal prestige or financial standing.
●
Take for granted that they are an interesting and valuable person for others, at least for
those with whom they have a friendship.
●
Resist manipulation, collaborate with others only if it seems appropriate and convenient.
●
Admit and accept different internal feelings and drives, either positive or negative,
revealing those drives to others only when they choose.
●
Are able to enjoy a great variety of activities.
●
Are sensitive to feelings and needs of others; respect generally accepted social rules, and
claim no right or desire to prosper at others' expense.
●
Can work toward finding solutions and voice discontent without belittling themselves or
others when challenges arise.
Low self-esteem can result from various factors, including genetic factors, physical appearance
or weight, mental health issues, socioeconomic status, peer pressure or bullying. A person with
low self-esteem may show some of the following characteristics:
•
Heavy self-criticism and dissatisfaction.
•
Hypersensitivity to criticism with resentment against critics and feelings of being attacked.
•
Chronic indecision and an exaggerated fear of mistakes.
•
Excessive will to please and unwillingness to displease.
•
Perfectionism, which can lead to frustration when perfection is not achieved.
•
Neurotic guilt, dwelling on and/or exaggerating the magnitude of past mistakes.
•
Floating hostility and general defensiveness and irritability without any proximate cause.
•
Pessimism and a general negative outlook.
•
Envy, invidiousness, or general resentment.
•
Sees temporary setbacks as permanent, intolerable conditions.
When given negative feedback, individuals with low self-esteem often take it personally and can
be devastated by it. This damage can be much more severe if the feedback is harsh or directly
criticizes the individual's worth, moral character, achievements.
Individuals with low self-
esteem are very critical of themselves and depend on the approval and praise of others for their
own evaluation of self-worthiness. They believe that a person's approval of them is dependent
on their performance.
Maslow wrote a long time ago that psychological health is not possible unless the essential core
of the person is fundamentally accepted, loved and respected by others and by her or his self.
Self-esteem allows people to face life with more confidence, benevolence and optimism, and
thus easily reach their goals and self-actualize. In other words, low self-esteem is a debilitating
condition, holding people back from reaching their goals and fulfilling their potentials. It pays
to be happy.
To develop self-esteem is to increase the capacity to be happy. Healthy self-esteem convinces
people that they deserve happiness.
Understanding this is fundamental, and universally
beneficial, since the development of positive self-esteem increases the capacity to treat other
people with respect, benevolence and goodwill, thus favoring rich interpersonal relationships and
avoiding destructive ones.
José-Vicente Bonet claims that the importance of self-esteem is
obvious as a lack of self-esteem is, he says, not a loss of esteem from others, but self-rejection.
Bonet claims that this corresponds to depressive disorders.
Other than increased happiness,
higher self-esteem is also known to be correlated with a better ability to cope with stress and a
higher likeliness that the individual takes on difficult tasks relative to those with low self-esteem.
The relationship between self-esteem and life satisfaction is stronger in individualistic cultures.
Life satisfaction, happiness, healthy behavioural practices, perceived efficacy and academic
success and adjustment have been associated with having high levels of self-esteem in many
studies, but, strangely enough, the concepts of self-identity and self-esteem have largely been
absent from studies dealing with organisational learning and behavioural change.
Social Capital
In stark contradistinction to identity capital, social capital is one of the most used, most
documented and most analysed concepts in all of sociology and in social science in general. The
starting point of social capital theory lies in the basic observation that, in any type of society,
people form groups. Groups are based on common ancestry, residence, beliefs, ideology or any
other factors. Groups, in turn, form associations - churches, unions and political organisations.
Groups both reflect and shape individual identity, norms, beliefs, and priorities. Networks exist
between groups and associations.
Through networks, people share information, provide and
receive support, and work together.
Perhaps the oldest definition of social capital is from
Hanifan, who defined it as 'those tangible assets (…) good will, fellowship, sympathy, and social
intercourse among the individuals and families who make up a social unit' (Hanifan (1920) in
Woolcock, 1998).
Bourdieu and Wacquant (1992: 3) define social capital as the '(s)um of
resources (…) that accrue to a group by virtue of possessing a durable network of more or less
institutionalized relationships of mutual acquaintance and recognition,' while for Putnam, Leonardi
and Nanetti (1993) social capital refers to '(…) features of social organization, such as trust,
norms, and networks, that can improve the efficiency of society by facilitating coordinated
actions' (Putnam et al., 1993: 13).
partnerships.
Networks consist of a multitude of collaborations and
Social capital and civic society:
In 1993, Putnam, Leonardi and Nanetti concluded, after a 20-year long study of decentralisation
and economic development in Italy, that social relations were the main explanation for differing
levels of political and economic success among Italy’s various regions. Those regions whose local
governments performed well also scored high on measures of civic engagement – that is, they
had high levels of newspaper readership, voter turnout, memberships in choral societies, soccer
clubs and other groups among their citizenry.
Putnam et al. argued that high levels of civic
engagement in regions such as Tuscany and Emilia-Romagna led to greater trust, enforceable
norms, and, hence, to dense networks of associations among citizens.
It is this stock, the
researchers claim, that led to improved governance, better educational outcomes in general and
economic prosperity in those regions. To them, the opposite also held true. Regions with little
evidence of civic engagement tend to have lower measures of social capital, and this explains
why they also have higher rates of lawlessness, poorer governance, poorer educational
attainment and weaker economic performance.
In 1995, Putnam proposed two distinct forms of social capital (see Putnam, 1995: 14 ff.). The
first type, localized social capital, accumulates in the course of informal social interactions of
families, churches and local groups that people participate in almost every day. These networks
help to engender trust as well as to enforce norms of behaviour among group members. He uses
the term bridging capital to describe the second type of social capital. This concept is based on
the work of Granovetter (1973), who showed that what he calls weak ties (relationships with
individuals outside of one’s immediate network) are essential for the acquisition of new
information and opportunities.
For localized networks to function and produce society-wide
effects, they must facilitate generalised trust.
To Putnam, social capital completes a series of
virtuous circles. As political negotiations take place within and among networks, the likelihood of
opportunism and corruption decreases. At the same time, subsequent successes in negotiations
reinforce earlier ones and further encourage the production of localized and bridging social
capital. Putnam’s conception of social capital has been widely embraced by a great number of
researchers as well as policy-makers.
Negative social capital:
Although most of the theoretical analysis and empirical research tends to treat all associations as
equivalent, it is clear that social capital within one group can be positively or negatively related to
other social capital that is present in institutions. The main distinction is between groups that are
tied to the wider community through associations and those that are not (Putnam’s bridging
groups (Putnam, 1995)). Negative effects are to be expected when there is low between-group
trust and/or lack of interaction or mediating networks between groups. Cross-cutting groups, on
the other hand, traverse social boundaries, increase members’ tolerance through contact with
diverse others and prevent the creation of pockets of isolated trust and idiosyncratic networks.
Isolated associations can intensify inward-focusing behaviour, reduce exposure to new ideas and
increase social cleavages. Associations that are connected to the larger community are therefore
more beneficial than associations that remain isolated. Curiously, this important distinction has
often been overlooked or neglected in the empirical research on social capital. Not much more
than a handful of articles (out of many hundreds) that present empirical work use this distinction,
although it is clearly an essential one.
What needs to be examined are the relations of power that create both inward and outward
looking groups and the relations of power which structure and stratify groups.
Whatever the
formal goal of a group or an association may be, the first characteristic to reckon with is that
people live in different groups at the same time.
People have personal needs and pursue
personal goals. Even being a member of a bird watching group – one of Putnam’s examples –
will have effects on information and networking unrelated to birds.
The idea that a better
position of origin promotes access to or better use of social resources has been confirmed many
times and it is also the case that not all individuals or groups uniformly acquire social capital
uniformly.
Inequality in social capital occurs, for example, when a certain group clusters at
relatively disadvantaged socio-economic positions and when the general tendency is for
individuals to associate with those of similar group or socio-economic characteristics. The first
reflects a structural process, as social groups differentially occupy socio-economic standings in a
society.
Depending on specific historical, political and institutional processes, societies provide
unequal opportunities to members of different groups defined over class, race, gender, religion or
other ascribed, construed, imagined or real characteristics.
The second principle, homophily,
suggests a general tendency in networking, namely the tendency for individuals to interact and
share sentiments with others with similar characteristics.
It is important to recognise that these two principles, socio-economic clustering and homophily,
produce relative differential access by social groups to the formation of social capital. Members
of a certain group, clustering to inferior socio-economic standings and interacting with others in
similar social groupings, are embedded in social networks that are poorer in resources, i.e. they
are poorer in social capital.
Resource-rich networks, on the other hand, are characterised by
relative richness not only in quantity, but also in kind – in resource heterogeneity (Lin, 2000).
The relevance of this insight will become clear if we transpose this analysis to the micro-level of
firms and small institutions. Members of heterogenic networks enjoy access to information and
influence in diverse socio-economic strata and positions. In contrast, members in resource-poor
networks share a restricted variety of information and influence.
Significant differences appear in the social networks and embedded resources between women
and men (Moore, 2004). Moore shows that men’s networks, when compared to women’s, consist
of fewer kin and more non-kin, and includes fewer neighbours but more co-workers, advisers and
friends. Women’s networks, in contrast, incorporate a larger proportion of kin overall as well as
more different types of kin, but fewer different types of non-kin. Campbell and Rosenfeld (1995)
confirmed that males had larger networks than females.
The gender differential in network
diversity and size is in part due to the fact that women and men participate in organisations with
different embedded resources. McPherson and Smith-Loving (2006) showed that men belong to
larger organisations when compared to women in similar categories, whether in work, status,
age, education or marital status. They also found that men were located in core organisations
which were related to economic institutions, while women were located in more 'peripheral'
organisations - those which were more focused on domestic and community affairs.
Men and
women had almost exactly the same number of memberships, but the dramatic differences in the
sizes and types of their organisations exposed men to many more potential contacts and other
resources than women.
Men’s positions in the voluntary network were much more likely to
provide access to information about possible jobs, business opportunities and chances for
professional achievement.
These differentials also explain why women and men have different access to different
hierarchical positions in society. Evidence consistently shows the existence of gender segregation
in occupational contact networks. Women tend to know people with fewer occupations than men;
their networks are negatively affected by having children younger than six and they often change
jobs in response to their spouses’ mobility; men’s networks are largely unaffected by these
constraints. Therefore, females are associated with disadvantaged networks – smaller and less
diverse, more female ties and ties lower in hierarchical position.
Since their associations and
networks also tend to be more homogeneous, there is network closure and a reproduction of
resource disadvantage among women.
The premise of social capital is that societies which have it function more efficiently than those
which do not; in small examples based on reciprocity between individuals this is clearly the case.
However social capital is a difficult concept to measure; Putnam’s book works through a welter of
proxy measures for social capital, although there is no one (indexed) calculation available, or
model to express the concept.
David Halpern has applied thinking from social capital in an
analysis of crime statistics from different countries (Halpern 2001). Halpern’s analysis found that
societies with higher levels of social capital (based on a few proxy measures) did indeed report
lower levels of crime; he accounts for this through the greater levels of trust, self-esteem and
‘collective efficiency’ in those societies.
From a social-psychological perspective, social capital can be regarded as an enabling resource
which individuals can draw on when planning courses of behaviour.
appear to drive behaviour per se.
Social capital does not
In this sense it resembles agency.
building social capital is in itself very difficult.
It also appears that
Putnam recommends ‘upstream’ interventions
which work to create more supportive contexts for building ties (Putnam 2000). These include
better town planning, different approaches to formal education, and more opportunities to get
involved in the democratic process. However, it is people themselves who forge the connections
which create social capital; furthermore, this process itself is recursive, involving the building of
reciprocal relationships and trust. Putnam concludes that the project to increase social capital
necessitates overturning the distinction between top down and bottom up solutions; both are
required.