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Time, Space and Capital

Åke E. Andersson and David Emanuel Andersson

In this challenging book, the authors demonstrate that economists tend to misunderstand capital. Frank Knight was an exception, as he argued that because all resources are more or less durable and have uncertain future uses they can consequently be classed as capital. Thus, capital rather than labor is the real source of creativity, innovation, and accumulation. But capital is also a phenomenon in time and in space. Offering a new and path-breaking theory, they show how durable capital with large spatial domains — infrastructural capital such as institutions, public knowledge, and networks — can help explain the long-term development of cities and nations.
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Chapter 12: Re-conceptualizing social capital

Åke E. Andersson and David Emanuel Andersson

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Social capital has been used in many different ways, and one aim of this chapter is to introduce a definition that is useful for the general theory that we propose in this book. Consequently, we limit ourselves to three major categories of capital: physical, human and social. Thus real estate capital is a combination of physical and social capital, while wages and salaries are payments for the human and social capital combinations that make each individual worker unique. We argue that it is helpful to use three levels of aggregation when analyzing social capital: micro, meso and macro. At the micro level, we find more or less stable interpersonal networks that tie people to one another in ways that increase “labor productivity,” while the meso level represents the various associations and subcultures that make up what is commonly referred to as civil society. The macro level of social capital is less obviously based on networks: it consists of the shared institutions and values that make a society more or less conducive to economic activities, ranging from everyday market transactions to disruptive product innovations. We thus view “institutional capital” and “cultural capital” as subsets of social capital. Logistical revolutions tend to have a social capital dimension. At present, the most visible manifestation of this is the cohort-driven change in social values from materialist, modernist values toward post-materialist, postmodern ones. Ronald Inglehart was the first to identify this restructuring, referring to it as “the silent revolution” in the 1970s.

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