SML as an Engine of Social Capital

Concept Bite & Book Review

socialcapitalThis hybrid piece starts off as a book review before coming back to elaborate on the title above. The book in question is ‘The Great Disruption’ by Francis Fukuyama. The author came to prominence through an essay with a snappy title, one just waiting to be a soundbite of the Zeitgeist. It was called ‘The End of History’.

Later, the essay was elaborated into a book. Its central thesis is that the developmental trajectory of the forms of social organisation, that is, the systems through which people have sought to organise themselves, has led inexorably to the liberal democracies, and that these seem to be the end of the line. Since the matter of history concerns itself with the ways societies organise themselves and live out the consequences of their manner of organisation both internally and externally (in international relations) then, if the end of the line has been reached by the liberal democracies, this is tantamount to the end of history.

It is a bold proposition and, while it builds on the work of other social thinkers, it is provocative and, therefore, controversial. It is not that Fukuyama is arguing that all societies that might be labelled ‘liberal democracies’ are organising themselves in exactly the same way, nor that there might not be many further forms operating within the overall category of that general political system. What he is saying is that he doesn’t see the likelihood of another system being developed, and being viable over time, which would replace the liberal democracies.

Again, this is not to say there will not be specific countries where democracy might slide back to dictatorship, for instance, or collapse into chaos. He is saying there is a trajectory and it leads to liberal democracy or, to change the metaphor, that liberal democracy is the point attractor around which all societies will come to oscillate, sooner or later.

The book is replete with Fukuyama’s arguments for this thesis. A flavour of his position can be conveyed by calling to mind the events in Europe over the last fifty or so years. Totalitarianism, whether of the right (Fascism) or the left (Communism), though it has had its run in many European countries, and often quite a lengthy run, has proven unworkable in the long term and has fallen to the democratic impulse. For many countries it might be a staggering, stuttering process, with plenty of slipping backward, but, Fukuyama claims, the trajectory is clear.

The follow-up book was called ‘Trust’. It explored the relevance of this quality to social and organisational effectiveness. While engendering trust in others has often been seen as a prerequisite for effective management, Fukuyama elevates its status from the single interaction to its being the oil that allows the social wheels to run smoothly. His central point is that there is a ratio between trust and the ‘transaction costs’ of doing business. Where trust is lacking, transactions, between individuals or organisations, are going to require much more monitoring. The monitoring of transactions is expensive. Therefore the societies within which there is more trust will be more competitive in the marketplace.

In ‘The Great Disruption’, Fukuyama, from having expanded our view of the role of trust in social life, extends his reach by seeing trust as one (though the central one) among a number of factors constituting ‘Social Capital’. Yes, you can see another buzz phrase in the making. But this time Fukuyama has, as he readily acknowledges, drawn his term from the work of other social commentators. Social Capital is the term being used to refer to the beneficial effects of a set of shared values as they find expression in the activities of a society. It is not the existence of shared values, in and of itself, which creates social capital though, for some values actively hamper the workings of the society which holds them. He gives the example of the mafiosi values of southern Italy which can be characterized as ‘take advantage of people outside your immediate family at every occasion because otherwise they will take advantage of you first’. Not a value likely to generate much trust in the society at large. It is easy to see how it will complicate any situation requiring co-operation among people (the ‘transaction costs’ issue).

When the shared values of a society enhance co-operation, then social capital is increased. As Fukuyama puts it:
‘Like physical capital (land, buildings, machines) and human capital (the skills and knowledge we carry around in our heads), social capital produces wealth and is therefore of economic value to a national economy. It is also a prerequisite for all forms of group endeavor that take place in a modern society, from running a corner grocery store, to lobbying Congress, to raising children. Individuals amplify their own power and abilities by following cooperative rules that constrain their freedom of choice, allow them to communicate with others, and coordinate their actions. Social virtues like honesty, reciprocity, and keeping commitments are not choiceworthy just as ethical values; they also have a tangible dollar value and help the groups who practice them achieve shared ends.’

What we have here is a matter of what might be called macro-accounting. In conventional accounting it is only the physical capital of an organisation which is recognized on the balance sheet. Though there is still no agreed way for the balance sheet to reflect the human capital of an organisation it does find de facto recognition in the share evaluations of, for instance, Internet companies. Social capital is a separate factor and, just as it is significant in the workings of the society at large, it is a determinant of an organisation’s ability and, therefore, of its viability.

The difference between human capital and social capital is clear if we consider the, not infrequent, situation where a company hires a bunch of very bright people with the hope that they will lead the company into the interconnected future. If those bright young things are all scrabbling for advantage in looking to make their personal mark and/or the ‘old guard’ views their influx with scepticism or the defensiveness that comes of perceived threat, it is unlikely that the organisation’s dream of its glorious future will be realized. A high quality of human capital, alone, will not enable an organisation to succeed. In an organisation there is organisation, and for organisation to work it is social capital which is required. Of course, the opposite is also true. If the organisation works wonderfully but no-one has any ideas or initiative, nothing will come of it. Both are needed.

So, what is the Great Disruption in the title of Fukuyama’s book? It is the shearing of the social fabric in the last half century, for which everyone has their own favourite indices: rising crime, vandalism, rapacious greed, incivility, the disintegration of the inner cities, the increase in single-parent families, etc., etc. Fukuyama sees this tide as turning, by the way, but it will be obvious how such factors would, in his terms, create negative social capital.

Since philosophical niceties tend to be less troubling to the power-hungry, extreme relativism can, paradoxically, preserve many factors of the status quo. The thinkers don’t know what to think, and those who don’t care carry off the country. At the same time, while the elaboration of the conceptual curlicues of postmodernism took place at so rarefied a level of discourse that most of us would need oxygen masks, the effect of its boring its way through the underpinnings of society does seem to have left our general social values extremely fragile. It is as if people felt they couldn’t put their weight on them. They might not have rejected them, intentionally or knowingly, but were unable to confidently put their feet on them when springing off into action. Consequently, the ‘radius of trust’, as Fukuyama puts it, was reduced: to the immediate group or even to the individual. The social fabric was coming apart.

Fukuyama doesn’t put his analysis in quite the terms I was using above, but he does see the West, in particular, as caught between the pursuit of contradictory desires: ‘They are increasingly distrustful of any authority, political or moral, that would constrain their freedom of choice, but they also want a sense of community and the good things that flow from community, like mutual recognition, participation, belonging, and identity.’

While my copy of ‘The Great Disruption’ languished on my never vanquished but constantly reconstituted pile of unread books, Ian read his copy. The point he made, and which sent me rushing to the text, was that the SML approach is a generator of social capital.

There are many interesting aspects to Fukuyama’s works. They are certainly thought-provoking. At the same time, he does seem rather a strange egg. In his latest book we find a passage which appears to place Dan Quayle in the vanguard of social analysts; without apparent irony. This is peculiar to the point of perversity. The only vanguard in which I have previously viewed that backward ex-Vice President is the vanguard of political buffoonery.

That’s the troubling thing about Fukuyama. There are various ways out of the sinkhole of relativism, and one which has been attempted with frantic frequency is to scramble back out the way we fell in, which gives rise to shrill calls for ‘law and order’ and such flights of rhetoric as the ‘war on drugs’ and ‘cracking down on crime’. “If we tried them once and they didn’t work, well then, let’s try them again, but harder.”

Such restless ghosts seem to flit at the edge of vision when reading Fukuyama. To turn one of his central terms back around to the author, if you put the question, Would you trust this man?, my answer would have to be, No. But that doesn’t warrant ignoring what is of value in his work and there is much. One of that much (as it were) is his elaboration of the concept of social capital. Let us turn now to my title and see the relevance this concept has for us.

Now what did he mean by this? When we think of the benefits of SML our focus tends to be on the learning of the individual. In that regard, SML is a generator of human capital. That much is clear. Yet we also know that a side-effect, as we have tended to put it, of having an SML programme running in an organisation is that people from different departments start interacting and learning about what each other does, and that this has a beneficial effect for the working of the organisation overall. It is for this reason that we advocate a Self Managed Learning programme as a means to organisational change. So we have acknowledged the contribution SML makes to social capital, but without having had a specific concept (or label) with which to capture that particular quality.

In some ways, this is analogous to the situation on the individual level some years ago. The focus then was on SML as a superb vehicle for enabling learners to learn the things they set themselves to learn. At the same time, we recognized that an equally, or even more, important thing they were learning was how to learn. In that sense, through the SML process the learner’s goals became the vehicle for their learning how to go about the process of learning for themselves. Subsequently, we were able to articulate this particular benefit of the SML approach, at the same time as shifts in market dynamics brought a greater recognition of the value of learning in organisations.

Once again, the availability of the concept of social capital as a way for us to capture one of the values of using the SML approach is paralleled by wider, market-led perception of the value of social capital to the workings of organisations (and of societies). Through his work with Zurich Financial Services, Ian was able to give me a rather compelling instance of this, for their CEO has recently authored a book on the subject of social capital. As Ian points out, if the head of a hard-headed financial services company sees the value of what some may argue is as soft and woolly a concept as that of ‘organisational culture’, then it is time for all other companies to take notice.

At one level, there is nothing new to us in any of this. It may seem that the arrival of a concept or, more particularly, its expression in a catchy phrase is of little moment. But this would be to assume that language is divorced from reality, and that reality can be simply known; consequently, all that would be important would be the effects that, in this instance, SML has, and whatever they were called would make no difference to their reality. That kind of reality, though, can be elusive (if not illusory). We are much closer to the case where language is constitutive of our reality. What isn’t ‘languaged’ has a very shadowy existence. While our experience always reaches beyond the periphery of our language it is very difficult to do anything with it when we are without words. What we have no way of talking to others about, we have no way of talking to ourselves about; this makes thinking difficult.

On the other hand, when we do have a word, or a label, for something it becomes a mental entity. Like mental furniture, it can be shifted around in our mental space, viewed from various angles and put in relation to our other mental furniture. So, to stretch the image to breaking point, you are invited to plop down the mental entity of ‘social capital’ among your mental furniture and shift it around in the SML space to find how it fits, and how useful it might be when you wish to convey to others the value of the SML approach to your organisation.

Dr Graham Dawes