Hans-Joachim Voth, Nico Voigtländer, Shanker Satyanath — Bowling for Adolf: How social capital helped to destroy Germany’s first democracy

The collapse of the Weimar Republic was a turning point in world history, bringing the murderous Nazi regime to power. This column argues that contrary to most conceptions of social capital, there can be negative outcomes to well-connected societies. Independent of ideology, dense social networks in interwar Germany greatly helped the Nazi party to rapidly and widely disseminate its messages. Putnam’s claims about the benefits of social capital for democracy need to be reassessed.

Of course "social capital" can be used for good or bad. Just look at organized crime, as the authors cite. So social capital is somehow disadvantageous or dangerous, and people need to avoid organizing? Everyone is supposed to "think for themselves"? Out of context?

Physical capital can also be used for good and bad, depending on one's point of view. It was not social capital that made Hitler and the Nazis so dangerous to the world but Germany's physical capital that could be put to military use in producing armaments. Is physical capital therefore potentially negative. Of course. Does that undercut the argument for capitalism?

Social capital is defined as the economic potential of organization and information complexity is social systems. Physical capital is defined as the economic potential of the means of production in social systems. Financial capital is defined as the economic potential of money, credit and other financial arrangements in social systems. Economically, they are amoral to the degree that they are evaluated on money return. But monetary return is not the only consideration, even economically. 

The use of the various forms of capital is not amoral from the societal standpoint in that evaluation of effectiveness in human affairs is broader than monetary and economics assumes this at least implicitly. All human societies are governed by law, and rights are key concepts in law. Rights are communal norms. Excluding non-monetary factors from consideration in effectiveness, e.g., limiting consideration to economic efficiency, is itself a normative judgement.

Vox.eu
Bowling for Adolf: How social capital helped to destroy Germany’s first democracy
Hans-Joachim Voth, Nico Voigtländer, Shanker Satyanath
(h/t Mark Thoma at Economist's View)