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The Role of "Social Capital" in the Market Process

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  • Ikeda Sanford

    (The State University of New York)

Abstract

From the standpoint of modern economics, the "marvel" of the price system is the way in which contextual knowledge is discovered and utilized without requiring individuals to articulate and transmit any great part of it to a central planner. While extremely valuable, this insight has tended to draw attention away from the actual contextual knowledge possessed by agents in a particular time and place that can over time promote the utilization of the market and its related institutions, including the price system, private property, and the rule of law. Examining forms of contextual knowledge such as social capital and trust can deepen our understanding of some of the conditions that promote the entrepreneurial discovery of profit opportunities in complex market processes, in which in the vast majority of trades very few of the actors involved ever know one another or meet face-to-face.Du point de vue de la science économique moderne, le "miracle" du système de prix est la manière à travers laquelle la connaissance contextuelle est découverte et utilisée sans que les individus aient à en articuler et en transmettre une grande partie à un planificateur central. Bien qu'extrêmement utile, cette idée a eu tendance à détourner l'attention de la connaissance contextuelle actuelle possédée par les agents à un moment donné et dans un lieu donné qui peut, à travers le temps, promouvoir l'utilisation du marché et de ses institutions telles que le système des prix, le droit de propriété et la règle de droit. L'examen des formes que peut revêtir la connaissance contextuelle à l'instar du capital social et de la confiance, peut améliorer notre compréhension de certaines conditions qui promeuvent la découverte des opportunités de profit par l'entrepreneur dans des processus marchands complexes, une des caractéristiques de ces derniers étant que peu d'échanges ont lieu entre des agents qui se connaissent ou lors de rencontre en face à face.

Suggested Citation

  • Ikeda Sanford, 2002. "The Role of "Social Capital" in the Market Process," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 12(2), pages 1-14, June.
    • Handle: RePEc:bpj:jeehcn:v:12:y:2002:i:2:n:4
    DOI: 10.2202/1145-6396.1059
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    1. Peter J. Boettke (ed.), 1994. "The Elgar Companion to Austrian Economics," Books, Edward Elgar Publishing, number 53.
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    Cited by:

    1. Paul Lewis & Emily Chamlee-Wright, 2008. "Social embeddedness, social capital and the market process: An introduction to the special issue on Austrian economics, economic sociology and social capital," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 21(2), pages 107-118, September.

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