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4160.0 - Measuring Wellbeing: Frameworks for Australian Social Statistics, 2001  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 12/10/2001   
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Social capital

Transactions that promote individual wellbeing are commonplace in our social environment (e.g. parents nurturing children, governments supporting the disadvantaged). However, these kinds of transactions are by no means a given - they are supported by a complex, functioning society that aims to distribute rewards fairly, has infrastructures of law, order and justice, and has a government acting with the support of the people. The amalgam of ideas, assumptions, obligations and values which underpin these infrastructures and allow for a civil society are part of what is now being recognised as 'social capital'.

Capital, in the economic sense, is a widely used term: a community foregoes consumption in order to save; saving is invested in the formation of capital (e.g. plant, machinery, infrastructure, technology, financial assets or liability reduction). By employing factors of production (e.g. labour force skills), further value is created from this capital in the form of goods and services. In other words, a stock of capital subsequently gives rise to flows (of goods, services and income).

In a wider sense, knowledge and ideas can also be seen as a form of capital. For example, the stock of knowledge that governs the manufacture of computer chips is a valuable commodity. Taking this analogy further, positive beliefs and values, for example, that facilitate social cooperation, tie social relations together and regulate or vitalise the social order, are of value to communities. For instance, principles such as altruism, reciprocity and philanthropy motivate people to form social networks of mutual support and obligation, which in turn can bolster wider community cohesion and development. Trust between people in a community also assists in building civil and expansive social relations. That Australian society provides for the transfer of income from the more to the less well off via the tax and social security systems, is a good example of social capital at work. In some societies (e.g. Indigenous cultures) similar social objectives are achieved via attitudes that people hold about extended family obligation.

There are a number of different definitions of social capital currently being debated internationally. In the context of the system of social statistics used by the ABS, social capital refers to the layer of commonly held social values, beliefs and attitudes that lies beneath individual behaviour and encourages transactions that result in greater wellbeing for society. It can be accumulated or diminished, when people interact with each other in families, workplaces, neighbourhoods, local associations and a range of informal and formal meeting places. Thus, over time the stock of social capital will change. For example, trust in the police to protect the community from crime may be a feature of Australia's stock of social capital. However, incidents of police corruption can subtract from that stock, by eroding that trust. Similarly changes can occur in how willing people are to trust in doctors or hospitals or to help their neighbour. Rising awareness among the population of threats to the natural environment and a greater willingness to protect it, represent significant increases in social capital.

Although the concept of social capital is a valuable one to use in analysing social wellbeing, it can be difficult to measure. While the transaction model does allow for notions such as the effective nurture of children to be considered part of the social statistics terrain, the concept of social capital is continuing to evolve and therefore is not yet fully integrated into the ABS system of social statistics.

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