Social capital

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See Wikipedia entry

It is a resource OVN affiliates have and can contribute with in value creation processes. It is an intangible contribution.

The OVN must have mechanisms to incentivise well-connected and reputable individuals to contribute to the network. Matchmaking and making connections between OVN affiliates and others increase the potential of the network. In the era of social networking social capital becomes a very important asset. We need to learn how to treat it in an ethical way. In the end social capital means a wide network of trust-based relations.

Discussion on social capital

This is a curation from a discussion in SENSORICA. For more insight contact Tibi, Lynn, Kurt


Someone well-connected and reputable in an industry proposed to bring SENSORICA affiliates to a gathering for networking. This person would introduce SENSORICA affiliates to executives in this industry to explore possibilities of collaboration. This person is using his trust-based relations for the introduction and can influence the outcome of these encounters.

Representation in the value accounting system

Social capital is an individual non-transferable resource, like intellectual capital.

  • Should-we represent it as a Resource Type?
  • Should this Resource type have particular properties?
  • It is definitely not like a material (and tangible) resource that you can use/consume/modify later or that you can transfer to someone else.
  • It is not like knowledge (immaterial but tangible) that you can also use or enhance later, or transfer to others.
  • Is it more like an activity or Type of work, something that you do in the context of a project?

When someone leverages his/her social capital to promote the OVN, he/she logs some hours doing a type of work, appropriately. This would be somewhat similar to activities in marketing.

There are causes and conditions that produce value, value in use of the thing produced, and the causes and conditions that create the potential of value being produced - the contextual probability of adding value. VAS must provide incentives to attract the causes and conditions that create the probability of adding value.

Example: Reading a book adds no value to the network. The knowledge created (if relevant to the context) has value if tangibly available ('*attention', '*concurrence' from someone with that knowledge in a context where it is relevant and needed).

Attention (engagement) has no value in and of itself, before anything is done. Much of value remains tacit, then it becomes perceived, usually when it is applied and converted to more tangible forms, from which we tend to project its future value (rightly or wrongly). There are two ways to perceive tacit value potentials, by them being identified as necessary to the project at hand (we need X for the project), and by them being surfaced through conversion to more tangible forms of value (X can do Y in the project).

There are a number of dimvals that speak to the value potentials more directly. Knowledge is something we need to entice. '*Surfacing' relates to the realization of bringing knowledge into context. '*Influence' is something we need to entice. '*Relationship' is the realization of influence and *Introduction is its vector. The question remains of how to measure '*influence'. Klout and its peers are trying to do that. We need to sort this out. It is a very hard problem.

We can record "contacts generated" or similar as a resource in addition to or instead of time.

An interesting line of thinking exists when we try to think of the non-tradeable asset '*influence' as capable of flow or transitivity.

Social 'capital' can be seen as the ability to gain preferential access to resources through the use of relationships (direct or categorical).

Social 'capital' can be developed actively for a purpose (manipulated) or developed as a side effect of other activities. In this sense it is at a given time passive and at a given time actively employed.

Influence is the ability to create +engagement. As noted before I see the engagement spectrum as '*attention', *participation, '*contribution' and '*deliverables' (contribution with prior commitment).

Social 'capital' develops into the ability to influence someone with whom you have a relationship. This can be thought of as a '+connection' spectrum. Connection starts with introduction (making acquaintance) and moves on to degrees of '*connection' (creating ties through interaction) to '*trust' (expectations of behaviour based on historical behaviour, contextually) and '*influence' (the ability to create engagement) to perhaps *obligation (the ability to compel '*delivery').

Move past the notion of social 'capital' as a thing to that of '*connection' as a spectrum, as this is more of a network concept. We can visualize a graph with nodes as people and edges as relationships. If the edge is present there is basic connection, which can be characterized by a degree of directed attention (accumulated or active/responsive). The edge gets 'thicker' based on increasing engagement across the relationship. It may also get thicker based on the discovery of common ties (for better or for worse, neo tribalism). Gifting across the relationship strengthens it further and reciprocity makes it active.

What is interesting is that developing a relationship with a person who has thick ties with others has more potential value than developing a relationship with a person with no such thick relationships. In this sense, from a potential value perspective, people with more '*influence' are more 'valuable' to a network in the same way that people with more education (in context) can have more potential.

You will want to connect to the rainmakers and the geniuses not because their social 'capital' or intelligence 'belongs to' the network, but because it thereby becomes available to it and in this way may be seen as transitive, or flowing with a degree of decay (not perfectly transitive).

The first step to representing this is to acknowledge its existence and give it a name, preferably one without baggage (hence the esoteric language I often use, with apologies).

The next is to determine how to measure it (not perfectly, but adequately enough to determine relative balances while minimizing the risk of gaming).

Finally is to actually measure.

There is no need for people to necessarily 'own' social capital for it to be represented. I do think that attribution will be to a core node with decayed representation at distant nodes.

Some graph metrics around connectivity of a node may be helpful in this regard, as can be the notion of transitivity across a relationship with decay based on degrees of separation

To complicate matters more, if a node is not fully described in its network representation, the discovery of its connections through interaction with it (developing connection) can make the node appear more valuable even though its value did not change in the real world. This is valid in that the usefulness of someone else's connections depends on your connection to them (your connection affects the transitivity of their relationships to you).

In summary, the social 'capital' of the third party has value to the network once a connection is established, and the value potential increases with the strength of connection to the third party and varies with the scope and scale of their connections.

A strongly connected graph has more value potential than a weakly connected one. The challenge is that the value in the third party node must be discovered through connection in order to have value to the network (even if its connectivity is unchanged). In the same way skill (intellectual capital) is discovered through observation of its transformative power. The skill may not 'belong' to the network it is connected to but it is preferentially available to it, which has value.

{from Seh}

Netention + the plugin almost does most of this: The implementation a graph that shows 2 kinds of connections. They are both visualized the same but they should actually be distinct. One is the type of object, which connects an object to its tags. The other is the Ripple "trust" (credit lines) link between Humans. There should potentially be other kinds of trust, that's why it's labeled "Ripple Trust" in Netention's ontology. All of the graph metrics are either implemented as part of Ripple financial flows or could be added to Netention (centrality, min/max flow, shortest path, etc..).

Some external links

About potential in VAS

Current interpretation of VAS

If social capital is characterized by potential to create value where does it fit into the model and where is it scoped in applications. Core REA and the current VAS do not consider potentials. That's not to say they are irrelevant - they are very interesting in a larger analytical and planning space, but that space is huge. An ability is valuable to someone who has it, but is only valuable to a network insofar as it does something. So we think that the VAS scope should stick with resources that are actually valuable in some way or at least are actually realized. OVNi on the other hand could certainly include potentials and related concepts.

Alternative interpretation of VAS

One can argue that nothing in VAS has value a priori. A prototype that someone physically assembles today and is logged in VAS and linked to different types of contributions (time, $, etc,) can end up never being used by the community, never cited, entirely forgotten. One way to see it is that something has value if it finds its way into other things. But nothing has a priori value, no matter how tangible or real it is. We can legitimately use an interpretation according to which VAS is only about potentials. Nothing has been marketed with value in SENSORICA's VAS until now. It only contains logged contributions connection. According to this new interpretation of VAS we can say that things that are already linked together, these things that are used/consumed/cited in other things, have some value or are in the process of acquiring value. In other words, value in the system becomes actualized when resources (created through contributions) are linked together, value is actualized by the edges of the network of resources. But to quantify further (it's always a relative quantity set in comparison with other things) we need another process, and a part of that is subjective.

Base don this interpretation, we can say that if we log an event "X creates a connection between SENSORICA and YYY", if this is cited (a link in VAS) later in a successful fundraising event for example, than that contribution is recognized as a source of value that we further need to evaluate in context, in relation with other things.

See also the discussion section for this page


  • I personally don't see putting more value on someone's social capital because they are an "important person" in some way, just encourages thinking of "value" in who someone is rather than what they did to actually add value.
  • How can we extract social capital contributions from other contributions? - meetings, sales, marketing... Everyone uses their personal "capital", whether social capital or technical skills or other education or physical ability or willingness to do the work, when they contribute their time. So, in practical terms, my opinion is - it is bottom line an activity, a type of work, done in the context of a project.
  • In terms of assessing value, you can always get more or less complicated with anything - it is hard to track what comes of the introductions you get, etc. Could possibly be done, but likely not worth it.

Social capital is not worth anything unless used to (eventually, hopefully) create value. Just as engineering skills are not worth anything unless they (eventually, hopefully) create value. We probably shouldn't consider social capital as a resource by itself. When someone uses his social capital to do something he only creates potential for value creation.

There might be other costs associated with the use of social capital - getting somewhere (transportation fees), time spent,, money spent on a diner for example, etc.

We always need to be clear on our bigger goals, and need to be vigilant about conscious or unconscious attitudes that we all hold that will lead us in the wrong direction. These could be related to class, race, gender, etc. It is impossible to escape these living in our society, just need to be always thoughtful about how these manifest in our individual tendencies.

We need to worry about the solidification of travelled routes in terms of organization (hierarchies), communications (network effect), business processes (best practices & models) which are travelled again and again with self reinforcing positive feedback loops that are by construction accumulative of power and reductive of diversity. The network effect killing the long tail, the reputation and trust systems that reinforce this and in the long run reproduce a normative systematizing model where the visible get more visible, rich get richer and the winner takes all by construction. Alternative systems/network ought to address this and provide for the 'release' phase and the reconstruction of diversity….

Evaluation and rewording

The idea is to reward people NOT for what they "have" but for what they "do with it". {Some justification - It is dangerous to get bedazzled by people's "importance" in the existing world. And what people *have* was usually obtained with many people's help and efforts, and often by luck.}

Contribution involving social capital would be evaluated in context by affiliates.


Sharing and use of social connections in SENSORICA

There is a practice emerging in SENSORICA around the sharing and the use of social connections. See more in the Normative System doc.