Social capital is not quite as intuitive a concept as plain old capital. Physical capital--buildings and computers et al--shapes the way people behave at work. Social capital--behavioural patterns that live in our heads--do too.
[...] A firm's cultural capital lives in all its employees; if one quits, it is not threatened; if most do, it is. When labour is organised, it can appropriate the returns of this cultural capital (as it deserves to do). When it isn't, the returns are most easily appropriated by top executives.
[...] As the information-processing capacity of firms has grown in importance--as culture has come to matter more--those working in successful firms have come to enjoy a critical advantage over those working elsewhere.
The digital revolution makes it far easier and cheaper to keep an eye on certain sorts of workers and assess their performance. As a result, the boundaries of the typical firm have shifted. [...]
In a very low-wage world, more people will opt out of work. That will inevitably strain the social-safety net; societies will be ever more clearly divided into those who work and pay for social programmes and those who live off them. Societies will face a reckoning: either they will decide that thi…
