Activity

[...] Big, skilled places are good at making workers more productive. Workers in places like Silicon Valley earn a hefty wage premium over similar workers in other cities, but new arrivals don't get the premium all at once. Instead it builds over time: evidence that the city is contributing to th…

Hopefully, thinking about society in this way allows us to better understand differences in economic performance. Social capital evolves over long periods of time, lives in the heads of those operating within society (but is often embodied in institutions, such as governments or firms), and influen…

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.