23 Jan 2018

Review: Brokerage and closure

This 2005 book by sociologist Ronald S. Burt is important in its subject (the subtitle is "an introduction to social capital"), but academic in its presentation, meaning that the book is thorough and well documented but also sometimes verbose, dense or repetitive.

Social capital (SC) is "the advantage created by a person's location in a structure of relationships" (page 4), and one's advantage is directly proportional to one's ability to share ideas across or link individuals from different groups. For example: I have SC when it comes to bringing American ideas on water management to the Netherlands (and vice versa), while my girlfriend has SC when it comes to connecting Romanian, Canadian and Dutch urbanists and transport experts. By the same logic, one's SC advantage would be weaker if one only communicates the same ideas within a small group of people. (Back in the 1960s, this situation was associated with group think. These days it's associated with echo chambers.)

NB on terminology: Strong and weak SC map directly onto bridging and bonding capital, respectively, but (confusingly) also to weak and strong networks.

Assuming these ideas make sense and that you understand their value, why read the next 280 pages of the book? The short answer is that you may not need to (I skipped some sections). The longer answer is that you should, if only to appreciate the value of SC (Burt provides many examples), the difficulty of strengthening it, and the need for you to act if you're going to build it for yourself. This book is not a self-help guide and there's no like button, so anyone interested in this topic needs to see this book as a set of ideas and goals that will only create value for people who put in effort.

Speaking of ideas, here are a few that I appreciated from the book:

SC is the "invisible glue" that conveys trust, norms and coordination. Bedroom communities may have weaker SC because residents do not see each other regularly, leading to insecurity, excessive capitalization (buying your own tools instead of sharing with a neighbor), and so on. Flat hierarchies will have weaker SC because they have removed middle managers, which can lead to mis-communication, poor coordination, and costly mistakes. (These ideas should be familiar to the readers of Bowling Alone and The Death and Life of Great American Cities.)

When you move from one organization to the next, then you lose some (or much) SC. A senior manager may take a massive paycut for shifting to "the same job" because they need time to build relationships and understand workflows in their new job.

Even commodity traders can benefit from SC as it's not always easy to understand the quality of goods on offer and deal terms can vary by a lot. SC is essential for trade and exchange of multidimensional goods and services, which is why we don't change dentists, car mechanics or romantic partners so easily. It takes time to get used to someone (and vice versa).

Someone with high SC has access to a greater diversity of information, early access to that information and (more) control over how information diffuses. Together, these characteristics describe one's "information arbitrage" advantage. Given these factors, we can understand the existence and role of "network entrepreneurs" (or bridge builders) who use their SC to create value by helping diverse people and ideas find each other. (Burt later links his discussion of the network entrepreneur to the Austrian School, i.e., Hayek's appreciation of local knowledge and Schumpeter's definition of the entrepreneur as someone who combines old ideas into new hybrids.)

In the business world, network entrepreneurs are the brokers and power players. In the academic world, these are the interdisciplinary types who borrow basic ideas from one discipline to "revolutionize" another (e.g., importing loss aversion from psychology to create the new field of behavioral economics). These bridging roles are not always appreciated and may be attacked by those who prefer bonding among their peers, with all the jargon, circular-appreciation, and arcane uselessness that tribalism implies.

I'm sure there's a case for bonding, but the academic world suffers from an excess that could be reduced to give more space for interdisciplinary bridging, a thought that Burt captures on page 77:
Weick (1996) makes a chilling analogy between jargon-bound academics and firefighters burned to death because they did not discard the heavy tools they were carrying. The analogy works, and generalizes to other kinds of people, because people so often identify themselves with the tools they employ in their work. People who cannot see clearly an alternative way to do their work are unlikely to give up the tools they have, and are likely to insist that others use the same tools. Recall the Planck quote... on people blinded by the paradigm in which they rose to prominence: “a new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die.”
Bridging can be useful when it brings new ideas or personnel to solve problems (especially ambiguous problems), but it can also be a distraction that wastes time by misleading or diverting attention to exotic non-solutions. This caveat explains the difference between a iconoclast and dilettante. It also explains why we should be suspicious of any academic, manager or citizen whose knowledge is based on a single area of study, work or living. Monocultures are simple yet limited, efficient yet fragile.

Burt contrasts brokers as entrepreneurs thriving on advocacy and change with team players who thrive on security and stability. There's clearly a place for both types, but it's hard to get those types to respect each other, let alone cooperate. On page 61, Burt quotes Thoreau saying "beware of all enterprises that require new clothes" to provide an example of conservative thinking that excludes outside beliefs. In my experience, such a perspective ("our situation is different") explains why water managers (most of them engineers) want to ignore economists with ideas of how to manage scarcity, risk and customer satisfaction. That want, combined with monopoly power, explains how they are able to ignore new ideas and continue to pursue failing business-as-usual policies. (Here's a blog post on that theme and another and another.)

Bottom Line: I give this book THREE STARS for discussing an important topic but taking far too many pages to do so. If you want to benefit from these ideas on leveraging social capital, then follow Burt's "simple moral: when you have the opportunity to learn how someone in another group does what you do differently -- go" [page 245].

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