At Paul's prompting, I've been stupid enough to sign up for Facebook, which reveals that I have precisely two friends. I'm so lonesome I could cry.
But lonesomeness isn't just a social problem. It's an economic problem. There are strong reasons to think friendship can improve economic growth, through (at least) three channels:
1. Friendship builds trust, and trust can increase economic activity in several ways.
a) It can overcome the market for lemons problem. If you don't know any builders, you might not want to employ any, for fear of getting a cowboy. But if you or a friend knows one, you might employ him.
b) If everyone distrusts others, they'll invest in either rent-seeking or rent-protecting activities - such as security guards and CCTV. If they do trust others, they're more likely to invest in socially productive activity, as the fear of predation is diminished.
c) Social networks can police informal contracts based on the "invisible handshake" (pdf). One reason why the City first became a powerful financial centre was that transactions were based upon trust - "a gentleman's word is his bond." But this worked not because men were naturally honest, but because if they failed to be so, the sanctions were harsh. Word of one's dishonesty would quickly spread, causing one to lose friends and livelihood.
2. Social networks can improve productivity by improving the match between workers and jobs, as Emilio Castilla has shown. They can also improve workers' productivity by increasing their skills, simply because people chat in pubs and bars. Work by Mark Granovetter, such as this pdf, shows that these mechanisms may account for some of the success of Silicon Valley.
3. Networks can help convert ideas into entrepreneurship. The problem here is that there's a "knowledge filter" - there are many barriers between having a good idea and having a company that turns that idea into money. Networks can help break through these barriers. For example, they help inventors or researchers meet salesman. And they are better ways of communicating semi-tacit knowledge. A chat over a drink can convert a vague idea into something more concrete and useable.
Now, things aren't as simple as I've made out. Some think networking can raise unemployment, and that some types of network can cut growth (pdf); there's much more here.
Nevertheless, it is possible that a friendlier society means a richer economy. Hank Williams might have made a fortune from being lonesome, but mere mortals can't.
Aren't you simply referring to one form of social capital (culture and institutions being other facets)? Much development literature recognises the importance of such capital, along with natural, physical, and human capital. So, yes many would agree that social capital/friendship leads to better economic outcomes.
Posted by: JH | July 12, 2007 at 02:04 PM
Isn't the Marxist in you going to kick in and tell everyone that capitalism will turn all relationships into economic ones?
Posted by: arthur | July 12, 2007 at 04:42 PM
I know how you feel. I don't think I've ever seen a night so dark. Even the moon's just gone behind a cloud.
Posted by: Laban | July 12, 2007 at 10:17 PM
surely it depends far more on who your friends are and how they could help.
How would having a bunch of heroin addcits as friends be a plus over being lonesome?
Posted by: cityunslicker | July 12, 2007 at 11:06 PM
Clearly you are not involved in a company that tries to sell to the public sector, because then you would need to know all about equal opportunities employment legislation and MEAT (the rule about accepting the Most Economically Advantageous Tender). Clearly you also don't take account of the argument that the growing gap between rich and poor damages the fabric of society. I agree with you about not wanting to be saddled with a cowboy builder, and indeed when I need a builder or plumber I look for someone who comes well recommended - so we need transparency, i.e. obvious and trusted ways for businesses to demonstrate competence.
Posted by: dreamingspire | July 13, 2007 at 07:15 AM
Are you the balding chap in the 'London' network?
Posted by: Workshy Fop | July 13, 2007 at 10:44 AM
Get a cat.
Posted by: dearieme | July 13, 2007 at 11:50 AM
Me? Nah. Used to have 2 cats.
Posted by: dreamingspire | July 13, 2007 at 11:54 AM
Dreamingspire's comment about how this isn't reflected in public procurement is interesting. If a politicised civil service were able to award contracts to it's mates, I suspect we'd all benefit from better cheaper services, and we'd be able to vote out politicians who didn't command suppliers effectively.
On the wider point, Chris, the question of how our actions diminish other people's social capital is one that's not considered very seriously except for the 'authoritarians' in new Labour. As technology creates new rights that liberals then quickly sweep into the 'inalienable' pile, we all get poorer.
Posted by: Paulie | July 13, 2007 at 04:25 PM
Oh, and if you're quoting C&W lyricist for fantastic examples of lonesomeness, try Patsy Cline's 'Walking after midnight' song...
"I see a weeping willow,
Crying on it's pillow
Maybe it's crying for me?
And as the night turns gloomy,
The nighttime whispers to me,
I'm as lonesome as I could be."
Posted by: Paulie | July 13, 2007 at 05:10 PM