Social capital and snake oil

S.P. Hargreaves Heap

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2 Citations (Scopus)


This paper argues that the social capital that comes from group identification has a mixture of effects on welfare. In this sense, this form of social capital is neither snake oil nor elixir but something in between. Strong group distinction and identification reduce the adverse impact that relative comparisons can have on happiness, and they probably help with existential anxieties. However, strong groups in this sense can also plausibly heighten inter-group animosity to the detriment of all. Whether they do, however, is likely to depend on the character of the beliefs that give identity to each group. The paper further argues that an 'open' set of beliefs in the Austrian or Hayekian sense are the ones least likely to spawn such animosity. In this way, the paper points public policy away from the encouragement to group formation to the character of the groups that are formed.
Original languageEnglish
Pages (from-to)199-207
Number of pages9
JournalThe Review of Austrian Economics
Issue number2-3
Publication statusPublished - 1 Sep 2008


  • Social capital
  • Group identification
  • A1
  • B52
  • B53
  • C92
  • D60
  • Z1

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