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Social Networks and Software Code

Written by: Bill Sherman on Friday, 8 August 2008, 6:17 AM

This week, I’ve three different ways of looking at social networks–are they like fisheries, software, or muscles.

For the moment, I’d like you to forget about digital social network tools like LinkedIn, Facebook, MyYearbook, FriendFeed, etc. That’s not what I’m talking about. Today, we’re discussing the actual social network itself and not the digital tool. What do I mean here? We’ll let’s take a short trip into economic theory.

In 1990, economist Paul Romer presented the “new growth” model that looked at how value was created. His new growth model distinguishes between rival and non-rival goods.

Rival goods–when someone consumes a rival good, others are prevented from using it at the same time. Mobile phones, clothes, and restaurant meals are all rival goods.

Non-rival goods–may be consumed by one person while still allowing others to do the same. Sunsets, Wikipedia entries, and commercial broadcast television are all non-rival goods. Common knowledge is also a non-rival good.

Generally, rival goods are known as “atoms” while non-rival goods are called “bits.” Atoms are tangibles. Bits can be replicated over and over and enjoyed by many.If social capital functions as bits, then people within the network should be able to consume the resource simultaneously.

Social capital can certainly exist within a community. David Crowley and his work with Social Capital, Inc. provide clear evidence that you can build social capital within a community. A non-profit or government agency can create tools and events that strengthen social capital within the community and yield benefits to many (if not all) of the community’s participants. For example, the MyDorchester event is open to the town’s participants. Hundreds of people can attend at once.

Let’s say that I organize a group to “Adopt a Highway.” We go out and clean up the litter. While out there, we plant daffodil bulbs to provide a spring surprise for drivers. Our actions won’t just be enjoyed by one person, they’ll be enjoyed by anyone who drives past.

So, it seems that some social capital projects can benefit multiple people simultaneously. If that’s true, then social capital shares characteristics of non-rival goods “bits.”

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