James S. Coleman

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James Samuel Coleman (1926–1995) was a sociologist primarily concerned with the theory of social and rational exchange. He was born in Bedford, Indiana, served in the Navy, and gained a bachelors in chemical engineering at Purdue University. After a short career in photography, however, he then pursued a Ph.D. in sociology at Columbia University. He studied under prominent theorists such as Robert K. Merton, and became a professor at the University of Chicago where he would establish his prominence as a writer by developing and releasing hundreds of manuscripts and works reflecting his sociological analysis. Coleman was primarily interested in the practice and execution of sociological thought, understanding the dynamics of social relationships and how people make decisions in the sphere of everyday life. Recurring motifs in his work include the idea of group-work and cooperation, and how trust is developed.

Exchange theory

Exchange theory in sociology is generally based on the premise that people, through interaction and action, make 'exchanges' to navigate their social life. They make rational calculations based on predetermined meanings and understandings of the situation, and act accordingly to how one's motivations and foundations of desire manifest in comparison to the amount that one is willing to sacrifice to the means to the exchange. However, Coleman's view on exchange theory extended beyond the immediate interaction of face-to-face behavior, and instead explores the effects of long-term exchanges, sunk-cost exchanges, and the existence of social groups and how the cohesion of a group changes the nature of the exchanges that are made.

Trust

Coleman develops his idea of trust in the context of social relationships and exchange. Essentially, his view on trust reflects the long-term exchanges that a person makes with another person, an understanding that the exchange that they're making is a legitimate one. A question is commonly begged when exchanges are considered: why does a person continue to sacrifice costs towards an exchange when they may theoretically be guaranteed a reward if they withhold a certain cost in an individual exchange? Coleman's answer would consist in the form of trust, providing a temporal aspect to the nature of exchanges and a sort of continuity to the relationship.

When trust is developed between two or more people in a group of interactions, a higher tendency for sacrificing costs is apparent. The person will be more likely to sacrifice something they care about, or risk the other person using something they own of value. Trust is built upon previous successful exchanges that were rationally calculated and realized within the scope of both parties, rather than a violation of said exchange where one party unfairly takes advantage of the other and makes off with the reward without sacrificing the cost necessary for attaining it. Instead, the development of trust over a long period of time within a relationship changes the definition of how exchanges will be perceived, and therefore cause the nature of exchange to differ: there will exist more forgiveness and less qualms in the costs the more trust is acquired, and vice versa.

Norms

Coleman discusses norms in an interesting way. The term 'norms' is hotly contested in the discipline of sociology because it can have different meanings and usages depending on the standpoint of the theory that a theorist is utilizing in understanding their social environment. In his context, Coleman describes norms as a function of societal sanctioning that cannot be exchanged away, and demonstrates a position of power from those who are enforcing said norm. In a sense, norms are used to coerce an individual to conforming with the rest of the group, and as a result, an amount of trust has been established within the person and the group, in that because said individual respected the norm that was being enforced, the group therefore can conclude that that individual will follow their interest.

Although critique can be aimed at Coleman's interpretation of norms, perhaps because some norms can be regarded as having no benefactor to its enforcement, it nonetheless holds a functional aspect to its understanding and role within society. When a norm is enacted upon an individual, they may instinctually or rationally decide that the cost of conforming to said norm is lower than the potential shame that is derived from breaking it, with an understanding that the continuing of social cohesion is vital to one's survival in the social world. The power of norms does not rest in the beneficiaries per se, but rather in the group beneficiaries, not those that benefit from the norm itself, but rather those who benefit from the enforcement of the norm, thus solidifying the power of both the group and the individual's role adopted in the confines and definition of said group.

Open and closed groups

Based on his views of trust, Coleman goes on to explain the function of different types of groups and how they translate to differing amounts of social capital. The exchanges that a person makes and the costs that they use to achieve their goals must be in some way linked to the people they know, as the development of trust results in higher rewards over long periods of time. So why is it that some people end up with higher rewards than others, and how is it that social groups are linked to this proposition of who gets resources when? He analyzes the function of human relationships in terms of how they interact with and exponentially affect their cultural and economic capital.

Open groups

In an open group, an individual within the chain of relationships is loosely connected to those within the group. Two people that a person knows will not usually be associated with each other, or scarcely will be. While there may be a strong connection to those who you are close to, the attainment of rewards from people further along the chain of the open group gets increasingly harder as you move further away in the degrees of separation, as the people that can vouch for you are increasingly distant and unknowing of your capability of trust. In addition, it is more difficult to get into contact with them, creating a social distance that undermines the ability to attain significant rewards from them and being able to spend a sufficient cost. As a positive function, however, trust is not an important cornerstone of this type of group because of the distance between those that do not know each other. Breaking the trust of one part of this group does not undermine the trust of another group because they could not communicate so.

Closed groups

Closed groups, on the other hand, exist in the form of interlocking and interdependent relationships in a matrix of exchanges and relations. One person in the group could be connected to five others, and those five people all know each other as well. In this type of group, the attainment of higher rewards is much easier to attain because you are both closer to the person in proximity and relation, and the trust between the two people are magnified by the vouching that other people that trust you can do for you. Thus, it is easier to attain rewards for lower costs, and you are more willing to use higher costs for the people you trust. As a consequence, however, the nature of trust requires a heightened judgment of exchange within the group. A lower tolerance to the swindling or taking advantage of trust to selfishly attain something that unilaterally benefits you and you alone can result in the disconnection from other potential exchange partners, or in extreme cases, the dissolution of the group as a whole.

Social capital

The distinction between open and closed groups, especially considering diversity of members of groups, translates to social capital by translating the resources that someone has, namely their cultural and economic capital, into tools that one can use for exchanges made with people that a person knows. A closed group would have a higher capability of both accepting the costs, as there would be a higher number of potential recipients of the costs that you are willing to offer, and a higher capability of attaining a reward, as there are more people willing to give you their objects. Closed groups also have an added benefit of creating an internal bartering system that one can take advantage of, rather than making a one to one exchange a person is able to make a set of exchanges across multiple individuals to get everyone what they want. In an open group, this is simply not possible, and in a closed homogenous group the reward-seeking is folly. Thus, a diverse and connected closed system is the most reliable one to make the most reliable exchanges.

The free rider problem

In a closed group or aggregate, however, there is always the potential for a person to attain rewards without intentionally using a cost. This is known as the free rider problem, where a person accidentally benefits from a group's collective effort and cost usage to acquire a benefit or reward. In economics, the free rider problem is known as a negative externality. Coleman points this out as a natural effect of a society in which this is systemically possible, and proposes three potential solutions to answer the question of why people DON'T act according to this idea of resource disuse.

Possible solutions to the free rider problem

The first proposed solution is to enforce the involvement of participants into a system that allows them to benefit. How much one is required to participate is not relevant, but simply the idea that one rewards or incentivizes people to join a cause or group effort is one that is acted upon as an effort to convince people to get involved. For instance, to benefit from a system of universal healthcare would be a free rider problem, but could be potentially rectified by giving additional benefits to those who are paying more in taxes, or perhaps work specific jobs or up to a specific number of hours. This incentivization is one way to convince people to participate in a system that they normally wouldn't.

A second proposed solution is to punish those who are not involved. The polar opposite of the first proposition, one can instead punish people whose non-participation in the event is allowing them to benefit without cost. One example of this is the taxation system, where people are arrested and audited with enforcement and punishment if they do not pay their taxes. Where the taxes are presumably used to benefit the society as a whole, to not pay taxes would be a demonstration of the free rider problem. Therefore, people who must pay their fair share of taxes are punished whenever they don't, as a sort of artificial enforcement to minimize the number of free riders.

A third and final proposed solution is to do nothing and hope that social conventions convince them to participate anyway. Harkening back to norms mentioned earlier, the inclination to join a cause purely for socially defined or normatively defined parameters is a real occurrence. Happening especially in social groups where a lot of trust is held between members, group-work and norm enforcement can convince people to join a cause where their individual contribution would be negligible, yet is still acted because of the sheer social pressure enacted upon the individual in question. In this regard, unofficial sanctioning such as intangible ideas of distrust, judgment, or shame can all be driving factors in determining whether one commits to the cause or becomes a "free rider".