The Concept of Capital

A while ago, a wrote about the concept of capital in sociology. In the same line, a bit more forcefully and certainly more eloquently put, Geoffrey Hodgson has a recent paper on the concept of capital. It carefully traces the origin of the term and how the forms of capital proclaimed in the literature have recently proliferated. Hodgson also shows that almost everything we call capital today — from human capital to social capital — fails to meet definitions of capital as such. Here are two telling examples: human capital can only be used as collateral if workers are slaves; social capital isn’t even owned… think about it.

While we might not care that much about the historical bits, in my view the crucial test is whether we gain anything by using the term capital. Hodgson is clear that there’s conceptual stretch, although he doesn’t use these words: “Capital has now acquired the broad meaning of a stock or reserve of anything of social or economic significance. Everything has become capital.” (p.1075) The answer to the question in the title can only be yes.

Hodgson, Geoffrey M. 2014. “What Is Capital? Economists and Sociologists Have Changed Its Meaning: Should It Be Changed Back?” Cambridge Journal of Economics 38 (5): 1063–86. doi:10.1093/cje/beu013.

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