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.

The Concept of Capital in Sociology

Inspired by a post by Colin Mills, I decided to post a comment on the concept of capital in sociology — something that has been in the works for ages. Already as a graduate student I was fascinated by the proliferation of different kinds of capital in the social sciences: physical capital, economic capital, social capital, ethnic capital, human capital, cultural capital, linguistic capital, global capital, symbolic capital, political capital, you name it!

As far as I know, capital is defined by two aspects: First, it can be accumulated, second it can be converted into different forms of capital. At some stage I embarked on the ambitious project to seek the mechanisms by which different forms of capital (as used in the social sciences) can be converted. Alas, I abandoned this project, largely because for many of the forms of capital I examined, I failed to identify clear mechanisms for conversion.

When I wrote capital can be accumulated, this means we can have more of it, but also we can have less of it. In this sense, different forms of capital are like resources. When I wrote convertibility (exchangeability), this means that one form of capital can be used in the generation of other forms of capital. This highlights that capital can be invested and used to achieve certain things.

The trouble with most forms of capital as they are used in the social sciences is that they are only convertible under certain circumstances, or that they require no conversion at all — such as when high human capital comes with prestige (symbolic capital).

On the up side, for most forms of capital, there is some convertibility, but usually it is only into economic capital. On the down side, for most forms of capital, such convertibility is limited, contingent on external factors, and subject to substantial transaction costs. In sociology, the focus seems to be on accumulation, in which case there is no apparent difference to using a term like resources. Let’s not hide behind buzz words.

While I would maintain that capital can be useful, much of what’s being offered is conceptual stretch. At least once we’ve reached negative social capital it is clear we’ve gone too far.