Matt Bruenig — The Rise of New Capitals

In his 1776 book Wealth of Nations, Adam Smith provided the classical definition of capital:

When the stock which a man possesses is no more than sufficient to maintain him for a few days or a few weeks, he seldom thinks of deriving any revenue from it. He consumes it as sparingly as he can, and endeavours by his labour to acquire something which may supply its place before it be consumed altogether. His revenue is, in this case, derived from his labour only. This is the state of the greater part of the labouring poor in all countries. 

But when he possesses stock sufficient to maintain him for months or years, he naturally endeavours to derive a revenue from the greater part of it; reserving only so much for his immediate consumption as may maintain him till this revenue begins to come in. His whole stock, therefore, is distinguished into two parts. That part which, he expects, is to afford him this revenue, is called his capital

Under this classical definition, capital refers to surplus wealth employed to provide non-labor income to its owner. It is from this definition, which was repeated for centuries, that we get such political-economic dichotomies as capital versus labor, capital's share versus labor's share, and earned income (wages, salaries, farm income, self-employment income) versus unearned income (rents, dividends, interest, capital gains).…
In the last few decades, this centuries-old idea of "capital" has been stretched to the point of unrecognizability by the rapid proliferation of things being newly branded with the word capital. We have, of course, the heavy hitters among newly designated capitals: human, social, and cultural,…organizational, institutional, … intellectual, … gender capital.… 

I am not going to argue that these things aren't really capital because capital can mean whatever you want it to mean. But it's clear these things are not capital in the sense that Smith, Marx, and basically everyone prior to 1950 used the word (and the way Piketty used it). Whereas old capital referred, basically, to wealth that provided its owners passive (non-labor) income, these new capitals, taken as a whole, don't coherently describe anything more than things that provide economic advantages.… 

…one of the problems with the late 20th century academic fad of calling everything capital is that it can and does generate some serious confusion via category errors.…
…the phrase "human capital" literally swallows the entire capital versus labor distinction. 

When slaves existed, you really did have "human capital" in the old sense of assets that provided passive income to their owners. But that's not what "human capital" in the Gary Becker sense refers to. In the Gary Becker sense, "human capital" is essentially just the present value of one's future labor income. And since labor's share of the national income is greater than 50%, capitalizing labor income into the present and calling it "human capital" renders the conclusion that most capital is "human capital."…

And this is the point of the exercise — to render "capital" ambiguous if not meaningless as an economic term by making it synonymous with economic advantage. Similarly, rent is conflated with earned income.

Demos
The Rise of New Capitals

Matt Bruenig