I’ve noticed a trend whereby writers are broadening the use of the word “Capital” in economic and political literature lately. I think the reason stems not only from the philosophical dimensions of the term but also the moral and ideological beliefs of the writers.
Capital in the “Econ 101 class definition” is simply a factor of production – something valuable that can be used to generate income by providing services or producing goods. Capital is wealth that is accumulated by an individual or organization. Distribution of wealth is a controversial issue. French economist Thomas Piketty caused quite a stir with his book Capital in the 21st Century. Whatever your beliefs about the morality or politics of wealth distribution, it’s a very hot topic now days. Wealth inequality is a stark reality and it’s going to get a lot worse according to Piketty and others.
The key themes of this blog are 1) It’s growing increasingly more important and difficult to accumulate personal capital; and 2) Economics is hostile – it’s highly competitive, brutal, not nice – …like war. Jonathan Nitzan believes Capital is the quantification of power over others – a measure of the relative power of owners over the broad social process. Noam Chomsky believes real power “does not happen to lie in the political system, it lies in the private economy; that’s where the decisions are made about what’s produced, how much is produced, what’s consumed, where investment takes place, who has jobs, who controls the resources, and so on and so forth”. Capital is power and control. If you fail to accumulate wealth and protect it with insurance, financial and estate planning, you are powerless – with no war chest. And that’s bad in times of economic war.