Question

Try to organize what we understand capital to be. Try to explain why we keep inventing new forms of capital such as human capital, social capital, and cultural capital. (maximum 1,000 words)

Answer 1

Capital is a term used to refer to assets that give the owner of the asset an advantage from ownership of that asset. Capital is used as resources, be it in physical, human, social or any other form. It can be used to benefit the owner of the capital or even people around (as in the case of social capital). Physical capital includes machinery, equipment, fixed assets such as land etc. Social capital refers to the social networks formed between individuals that help them exist in harmony. Cultural capital refers to knowledge of a particular culture which gives social mobility, confers social status and power. Human capital refers to the education/skills etc a person requires through out the lifespan. It can be used for individual and societal benefit.

Capital is invented so that we can label different resources that can be used to benefit us and others. Resources give power, money, success and stability. Environment capital is also important. It means that our natural resources are also assets and should be treated as such. They cannot be exploited needlessly for selfish purposes.

Assets/capital need investments so that they can give return and benefit society in general. That is why classifying things into capital is important.