Well, I agree with that on one level but clearly there is some deeper biological analog there too, where money=energy=food and we’ve agreed to use a common currency rather than having to zap each other with energy or eat each other for food (alternatives we have in fact taken in the past, and not the far distant past either). So while social credentials do signal a capital asset of a kind (training, discipline, insight, courage) it tends to be an individual capital asset: something inherent to persons.

Distinguish individual (talent), social (trust), instructional (encodings) even in such enterprises as sports or teaching where it seems very obvious that the textbook is not the teacher and the trust of the students is not wholly based on any talent of the instructor but also on charisma and a “fit” between their desires or dreams and those of the person they’re listening to. All of this in some combination is the “human capital”, of which only the “individual” dies with the person.

That’s the first thing neoclassical economics failed to see: that “human capital” is not simply a fundamental or underlying thing that unleashes some financial stream in the form of a salary. Most human capital probably is devoted to creating more social capital (nonprofit or volunteer work) or individual capital (raising children, coaching, counselling, helping others deal with addictions or personal emotional problems). Sure some of this is paid, but the vast majority of it, isn’t. Someone has to raise the children, teach the young, and care for the old, most of this is “women’s work”, as Marilyn Waring pointed out. Nothing in “the real economy” functions at all without these things being done.

The other thing neoclassical economics failed to do was give a role to nature’s services. Instead it sees them as reducible to commodity (”supply and demand”) or product (”substitution”). Commodity and product are wholly artificial ideas that have no basis in biological reality. You can’t say biologically that all soybeans are “the same” even with respect to the nutrition in them or the chemical content (certainly not if you get into pesticides), and ecologically they are definitely not the same (some are genetically modified, others grown organically and in sustainable ways). You can only say they’re legally the same – that the obligations of delivering one type equals that of the other. Viola! Now you have a “supply” and a “demand” that can be compared. Even if you quantify demand in terms of linguistic convention, such as, all the recipes that call for milk, you still have to admit that not all milk is “the same” and that we increasingly care about what’s in it, because what might be in it is getting broader, and scarier, and uglier. So there is no solution to this short of redefining all commodity and product relations in terms of services with contracts that we trade in, knowing that they aren’t objectively real things except in the courtroom. Nature isn’t just a pile of leftovers or “resources” but a set of functioning services, and our human infrastructure and nation-states’ services lay on more of these and interfere with the ones nature set up. Natural capital has a yield, and that yield is pollination, erosion prevention, as well as board-feet of wood and megalitres of filtered water.

A decent analysis of this latter problem, such as Hawken, Lovins, Lovins, “Natural Capitalism”, 1999, does a reasonable job of explaining how natural capital, manmade/infrastructural/manufactured capital, financial capital and the “human capital” (the former problem) interact. But looking closely at “human capital” and understanding just how it is that we assess it, via such means as medals of valour, Olympic medals, Nobel Prizes, PhDs, elections, laughter of friends, criminal records, is going to be if anything more complex than nature as capital.

So, let’s deal with nature as capital first, and run many more experiments in starting social economies, prediction markets, bidding to support various projects, before we try to decide how to optimize our deployment of human capital. Or even what it really “is”. But if you must, here’s some thinking about it

http://openpolitics.ca/Beyond+GAAP
http://openpolitics.ca/capital+asset
http://openpolitics.ca/human+capital
http://openpolitics.ca/value+reporting