Most people have a fixed idea about the meaning of the word ‘capital’. They tend to think of it strictly in materialistic terms as money or goods that allow a business owner to produce products and earn a profit. A factory filled with machines or a bank brimming with money to loan comes to mind. Of course, there is nothing wrong with that definition as far as it goes – it simply doesn’t go far enough.
The word ‘capital’ is defined variously by Webster’s dictionary (3rd definition) as:
- A stock of accumulated goods,
- accumulated goods devoted to the production of other goods,
- accumulated possessions calculated to bring in income,
- net worth,
- advantage or gain,
- a store of useful assets or gain,
the general theme knitting all these definitions together being that capital is a set of assets or advantages (things of net worth) that promote the accumulation of other assets or advantages of the same or different kinds. So, the commonly held view of capital is correct but limiting.
Why does it matter how capital is defined? It matters because, as a society, we continuously craft political structures and laws that limit what can be done with one type of capital while allowing other types of capital unfettered reign. We are also in a better position to understand the motivations and the accompanying behavior of others if we can perceive what marketplace they are actually engaged in and what capital they are trying to accumulate.
In the rest of this post, I am going to explore the two most common types of hidden capital: reputation capital and political capital.
Reputation Capital
How familiar is the following scene? The latest sports news comes on the radio or television and the announcer coolly states that so-and-so has just signed with some-such team for millions of dollars, making him the highest paid player at his position. A friend of yours turns to you and says “how much money does one man need?” Another friend responds by saying something like “It’s not about the money! He just wants more than the other guys. He just wants to be known as the best player in world.” What the player in question is doing is building reputation capital.
Alex Rodriguez is a prime example of this. His early success as a baseball player garnered him a reputation as a great ball player. That reputation, in turn, garnered him a chance to play in bigger venues, which in turn grew his reputation. The money was a secondary affair as his fame was really the means to the end. It opened doors for him, the entire country talked about his contract, his lifestyle, and his legacy.
This is all innocent enough, and A-Rod’s celebrity fame and eventual infamy did not actually shape the economic or political sphere very much. Outside of his influence on America’s pastime and popular culture, his mark will soon disappear.
Much more interesting and worthy of a skeptical eye are the so-called ‘paragons’ of society in whom is invested a lot of trust. Journalists and scientists fall squarely into these categories.
Take the recent fall from grace of NBC’s pride and joy, Brian Williams. Whether you call his fabrications exaggerations or outright lies, it is clear that he has played fast and loose with the truth. But why did he do it? I think his behavior is best explained by the model that he was trying to build his reputation as a gritty journalist. His fantasies related to his time in Iraq or his encounters with dead corpses and armed gun men in New Orleans in the aftermath of Hurricane Katrina were meant to build capital with his viewers. He intended his audience to regard him as an objective journalist who would back down before nothing and no one. From such a position, he wielded great power and basked in the adoration of fans and the admiration of his colleagues. He achieved assets and advantages that mere money could not buy.
University professors and academics engage in their own unique marketplace. They are first and foremost tradesmen whose primary focus is to sell their ideas to each other and to society as a whole. Journal articles, published books, and television and radio appearances are their currency, and their academic reputations are their capital. Their wealth is measured in terms of the number of times their article is cited by peers, or how many of copies of their book were sold, or how many tweets and postings their TV appearance generated. As their reputation grows, so does their power, even though very little in the way of money changes hands.
Political Capital
No matter where you work or volunteer, there are always a few people who are at the center of the institution. These are the people who get things done by pulling strings, facilitating compromises, and horse-trading between one group and another. These people engage in the marketplace of political capital, and the favors they give and receive are the currency. They hold and wield power in the institution, and the larger the institution the greater the power, political capitalists in governmental positions being the most influential.
Political capitalists in government fall into two classes depending on whether they are elected or appointed and in the public eye (e.g., John Boehner or Samuel Alito), or they are far removed from general scrutiny (e.g., the head of the EPA). In both cases, even though their assets and advantages are never translated into a monetary value, these people are able to buy and sell for goods and services just the same. The public only thinks about this marketplace when an elected official grossly abuses their capital, as in the case of Bob McDonald, who was recently convicted of corruption for ‘selling access’ to his political capital in exchange for financial compensation. In other words, the public doesn’t seem to care when the bartering is done strictly in terms of political favors – even though such bartering may lead to material gain on all sides – but only seems sensitized when political capital is turned into cash directly.
Regulating Marketplaces
As I alluded to above, the major reason to care about how capital is defined is to level the playing field when it comes to how different types of capital are accumulated, spent, or exchanged. As a society, we tend to regulate and focus on financial or monetary capital and ignore reputation and political capital.
I’m not objecting to the capitalists that trade in either of these marketplaces, nor am I objecting to their accumulation of assets and advantages. I do object to the thoughtless position that fears the business man and his accumulated financial wealth but embraces the celebrity and his dominating reputation. I’m against laws that limit the modes of speech and the exchanges of ideas because they are purchased by money but leaves unfettered the speech and exchange of ideas that are bought through political favoritism. I don’t understand why society is willing to be suspicious of one and not the others.
I’m skeptical across the board. The accumulation of capital is not a bad thing, in and of itself, and I am willing to give the person who has acquired any type of capital the benefit of the doubt that he has earned it. But the use of that capital is no less corrupting if it is based on reputation or political connections than if it is based on cold hard cash.