Different types of capital assets

Physical capital - or just 'capital' refers to any already-manufactured asset that is applied in production, such as machinery, buildings, or vehicles. In economic theory, physical capital is one of the three primary factors of production, also known as inputs in the production function. The others are natural resources (including land), and labor — the stock of competences embodied in the labor force. "Physical" is used to distinguish physical capital from human capital (a result of investment in the human agent)) and financial capital. Often used to mean fixed capital.

Fixed capital - not used up in the creation of a thing. Karl Marx emphasizes that it is really purely relative, i.e. refers only to the comparative rotation speeds (turnover time) of different types of capital assets. Fixed capital also "circulates", except that the circulation time is much longer, because a fixed asset may be held for 5, 10 or 20 years before it has yielded its value and is discarded for its salvage value.

Circulating capital - short-lived items that are used in production and used up in the process of creating other goods or services; includes raw materials, intermediate goods, inventories, ancillary operating expenses and (working capital). Contrasted with fixed capital.

Liquid capital - or fluid capital, a readily convertible asset, such as money or other bearer economic instruments, as opposed to a long term asset like real estate

Financial capital - money (the most fluid capital)

Human capital - the stock of competencies, knowledge and personality attributes embodied in the ability to perform labor so as to produce economic value. It is the attributes gained by a worker through education and experience. [1] Many early economic theories refer to it simply as workforce, one of three factors of production, and consider it to be a fungible resource -- homogeneous and easily interchangeable. "...up to a point, consumption is investment in personal productive capacity." ~W. Lewis

Marie Mies on capital accumulation and unpaid subsistence labor

The issue was: what does housework mean in capitalism? Why isn't this work seen as work? Why isn't it paid? Why is it non-paid labor? We recognized that in capitalism this work can't be paid, because if it were, the accumulation model would collapse...

And then we discovered...that the small farmers' work also has something to do with housework and both have something to do with the work in the colonies. Then this concept emerged, as all three of us were in the Third World for extended periods. I was in India for many years, my two friends were in Latin America, and so we realized: if entire countries hadn't been exploited as colonies for long periods of time, then there wouldn't be any capitalism. And if they were treated equally today, all of the work in the "colonies" - I still call them "colonies" - well, then there wouldn't be much to accumulate. And that's why we call all of these relations colonial relations. The man-woman relationship is colonial, the relationship between the small farmer and industry is also colonial, and naturally, the colonial relationships between metropolises and colonies are definitely colonial.

...with these activities - even if they take place at a very low level - people rediscover their sovereignty, their own authority to produce their lives, as we call it. That is no shortcoming, it is something very positive to discover, that we are entirely capable of collectively producing and organizing our lives together, with others. Naturally, you also need money. I don't want to deny that at all, but exclusively working for money is not the best thing - that is only one side of it. The other is that subsistence production, or subsistence orientation, satisfies needs in a much more comprehensive way than purchased products ever could.

- from P2P

Trees as design challenge

"The book itself is a polymer, it is not a tree. Imagine this design assigment: Design something that makes oxygen, sequesters carbon, fixes nitrogen, distills water, accrues solar energy as fuel and makes complex sugars and food, creates microclimates, changes colors with the seasons, and self-replicates... Why don't we knock that down and write on it."

Will McDonough on his TED Talk on his book Cradle-to-Cradle.

On Maximizing Public Choice

From an LSE talk by Lord Adair Turner:

"Over the course of the last 10 years there was a lot of focus on the UK's national productivity deficit vs. the US, and there was analysis that showed one of the key elements of this national productivity deficit was the problem of retail productivity, and this entered public policy in a real influential fashion in saying that we therefore have to deregulate out-of-town super markets because we will then achieve improvements in our national productivity, national productivity which would then slightly increase our long-term growth rate. But the point about such developments is that they have negative downsides - at least perceived negative downsides for some people - in terms of traffic creation, in terms of countryside destruction, in terms of village stores put out of business, in terms of the vibrancy of local town centers.

"The key point, once you shift the definition of objectives from growth as the overriding objective to growth as the byproduct of desirable things, is that you end up believing that those sorts of decisions ought to be made by local choice rather than just by entering in to that debate some supposed national imperative to squeeze out the last percentage points of productivity improvement and growth, particularly because...exercising choice is actually something that people value in and of itself, quite separate from the fact that they may be able to achieve, what to them, are superior culmination outcomes."

"Economists divert their eyes from the concept of fairness because it's a tricky concept."

De Soto's Indigenous Property Rights

Hernando de Soto on property rights for indigenous Peruvians.

(Video from ILD's web site).

I wonder, though, why property rights don't translate into capital for the poor in the developing world? Or do they? Could they?

The Right to Say No. Or Yes.

The going socialist theory (as expressed by folks like Kim Moody here) sees the capitalist class abolished by a worldwide democratic uprising of workers, who seize power over the means of production and redistribute assets equally among people.

My own observations of the world suggest that, with rare cooperative exceptions, someone generally organizes productive capacity (material resources and other people), and some people have more vision, drive, and capability for doing so than others. These people, of course, are certainly not the ones that always end up in these positions. Inheritance, class entrenchment, etc. ensure that idiots or assholes or otherwise undeserving folks end up at the top all the time. But if workers did succeed in seizing and equally distributing the assets of the capitalist class, the need would arise again for someone to organize people and assets and shape it all somehow, to manage cooperative projects. People would offer their assets and their labor to "buy into" someone's suggested project, or people would come up democratically with a project they'd like to pursue, and put the best individual or team on the job. This again ends up with more power and more resources in the hands of some people than others.

I am not anti-capitalist, in that I am not against some people having more than others. Greed is disheartening and inequality is ugly, but to attempt to manage human beings to ensure consistent levels of equality in all regards among them sounds like a tedious and frankly oppressive project, and one that is stacked too tenuously against the organic motion that is living and being.

So I am not anti-capitalist, in this regard at least. What I am is for accountability and power-sharing. I am for people having a say, and having the power to really have a say. I think that workers have the right to surrender some of their autonomy to "buy into" collective endeavors, and that includes both unions and private business firms. In other words, they have the right to sell their labor. That said, it's obvious there are some preconditions to making that right practicable.

Where the arguments of the socialists gain traction is in pointing out that workers often have very little decision in how or by whom they are employed because they have to be employed. The industrial, urban, mercantile economy we have surrendered to over the last several hundred years has severely limited peoples' ability to provide for themselves, thereby limiting their ability to say no to bad employment when it's the only employment option to be had. Again, we can trace this back to the expropriation of the peasantry in 17th century England, one of the first clear motions by the burgeoning capitalist class to ensure a dependable supply of low-wage labor - a.k.a., those that don't have an option to say no.

So this is where I end up in my political and economic orientations: I believe in strengthening the capacity of people to say no to shitty employment. Sometimes this means changing employment conditions, and sometimes it means increasing options through developing external or internal resources. While ideally this would entail mostly attentive, dedicated local work, the reality of the globalized age is that it often demands coalition and coordination with actors far and near. I suppose it can take a lot of shapes.

All peoples that exist in the world once had their own land or equal access to collective land. They could grow food, fuel, and textiles on it. Few chose to leave these original holdings; most were forced off. This is the history of labor. In my ideal world, we would all be well-organized smallholders, providing for ourselves and our communities and living freely. The complexities and realities of the modern age preclude this from becoming a reality anytime soon, if ever. But it shapes my policy inclinations nonetheless.


(images from maggieblanck.com)

Capital-ish and Social-ish

Suggest reforming a shitty health care system and you're called a socialist. Suggest that a private business can create public value and you're called a capitalist.

This is bothersome.

To begin with, even if I espoused an unfettered free-market ideology - which those that call me a socialist know I do not - I still couldn't be a capitalist. A capitalist is someone who owns capital. Not me.

Beyond this, while it's easy to see the socialish aspect of an idea or policy, or the capitalish aspect - and I believe it's worthwhile to note these aspects and include them in any worthwhile discussion of an idea or policy - it seems truest to me that most of the time there's a bit of both. It's like anima and animus. Hemingway contains both masculine and feminine energy. The proportions change from individual to individual and for one individual over time, but there's a little of both in everyone.

In examining policies I would like to simultaenously (1) not jump to any foregone conclusions based on the ishness of a policy, but (2) DO consider the complexities over time that said ishness implies. In other words, if a policy has a socialish aspect, let's consider what that might do to the motivation of the policy beneficiaries (for example). Let's consider it IN CONTEXT. I'm a big fan of this in-context thing. And, contrary to the presumptions of a lot of people, I don't think it's impossible to think in context while also considering the long-term implications and theoretical complexities of the thing you're thinking about. As a matter of fact, I think it's necessary.

Notes from David Harvey's lecture on Marx's Capital

Class 02 Reading Marx's Capital from David Harvey on Vimeo.

"There's no way in which you can examine this whole process without actually looking at this metabolic relation to nature... The physical bodies of commodities are combinations of two elements - the material provided by nature and labor. If we subtract the total amount of useful labor of different kinds which is contained in the coat - linen, etc, - a material substratum is always left. This substratum is furnished by nature without human intervention. When man engages in production, he can only proceed as nature does herself... you can only only change the form of materials. Furthermore, even in this work of modification he is constantly helped by natural forces... Labor is therefore not the only source of material wealth. As William Petty says, 'Labor is the father of material wealth, the earth is its mother.'"

Albert Einstein on the deal with American capitalism

"Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights."

From here.

Interesting Ideas

"From both a liberal and a mildly libertarian perspective, it would be preferable to have big, decisive, well-defined programs that fully guarantee key public goods--such as Social Security, defense, national health insurance, or anti-trust regulation--on one side, and a fairly open field for human activity on the other, with the line between public and private, regulated and unregulated domains, fairly obvious and well-guarded."

Interestingly, this encapsulates my recent thoughts that certain services - health care, education, social security, etc. - should be universal and guaranteed, and innovation and entrepreneurship allowed free reign after this.

I would add that environmental protections have to be as rigorously maintained as anti-trust laws. And that money has to be kept entirely out of politics, and perhaps entirely out of media, as well.

From here

"We are fully convinced that every human being is endowed with enormous capacity to contribute to the economy and society. By one’s own effort one can pull himself/herself out of poverty.… The poor do not need charity or a handout. The only thing that the poor need is a supportive set of institutions and rules. Charity and handouts were invented to avoid the issue of poverty alleviation. Handouts carry the message that the society is ignoring you. It is not interested in your ability. (p. 8)"

- Muhammad Yunus, founder of Grameen Bank, from this article by David Stoaz, advocating asset-building institutions rather than income-subsidized welfare policies.

Black-owned businesses in America: another way to measure economic inequality

Income inequality between Blacks and Whites in America is bad, but in itself offers an incomplete picture of the real economic inequality between the two races.

Median per capita Black income, circa 2008, was $34,218.
Median per capita White (non-Hispanic) income was $55,530.

This means that Blacks, on average, made about 62% what whites made.

As dismal as this income disparity is, however, it is not representative of the extent of economic inequality.

When we look at economic inequality in terms of business ownership, a more disturbing picture emerges.

In 2002 (according to the U.S. Census' Survey of Business Owners):

White Americans, though only 69.1 percent of the population, owned 86.6 percent of business firms. Black Americans, despite making up 12.8 percent of the American population, owned 5.2 percent of firms. White-owned firms accounted for 36.6 percent of the total sales and receipts in the American market (excluding publicly held and other unclassifiable firms), while Black-owned firms accounted for only 0.4 percent of total sales and receipts.

This means that Whites are over-represented as business owners (per their proportion of the population) by 25%, while Blacks are under-represented by nearly 60%.

One of the most startling numbers in this analysis, however, is this: the total sales and receipts of White-owned firms are nearly 100 times that of Black-owned firms.

Considering that Blacks make up nearly 13 percent of the U.S. population and Whites make up about 70 percent, if all was fair the total sales and receipts of Black-owned firms would account for about 6.8 percent. In other words, Black businesses are making less than 6 percent of what they should be, in a just and fair world.

Finally, Whites are three and a half times more likely to own businesses with paid employees than Blacks; three and a half times more likely to be boss. And since Blacks make up a disproportionate number of employees (considering the relative lack of business ownership), we can guess that Whites are probably far, far more likely to boss around Black folks than the other way around.

This pattern is perpetuated outside of business ownership as well, where Blacks and Whites compete for positions of authority in businesses they don't own. According to the 2002 Census CPS, the percent of Blacks in the workforce who were working as administrators or in executive and managerial occupations in March of 2002 was 9.9 percent, compared to 17.2 percent of Whites. In 2003, Blacks made up 18.7 percent of social and community service workers but only 11 percent of social and community service managers. Similarly, while Blacks made up 13.9 percent of production, transportation, and material moving workers, they accounted for only 5.9 percent of transportation, storage, and distribution managers. The trend here is that Blacks make up a disproportionately low number of managers even within industries in which they are represented disproportionately higher than other races.

Correlation of economic growth with resource depletion and/or environmental degradation

If the reduction of poverty comes at the expense of the natural environment, can it actually be considered a reduction of poverty?

I ask this question because it potentially undermines the basic legitimacy of economic growth as a means to reduce poverty, and not only the neo-liberal/neo-con version of the argument, but the social liberal version of the argument as well.

My social work readings so far tend to support the following analysis: though an increase in economic growth, as measured by GDP, does not necessarily correspond to a decrease in poverty, a decrease in economic growth is consistently correlated with an increase in poverty. The problem - so most of the readings say - is in the unequal distribution of that growth.

However, whether economic growth is distributed equally or not, if it occurs at the expense of the natural environment and/or involves the depletion of unreplenishable natural resources, then it cannot be considered a valid long-term gain, for either the rich or the poor.

There are social costs to environmental degradation that are crucial for a social worker to consider. It seems clear that the costs of environmental degradation accrue to the most vulnerable members of society, while the profits accrue to the wealthy or otherwise privileged. Of course, all pay in the end.

This analysis also (obviously) trumps the classic neo-liberal/neo-con argument that, as markets are consistently deregulated, the rich not only get richer (receiving a bigger piece of the pie) but the poor also get richer, or at least don't get poorer (because the overall pie gets bigger). Even if or when it's true (1949-1969, for example), this an invalid argument if the result of such deregulated market activity is resource depletion and environmental degradation.

It should be noted that natural resources and the quality of the environment are shared resources which industry consistently plunders for little or no cost, and at the expense of everyone. The so-called "tragedy of the commons" is as much its abuse by the wealthy as its neglect by the poor.

I would like to figure out the historical relationship of economic growth to environmental degradation/resource depletion. Have any scholars or economists attempted to measure the historical consumption of resources? Are there estimates as to the accrued cost of resource loss so far? It seems this would be easier to measure than environmental degradation - one might, for example, conceivably measure the amount of forested land lost and translate that to real dollars, even if this takes only partial account of the bigger, long-term costs to the environment.

In particular, if one could measure resource loss between 1949-1969, the same years which Iceland (Ch. 6) identifies as the most prosperous for all Americans including the poor, how much would the costs of resource loss impact the overall real gains for the poor?

What's Obama's vision for American capitalism?

"What we want to create is a race to the top where, because of a strong regulatory framework, the free market can still operate effectively and there's still innovation and dynamism and creativity -- all of the things that have made America great -- but that it's happening with some rules of the road so that things don't spin out of control." - From the Pittsburgh Post-Gazette

Hm.