Capital first referred to head counts of cattle. The Greeks and Romans used it to refer to wealth in general. # Capital as money In Italy, the development of double-entry bookkeeping in the 13th century encouraged merchants to begin using the word in monetary and accounting terms. From 13th-century Italy to 18th-century Britain, capital continued to be used primarily in the sense of "money advanced by owners or shareholders to establish a business". The term can also be used to refer to the money value of assets owned by the person or firm that can be used as collateral. Capital is measured as an amount of money. Since wages or wage labor can't serve as collateral, neither are considered capital. This is as close to an everyday meaning of capital as we can get to: > ... capital is either money or the realizable money value of an asset. Realizable money value means that the asset can be used as collateral for securing a loan. Capital is money or money value, and it is tied up with the capitalist system of debt. # Capital as physical factors of production Adam Smith, inspired by the physical sciences and wanting to make economics more rigorous, decided to re-define capital as the physical assets of a company - including machines, buildings, and land. Capital was now a productive resource, rather than being a form of money. Instead of the money that was invested in things, capital was now the things themselves. It was a durable thing that led to the satisfaction of wants, and had existed since the dawn of humanity. Marx, motivated by his desire to bring attention to the oppression of workers, muddled things further by bringing social relations into his definition of capital. "But capital is not a thing, it is a definite relation of production pertaining to a particular historical social formation, which simply takes the form of a thing and gives this thing a specific social character." According to Marx, capital exists only when workers are employees and do not own the material means of production. He took Smith's definition and narrowed it to a specific historical moment. # Human capital The first known use of the phrase "human capital" is from an 1844 report by Sir William Cornwallis Harris (1807-48), an officer in the army of the East India Company. It is likely that he was using it to describe African slaves. It made its first appearance in an economics journal in an 1897 article by Irving Fisher, by which point it had shed its association with slavery and now referred to labor as a factor of production. The term became commonplace in the 1960s, when Theodore W. Schultz and Gary Becker developed theories on how to value human beings. One approach was to evaluate the cost of producing an individual in terms of care, nutrition, etc. Another approach was to evaluate the expected future earnings of an individual. What both approaches leave out is the fact that with the abolishment of slavery, a human being cannot offer himself up as collateral. This is the main difference between human capital and other forms of capital. Because a wage worker cannot use his lifetime value as collateral (if he failed to pay back the loan, a lender would not be able to ensalve him), he is at a disadvantage when raising funds compared to a business or owner, who can put up material assets as collateral. > ... given the importance of understanding money, debt, and collateralization for even an elementary appreciation of the nature of capitalism, it is important to acknowledge that the “human capital” of a wage worker is of a very different nature from the “capital” owned by a capitalist. Both are assets, but—with slavery prohibited—only one can serve as collateral. This crucial distinction gets lost if we extend the usage of the word capital, at least without adding qualifying terms that preserve the vital monetary meaning and its association with collateral and debt. After Smith, economists changed their conceptual toolkit in a way that made key features of the rising capitalist order invisible to their theory. That conceptual blindness has to be rectified. Without slavery, humans cannot be capital, and "human capital" is a misnomer. # Further extensions of capital Moral capital made an appearance in 1837 (Observations Relative to the Bill). Social capital appeared in 1899 (Ernest Renan). Natural capital appeared in 1909 (Johnson, 1909). Information capital appeared in 1959 (Kenneth Boulding). After Schultz's and Becker's work in the 1960s, the uses of the word "capital" proliferated: “health capital” (Grossman 1972), “religious capital” (Azzi and Ehrenberg 1975), “linguistic and cultural capital” and “symbolic capital” (Bourdieu 1977), “knowledge capital” (Nelson 1982), “reputational capital” (Veljanovski and Whelan 1983), “social capital” (Bourdieu 1986; Coleman 1988, 1990; Putnam 1995), “organizational capital” (Tomer 1987; Klein 1988), “academic capital” (Bourdieu 1988), “cultural or consumption capital” (Becker and Murphy 1988), “cognitive capital” (Rescher 1989), “symbolic capital” (Bourdieu 1990), “environmental capital” (Hartwick 1991), “self-command capital” (Lindenberg 1993), “personal capital” (Dei Ottati 1994; Becker 1996), “network capital” (Sik 1994), “political, social and cultural capital” (Mouzelis 1995), “intellectual capital” (Edvinsson and Malone 1997), “resource capital and institutional capital” (Oliver 1997), “spiritual capital” (Verter 2003), “individual trust capital (relational capital)” (Castelfranchi, Falcone, and Marzo 2006), “collective trust capital” (Castelfranchi, Falcone, and Marzo 2006), “street capital” (Sandberg and Pedersen 2009), and even “erotic capital” (Hakim 2011). > “Capital has now acquired the broad meaning of a stock or reserve of anything of social or economic significance. Everything has become capital.” > “With capital long divested of its monetary associations, economists have made it respectable to describe any unconsumed productive resource as capital.” # Social capital Social capital is found in all three volumes of Marx's Capital and in Marshall's Principles. In these contexts, it referred to national aggregates of productive assets or wealth. It refers to national wealth. In 1916, American social reformer Lyda J. Hanifan defined social capital as “good will, fellowship, sympathy, and social intercourse among the individuals and families that make up a social unit.” --- Source: [[Conceptualizing Capitalism]]