8 forms of capital

“What would it look like if we re-designed the global financial system using permaculture principles?” and “What if our financial system looked more like an ecosystem?”
Fig_1_Eight_Forms_of_Captial

The 8 forms of capital have been developed by Ethan Roland. Below you find a description of the 8 forms, and here is a link to the background, reflections and resources connected to the development of the model.

 

SOCIAL CAPITAL

Influence and connections are social capital. A person or entity who has ‘good social capital’ can ask favors, influence decisions, and communicate efficiently. Social capital is of primary importance in politics, business, and community organizing.

Jason Eaton of Social Thread LLC explained to me that Capital can be in the form of equity or debt. In social capital, a person can ‘owe’ favors or decision-making influence to another person or entity.

MATERIAL CAPITAL

Non-living physical objects form material capital. Raw and processed resources like stone, metal, timber, and fossil fuels are ‘complexed’ with each other to create more sophisticated materials or structures. Modern buildings, bridges, and other pieces of infrastructure along with tools, computers, and other technologies are complexed forms of material capital.

FINANCIAL CAPITAL

We are most familiar with financial capital: Money, currencies, securities and other instruments of the global financial system. The current global society focuses enormous amounts of attention on financial capital. It is our primary tool for exchanging goods and services with other humans. It can be a powerful tool for oppression, or, (potentially) liberation.

LIVING CAPITAL

A precious metal dealer who attended both Financial Permaculture courses advises, “Rather than U.S. Dollars, measure your wealth in ounces [of gold and silver]!” Recognizing that  “precious” metals are just another form of financial capital, Catherine Austin Fitts recommends that we diversify and, “Measure your wealth in ounces, acres, and hooves.” Living capital is made up of the animals, plants, water and soil of our land— the true basis for life on our planet.

Permaculture design teaches us the principles and practices for rapid creation of living capital. Permaculture encourages us to share the abundance of living capital rather than the intangible “wealth” of financial capital.

(Note: “Natural Capital” could be a synonym for Living Capital, but the 1999 book “Natural Capitalism” by Hawkens et al. focuses more on a slightly updated system of capitalism than on the true wealth of living systems. The current Slow Money movement is also making strides in a similar direction, seeking to transfer financial capital into the living forms of soil, animals, and agriculture.)

INTELLECTUAL CAPITAL

Intellectual capital is best described as a ‘knowledge’ asset. The majority of the current global education system is focused on imparting intellectual capital — whether or not it is the most useful form of capital for creating resilient and thriving communities. Having intellectual capital is touted as the surest way to ‘be successful’.Science and research can focus on obtaining intellectual capital or ‘truth’, though it is often motivated by the desire for financial or social capital. For example, “going to university” is primarily an exchange of financial capital for intellectual capital. It is supposed to prepare people for the rest of their lives in the world.

EXPERIENTIAL (OR HUMAN) CAPITAL

We accumulate experiential capital through actually organizing a project in our community, or building a strawbale house, or completing a permaculture design. The most effective way to learn anything comes through a blended gathering of intellectual and experiential capital. My personal experience getting a Master’s degree at Gaia University showed me that experiential learning is essential for my effective functioning in the world: I was able to do projects instead of take classes, and I’m now collaboratively organizing the local permaculture guild and co-running a successful permaculture design firm (2).

I can see that ‘Human Capital’ is a combination of social, intellectual and experiential capital,all facets of a person that can be gathered and carried in essentially limitless amounts. But there’s one more form of capital that a person can gather and carry inside themselves.

SPIRITUAL CAPITAL

As one practices their religion, spirituality, or other means of connection to self and universe, one may accumulate spiritual capital. It contains aspects of intellectual and experiential capital, but is deeper, more personal and less quantifiable. Manyost of the world’s religions include a concept of ‘the great chain of being’, a holarchic understanding of existence where spiritual attainment (in this context, the accumulation of spiritual capital) leads to different levels of being (3).

Buddhism even contains an explicit spiritual currency: Karma! This form of spiritual capital is tallied and accounted for not only in one’s current life, but (taking re-incarnation into consideration) also in all of the past and future lives of one’s soul. In spiritual capital again enters the concept that capital can be in the form of equity (gathering positive spiritual experience/understanding/attainment) OR in the form of debt. In some Mayan cultures (like the Tzutujil of Lago Atitlan), a basic understanding of existence is that humans owe a ‘spiritual debt’ to the magnificent beauty and complexity of existence. According to this worldview, the goal of one’s life in the world is to create works of unspeakable beauty and gratitude, thereby repaying the spiritual debt to existence (4). The Tzutujil also recognize that single human beings can never really be effective at gathering and flowing capital if they are separated from their community.

CULTURAL CAPITAL

All the other forms of capital may be held and owed by individuals, but cultural capital can only be gathered by a community of people. Cultural capital describes the shared internal and external processes of a community – the works of art and theater, the songs that every child learns, the ability to come together in celebration of the harvest or for a religious holiday. Cultural capital cannot be gathered by individuals alone. It could be viewed as an emergent property of the complex system of inter-capital exchanges that takes place in a village, a city, a bioregion, or nation.

Links: http://www.appleseedpermaculture.com/8-forms-of-capital/http://www.regenterprise.com/