Can Ideas be Capital: Can Capital be Anything Else?

A recent article suggests that the concept of “capital” cannot be routinely applied to the intangible items usually referred to as intellectual, social or human capital. The authors question whether ideas can be capital. We believe that this inquiry (which may reflect more general doubts) fails to capture the essential nature of capital. A reexamination of the nature of capital leads us to ask instead, “can capital be anything else?” We propose here a reexamination of the concept of capital in the interest of providing a sounder and more unified basis for management studies in the postindustrial, information age. Rather that the static, closed-system version of capital, such as that found in the orthodox neoclassical economics literature, which cannot serve as a basis for the study of management capabilities in a dynamic, ever-changing world, we propose one more suited to change and entrepreneurship, one that has roots in the alternative market process tradition of the Austrian School of economics. We provide a more appropriate set of criteria by which to decide whether something is capital – criteria that are forward looking and action based. This is more than semantics; conceptual clarity and efficiency through shared understandings can do much to facilitate productive research – it is itself a kind of intellectual capital. We offer a unified capital-based framework for the analysis of firm management and strategy in a dynamic, changing, digitally-based world.