The forms of capital
The last two decades, as the first devices of the digital age has evolved from a bunch of futuristic prototypes and ideas to common necessities, we have been used to phenomenons such as tech startups and unicorns. Small creativity and knowledge-driven service enterprises going from nothing to billion dollar balance sheets on a few years. Compared to traditional industries, their valuation is very different. No machines, no properties, representing value. Only knowledge, and the ability to keep knowledge and attract new knowledge is worth anything. What they are doing is not that important either. With access to skilled people and great knowledge, the service appears where there is an instant need to fill, and discontinue when there is none. No capital invested in infrastructure or machinery that needs to be returned before the business can be considered a mistake. Just take your computers and expertise and work on something that is actually needed.
Access to the market is another significant key to success, meaning close contact with the customers.Traditionally, marketing was focused on branding and segmentation, meaning a strange one-way-communication strategy ,where you describe a lifestyle, feeling or social context to your customers, and then brainwash them to believe that they want it, and your product will provide them with that. In the age of information people see through all that. And when they in the process of finding out whats behind the mumbo jumbo realizes that your product is bad for the environment, bad for the farmer, and bad for the human body, your marketing investment is gone. There is no accident that the company that right now is maybe the most characterizing actor in the early information age, Google, never runs commercials. They just provide answers.
The act of farming will continue to take place as long as there are mouths that wants delicious food. That’s for sure. But to fully understand the mechanisms in motion behind the digital economy, and apply those on a successful agricultural enterprise, we need to expand the view on accounting, marketing and financing, all experiences inherited from the industrial age. Instead, we need to include the human as a social and intellectual being, depending on and appreciating her ecological environment as well as the society she is a valued part of, rather than just a profitable consumer or zealous worker.
The french sociologist Pierre Bourdieu introduced quite such a model in the 80’s in his well cited essay The Forms of Capital. It derives from deep sociological and economical roots, including Karl Marx, Max Weber and Gary Becker, and proposes that there are essentially three different kinds of capital: economical, cultural and social, and that many important choices are made in order to develop and transform these capitals.
Economical capital, well we’re all familiar with that. Money in the bank. It can take different shapes, currency, stocks, properties, debts, but it’s all an accumulation of the social construct that we all agree on as money. It follows a few agreed upon rules. A surplus of capital generates interest, for example, just a negative balance will cost you. It can be inherited, accumulated from value-creating activities as labour or trade, spent in a day, or taken by a robber, inflation or the tax authority. Even though it seems to be a placement of high risk, economical capital is the only fully tangible form of capital, and as such, defining the value of other capitals out of how easily they are converted into economical capital. Economical capital is the easiest form to convert into other forms. It’s said that money can’t buy you love, but one of the main reason for a society to establish the construct of money is that they should be universally interchangeable. Not necessarily the best way to obtain everything, but certainly one way.
Cultural capital are the abilities that let you function in the society. Languages, skills and acceptable behaviour are some examples. Good health, creativity, a job title or an academical qualification are others. In most cases, cultural capital is either innate or achievable through education or experiences. We often speak about cultural capital in terms of how they can be converted into economical capital. We acquire skills in order to get a job, from wich we get salary. We use our creativity to perform music and sell tickets and records. Many people developing their cultural capital derives feelings of joy and meaningfulness from these activities, and I think that more and more people would rank learning higher than earning, if not earning were the means to be able to acquire knowledge and skills. Being rich on cultural capital often automatically converts into social capital, as the highly skilled, creative and educated often are seen as venerable and respected members of the society. Being in good health also becomes crucial to the accumulation of cultural capital, since sickness easily destroys the possibilities to monetize, as well as acquire new skills.
Social capital are the benefits you get from your social environment. Being members of your family, acquired friends, politicians, fans, customers, followers, they all influences you, and get influenced by you. By developing social relations and building trust and friendship, a social safety net is constructed, that activates in times of trouble and can greatly reduce the time and effort needed to get back on track. Group memberships is another social ticket to transactions based on borrowed and shared trust, that never would been possible to build on your own.
What about ecological capital? No, Bourdieu didn’t mention that, but during the 30 years since he wrote The Forms of Capital, the issue of ecological sustainability has risen from a hippie thing, to everybodies concern. We might as well add this to the model. The human civilization as we know it is depending on a working ecological system on the planet. Disturb it, and famine, draughts, war and plagues comes running, rendering all other forms of capital practically useless. Every person is born with a quota of natural resources that can be consumed without depleting the earth, or without forcing coming generations to lower their standards or face catastrophes. When world population increases, that quota decreases, but when inventions in the area of ecological sustainability are made, more are being produced from less. When more of the resources are put into recycling systems, the quota is extended. When you develop ecological capital, is when you develop the other forms of capital, without letting the earth’s resources take the cost. Neither today, nor in the future. Hopefully, increasing population also comes with increasing cultural capital, as knowledge and consciousness seems to present the best opportunities of conversion into ecological capital.
The farms of capital
So how do we best use a farm to accomplish growth in these four capital forms? There are no final answers to that question, rather an eternally ongoing investigation, so let’s down with the results found so far, before they dissolve in the inflation device of cultural capital called memory.