Capital and Power

Crucial to the exercise of power are the concepts of capital and exchange. You can think of these in economic terms. Economic capital in its simplest form is money. Exchange in these terms is simply the trading of money for goods and services. When you go to a store and buy some item or service, you are exchanging your money (economic capital) for some desired good (exchange).

Power works the same way. You spend capital to affect outcomes to your liking. However, in power exchanges, money is not the only type of capital that can be spent. There are numerous types of capital.

In doing some quick research I found many different types of capital, some germane to this discussion and others tied to specific ideological viewpoints. I noticed that there are 6 types of capital that seem to be recognized across a spectrum of diverse thought: economic/financial, social, intellectual, natural, material, and human.

Economic/financial capital refers to money and financial instruments. Financial instruments are investments that are quickly and easily converted for money. This is typically what people think of when they think in terms of capital, that is, when they ask how much something cost. Exchanges of economic capital are easy to measure because we are all familiar with the value of a dollar.

Social capital is a measure of what can be accomplished through the networks of people you know. It is everything you can achieve through the giving and receiving of promises, favors, advice, and relationships. This is another form of capital that all of us are familiar with even if we are not thinking in terms of exchange.

Intellectual capital is what you create from your own thinking and efforts. Trademarks, patents, and copyrights are what we typically consider intellectual capital. The United States Patent and Trade Office (n.d.) defines a trademark as “a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others,” and a patent as “a limited duration property right relating to an invention, granted by the United States Patent and Trademark Office in exchange for public disclosure of the invention. Patentable materials include machines, manufactured articles, industrial processes, and chemical compositions.” The Library of Congress (n.d.) notes that you can copyright “original works of authorship including literary, dramatic, musical, and artistic works, such as poetry, novels, movies, songs, computer software, and architecture.”

Natural capital is the land and natural resources that are under your control. Any trade involving land, agriculture, livestock, water, minerals, or any raw material derivatives of these is a natural resource. Exchanges can be anything from giving away kittens from your cat who you did not realize was pregnant to complicated multiyear contracts for timber and land use.

Material capital is constructed or manufactured things. Your house and computer and clothing and car are material capital. This type of capital encompasses most of the things you might own, including the food you eat, the things you collect for hobbies, tools you use for work, or household furnishings. These all have an exchange value.

Finally, there is human capital. Human capital is the capabilities, skills and knowledge possessed by an individual. This is different from social capital: your human capital is your individual ability to trade your time and efforts for some exchange, whereas your social capital is your knowing exactly where to find a person with the appropriate capabilities, skills and knowledge when you need them.

We all possess capital in all of these forms. Money is an obvious form of capital. Our networks of family, friends, and acquaintances are social capital. The creative things we do, whether or not we ever show them to another person, are intellectual capital. The land we live on, the water we drink, the pets we adore, and the gardens we tend to are all forms of natural capital. The homes we live in and all the stuff we own are representative of our material capital. The things we are able to sell our time, knowledge, and skill for are our human capital.

In a sense, capital is a measure of the power one possesses; like looking at the gas gauge in your car or the battery meter on your phone; it is a simple way of determining how much farther you can go or how much longer you can talk. Capital exchanges can be used to keep followers happy or to fend off rivals, whatever is necessary to achieve a goal. Leaders have to find creative ways to make exchanges between these different types of capital in order to achieve their goals. Capital exchanges will be the focus of the next post.


Library of Congress. (n.d.). What does copyright protect? Retrieved from

United States Patent and Trade Office. (n.d.). Trademark, patent, or copyright? Retrieved from

Published by Leo

Leo Barrera Expert at dealing with conflict. Grim, determined, a little chaotic, a threat to good order. Veteran. Chicano. Husband. Father. Writer. Photographer. Gardener.

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