The key difference between fungible and unfungible capital is in the
way it is represented. Capital is brought to life to the extent that
its value is transparently and transferably represented in
documentation. When clear titles, common currencies, or other evidence
of ownership are uniformly produced and universally accepted, they are
sufficient to the tasks of proof or collateral in financial
institutions and courts of law.
To
be successful, capitalism depends on the existence of an economic
infrastructure with legal and financial institutions capable of
supporting entrepreneurial cycles of investment. In keeping with the
shift from mechanical to organic metaphors, the infrastructure is
better conceived as an ecological web of relationships. In these
relationships, the social capital values of trust, loyalty, and
commitment are paramount.
The irony here is that manufactured
capital and property are usually represented with transparent and transferable
metrics, which bring these inanimate forms of capital to life,
economically speaking, while natural, human, and social capital are
represented with obscure, locally-dependent metrics, rendering them
economically dead.
Note that inanimate forms of capital usually are effectively brought to life in their media of representation. They aren't always. For instance, in many countries it is incredibly difficult to obtain
legal title to property, and so the value of people’s homes cannot be
put to work in establishing small businesses. The conservatively
estimated value of dead capital resources lying unleveraged globally in
Third World and former communist countries is astronomical.
And not all human capital assets are expressed in
nontransferable media and metrics. The Lexile Framework for Reading
(http://www.lexile.com), for instance, functions as an effective unification of 1) reading ability metrics, given that many different reading tests and general ability examinations report Lexile measures for more than 20 million US students every year; and 2) text reading difficulty estimates, with more than 100,000 books and tens of millions of magazine articles in English and Spanish all having Lexile measures. Thousands of teachers in North America and Australia use Lexiles to inform reading instruction by matching students' reading ability measures with book and article reading difficulty measures. See the Lexile web site for more information, product availability, and research on this measure of literacy capital.
Copyright 1995-2023 Living Capital Metrics Last updated 10 May 2023.
