Capital is usually separated into intangible assets and physical assets. Physical assets are talked about often enough — they are the physical means of production. Intangible assets, though, are too-often missed in socialist discussions of economics.

Intangible assets are all the forms of capital that one cannot directly pick up and hold. It includes human capital, relational capital, and structural capital.

Human capital is all the attributes inherent to actors. This includes, but is not limited to, the knowledge and skills that actors have. It also includes their inherent mental and physical attributes.

Relational capital is the relationships that an actor has with other actors. The most lucrative form that this takes is in the mind-share that platforms have — the biggest thing standing in the way of making a competitor for Uber or Lyft (for example) is that it would be hard to get others to download your competing app. The most common form that this takes, though, is in one’s personal reputation and personal contacts — “it’s not what you know, it’s who you know”.

Structural capital is all the institutional infrastructure that makes up a firm. It is the org chart, the company culture, the knowledge passed around the office, the methods developed to deal with specific issues within the specific firm, etc, etc..

Now, all three (human, relational, and structural) of these sorts of capital are based in the existence of information — specifically, information that is not known by all actors.

The information that comprises human capital mostly takes the form of skills known by some actors and not others — the more actors have a skill, the higher the supply, the lower the rents. The information that compromises an actor’s relational capital takes the form of information that other actors know about it. The information that compromises an organization’s structural capital takes the form of information that is (in some, perhaps overly poetic, sense) contained within the organization — especially about how to organize the organization and what to do within it. It could, perhaps more literally, be seen as the information that is distributed among a group of actors and tells them how to act within that group.

All of these forms of capital, being based on infinitely copyable information, are in some sense naturally self-destroying. The higher the rents on having information, the more value actors will expend to get it. The more value actors expend to get it, the more actors will get it. The more that actors expend to get it, the lower the rents on having that information go. On a long enough time-scale, the time-discounted rents on these forms of capital tend towards the cost of acquiring them.

It would appear, naively, that intangible and physical capital have a rather different divide than they really do. This is inaccurate. It is not even the case that physical capital is made of objectively existing objects while intangible capital is made up of information. Both are, arguably, made up of information — at least partially. Physical capital is not the objects themselves. It is the claim to those objects — physical capital is a social norm created and maintained through both violence and reputation. The ability to do violence ultimately rests in human, structural, and physical capitals — that is to say, our minds and bodies, our organization, and our weapons. Of course, that definition recurses. Reputation is relational capital, perhaps mixed with structural capital. In this way, we see that intangible capital precedes and creates physical capital. This is where our socialist insights begin to transform our use of this conceptual framework in a major way.

It would seem that the real difference between intangible capital and physical capital is that intangible capital is not transferable, and physical capital is. One can buy a tractor, and once one has done so, the person from whom the tractor was purchased now no longer has that tractor. One cannot directly and easily buy intangible capital — it must be created. One can hire a consultant to help one acquire the intangible capital through an act of self-modification, but the consultant does not lose their own ability to do that labor in the future through this process, and the success of this attempt at self-modification (or, perhaps, self-creation) is not certain.

However, even the ability to transfer physical capital is a manifestation of the social process (norms maintained through reputation and violence) that makes an object into physical capital. It is not at all true that all imaginable systems would allow for all physical capital to be transferable through a market process. In feudalism, land titles were both the main form of capital and were transferable only through inheritance, gift, war, and (arguably) vassalage. Under occupancy-and-use, land titles might not be transferable at all, only abandonable and homesteadable. Under a sort of ultra-strict quasi-geoism, it might be the case that all land is rented through the local community and never leaves it. So on and so on.

We must always keep in mind that physical capital is a significantly more changeable and socially constructed thing than intangible capital is. Further, intangible capital is almost intrinsically less bound to be scarce than physical capital is.