Lion of the Blogosphere

Four types of human capital

with 58 comments

Human capital is what enables a person to make money in our capitalist economy.

Human capital can be divided into four categories:

(1) Biological capital
(2) Knowledge capital
(3) Track record capital
(4) Social capital

Biological capital includes your innate biological characteristics such as intelligence, sex, age, and health. Biological capital is the only one of the four types of capital which decreases with age. Not only does intelligence decrease with age (after it peaks in your twenties), but your entire body eventually wears out and dies.

Knowledge capital is everything you’ve learned. Most practical learning which leads to higher income occurs on the job and not through formal education (as evidenced by the relatively low wages paid to college graduates with no real-world experience). So in order to acquire knowledge capital, you need someone to hire you, and that requires track record capital and social capital (see below).

Track record capital is your track record of accomplishments, including your education (credential capital). It’s correlated with your knowledge capital and biological capital, but it’s far from a perfect correlation.

Social capital is your acquired social influence. It’s who you know.
The former two types of capital, biological capital and knowledge capital, are positive-sum capital. This capital adds to the world’s economy.

The latter two types of capital, track record capital and social capital, are zero-sum capital. This capital enables you to transfer wealth from other people to yourself, but it doesn’t create value.

If someone earns a massively huge salary (a CEO for example), it’s probably because he possesses a great amount of zero-sum capital.

* * *

The above post is something I wrote in the past, slightly edited.

* * *

Peterike wrote in a comment:

A big part of biological capital are things like aggressiveness and ambition. I’m a pretty smart guy — despite all evidence on this blog — but my aggression level is very small and my ambition even less. I’ve done ok financially, but could have done a lot better had I had more aggression and drive. Basically, I’m a lazy person who prefers my leisure pursuits over spending the extra hours and energy needed to push up the corporate ladder.

There are also things like ethics and morality that can stand in your way. Having a cutthroat attitude surely helps, and is virtually required if you want to reach into the C-level suite in corporate America. Also, things like loyalty — which is to say, the lack of it. Were I the CEO of a vast corporation, I would never outsource any work or hire H-1Bs because it’s disloyal to my nation and my people. I would share profits with the workforce rather than spending billions on stock buybacks. And of course that’s why I would never make it to be a CEO, or last more than a week if somehow I got there.

So personality traits are a very important part of the biological profile you are given. Intelligence is required for success (outside of sports/entertainment), but not nearly enough.

Inheritable personality factors is something I overlooked.

There are positive-sum personality factors like conscientiousness and not being lazy (which are related).

And there are zero-sum personality factors like extroversion or the right amount of psychopathy which are good for making money in America but don’t benefit society as a whole.

Ambition could be a good thing or a bad thing from a zero-sum vs positive-sum perspective. Ambition is probably correlated with extroversion.

Written by Lion of the Blogosphere

September 11, 2017 at 9:49 am

Posted in Economics

58 Responses

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  1. What? In a capitalist economy, money is made by being a capitalist (owning capital). The living and breathing capitalist isn’t capital, he builds, purchases, or inherits capital. Money in your pocket isn’t capital but money in the stock market is. And it’s easy for anyone to convert money into capital, at least on a small scale. HR departments are not concerned with a company’s owner(s) but with the human capital (in the usual sense, not yours) that was hired to do or oversee the actual work.

    Anthony

    September 11, 2017 at 10:49 am

    • I create nothing. I own.

      ron burgundy

      September 12, 2017 at 12:13 am

  2. Yup, the last two are zero sum.

    The last three all flow from the first.

    JayMan

    September 11, 2017 at 10:58 am

    • Argh, you beat me to it. Of course, you’re the original authority on the “genetics are almost everything” phenomenon. So no biggie 🙂

      What Lion and others like him (Robert Mugabe) don’t want to accept is that the ability to acquire social capital is itself highly driven by genetics/biology. Also, educational credentials or your school don’t mean that much once you control for genetic factors.

      GondwanaMan

      September 11, 2017 at 11:07 am

    • Jayman, if you see this and care to respond:

      Do you know anything about testosterone-replacement therapy? Do you think it’s placebo or not? Are there any solid studies on this?

      GondwanaMan

      September 11, 2017 at 1:29 pm

      • I answered but the site ate my response. Let me know if you are interested in my thoughts on TRT and raising testosterone naturally.

        Otis the Sweaty

        September 11, 2017 at 6:48 pm

      • That sucks. Give me your thoughts.

        GondwanaMan

        September 11, 2017 at 8:06 pm

      • my posts are in the Orville thread because I thought that something about this thread was eating it.

        Otis the Sweaty

        September 12, 2017 at 8:16 am

  3. Another good post! Hurricane updates were fun as well!

    E. Rekshun

    September 11, 2017 at 11:04 am

  4. Thinking a bit more about it, I’m not sure the 4 are so different.

    1) Your biological capital and the knowledge you’ve acquired don’t add anything to society unless you do something with it, the same way track record and social connections.

    2) And both have only relative value, it’s always what you can add compared to others, except if you’re in position where could be the only one to do the stuff. But that would be the same with track record and social then.

    3) It looks like every human capital is 0 sum game except for the people who are able to create new knowledge or new wealth.

    4) And even here, maybe other people could have created if they had benefited from the same environment or infrastructure. So the true added value would be the knowledge or the wealth than no one else has a individual or group was able to create at a given period of time. Let’s say Einstein versus Lorentz/Poincaré/Hilbert and Grossmann and Besso. There were no isolated discovery there. And the bomb was a collective work in Los Alamos. German had almost it done too (they were bombed).

    –> Except to extremely rare individuals and circunstances, everything is more or less an entitlement on society.

    Bruno

    September 11, 2017 at 11:11 am

  5. A big part of biological capital are things like aggressiveness and ambition. I’m a pretty smart guy — despite all evidence on this blog — but my aggression level is very small and my ambition even less. I’ve done ok financially, but could have done a lot better had I had more aggression and drive. Basically, I’m a lazy person who prefers my leisure pursuits over spending the extra hours and energy needed to push up the corporate ladder.

    There are also things like ethics and morality that can stand in your way. Having a cutthroat attitude surely helps, and is virtually required if you want to reach into the C-level suite in corporate America. Also, things like loyalty — which is to say, the lack of it. Were I the CEO of a vast corporation, I would never outsource any work or hire H-1Bs because it’s disloyal to my nation and my people. I would share profits with the workforce rather than spending billions on stock buybacks. And of course that’s why I would never make it to be a CEO, or last more than a week if somehow I got there.

    So personality traits are a very important part of the biological profile you are given. Intelligence is required for success (outside of sports/entertainment), but not nearly enough.

    peterike

    September 11, 2017 at 11:12 am

    • I can’t think of any “vast” corporation with a provincial mindset, that only hires a specific people, within a certain boundary.

      JS

      September 11, 2017 at 12:14 pm

    • Peterike, Biocapital as stated in A doesn’t exclude personality traits. Btw, without any comment on smartness, I would say you happen to express sometimes an assertive opinion in your writen comments …

      Bruno

      September 11, 2017 at 12:27 pm

      • “I would say you happen to express sometimes an assertive opinion in your writen comments …”

        Yes, because it’s very easy to have assertive opinions with anonymous blog comments! Were I public with it all, I’d be fired in five minutes.

        peterike

        September 11, 2017 at 1:17 pm

      • “I never heard of a black guy in his 20s who was low-T.”

        Obama? I’ve known some. When they get older you call them Your Honor.

        Curle

        September 11, 2017 at 8:39 pm

      • it’s legal to fire a private employee for his politics in most states.

        in the land of the free and the home of the brave it’s legal to fire someone for what he thinks, but not because he comes to work dressed as a leather daddy.

        ron burgundy

        September 12, 2017 at 12:06 am

    • This is also my problem 100%.

      Lion, do you recommend testosterone-replacement therapy for a guy in his 20s?

      GondwanaMan

      September 11, 2017 at 1:27 pm

      • I thought you were black, I never heard of a black guy in his 20s who was low-T.

        Lion of the Blogosphere

        September 11, 2017 at 1:39 pm

      • Black can mean anything. Like 5%? Are the gay blacks low on testosterone?

        Yakov

        September 11, 2017 at 4:28 pm

      • I’m 75% black and not trans/gay.

        GondwanaMan

        September 11, 2017 at 5:42 pm

      • You should get an adjunct-job at a 5th rate NYC college, Lion. You’ll learn all about the different kinds of Black people, including the Black Nerds (or Dweebs, as Snorlax might call them) who are actually interesting to converse with and don’t try to manipulate you. (I remember you saying that you had a Black Nerd/Dweeb work-colleague once that you liked, but if you adjunct you’ll see that this is actually an entire sub-category, probably with its own genetic switch.)

        Garr

        September 12, 2017 at 6:18 am

      • Man, I didn’t mean to imply that you are gay or trans, I regret the misunderstanding. 75% is a lot. Wow!

        What do you need the therapy for? I mean, you wanna develop aggression? In the former communist countries they used to pump women up with testosterone and some chose to become trans after their competitive years. Some got cancer. So my tecomendation is – avoid.

        Women? They aren’t worse the chance of becoming a freak or getting cancer. You just let Darwin do his thing here, or at least that’s what I think.

        Yakov

        September 12, 2017 at 7:29 am

      • Nevermind, I thought it was Mugabe/Ron burgundy saying I was trans…

        I’m got my testosterone levels tested several times over the past few years and it always been very low. It’s not a big deal because I’m otherwise very healthy but ive always wondered about the impacts it could have on my aggression/motivation levels.

        GondwanaMan

        September 12, 2017 at 9:54 am

      • Hillary Clinton manages to be aggressive and motivated without any obvious sex hormones.

        Lion of the Blogosphere

        September 12, 2017 at 9:56 am

      • I searched for “how to increase testosterone naturally” and found a number of sites backed by research that say you can. In a nutshell — diet, exercise, maintaining healthy weight and getting enough sleep. Interestingly, it’s not just any diet and exercise but certain kinds, They also mentioned that sugar lowers testosterone. Sugar also increases cholesterol. So now there’s two reasons not to eat sugar. Also, certain medications, pesticides and chemicals lower testosterone. So there’s a case for eating organic.

        Most sites listed the same things to do. So I won’t link them. But I will link one from a guy who says he doubled his testosterone in 3 months. And that he tested it again a month later and it was still increasing. He has a pretty famous blog and seems to be both intelligent and honest. So I take that to mean one can dramatically increase testosterone with lifestyle changes.

        http://www.artofmanliness.com/2013/01/18/how-to-increase-testosterone-naturally/

        He was doing several things including scarfing down bacon and eggs. I think I’d skip that one. But he did mention that some foods like cabbage, cauliflower and broccoli help boost T levels by removing estrogens that lower T. That sounds like a better idea. I think I’d probably try all the other healthy things and see if they worked before I tried any of the risky things. After all, it’s probably not every risk factor dragging your T levels down. So you might find that your T levels hit the normal range without having to subject yourself to clogged arteries!

        destructure

        September 12, 2017 at 11:18 am

      • The main emphasis of the article was that cholesterol leads to higher T. Eat bacon and eggs and steak every day, and lots of it, if you want more T. That’s the message I got.

        Lion of the Blogosphere

        September 12, 2017 at 12:22 pm

      • I only linked his article because it shows that a random guy with a blog more than doubled his testosterone in 3 months. It has the added benefit of summarizing a number of factors (diet, exercise, sleep, stress, pollution, etc) while telling exactly what he did.

        There was a lot more to his experiment than diet and a lot more to his diet than bacon and eggs, Still, I think he went overboard on the bacon and eggs. I believe in moderation. People need meat. But they don’t need a lot of meat. They just need enough. If someone is a vegetarian then adding some bacon and eggs might help. If someone has a tendency towards high cholesterol then they obviously don’t need any more cholesterol in their diet.

        destructure

        September 12, 2017 at 3:25 pm

      • Why do you want high testosterone? I’d never measured mine, but I’m sure it’s down compared to what it was. I like having less. I’m much less aggressive, which is good. Women can just fly under my radar, which is also very good. I’m still ambitious and driven, but I am more realistic in my goals. It’s much easier to live. I’m in better control of my ADHD. I can only see good things from having a lower level. I think it’s a blessing. I don’t beleive in playing with things like genes or testosterone. Just let them do their thing, that’s what I say.

        Now if you are, say, impotent or feel feminized, that I don’t know anything about. This is a very extreme case and maybe interference is warranted. I dunno. So why do you want more of this thing?

        Yakov

        September 12, 2017 at 8:21 pm

      • I guess there’s several reasons:

        1. I believe someone with my intellect should be more successful. I didn’t get a raise I deserved, and ended up changing jobs. If I had been more aggressive about sucking up to the boss/playing office politics I might’ve gotten the raise.
        2. I wanna be more aggressive/fearless in starting my own business. I’m a single man with no children or other burdens. I should have no reason to fear failure.
        3. I wanna be hornier and more aggressive in pursuing women. I want more pussy, but putting in effort to get it just seems like…so much work.
        4. I lift weights but I’m developing no muscle, even though I’m losing weight, which should help with the appearance/definition. I can’t lift much more than when I started over a year ago. It also doesn’t make any sense because I’m black, so I should be able to develop muscle.

        GondwanaMan

        September 12, 2017 at 9:45 pm

      • Thus is very simple. The key to happiness in life is being yourself and operating on your own level. All four examples that you’d given indicate the opposite. I beleive that even if you were to pump yourself up with testosterone and become a walking spermatazoid, it wouldn’t help very much in making you happy. Gotta be yourself and be happy with who you are. I don’t beleive anything else can work. Have you read ‘The Adventure of the Creeping Man’? It’s available free online.

        Yakov

        September 12, 2017 at 10:15 pm

  6. All of the zero sum qualities can be described with this simple maxim: Nature despises a beta.

    TWO IN THE BUSH

    September 11, 2017 at 12:37 pm

  7. I would guess extroversion and psychopathy are modestly positively correlated, particularly among males. I’ve never seen any studies on this but it seems obvious to me (barring weird, creepy serial killer-types).

    GondwanaMan

    September 11, 2017 at 1:32 pm

    • I’m not sure that’s the case at all. Psychopaths don’t worry about what people think about them, so you may be mistaking lack of shyness with extroversion.

      Lion of the Blogosphere

      September 11, 2017 at 1:40 pm

      • Actually they do care, in a superficial way. Psychopaths (and also extroverts) are masters of what’s called impression management. They’re good at knowing what image to project to appeal to their audience, but they don’t sincerely care what they think on a deeper level.

        GondwanaMan

        September 11, 2017 at 2:59 pm

  8. Lion, I agree with what you have written. But I think you don’t have an appreciation for how small the number of people is that will perform really well as a CEO. I am part of a private equity firm that allocates money to small companies. No matter how careful we are in hiring CEOs, more than 70 percent of them fail. It takes a special person to succeed as CEO. We have to pay a big piece of the upside to the CEO in order to keep a great performing CEO working for us. You should become friends with people in private equity. It is a hell of a lot harder than you think

    wencil

    September 11, 2017 at 2:45 pm

  9. Did anybody watch Bannon on 60 Minutes last night?

    I never watch that shit show but last night it was worth it. Bannon was pretty good, when Charlie Rose let him speak. Bannon isn’t giving up. The nationalist fight continues.

    gothamette

    September 11, 2017 at 2:55 pm

    • Nobody here cares about Bannon? You guys are so flighty and disloyal!

      gothamette

      September 11, 2017 at 4:59 pm

    • Charlie Rose is a terrible interviewer. He constantly interrupts his guests when they are on the verge of saying something interesting.

      SQ

      September 11, 2017 at 8:09 pm

      • Agree, I stopped watching when Rose started another of his loaded questions, this time about Charlottesville, with ‘some people say’. It’s always the lead in to a questionable assumption laden question.

        The fact is that the people controlling this country own the media and select the professoriate. If they want us to believe that Richard Spencer is a brain eating alien running the country Rose will say it with a tone of unquestioned authority and most will be to stupid to question it.

        Curle

        September 11, 2017 at 8:49 pm

      • No he is a great interviewer, but Bannon triggered him pretty good and got him off his game in that interview. I think that limousine liberals comment really got under his skin.

        Two in the Bush

        September 11, 2017 at 8:59 pm

      • Addendum- And did anyone else catch Rose trying to sound so reasonable and sensible when he said ‘but American soldiers fought WW2 to protect minorities’. Total f**king hogwash, most had no clue why they were fighting and those that did imagined Hitler planned to invade the US. Like Accosta thinking the Statue of Liberty somehow dictates immigration policy. These f**kers simply make shit up! I really hate this propagandized world we live in.

        Curle

        September 11, 2017 at 9:00 pm

      • Regarding Richard Spencer — he would be an Aryan Ideal, if he could stop stuffing himself with food and live a false SWPL lifestyle of indulgence. However, most Nordic type men seldom achieve true greatness, because Machiavelli was a Mediterranean, and so were most of his characters in his writings.

        JS

        September 11, 2017 at 10:43 pm

      • or like e pluribus unum being used to mean open borders good, when it never meant that.

        ron burgundy

        September 12, 2017 at 12:10 am

      • Charlie Rose is a good example of someone with social capital rising to the top of a profession despite having little talent. Competent interviewers know how to listen. Rose doesn’t. He likes to show off. He can’t resist it. He has to make sure the audience knows how smart he is at all times. He (or his people) book some great guests, but he should not be the host of an interview show. His show has been on for 26 years!

        Brian Lamb of C-SPAN is a much better interviewer because he is unobtrusive. He is not afraid of asking basic questions that his audience appreciates. He lets his guests speak. His retirement was a real loss.

        Rose has an admirable work ethic. At age 75, he hosts his own PBS interview show, co-hosts the CBS Morning News, and works for 60 Minutes and other units of CBS News. He doesn’t need any of those jobs, but that proves Lion’s point. The elites want to work even when they don’t have to, and they don’t have to be particularly good at their work to keep their jobs and flourish in their careers.

        SQ

        September 12, 2017 at 12:36 am

      • I totally agree, plus I think they edit the footage to make Rose look smarter than he is, but Bannon did manage to get in a few sane words in edgewise.

        gothamette

        September 13, 2017 at 2:21 pm

  10. Low biological and social capital people often work like dogs to acquire status and money. Doctors and lawyers are very often of this type. Fives and sixes trying to gain a point or two. Then on the flip-side there are a lot of beautiful, charming people who never feel the need to strive. The aristocracy of the flesh. They have cool friends, are healthy, look good, and often have impressive artistic or athletic skills. Why compromise that state of health with some shitty grind?

    bobbybobbob

    September 11, 2017 at 6:21 pm

    • Social and knowledge capital are the 2 most important, among those who want a swell job in a swell metropolitan area, living off a parasitic existence, under a rent seeking economy, at the expense of hardworking laborers.

      If American elites and capitalists can figure out a way to turn our country into one gigantic leech, that sucks the fruits of labor from the rest of the world, then all of us are gold and there would be no need to circle jerk as to why…

      JS

      September 11, 2017 at 8:47 pm

  11. Life is built on Status. Status counts for everything. It is relevant because life is too short and time is too limited to dedicate a substantial amount of either to figure out with whom to deal.

    The point of signaling Status is to provide a useful heuristic for other people not to filter you out. This is key. Whatever your capital happens to be, it has to result in a shortcut that gives others a reason to have you in their lives.

    map

    September 11, 2017 at 9:09 pm

    • Interesting. I hadn’t thought of status this way. I had generally thought of it only as a big ego trip. But it does serve a useful purpose. This is a comment that I’ll remember.

      maryk

      September 11, 2017 at 10:06 pm

    • I agree with MaryK. Good comment.

      Curle

      September 12, 2017 at 1:04 am

    • I filter out neurotypicals. They’re barely visible to me anyway — just gray humanoid smears against a gray background.

      Garr

      September 12, 2017 at 6:24 am

    • Yeah, good insight. I always say that I have zero of the regular understanding of status, but of status in this sense I have a lot.

      Yakov

      September 12, 2017 at 7:33 am

    • The smart upper classes are now spending their money on fancy credentials and foreign language acquisition.

      Other than that, what’s there to brag about in this rent seeking economy?

      JS

      September 12, 2017 at 9:29 am

  12. Lion, have you ever read the following blog?:

    https://devinhelton.com/

    I just started reading some of the old posts recently. Good stuff!

    GondwanaMan

    September 11, 2017 at 10:37 pm


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