This article is part of a series of adapted excerpts from “Bitcoin Is Venice” by Allen Farrington and Sacha Meyers, which is available for purchase on Bitcoin Magazine’s store now[1].
You can find the other articles in the series here[2].
Following Hernando de Soto, we see capital as “economic potential energy”; a stock of crystallized and stored time; the memory of experimentation and discovery; a tool allowing us to not need to work completely from scratch, and shared in a common language to spare us equally from isolation. As de Soto explains in “The Mystery Of Capital[3]”:
“To unravel the mystery of capital, we have to go back to the seminal meaning of the word. In medieval Latin, ‘capital’ appears to have denoted head of cattle or other livestock, which have always been important sources of wealth beyond the basic meat they provide. Livestock are low-maintenance possessions; they are mobile and can be moved away from danger; they are also easy to count and measure. But most important, from livestock you can obtain additional wealth, or surplus value, by setting in motion other industries, including milk, hides, wool, meat, and fuel. Livestock also have the useful attribute of being able to reproduce themselves. Thus the term ‘capital’ begins to do two jobs simultaneously, capturing the physical dimension of assets (livestock) as well as their potential to generate surplus value. From the barnyard, it was only a short step to the desks of the inventors of economics, who generally defined ‘capital’ as that part of a country’s assets that initiates surplus production and increases productivity.”
Capital is whatever can be transformed or used to produce goods that satisfy human wants. It can
