Wealth Is Merely One Form Of Capital

Late, but not too late, I’ve discovered the greater values of intellectual capital

I have always struggled between devoting myself to business vs. devoting myself to learning, i.e., the conflict between acquiring financial capital vs. acquiring cultural/intellectual capital. For most of my life, financial capital has dominated the contest, but intellectual capital was never completely defeated. Instead it took to the hills and would occasionally come down in a raid to unsettle me and prick my conscience.

In this essay I’m referencing different forms of capital based on the pioneering work of French sociologist Pierre Bourdieu. I’ve found his insights helpful to my self-awareness. See my Note at the bottom for more about Bourdieu’s work on this topic.

Now that I’m almost 62 years old (February 27th, thanks for asking), I think I understand the various types of capital that have battled for dominance inside of me.

My natural inclination was towards knowledge. From a very early age, I read history books. I loved a series of childhood biographies of men who grew up to be important historical figures. I was bothered by the itchy ruff that Myles Standish had to wear and disgusted by half eaten food thrown to the ground in Tudor England to molder in the rushes. ¹

But my role models growing up, my father and two grandfathers, were businessmen, not intellectuals. They spoke to me not about history or books, but about their businesses and their investments with an enthusiasm that had for me a decisive attraction. And it was apparent to me that the lifestyles they lived and the one I enjoyed were bound up with their business successes.

I understood from an early age that if I wanted to attain that same lifestyle, and I did, I’d need to go into business.  

But that’s specific to me; there’s another more general and therefore more significant aspect of financial capital that influenced me.

With permission of Sketchplanations.com ²

The man at night looks for his lost keys under the light of a lamppost, because that’s the only area he can see. Similarly, we tend to measure our “capital” in financial terms, because that’s what’s easiest to observe and quantify. As a result, we tend to undervalue other forms of capital that are not susceptible to being quantified, namely cultural/intellectual capital and social capital.

I love numbers, and the acquisition of financial capital has always drawn me in partially because it’s seductively easy to measure. I’ve kept track of my wealth on a spreadsheet that dates back to 1996, when I was 34 years old.

Spreadsheets are a world of absolute order. Each number knows its proper place and communicates formulaically with the other numbers in the precise way it’s commanded. When I update my personal spreadsheet, I have a living history of our finances, brought current to that very day. That gives me the feeling, if not the reality, of control and precision.

I’m drawn to precision; ambiguity bothers me. My daughter Lauren and I hate the meme in a movie, usually a rom-com, when the dialogue goes as follows: “Are you free Saturday night? Yes! Great, see you then.” How are these two people actually arranging to meet? Lauren and I demand to know.

In contrast, the acquisition of knowledge at school seemed like insincere, performative credentialing (another Bourdieu term).  Getting the credential of a gold star or an “A” was a game I could “win” by figuring out the minimum effort needed to get the maximum result.

In high school, instead of reading “The Mayor of Casterbridge,” I could read a forbidden summary (Monarch Notes were my era’s Sparks Notes). At undergraduate business school (Wharton at UPenn) I could read the textbooks for my business courses, miss almost all the classes, and still get the credentials of enough “A’s” to graduate summa cum laude. When I graduated and went into the business world, no one cared.

---

My first job after school came through a family connection, i.e., social capital, at my uncle’s firm, L.F. Rothschild, Unterberg, Towbin, where I had worked the previous four summers. It was a small firm, and I stood out for my fluency with numbers and analysis. I soon became the go to person for anything complicated.

When the market crashed in October, 1987 (the S&P 500 was down 24% in a single day), it dealt a fatal blow to L.F. Rothschild, and I saw an opportunity for a career “do-over.” I hadn’t completely neglected reading literature and history. I had given myself enough of a continued taste to yearn for what I considered authentic learning. Not like business classes at Wharton, which seemed like a trade school compared to the serious study of history and literature

My decision to pursue a PhD in history was reckless, a sudden jump without much thought of a plan other than rebellion against the business life.  I was twenty-five, Debbie was pregnant with our daughter Lauren, and I don’t recall she and I discussing the long term financial repercussions of my career change. ³

We’d taken the summer off before school to spend two months in Paris, with six-month old Lauren and a Jolly Jumper as our “babysitter.”

It sounds like an idyllic time, but photographs and memories play tricks. Paris was the first time my digestive system started to malfunction. I was stressed without knowing what to call it.

For no reason other than wanting it to be so, I decided I could earn a PhD in three years and then seamlessly move on to a tenure track, ideally in New York. However, when I told Debbie we might have to move somewhere remote from New York–– I used Iowa as an example–– Debbie burst into tears, which I suppose was a sign.  

But, having made the decision, I had a bad case of confirmation bias. When Debbie’s brief tears stopped, I assumed she’d dismissed her fears. When an old economics professor of mine at Penn, Robert Summers, had told me that being a graduate student was lonely, that post-PhD job prospects were a crapshoot, and that unless I wanted to eat home-cooked pasta seven days a week, it helped to have a trust fund, I ignored his warnings.

I enrolled that fall at the Graduate Center at CUNY, which picked me as the first recipient of the Vartan Gregorian award, based solely on past academic excellence. I was awarded free tuition plus a stipend.⁴ The award was merely another credential based on my past academic success that I hadn’t valued, but I took it anyway as confirmation of my future glorious academic career.

Once I started at school, my naïveté about my jump to academia became painfully apparent. I was lonely as predicted. I made no friends and had lost the camaraderie of the office. As well, after five years in business where I could interrupt and ask questions during meetings, I hated sitting mutely in class being lectured to. And it became clear that my idea of completing a PhD in three years and writing a dissertation on some grand topic of groundbreaking importance was a foolish dream.

But for all that disappointment, the experience was valuable. For the first time ever I felt that my learning was authentic and substantial. I read and studied de Tocqueville in an intimate class with Arthur Schlesinger, ⁵ developed an intellectual crush on the writings of Max Weber, and read a great deal about  20^th Century British history, including A.J.P. Taylor’s great and iconoclastic The Causes of the Second World War, my favorite history book to this day.

At the end of a single semester, age twenty-six, I went back to finance, this time on the buy-side where instead of being an agent, like an investment banker trying to put deals together, I was working for firms that had money to invest and were the clients of bankers.  Right place, right time, and I had a financially rewarding thirty year run.

During that time, I didn’t allow my intellectual capital to be depleted. It increased although at a slow pace. I believe my children were the biggest factor in keeping me intellectually engaged. The initial reason was one I’m not proud of: I hated the idea of my children knowing things I didn’t. I wanted to always stay ahead of them. Eventually I realized how silly that was since their eclipse of me was inevitable. (I expect comments from all three of them about this).

---

Now that I’ve retired from finance (and after a brief stint in government), for the first time in my life, my pursuit of intellectual capital has replaced financial capital as my primary goal. Intellect now seems permanently in charge, and while finance is present (I still do my personal spreadsheet, still actively invest) what’s important is that comparative financial angst has been quelled and I hope permanently put to sleep. Changes in my spreadsheet no longer change my measure of self-worth.

I’ve always been fortunate to have a balance in my sources of capital, which is another way of thinking about various forms of self-esteem. Along with the financial capital created by the success of my career, my role as a husband and father has been a core part of my self-esteem. For lack of a better term, I might call that familial capital, which is distinct from Bourdieu’s term of social capital.

Over the past year, intellectual capital has caught up up to the other sources of my self-esteem/capital. This Substack that I write is both symbol and expression of that pursuit of intellectual capital. Like the capital from family and friends, it can’t be measured, so no hedonic treadmill is even available.

And like my love for my family, the pursuit of knowledge carries for me the sense of this well-worn quote from Hamlet: “As if increase of appetite had grown by what it fed on.”

The other wonderful aspect of intellectual capital is that unlike financial capital, the more you share it, the more it seems to grow. Generosity brings in other people to your intellectual orbit.

The people I now tend to admire the most are those who dedicate themselves to the pursuit of knowledge for its own sake. Especially those who have made it a lifelong pursuit, sometimes choosing it as a more rewarding source of capital than what could have been a successful pursuit of business/financial capital.

I’ve encountered many of these people on Substack––remarkably wise, kind, and generous––who have become my intellectual role models. I’ll name two who I believe are somewhere near my vintage in age:

A. Jay Adler

and

John Halbrooks

. These two polymaths share with their readers their vast treasure trove of knowledge on what seems like every subject worth knowing about under the sun. I learn something valuable from them every week.

I’m participating in a group reading of Hilary Mantel’s Cromwell trilogy led by another brilliant and generous (and annoyingly younger) polymath,

Simon Haisell

.

In this week’s Mantel reading, I came across an obscure reference to “The Shirt of Nessus.” I looked it up and learned that it was the poisonous shirt that killed Hercules. The obscure reference in the text now became clear.

Learning this made me smile, made me happy. Thinking about the Shirt of Nessus as I write this is making me smile once again.

I can’t say exactly why.

Question For The Comments: Is it useful to consider your life using various forms of capital/self-esteem?

All paid subscription revenues will be donated by me to The Robin Hood Foundation, a leading poverty fighting organization in New York City. Robin Hood has a thirty year history of doing innovative and highly impactful work, helping hundreds of not-for-profit organizations with both funding and advice.

The standard paid subscription price is $30 per year, which can provide 15 meals at a food bank or 10 subway rides enabling a mom in shelter to take the subway to find housing and employment.

1. It’s odd what we remember and when we remember it. Myles Standish was brought up in England before becoming a leading figure in the first Puritan settlement in Massachusetts. A ruff is a starched, large frilly collar worn around the neck. Rushes are straw laid on the ground to collect garbage. I haven’t thought about reading that book forever.

2. Sketchplanations.com has many clever cartoons that can be used free of charge, provided credit is given.

3. I was aware then and now that I had the privilege of family resources that were always a fallback for me. But, still, on my own terms, I thought I was being very brave.

4. That December, the Graduate Center wanted to hold a small ceremony to officially present me with the Gregorian Award, including half the stipend, now due. I told them I was leaving so couldn’t accept the money. At the time, I felt honorable in not taking the money. Writing this now, I realize that accepting the money would have been tantamount to fraud. Moreover, I feel guilty at having disappointed them and taken the opportunity away from another student.

Vartan Gregorian was a famous historian who was the head of the New York Public Library at the time.

5. Arthur Schlesinger was a big deal to me. From his obituary in the NYT:
“Arthur M. Schlesinger Jr., the historian whose more than 20 books shaped discussions for two generations about America’s past and who himself was a provocative, unabashedly liberal partisan, most notably in serving in the Kennedy White House…”

The papers I wrote for him on de Tocqueville with his comments are among my most prized possessions. Credentials, but also evidence of my authentic learning.  

Note on Pierre Bourdieu:

The French sociologist Pierre Bourdieu was a pioneer in thinking about these different forms of capital. His essay, The Forms of Capital was kindly suggested to me by Professor James English of the University of Pennsylvania as the best introduction to Bourdieu’s writing on this subject.

I’m anything but an expert on Bourdieu, and I apologize to any Bourdieu scholars if I’ve misinterpreted his meanings. That said, I’ve found his classifications of capital useful to my self-awareness. I should also add that Bourdieu understood that these different forms of capital all interact with each other differently in different fields of endeavor and life.

I note as well that Bourdieu felt that all these forms of capital were devices to perpetuate am upper class.

Bourdieu had an expansive definition of cultural capital, an element of which is knowledge, which, for purposes of this essay, I refer to as intellectual capital. Bourdieu also included within cultural capital: mannerisms, aesthetic taste, the ownership of actual cultural objects like art, and credentials such as degrees.

Bourdieu’s definition of social capital is a network of durable connections––think family and friends–– who have a sense of obligation to help you if asked and vice versa. Social capital is often inheritable so that if you’re gone, your social capital network would include people who would help your descendants if called upon, even if the request for help was an initial encounter.

I know an estate planner who strongly advises that people leave a complete list of their social capital network for their heirs so as not to deprive them of that valuable inheritance.

A dive into social capital is worth its own separate post.

In “The Forms of Capital,” here’s how Bourdieu described cultural capital:

“Cultural capital can exist in three forms: in the embodied state, i.e., in the form of long-lasting dispositions of the mind and body; in the objectified state, in the form of cultural goods (pictures, books, dictionaries, instruments, machines, etc.), which are the trace or realization of theories or critiques of these theories, problematics, etc.; and in the institutionalized state, a form of objectification which must be set apart because, as will be seen in the case of educational qualifications, it confers entirely original properties on the cultural capital which it is presumed to guarantee.”

And here’s how he described social capital:

“…the aggregate of the actual or potential resources which are linked to possession of a durable network of more or less institutionalized relationships of mutual acquaintance and recognition—or in other words, to membership in a  group—which provides each of its members with the backing of the collectively- owned capital, a “credential” which entitles them to credit, in the various senses of the word.”