Four Balance Sheets and the Rate Between Them

There are four forms of capital, each with its own dynamics and conversion rates.

Financial capital: What you own minus what you owe (section “Financial Capital: Assets, Liabilities, Net Worth”). Priced continuously, taxed, seizable — and the only one a bank will lend against.
Human capital: The present value of what you can still earn (section “Human Capital: Skills, Education, Earnings Potential”). Largest the day you finish training, and spent down for cash from then on.
Social capital: The network you can actually mobilize (section “Social Capital”) — the call that gets returned, the deal that never gets posted.
Cultural capital: Language, manners, taste, and the assumption that you belong in the room (section “Raising the Earner: Responsibility, Cultural Capital, and Scholastic Dispositions”) — what gets you past the gate where competence is assumed and fit is judged.

The sociologist Pierre Bourdieu made the case in The Forms of Capital that economics had quietly agreed to price the first and to call the other three priceless, which is a convenient arrangement for whoever already holds them.¹ Skip the taxonomy — you have it above — and take the part that pays: the four convert into each other, at a cost, at a rate that moves.

Table 1.1: Conversion Rates Between Forms of Capital

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Conversion	Mechanism	What it costs you
Financial $\to$ human	Tuition, training, unpaid apprenticeship	Cash plus the wages you did not earn while studying
Financial $\to$ cultural	Buying time free from necessity	A decade, spent by a parent, mostly before the child turns twelve
Financial $\to$ social	Dues, the selective school, the address	The admission price, then years of showing up
Human $\to$ financial	Salary	Taxed at the highest rates in the code, and the clock
Cultural $\to$ financial	The gate: hiring committee, admissions, partner vote	Nothing at the moment of exchange; everything was paid upstream
Social $\to$ financial	The introduction, the off-market deal	Maintenance — see below

Note what the last row does not say. Social capital is the only line in the table that carries an ongoing charge rather than a purchase price, and its volume is not what most people think it is; section “Social Capital” works through both.

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