Can Ideas be Capital? Factors of Production in the Post-Industrial Economy: A Review and Critique

It is a widely accepted premise that we are in a midst of a radical change of

economic and social relations, associated with terms such as the “knowledge

economy”, “weightless economy”, “post-industrial society” or “information

society”. The intellectual capital literature appears to suggest the arrival of a

distinct factor of production, replacing or supplementing land, labour and

capital. Some exponents of intellectual capital analysis see knowledge, ideas,

capabilities and skills as a new, perhaps overriding productive factor; others

conceive of the changes within a widening of the traditional definition of

capital to include business processes, intellectual property, product ideas, even

customer loyalty; again others use “intellectual capital” as a rhetorical tool

withholding any coherent definition.

In this article, we first give a historically informed theoretical exposition of

capital as the durable result of past production processes, transforming future

production while not being transformed itself, and associated with a particular

economic actor. Second, we offer a taxonomy of the perceived characteristics

and location of intellectual capital in the production process. Third, we argue

that capital, and thus intellectual capital, is not a useful way of theoretically

capturing knowledge and ideas