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Journeys through three types of capital



The map is not the territory. No model of the world is ever going to be an exact match. But for all that, models of the world can be absolutely invaluable. You just have to pick the right ones (and it is usually more than one) for you.


If I want to get from Trafalgar Square to Waterloo station by tube I need a different map to the one I’d use to drive there, which would be different again (ideally) from the one I’d use to walk.


To put it more dramatically still, I’d need one kind of map to answer the question ‘How do I get from Trafalgar (the cape in southwest Spain) to Waterloo (the village in Belgium)’ and a completely different kind of map to answer the question ‘How did Napoleonic France get from Trafalgar (in 1805) to Waterloo (in 1815).”


This is all by way of introduction to one of the most useful maps, or models, of the world I’ve come across. Funnily enough, when I first heard it explained (at a launch party for a boutique financial firm in 2007) my first instinct was to reject it. But I was too honest with myself to let that rejection stand, and by the time I was on my way home (albeit suitably refreshed) I was mulling it over, and before long I was convinced.


This model is the theory of the three kinds of capital that contribute to a person’s success in life. The obvious one is financial capital; the other two are social (who you know) and cultural (broadly, what you know). When I rejected this, I thought it watered down the concept of capital in the financial sense without actually adding anything to my understanding of the other two.


I was very, very wrong, and the three types of capital has become a hugely enriching model of the world for me. Here’s a brief explainer with a bit more detail.


We are all aware of the importance of capital when it comes to achieving success in life. But what is less known is that there are three types of capital – social, cultural, and economic – and they all play an essential role in personal success.


Social capital refers to the relationships and networks we have with others. It is the currency of social interaction and can help open doors to opportunities, such as getting a job or making a business deal. It is important to have strong relationships with people who can offer support and advice.


Cultural capital is the knowledge and skills that we have acquired. It is the knowledge and understanding of the world around us that we can use to our advantage. Cultural capital can help us make informed decisions about our career and life choices.


Finally, economic capital is the financial resources we have access to. Money can open doors and make it easier to achieve our goals. It is important to use our financial resources wisely and invest in ourselves.


These three types of capital are all important for personal success in life. Social capital helps us build relationships and networks; cultural capital gives us the knowledge and understanding of the world; and economic capital provides us with the financial resources to achieve our goals. By leveraging all three types you can truly excel.


One of my favourite training courses to deliver was built around identifying your respective levels of these three types of capital and identifying how to leverage that into the other two. (Hint – turning social capital into financial capital doesn’t mean trying to rope your old school classmates into a pyramid scheme!


A surprising number of people I’ve met have actually been struggling with the opposite problem – being high in financial capital but struggling to convert that into social or even cultural capital. In a way that’s not surprising. What I learnt from those people was that accruing financial capital often both requires and reinforces having a fixed way of thinking, often being very good at one thing. Accruing cultural capital, on the other hand, requires flexibility of thought, and accruing social capital requires flexibility of behaviour. Once I cracked that, it all became clear!






 
 
 

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