MSN Slate's Chris Suellentrop, because he doesn't know what capital is, wins the economic poseur of the month award. You have to be trying to sound smart, you have to be smug, and you have to be trying to make someone else look bad. Those are the rules. It's a tough job, but Suellentrop is up to the task. And then some.
He's criticizing Bush for the latter's use of the term "political capital," particularly because Bush talks about "spending" political capital. Bush is an easy target on these issues (and I do not support Bush's economic policies.) But the condescending journalist, precisely because he feigns an expertise he does not have, comes off looking much worse than the Texan. Suellentrop writes:
We've become accustomed to talking about all kinds of abstract capital in recent years—human capital, social capital, intellectual capital—but Bush's definition of political capital makes the metaphor particularly inapt. For one, you don't spend capital. You invest it.
Oh. So we've become accustomed to talking about these kinds of capital, have we? Hmmm. Do "we" understand what "we" have been talking about? Um, nope. Not at all. In Econ 1A-- the introductory class that has the texbook with big glossy pictures in it--the average college freshman learns that "capital" is defined as a good or goods used to produce other goods. A machine is capital. A hammer is capital. Let's revisit Suellentrop's critique:
For one, you don't spend capital. You invest it.
Oh, really. Do you invest a hammer? Nope. You do not invest capital, you purchase capital (or invest IN capital). The colloquial usage in financial circles sometimes differs from the economist's usage, but Suellentrop is clearly using terms from economics here--and pretending to understand them. He uses the term human capital, for example. This is education or skill that individuals acquire that raises their future productivity. Obviously, you do not "invest" education. You purchase it or invest time and effort to acquire it.
Is political capital a meaningful concept? Most economists would judge the usefulness of the term by whether you could write down an interesting model using the concept and generate interesting predictions. I haven't seen such models, but they might exist. The journalist, for his part, writes:
Edward J. López, an economist at the University of North Texas, delineated two types of political capital in a 2002 paper for the Review of Austrian Economics: "reputational" capital, a politician's "standing with voters and other unorganized interests," and "representative" capital, which includes the powers that stem from a politician's office. But Bush doesn't mean anything that rigorous. In fact, he'd probably scoff at the idea. He just uses it as a substitute for the goodwill that an election gives an executive with the legislature.
Though the journalist belittles the notion, it is actually quite natural to think of goodwill as capital. You have to invest time and resources to get it. Once you have it, it raises your productivity and allows you to accomplish more than you would have without it. And like most forms of capital, it depreciates. It's true, you do not exactly spend capital. But there is an opportunity cost when you use capital: When you use it to produce one thing, you cannot simultaneously use it to produce something else. In this sense you can waste or squander your capital (or your goodwill). You can use it in unproductive ways.
But truly, the funniest line in the article is the journalist's somber pronouncement that the President's political capital metaphor isn't "rigorous." Yep. True enough. But this comes from someone who doesn't even understand the most basic of basic concepts relating to the topic about which he has written a column. If the journalist himself ever had a rigorous thought in his own head, it would die of loneliness.
Journalist, inform thyself.