TECHNO-JABBERS The evolution of capital

ECONOMISTS use the word ''capital''

to refer to assets that make people

more productive. The forms of capital

have been changing over time. In fact

one can use historical documents to trace the evolution--take

for example the encyclicals of past Popes.

For centuries much production came from agriculture and land

was the key asset. In 1891 Pope Leo XIII wrote that the worker's

private ownership of land was his best defense against

exploitation.

As the industrial revolution spread around the world, machines

and the funds for buying them gained importance. So in 1931

Pope Pius XI wrote on the significance of widespread yet

moderate ownership of capital.

He said that the capitalist had a right to the fruits of what he

owned. At the same time, the capitalist was a steward of capital.

He had a duty before God to use that wealth to create jobs for

society.

The last decades of the 20th century are marked by the rise of

the information economy. Pope John Paul II thus wrote on the

modern form of capital:

''In our time, in particular, there exists another form of ownership

which is becoming no less important than land: the possession

of know-how, technology, and skill.''

In a word, it is human capital. John Paul continues that,

''Whereas at one time the decisive factor was the land . . . today

the decisive factor is man himself, that is, his knowledge.''

But the evolution doesn't stop there. Economists today speak of

social capital, or a culture of trust. True to its nature as capital,

social capital is productive.

Think of a farming community. If the members trust each other

they can lend each other's tools and work together to build

irrigation canals. Everyone ends up more productive.

It works in public finance as well. Certain studies show that

many Filipinos are reluctant to pay taxes because they feel the

money may be stolen by corrupt officials.

Each act in a culture of trust is marked by short-term service and

long-term benefit. Person A helps Person B trusting that Person

B will help him in the future.

The importance of trust is underlined by economist Kenneth

Arrow:

''Virtually every commercial transaction has within itself an

element of trust, certainly any transaction conducted over a

period of time. It can be plausibly argued that much of the

economic backwardness in the world can be explained by the

lack of mutual confidence.''

From land to machines to money to knowledge to trust. What

form will capital take in the next millennium? Love?