RODERIC HEWLETT · RESEARCH COMPANION

Capital in Motion: A Six-Capital Framework for Productive Capacity, Intellectual Capital, and Ethical Capital

Version 1.0 · Prepared for publication Tuesday, September 29, 2026

In this framework, capital is an accumulated stock of resources or capabilities available to support production and future service delivery. Stock is a point-in-time concept; investment and capital services are measured over a period. Adam Smith (1776, Book II, chapter 1) distinguished stock used to generate future revenue from stock reserved for consumption. Edith Penrose (1959/1995) distinguished productive resources from the services their use can provide. The OECD (2009) distinguishes capital’s productive role from its role as wealth.

Core Capital Terms:

• Productive capital stock: Accumulated resources or capabilities available at a point in time to support production and service. Financial capital enables access to and development of productive resources.

• Capital services: Contributions supplied through the use of a capital stock during a period. Using capacity does not necessarily consume or transfer the stock.

• Investment and formation: Resources and activities committed to developing additional capacity. Investment is an input; formation is the resulting addition to the stock.

• Maintenance: Practices and resource commitments that preserve existing capacity. Maintenance does not automatically increase the stock.

• Depletion and deterioration: Loss of capacity through damage, neglect, misconduct, loss of knowledge, or other impairments.

• Obsolescence: Reduced usefulness of existing capacity as technologies, tasks, or circumstances change.

• Restoration: Recovery or rebuilding of previously lost or impaired capacity.

• Reallocation: A change in where or how resources or their services are employed. Relationship-specific capacity cannot simply be transferred between people.

• Transformation: Reconfiguration of resources, knowledge, or arrangements that changes productive capacity. It may increase, preserve, or reduce that capacity.

• Capital outcomes: Goods, services, learning, or other results generated through the use of capital alongside other resources.

• Valuation and revaluation: Estimates, and changes in estimates, of capital’s economic worth. Value can change without an equivalent change in productive capacity.

Generalized capital specification:
Kₜ₊₁ = (1 − δₜ)Kₜ + Iₜ

K is a consistently measured stock; I is investment additions during the period; δ is the proportional loss rate; and t identifies the time period.

The definitions below extend the stock-and-services reasoning. They are proposed analytical specifications, not BEA/OECD asset categories or instructions for recording balance-sheet assets.

Reallocation, Transformation, and Capital Outcomes

Capital is an accumulated stock, but a stock need not remain confined to the person, organization, or institution where it was initially formed or accumulated. Depending on its characteristics and governing institutions, capital may be transferred, shared, pooled, opened to broader access, or held in common. Rivalry and excludability shape how such reallocation occurs, but they do not determine whether the underlying resource or capability can function as productive capital. Financial capital may be transferred from one owner to another; intellectual capital may be shared without depriving its original holder of knowledge; structural capital may take the form of institutions and rights available broadly across society; and collectively governed resources may remain productive stocks without exclusive individual ownership. This distinction allows the six-capital framework to recognize the movement, sharing, and widening accessibility of capital stocks without redefining capital itself as a flow. The following examples illustrate several forms this can take:

• Public-domain research and intellectual capital. Research findings, scientific knowledge, data, and other intellectual capital placed in the public domain become a shared stock available to many people and organizations. Because knowledge can be nonrival, broad access need not reduce the stock available to existing users and may contribute to its further development through testing, application, recombination, and additional research.

• Philanthropy and financial capital. Individuals, foundations, firms, and other institutions may transfer part of an accumulated financial stock from those with greater resources to organizations or people with unmet needs. In this case, ownership or control of the transferred stock changes. The recipient may then employ that capital directly or use it to develop human, intellectual, structural, physical, or ethical capital.

• Independent Research and Development (IR&D). Firms, universities, and independent researchers may develop intellectual capital and subsequently publish, license, disclose, or otherwise share the resulting knowledge. Once shared, the same intellectual stock may become available to multiple researchers or organizations without necessarily ceasing to be available to its originator.

• Constitutional and legal institutions. Constitutions, laws, courts, established rights, and systems of obligations can be part of society's structural capital. This institutional stock is broadly available to support productive and social activity. Exercising a constitutional or legal right does not ordinarily diminish the institutional stock available to others.

• Common-pool resources and institutions. Common-pool resources demonstrate that productive stocks need not always be organized through exclusive individual ownership. Elinor Ostrom showed how communities can develop durable rules, monitoring practices, sanctions, and governance arrangements for managing shared resources. The underlying resource and the institutions governing access can be distinguished as physical or natural productive resources and structural capital, respectively.  

• Open-source software. The software code can constitute an intellectual stock made simultaneously available to many users. Additional use ordinarily does not remove the code from existing users, while debugging, documentation, modification, and new contributions may expand or improve the shared stock.

• Public infrastructure. Roads, bridges, ports, water systems, parks, and similar infrastructure constitute physical capital that can be made broadly accessible to people who do not individually own the assets. The productive stock remains in place while access to it is shared among many users.

• Libraries, archives, and research repositories. These institutions accumulate intellectual and structural capital and make these stocks available beyond the original creators or owners. Digital repositories can substantially expand access without diminishing the underlying knowledge stock.

• Technology transfer. Patents, technical knowledge, designs, software, and production processes developed by one organization may be licensed, disclosed, or transferred to others. Depending on the arrangement, access may be exclusive or shared, allowing intellectual capital to be reallocated or made more broadly available without necessarily depleting the original knowledge.

• Intergenerational stewardship. Endowments, infrastructure, knowledge repositories, conservation resources, and institutional arrangements may be deliberately maintained so that productive stocks remain available to future generations. Present use is governed to preserve or enlarge the capital available over time.

These examples show that stock does not imply immobility, private ownership, or exclusive control. A capital stock can be transferred, shared, pooled, jointly accessed, institutionally guaranteed, or held for future generations. The specific mechanism depends on the characteristics of the capital involved. This distinction aligns with the six-capital framework's broader definition of productive capital as accumulated resources or capabilities available to support production and service. 

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