4Capital and Performance

By Dr. Alex Liu

• Introduction
  

• 4Capital Extension
  

 

• 1. Evolution of Capital
  

 

• 2. New capitalism needs 4Capital
  

 

• 3. Material capital: definition & measures
  

 

• 4. Intellectual capital: definition & measures
  

 

• 5. Social capital: definition & measures
  

 

• 6. Spiritual capital: definition & measures
  

 

• 7. 4Capital determines results
  

 

• 8. 4Capital and life satisfaction
  

 

• 9. 4Capital and organizational performance
  

 

• 10. 4Capital and national development
  

 

• 11. Measuring your 4Capital
  

 

• 12. 4Capital Transformation
  

 

• Conclusion
  

 

• Appendix
  

 

• BACK

Chapter 1: Evolution of Capital

The meaning of “capital” has evolved from a strictly economic or financial term to include intellectual, social, and spiritual dimensions. This broader view reflects how value is created and sustained in modern life. Below is a brief historical review and a simple framing for today.

Material or Economic Capital. Traditionally, capital meant material or economic wealth. It referred to tangible assets like money, land, equipment, and other resources used to produce goods and services. This view, grounded in classical and neoclassical economics, dominated through the mid-20th century.

Today’s note: material capital also includes critical infrastructures such as energy, transportation, digital networks, and even computing capacity—foundations that enable all other activity.

Intellectual Capital. As knowledge-based economies rose in the late 20th century, intellectual capital gained prominence. It captures how knowledge, skills, and innovation drive growth and competitiveness. Intellectual capital is often described in three parts: human capital (people’s skills, knowledge, experience), structural capital (processes, data, software, and systems), and relational capital (customer and partner relationships). Pioneers such as Peter Drucker and Thomas A. Stewart helped popularize this concept.

Today’s note: data, software, and AI models have become core intellectual assets, alongside education, research, and everyday learning.

Social Capital. Social capital came to the fore in the late 20th century through the work of scholars like Pierre Bourdieu and Robert Putnam. It refers to networks, norms of reciprocity, and trust that help people coordinate and act together for mutual benefit. Social connections—within teams, across communities, and between institutions—carry real value.

Today’s note: online and offline networks shape opportunity and resilience. Bonding ties build reliability; bridging ties open access to new ideas and resources.

Spiritual Capital. The newest addition is spiritual capital. It highlights resources drawn from spiritual and religious beliefs, practices, and traditions that support well-being and constructive action. For people of faith, it can be a sense of connectedness with God. For others, it can be commitments to noble purposes, ethics, and meaning. Authors such as Danah Zohar have explored and advanced this concept.

Today’s note: purpose, values, and moral standards translate into habits and choices; when these guide behavior, they form usable capital for individuals, organizations, and societies.

Taken together, these shifts expand capital from purely financial assets to a more holistic set of resources—material, intellectual, social, and spiritual—that contribute to personal and societal well-being. Not all value is tangible, and not all capital is measured in money.

Note: The work presented here includes research conducted by Dr. Alex Liu at Stanford University and that for the Global Entrepreneurship Monitoring initiative. Dr. Alex Liu greatly benefited from valuable discussions with several accomplished authors, including Danah Zohar, author of 'Spiritual Capital'; Ernie Chu, author of 'Soul Currency'; Theodore Roosevelt Malloch, author of 'Spiritual Enterprise'; and Lawrence M. Miller, author of 'The New Capitalism'.

Note: To cite us, please write "Liu, Alex. 4Capital and Performance, RM Publishing, 2008, ResearchMethods.org, https://www.researchmethods.org/4capital.htm.