Invisible Capital is an insightful book by Chris Rabb that challenges the myth that “hard work, a good idea and a positive attitude” are all it takes to achieve the American Dream. The publication explores the various types of capital needed to succeed in contemporary business. As a Black woman, I was familiar with some of these invisible obstacles, yet I was happy that the book didn’t dwell exclusively on class, race or gender. Although the author acknowledges these social conditions, he reasons that there is little one can do about them and moves forward. I wanted to highlight a few passages that stuck out to me.
In the beginning of the book, Rabb offers a concise definition of entrepreneurship. He counters the conventional wisdom that entrepreneurs are “daredevils” or “risk takers.”
It is not risk that is at the heart of entrepreneurship—instead, it’s uncertainty. If what characterizes risk is the prospect of danger, then ambiguity is the partner of uncertainty—sheer Kryptonite to those who require a clear and linear path toward professional fulfillment.
“Comfort with living in uncertainty,” as Rabb puts it, is also a prerequisite for being an artist. If done well, an entrepreneur is creating a business as interesting as any work of art. If the organization is able to have a wide reach, business can be more interesting than art.
And while entrepreneurs must somehow relate to an ongoing economic activity, it is not inherently or solely related to profit-making. What determines whether an enterprise is entrepreneurial is the freshness of its products, services, processes, or structures, and whether the enterprise creates value for the consumer, market, or society itself. The people who make this kind of enterprise happen are entrepreneurs.
With this definition in mind, many artists begin to fit the bill. I don’t count artists like Jeff Koons or Damien Hirst because they aren’t innovating—they’re cashing in. Artists who are “entrepreneurial” are actively engaging an audience with a novel concept-product-service. A recent Art21 blog post offers a few (European) examples: Erik van Lieshout rents space in shopping malls; Constant Dullaart has a Google Adwords scheme; and Martin Thacker makes mobile phones.
The unfortunate reality of these artist-run businesses is that they will probably all fail. By failure I mean that the enterprise will not make enough money to operate at a profit, which in turn will prevent the hiring of employees. The owner will be crushed by the overwhelming workload and the business will cease to exist. (I’m speaking from experience here.) If the artist-entrepreneur can leverage his or her invisible capital, this fate may be avoided.
Invisible capital is not one thing; it’s a set of tacit assets that are invaluable to aspiring entrepreneurs. Invisible capital includes economic capital, cultural capital, social capital, and what is often, in macroeconomic and corporate circles, termed human capital.
Economic capital are financial assets, including investments, real estate, equipment and intellectual property. Cultural capital is the “embodied value” of what we have learned in school and in life, often represented as where we grew up, the degrees that we have, fraternities/sororities and so on. Social capital is who we know and who we have access to through our network. Human capital is what we know; our skills, knowledge and experience. With these concepts in mind it is easy to understand that there is no such thing is a self-made man. (If you hear someone say otherwise, scream “BULLSHIT,” and run the other way.)
The natural order order of the three factors in production is land, labor, and capital. As [Henry] George argues, “land” in this context is not meant to be narrowly defined as the dirt under our feet; rather, it represents “all natural materials, forces and opportunities. It is the whole material universe outside of humans themselves.”
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So, invisible capital, while valuable, is not wealth in and of itself. Its economic value, as George applies the concept of “relative wealth,” is based on its potential to “obtain [material] wealth in transactions between individuals (or groups).”
I had a long discussion with a friend about this exact idea a few months ago. She asked me if I thought it was possible to convert cultural capital into economic capital. I believe it is possible, but incredibly difficult. In my experience, social capital has led to more money than cultural capital. I sometimes think of cultural capital as “cool factor.” I often joke that I’m cool enough and would prefer money at this point. That’s the financial struggle of the artist. How can we transfer our immense invisible capital into economic capital? We need to know people with money, or people with access to money, or people with access to people with access to money.
Entrepreneurship is a process—a practice—not a destination or genetic disposition. Its shape and value can be dictated by the opportunities we create. Some entrepreneurs will create great material wealth; others will create expansive employment, long-term technological advances, or rapid environmental remediation. Some will simply be good neighbors and promote what authors Ed Diener and Robert Biswas-Diener call “psychological wealth” that fosters the well-being we all seek, as enshrined in Jefferson’s indelible phrase “life, liberty, and the pursuit of happiness.”
Notes:
1. Chris Rabb. Invisible Capital. Berrett-Koehler, 2010.
2. Lindsay Lawson. The Artists as Entrepreneur. August 16 2011.
