#The claim

Once networked actors share structures, they begin to score, and that scoring is capital. Capital is not a pile of stuff but a running measure of value built from a sequence of choices and outcomes — and the sequence matters. Early advantages lock in and compound: the QWERTY keyboard survives not because it is best but because every typist trained on it raised the cost of switching.1David (1985), “Clio and the Economics of QWERTY.” The canonical case of an early advantage locking in against a better alternative. Capital accumulates the same way, as path dependency crystallized into a score.

The score is not read off any absolute scale, because none exists. Value is subjective — whatever the networked scoring system recognizes.2Menger (1871), Principles of Economics. Value as a judgment made by valuers, not a substance in goods. Prices are one such score. Reputation, status, and citation counts are others, running on different ledgers with different rules. And because the network is an emergent system no one controls, these scores are produced, not decreed — which is precisely why everything that follows in this framework is a problem of design.

#The mechanism

Capital rests on two standards. The first is control — the ability to decide how a resource is deployed. The second is ownership — the claim that attributes value and its returns to a holder. Neither is a fact of nature. Ownership is a convention, a product of shared cognitive structures that the network honors because honoring it is cheaper than fighting over everything.3Demsetz (1967), “Toward a Theory of Property Rights.” Property emerges where the gains from internalizing externalities exceed the cost of enforcement.

This is why owning knowledge is uniquely hard. Ideas are nonrival — my use of a theorem takes nothing from yours — so exclusion must be manufactured where scarcity does not exist.4Romer (1990), “Endogenous Technological Change.” Ideas as nonrival inputs that escape the arithmetic of scarce goods. Ideas are recombinant — each new one multiplies what the existing stock can produce — so fencing one idea in taxes every idea downstream.5Weitzman (1998), “Recombinant Growth.” New ideas are made from combinations of old ones, so the stock feeds its own expansion. And any scheme for selling knowledge runs into the disclosure paradox: to price information you must reveal it, and once revealed it need not be bought.6Arrow (1962). The buyer cannot value information without receiving it — at which point the sale is moot. Patents and copyrights are imperfect patches over this triple bind, and the unit of account for knowledge remains open for design.

#Why it matters

Seen this way, capital of this kind is not only a stock of ideas but a capability. Human-capital theory made the first move by pricing skills carried in people.7Becker (1993), Nobel lecture. Skills, education, and habits priced as durable productive assets held in people. Extend it fully: any durable capacity to convert signals into value — a person’s skill, a trained model, an institution’s accumulated know-how8Corrado, Hulten & Sichel (2006). Measuring intangible capital — organizational know-how as unbooked assets. — is itself an asset. A cognitive actor, economically, is capital.

Its accumulated, compounding form is what this framework calls cognitive capital: the capacity to act effectively under uncertainty, held in a mind, a model, or an institution, and worth exactly what the scoring system recognizes. The name is deliberate — not knowledge capital, a warehouse of ideas, but cognitive capital, the capacity to use them. A warehouse you cannot price without emptying it makes a poor asset; the capability that fills, filters, and deploys it is the thing the network can actually score. The next factors take the two open problems this one exposes — how a market activates knowledge it cannot easily price, and how mechanisms can be designed so the score serves welfare rather than mere lock-in.