 Good morning. It is a honor to be speaking here at the PFS meeting 2021 And my subject is the body as a capital good and this is a very important economic issue and an asset ultimately the human body and it hasn't had a proper role in economic theory for reasons we're going to explore today and There have been theoretical both theoretical and historical reasons for this Of course omission So the the soft tile is how land labor and capital left out our own vehicle in the world so human action is it for ghosts and This this may be ridiculous or just theoretical Stretches of different sorts, but we have articles and we have books on the economics of vampires and zombie was zombies So whether we we considered this interesting you know thought exercises or or actually productive in the realm of economics it seems that the Analysis of human action itself has been deprived of the of its vehicle the Human body so basically we have been doing economics for ghosts And I'm going to try to explain why I consider this so As you can see you have the economics of vampires an agent-based perspective You have economics of the undead a full book on the zombies vampires and the dismal science by several authors and Part of this podcast free economics if you you find what can vampires teaches about economics et cetera, but As you can see and you will see after this talk, hopefully Even Austrian economics is not Too far away from these since we are dealing with the economics of ghosts to some degree So why has the body been missing and let's hear delve into the theoretical reasons first of all, we have the British classical economists or so-called classical economists and The problem is that The common practice This is according to Adam Smith the common practice of farmers has misled the physiocrats and to some extent Adam Smith himself not to include land in their notion of capital in those days farmers very often did not estimate the Monetary value of their land and therefore land did not constitute capital for them so basically there was no good reason in general to include land as capital and These leads us directly To something that may sound like a sacrilege to some of us Which is the idea that? Bombaberg was not a direct Continuator of Carl Manger's work on capital, but rather that Carl Manger This is 17 years after the publication of his principles of political economy or principles of economics that it has been translated to English as the title 17 years later in 1888. He basically recanted or Clarified what he meant about capital and He basically He basically criticized Several uses of the word capital in the micro sphere that are very relevant to us today so for example Carl Manger attacked the use of capital as any basically as any Wealth dedicated to the acquisition of income like that was too brought of as a generalization because of course There is psychic income in there in the Austrian school not only material income So this is too broad we cannot Say that an armchair because it gives us psychic income. It's capital in any sense And and Manger explained this in his famous work in the well not so famous work in 1888 As something to do with the etymology of words Themologically I'm quoting Manger here the word capital indeed traces back to kaput the head or main good as against its Utilizations its fruits, etc Yet Manger considers it at the formation of the theory of capital income an income to call an armchair Capital because its ownership allows allows us to have a siesta and to call the relaxation it affords income This is this is Manger himself So such categorization he argued is of no help in the theory of the different resources and fields of income But what about proper investment with monetary outlays as well as income? subject to economic calculation Apparently Manger was onto something in that sense that we're gonna arrive there But another two senses in which he criticized the use of capital and he even went on to say Something very harsh about His student bon baberg. He has a very famous remark To Schumpeter where he says something like Time will come when people will realize that bon baberg's theory of capital and interest is one of the greatest Errors ever committed and those are very strong words from Carl Manger Especially because and I mentioned the word sacrilege We assume that from Manger we have a bon baberg and then we have misses and then we have you know hi egg and rod bar preferably and And the whole tradition but it turns out that Manger was very critical of what happened with with the concept and the second way in he in which he attacked the the What we now would call the Austrian standard view of capital is that he was very critical of The idiosyncratic use of terms so basically He stated that science at least or at least of all the science like economics Which deals with phenomena of everyday life has the rights of or to arbitrarily redefine popular terms and here we're arriving to Manger's definition with which is gonna support us today to explore the body as a capital good and of course the third definition that Manger basically attacked in 1888 was the definition of capital as produced means of production or produced factors of production because he Brilliantly quite characteristically of him went on to explain that what is the true difference between some Parts of you know land we may use in in a in a project or in a productive endeavor and he also Clearly well actually very specifically rejected the view that higher these Goods of a higher order Where to be considered capital per se? I mean he said he clearly says that they can be Considered capital in a technical sense. We may even say an engineering point of view But again, that's not the view of capital that What he would set forth as his positive positive theory of capital 17 years after his principal of economics So that's that's a problem And so we can see with the British classical economics land was nowhere to be found because it was not a common practice to appraise land and to engage in monetary calculation and with Bomba work We have somewhat of a problem here. And as I said, this is somewhat of a sacrilege To view Manger or the late Manger as a rival to to to his disciples view on capital and development of the whole theory and Quite troubling in some ways and of course why has the body being missing of economic analysis for historical reasons? It's because slavery and totalitarian regimes of all sorts Are only too close historically, so it's it's it's been a touchy subject. It's been a subject that A lot of economists or most economists have been very weary of entering Into because it may sound like we're talking about the buying and selling people basically and even though the libertarian position on a market for for for human organs is is positive Of course, the even the analysis the economic analysis of the body as a capital good has been something prohibited So can the human body be a good to begin with and Here Well, it is well known to the student of economic ideas that several goods that were not even considered goods until the force of events All but impose their recognition of good as goods for example cultural and artistic activities as valued entrepreneurial You know money-making activities As we know Carl Manger founder of the Austrian school the most advanced in the European continental tradition of You know subjectivism and first post first pull first pull full action Explain that good character requires for criteria to be met possible use or need for something That the thing has characteristics that render it of use to satisfy that need knowledge of such characteristics and enough control physical control or Control may require may require even legal control nowadays Of the thing to render it a good for human purposes. So as we can see human ingenuity and intersections are Behind good character in any and all cases It is human action in the world that which determines good character Plus the classification of any good at any time among several taxonomies Which we know scars versus non-scars public versus private production versus consumption good inferior versus normal versus luxury good, etc now think of it if Your shovel breaks down while you're digging a hole and you continue to dig the hole with your arm Whether it be for consumpting or product events your arm is at that moment your tool As the shovel was so it clearly has good character. So why is it not mentioned at all? So it is important to keep in mind that the classification of a good is not an objective of binary classification based on the physics physical-chemical content of this resource it is determined by subjective appraisals of the thing in question Just as no object has intrinsic value or objective value All value is subjective. It is not a quality present in an object resource or good So what about capital and here's where we go with Manger versus Manger and Bombabberg Lagman and all that development of capital theory and of course Human actions in the world do not only generate goods They can also generate bats for example Let's think of a let's think of a bad tattoo if you get a bad tattoo or one that ages badly over the years It's not a good in time It may become a bad and you may even want to pay to have it removed the same in the same way We pay for trash to be removed from our lives um What is happening now a day do we have the same problems as the farmers not appraising their lands well Let's Go again to this definition the core of the problem Physiocrats and to some extent Adam Smith didn't include land in their notion of capital because farmers very often did not Estimate the monetary value of their land that is why land did not constitute capital to them or for them Instead Smith Ricardo mill and their followers left an artificial tricotomy of supposed land Capital and labor so is the body land? No, it's not is the body capital Well, we're exploring that today is the body labor now because labor is the action performed in the in the External world by humans So what do we have today? World figures Leonel Messi Heidi Klum the famous model and many artists athletes Performers and surgeons have already had insurance over body parts and their normal functionality If we lean on Even if not too heavily on ethics We find that the act of argumenting for and obtaining those services in the market Render testimony to something explained by Hoppe's argument argumentation ethics Which is that hiring a risk-pulling service such as insurance? Presupposes ownership over one's own body in such way that capital investment amortization and passive income of past achievements and brand deals are already a real world category and Let me confess something here before we see a list of these artists and what body parts they they have insured. I thought this This topic was only one About markets being quicker and more dynamic than economic science to recognize You know subjects and phenomena in the in the in the real world But it's not only that it's lagging that economics is lagging behind markets I mean as it usually happens, but it's also that the own British And then the British schools the rate the realities are you know, you know as neoclassical Chicago school, etc. And even the Marxist who follow Ricardo They are unequipped to deal with the body as a capital good and also the Austrians Because of the work we have done on capital theory Instead of going back to menger in a way and I'm going to quote menger in a in a little while and you can see how Late at the late manger opens up the path for this analysis. So what about today? This is a list of top musicians who have insured their body parts You have the back it richards Although I we don't know why kid Richard would need insurance over his body parts since he's apparently immortal Dolly Parton David Lee Roth Tina Turner Madonna Kylie Minogue Rihanna. We have this famous violin player or of course pop violin player has insurance of over one million over his fingers Gene Simmons from keys in the middle has insurance over his tongue Because it's a very famous tongue in the in the rock world. And of course we have kid Richard and Here I want to quote manger himself when he defines Capital we already went through several critiques of what? Things are not capital for a manger. It's not produced Means of production. It's not anything or wealth that yields income. And of course, it's not It's not just tools in general and as we said manger himself Invited us to use terms as regular people use them. Although, which is kind of funny because Austrian authors have tend to be kind somewhat if you're syncretic Or love to redefine terms. So under car mangers definition of capital Capital is all assets of a business or whichever technical nature They may be in so far as their monetary value is the object of our economic calculations in other words when they Calculatorily constitute some sums of money for us that are dedicated to the acquisition of income which opens up the path for Analyzing several things of capital even manger himself in 1888 decries Not only the British classical economies, but also bomb aberks treatment of capital as the orders of goods and that technical or Let's say entrepreneurial or productive analysis has not been the true economic analysis Which may include several things and he mentions a bankers for example what bankers lending their sum a sum of money is Not included in that analysis because money We cannot place money properly in any of the of the of the orders of goods and of course in the not to mention in the British classical Schools, it's not land. It's not labor. So can it be capital even that the the funds for bankers do not fall into this categorization So the recognition of this fact of human action in the world May allow us to further assess risk among activities if we recognize that the human body can be a capital good and of course Let's remember. Let's keep in mind that even it's good character depends on human action It's not per se yet good and it's not per se a capital We can further and better risk assess risk among activities Organizations and individuals and perhaps help restore the insurance industry from within because lots of activities imply the use of the human body as a capital good Also recognizing the body as a capital good Where and when it applies demolishes the quote-unquote sacrosanct dichotomy of land labor and capital from the British schools That leaves the individual quite characteristically of them Marxism included as we said since they are recurrents out of the analysis and And The thing is This is just beginning. We're beginning to use the body as a Recognizable investment vehicle. This is the beginning of an era of biotech nanotech In general biohacking we're doing body enhancement the models and sports figures and Surgeons already have insurance over their body parts This is only this is happening nowadays and this is just beginning What happens when we begin to enhance ourselves our intelligence or memory or other physical abilities with biotech and basically you know we Some people are going to become cyborgs or I don't know lots of people want but all these Investments are going to be money-yielding and these enters the broader categorization of Carl Manger of anything as potential capital Good in so far as their monetary value is the object of our economic calculations In other words as Manger said when they Calculatorily constitute sums of money for us that are dedicated to the acquisition of income So we know when Athletes for example have 20 years to to to have a good run and then they have to leave off the money They made of those most productive years and that was that was it basically models age And people in other professions and ever even lesser trades or so-called lesser trades are Constantly depreciating their bodies in certain activities and all all this is going unrecognized because Economics the mainstream economics, but even Austrian economics have been unequipped to deal with this phenomena and Finally, I just want to finish with this if your body can or Is can be or is a capital good that surely includes mental well-being and thus come into a PFS meeting is An act of wellness and self-care. Thank you