1. because the services of some types of capital, particularly knowledge, can be simultaneously used by everyone without appropriate compensation to its owners.
2. because institutional conditions do not make it possible for owners of some capital types to claim the full income produced by them.
3. because institutional conditions cannot prevent theft of capital.
4. for all of the above reasons.
Choose the correct option.
Option 4 is the correct one. The fact that everyone can simultaneously use the same body of knowledge means that everyone the inventor of knowledge capital sells his invention to can re-sell it to someone else and still continue to use it---in contrast, for example, to a car, which only one person can drive at a time. The inventor thus cannot capture the full return from the invention. A partial way to get around the problem of non-capturability by inventors of the returns to their inventions is to introduce a copyright system. Theft of capital means that its return is appropriated by the thief rather than its owner.
There are many additional ways in which investors can be prevented from capturing the return from a piece of capital. A competitor with access to the political process, for example, can reduce others' private returns to capital by getting the government to impose a prohibitive tariff on an input that must be used jointly with it, or on the output produced by it.