Capital

“Capital” is the term used to describe a good which has value or could be consumed now, but if it is held and not consumed, will grow in supply and value over time. It is the stock a person owns which they expect to earn them revenue. Land and non-renewable resources cannot be described as capital, as capital is what is increased by human labour. It is also used to define anything that is an input to production function or anything that increases a person’s economic production value, such as tools to a worker. In classical economics, particularly Marxist economic theory, “capital” is money that is exchanged for goods in order to be sold for a profit. To Karl Marx, capital exists only in the process of economic exchange, as in wealth that only grows from the capital circulation process, forming the capitalist economic system. In contemporary economics, “capital” is generally used to describe financial capital which is distinct from capital goods.