Talk:Capital (economics)/Archive 1

Archive 1

Fiat Money and Bank Money are NOT Capital

At the very beginning of this article we find the statement "Not to be confused with Financial capital". Yet we see that someone posting as "Battlecry" has taken it upon itself to violate that statement and reintroduce the notion that "money" is capital, in and of itself. The assertion violates the actual reference being used. That reference says that "capital is money or assets put to productive use". For if and when money is put to productive use then the money disappears and a productive instrument of use, takes its place. There was a time when money was actually a commodity or was tied to a commodity. And in that world it was possible to confuse this issue. But in our current system, all money is credit and produced on keyboards by the elected government in the form of treasury notes, or by the Federal Reserve and by banks in the form of Federal reserve notes and clearing balances. Hint!!! It has no labor component as does commodity money. It has no INTRINSIC value and all of its value arises from the enforcement of sovereign law in regard to the repayment of loans.

The person asserting the misquoted phrase then further asserts that this magically created "money" is the cornerstone of "capitalism", attributing that ridiculous assertion to the same misunderstood referenced cited for the initial assault. This second sentence and nothing remotely resembling it can be found at the cited reference.

Here is the statement: "Capital refers to sums of money or assets put to productive use. Capital, in the form of money seeking to expand itself through investment, forms the basis of capitalism."

The statement has been removed by ME and I will remove it again if it magically reappears.--The Trucker (talk) 06:48, 3 January 2013 (UTC)

References

untitled

NPOV dispute courtesy of user:The Anome from wikipedia:pages needing attention. I'm not an economist, so I make no judgement... :-/ Martin So far as I can tell, the following is not a grammatical sentence: "The Austrian economist Eugen von Böhm-Bawerk maintained that capital intensity within a certain industry as determined by consumer demand rather than the supply of saving, through the roundaboutness of production processes." Perhaps the "as" (after "industry") should be "was".

References, please!

I'm concerned about a lot of the material in this article and related articles, in particular the analysis of the six "styles of capital". Every reference I can find to this analysis is sourced back to the same person, Craig Hubley. Hi!!!!not an economics professional, but rather someone who likes to post his ideas up on the internet. Unless the information can be backed up by a source other than Craig Hubley, it needs to go; an encyclopedia is not the place for articles that describe the ideas of one individual, where that individual is not well known.

Enchanter 10:34, May 28, 2004 (UTC)

Sorry but that is really serious witch hunting. A lot of the assertions in this article are just regular stuff, and several names are mentionned as reference. If you object to one specific point, please do so, but just deleting the article because of its author is not reasonable. SweetLittleFluffyThing

Yes, there is plenty of stuff in there which is regular stuff, and I'm not suggesting for a moment that the whole article is deleted. But some of the material here is very dubious. I can find no analysis referring to "styles of capital" in any economics reference, or anywhere on the internet (other than by or sourced to Mr Hubley), at all. The same goes for instructional capital (which I've already reduced to a stub after trying and failing to come up with anyone, anywhere, who used the term instructional capital in the same way as the article.) If you disagree with me, and think that that part of the analysis is "regular stuff", I would be interested to see references, which is why I have asked on the talk page before removing any content. :)

This is not witch hunt; I don't care who wrote the article. What I care about is that the article should be a high quality summary of knowledge on the subject, rather than reflecting some new research by one individual. Enchanter 20:47, 29 May 2004 (UTC)

Enchanter, I agree with you that this is a contraversial issue. When I studied economics these terms were not used as described here. However there is a legitimate literature that has developed in the last decade. For example, look at Thomas A Stewart, 1997, Intellectuall capital: The new wealth of organizations, Doubleday, NewYork. Stewart divides intellectual capital into Human capital, Customer capital, and Structural capital. The term Digital capital comes from Don Tapscott, David Ticoll,and Alex Lowery, 2000, Digital Capital: Harnessing the power of business webs, Nicholas Brealey Publishing, London. Knowledge capital is from Alan Burton-Jones, 1999, Knowledge capitalism, Oxford University press, Oxford. Charles Leadbeater, 1999, Living on thin Air, Penguin, London, uses the distiction between knowledge capital, social capital, and financial capital.

The proliferation of capitals is quite recent and still very much in flux. But I do not think that this warrants there exclusion on the grounds of original research. One of the advantages of an online 'opedia is that we can deal with the state of human knowledge as it evolves.

Just one suggestion, this part of the article should be moved to Capital (business) because these new capitals originate in the management literature (both popular and academic) rather than from economics. mydogategodshat 18:39, 2 Jun 2004 (UTC)

I agree with the need for references. Not because the information in the article is necessarily sketchy, but with only one citation, there's no easy way to follow up on the the more specific and peripheral claims the article makes. Some versions of classical economics include "organization, entrepreneurship, or management" as a forth kind of capital? Which versions, espoused by whom? I am new to Wikipedia editing, otherwise I'd give this article a tag saying it needs citations. Hopefully a more experienced editor reads this and agrees. Alweth (talk) 00:52, 22 January 2009 (UTC)

Real Capital

To be sure there is much yammering, posturing, and pompous rhetoric regarding the term "capital" in economics. The classical economists did not define the term well enough even though they noted the difference between land and "real capital". I wish to define this term "real capital" as a much better description of "capital" as that term relates to political economy. For now I will say that there is no such thing as "natural capital" because such a thing is included in the word land which is very much distinct from "capital".

Also there is no such thing as "infrastructural capital" unless, perhaps, one wishes to differentiate capital which is privatized from capital which is socialized.

In the discussion of "infrastructural capital" in this article we see the torturing of the concept of depreciation which ONLY APPLIES TO CAPITAL. Depreciation (actual deterioration or a wearing out) is one of the distinguishing characteristics of "capital" as distinct from land. Natural resources are depleted (e.g. oil depletion). The oil does not "wear out". Farmland can be depleted, but left alone it will recover quite naturally. Real capital is created by labor and it will "wear out" and left on its own it will rust or crumble back into the land from whence it was harvested. Such attributes are what distinquish land from real capital.

There may be such a thing as individual personal capital and it is produced by labor and owned by the laborer (e.g. the individual studied hard or trained his body) and now has the result as personal capital. If it occurs naturally within the laborer such as any natural talent we might as easily styled it as personal "land". The distinction is meaningless due to the inalienability of the asset. There is NO WAY you can deprive the baseball player or the mathematician of his abilities and then make use of these inalienable assets. The return to individual capital or individual natural resource is normally regarded as wages as opposed to interest or rent. And thus the asset is still encapsulated in the term labor as opposed to capital.

As to intellectual capital we can see this as a particular manifestation of socialized capital in that education for the masses is part of the infrastructure of the society no less than the roads and bridges.

"Natural capital" my Aunt Fanny!:) BWAHAHAHAHAHAHAHA. :) :)

"Those are my opinions and you can't have em!" -- Bart Simpson

--The Trucker 07:26, 6 January 2006 (UTC)

I think you will find there is such a thing as natural capital and there is also a system for measuring natural capital at a national level. The system is available from the United Nations Statistics Division website in the Handbook of National Accounting: Integrated Environmental and Economic Accounting 2003 (SEEA2003). It is worth noting that the SEEA is a satellite account of the System of National Accounts (SNA) which as you will be aware is the system used to calculate aggregates such as Gross Domestic Product and Gross National Product. I don't think there should be any further debate as to whether natural capital exists.

For more information see: http://unstats.un.org/unsd/envAccounting/seea.htm

Best regards - Winston

just two questions about farmland recovering quite naturally. If the land is depleted of trace minerals, what natural process recreates them? I understand that nitrogen, carbon and other nutrients will accumulate from dead plants, but these dead plants will not contain trace minerals if the minerals no longer exist in the soil, will they? If so perhaps you can cite the botanical method by which this occurs. ThanksStephenstillwell 17:20, 4 May 2007 (UTC)

Capital simply means value. If something has value than it is capital. I'll give you a dollar for the hot dog, the dollar and the hot dog are both capital. — Preceding unsigned comment added by 98.87.241.128 (talk) 05:53, 24 September 2011 (UTC)

mergefrom Risk capital

I know nothing about this topic. Someone who does should look at Risk capital and see if the content of that article should be merged into this one, possibly then redirecting that article here. If that article is not worth keeping at all, someone could just redirect that here, and remove the "mergefrom" tag from this article. --Xyzzyplugh 11:06, 17 September 2006 (UTC)

classical explanation

Could someone expand the definition with some real world examples or a more layman explanation.

How about this. If you go into some wooded commons and shoot some pheasants, you are living off the Land. If you apply for permission to enclose part of the same commons and start breeding pheasants to be released, and invite shooting parties who pay a fee for the shoot, you have invested some money to create an income earning capital asset. -- Janosabel 22:37, 23 June 2007 (UTC)

Thanks 99.236.220.155 (talk) 08:54, 25 September 2009 (UTC)

Land

I don't believe that land is viewed upon as a seperate factor of production from capital any longer. In the days of Adam Smith and his contemporaries technical progress was unheard of so land was the main driving force behind sustainable wealth. In modern times, land is regarded as much less important and as such is simply viewed as a category of capital. --Skatastic

"I don't believe that land is viewed as a seperate factor of production from capital any longer."

Yes, you are referring to the dubious achievement of neoclassical economics in managing to hide Land (all nature-provided resources) "under the skirt of capital". Try building a factory or a block of flats without Land.

As to importance, try buying an acre of development land in a crowded city for less, or no more, than the cost of the building you are going to put on it. -- Janosabel 22:46, 23 June 2007 (UTC)

Land can be used as capital but its not necessarily capital. Investing in real estate or giving land for something than it is capital. An acre of land just sitting in the desert is not capital, at least atm. — Preceding unsigned comment added by 98.87.241.128 (talk) 05:56, 24 September 2011 (UTC)

"In Modern times, Land is regarded as less important ..." Wow. That ignorance may well explain the economic problems we are in. Every depression, recession, panic has its origins in land speculation! Same as it ever was. Will we never learn. 68.55.60.111 (talk) 14:43, 14 February 2013 (UTC)

I agree that Land is capital. However, the problem is that economists do not agree on what capital is, and I think this article should reflect that rather than adopt a point of view. I wish there had been some productive discussion on this (since 2007!). Allow me to quote at length from Piketty, because I think this is a really good introduction to the issues involved:

[C]apital is defined as the sum total of nonhuman assets that can be owned and exchanged on some market. ...

By some definitions, it would be better to reserve the word "capital" to describe forms of wealth accumulated by human beings (buildings, machinery, infrastructure, etc.) and therefore to exclude land and natural resources, with which humans have been endowed without having to accumulate them. Land would then be a component of wealth but not of capital. The problem is that it is not always easy to distinguish the value of buildings from the value of the land on which they are built. An even greater difficulty is that it is very hard to gauge the value of "virgin" land (as humans found it centuries or millennia ago) apart from improvements due to human intervention, such as drainage, irrigation, fertilization, and so on. The same problem arises in connection with natural resources such as petroleum, gas, rare earth elements, and the like, whose pure value is hard to distinguish from the value added by the investments needed to discover new deposits and prepare them for exploitation. ...

Some definitions of "capital" hold that the term should apply only to those components of wealth directly employed in the production process. For instance, gold might be counted as part of wealth but not of capital, because gold is said to be useful only as a store of value. Once again, this limitation strikes me as neither desirable not practical (because gold can be a factor of production, not only in the manufacture of jewelry but also in electronics and nanotechnology). Capital in all its forms has always played a dual role, as both a store of value and a factor of production. ...

[A]ll these forms of wealth are useful and productive and reflect capital's two major economic functions. Residential real estate can be seen as a capital asset that yields "housing services," whose value is measured by their rental equivalent. Other capital assets can serve as factors of production for firms and government agencies that produce goods and services (and need plants, offices, machinery, infrastructure, etc. to do so). Each of these two types of capital currently accounts for roughly half the capital stock in the developed countries.

Compare this article to Capital asset (a term that has a general meaning synonymous with capital, as well as more specific meanings). The two articles present different takes, but neither one adequately addresses the complexity of the subject. Kyle Cronan (talk) 15:47, 28 August 2014 (UTC)

Picketty: "The problem is that it is not always easy to distinguish the value of buildings from the value of the land on which they are built."

This is plain wrong. Any developer or builder needs to separate these two things.

Also, Capital is distinct from Land because land is a non-produced factor, i.e. it is there regardless of hman effort. And the distinguishing is done by the demand for a particular piece of land (space, actually)

Janosabel (talk) 22:08, 24 September 2015 (UTC)

You ignored my actual point, which is that the article should reflect the real disagreement that exists, rather than adopt a point of view. Kyle Cronan (talk) 04:55, 9 January 2016 (UTC)

Picture?

What's with the picture? It looks sort of silly. Reminds me of BET

-Brad Kgj08 (talk) 08:42, 5 May 2008 (UTC)

Ghandi quote?

It is non-standard to have a "quotations about" section. I think this is encouraged POV. 69.112.164.135 (talk) 05:20, 21 May 2008 (UTC)

Financial Capital

In strictly economic terms, capital does not apply to any kind of financial instrument. It seems to me that the definition of financial capital in the article is suggesting the contrary. In economics ownership is not especially important. It doesn't really matter if someone is heavily indebted to own their factors because factors of production will, in a free market, be used in the most efficient way possible, regardless of the owner or debt structure. This follows from the assumption that individuals are rational, that is it doesn't matter if someone owns a factory and pays someone else to manage it or if they lend someone the money to purchase the factory and have them pay interest. In either case the economy will produce the same widgets.

Ummm

"are not themselves significantly consumed (though they may depreciate) in the production process" - isn't this the difference between "fixed capital" and "circulating capital"? The text gives the definition of fixed capital (which is what is usually denoted by K in the literature these days) but there's also circulating capital (generally referred to as "intermediate goods" now, more or less). Wouldn't a better definition be that it is goods produced with other goods which are not directly consumed (i.e. provide no utility in and of themselves)?radek (talk) 09:43, 1 February 2010 (UTC)

Intro

I find it strange that in the intro of the page on "Capital" that "Marxian Economics" is mentioned, but no other Economic philosophy is also mentioned. Propose deletion of that part entirely, with possible expansion of the discussion in a later section. — Preceding unsigned comment added by 76.19.251.250 (talk) 10:03, 27 June 2011 (UTC)

It is becoming quite tiresome, this constant hammering away at economics fundamentals by the neoclassical tap dancing financial weenies all decked out in cap and gown. Today I have removed the incursion of "Triple Bottom Line Accounting"; yet another assault on fundamental economics by the finance people. LAND is all natural resources and capital is as it is now defined in this article ABSENT the accounting business. The phrase "natural capital" is a contradiction in economic terms and has no place in an article explaining the economic meaning of "capital". The Trucker (talk) 00:10, 1 April 2014 (UTC)

Unusually poor article

The first paragraph is is too much to bear. I couldn't go further.

1. Why is the etymology of stock mentioned.
2. Why isn't Online Etymology Dictionary used as a source or a reason to be skeptical about the stated etymology of capital?
3. Is Karl Marx really a good source on Medieval French business practices? What are his sources? Has no one done better since? This like relying on Thomas Huxley for one's understanding of evolution. DCDuring (talk) 03:44, 3 February 2015 (UTC)

units of measurement

Capital is a term in economics models. What is its unit of measurement? AllGloryToTheHypnotoad (talk) 14:50, 9 March 2016 (UTC)

Dr. Breton's comment on this article

Dr. Breton has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

"Capital is distinct from land (or non-renewable resources) in that capital can be increased by human labor."

I think land is a form of capital, and it can be made more productive through human labor, so I think this statement is incorrect.

"Human capital, a broad term that generally includes social, instructional and individual human talent in combination. It is used in technical economics to define balanced growth which is the goal of improving human capital as much as economic capital."

This is not a good definition.

"Investment is closely related to saving, though it is not the same."

This is not helpful at all.

Overall this article suffers from combining current ideas about capital to very old ideas in a confusing fashion.

We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.

We believe Dr. Breton has expertise on the topic of this article, since he has published relevant scholarly research:

• Reference : Theodore R. Breton, 2014. "A Human Capital Theory of Growth: New Evidence for an Old Idea," DOCUMENTOS DE TRABAJO CIEF 011999, UNIVERSIDAD EAFIT.

ExpertIdeasBot (talk) 19:38, 1 July 2016 (UTC)

A taxonomy provided by an external link

Years ago, I put up a taxonomy of capital at this link: http://robertvienneau.blogspot.com/2014/06/elements-of-taxonomy-of-capital.html. Perhaps this would be helpful in editing the topic page. -- RLV 128.132.1.10 (talk) 11:06, 29 August 2017 (UTC)

External links modified

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