capital

The existing stock of productive resources, such as machines and buildings, that have been produced. Capital Intensive Production methods with a high quantity of capital per worker.

The existing stock of goods which are to be used in the production of other goods or services and which have themselves been produced by previous human activities. Capital is conventionally subdivided into "fixed capital" and "circulating capital," although the distinction is mainly a matter of degree of durability rather than a clear-cut difference in kind. Fixed capital refers to durable producers' goods such as buildings, plant and machinery, while circulating capital refers to stockpiles of materials, semi-finished goods, and components that are normally used up very rapidly in production. Notice that "capital" in the strictest economic sense refers only to real, physical means of production already in being, not to the sums of money put aside through savings to purchase real capital with in the future (although the total amount of capital in a particular firm may for convenience be described or summarized in monetary terms by the potential resale values of all the separate items of capital added together in one grand sum).

[See also: investment, human capital]