Capital (economics)

Capital is a term that has different meanings in economics, sociology and in ordinary language.

• 3.1 Classic managerial concept of capital
• 3.2 Monetary managerial concept of capital

• 4.1 General
• 4.2 forms of capital
• 4.3 commercial capital
• 4.4 Interest -bearing capital
• 4.5 tendencies of capital

Etymology

Etymologically, the word from the Latin " capitalis " derives ( " head " or "life on " ), this even goes to " caput " - " head " back. From the 16th century we find the Italian loanword " capitale " - " property " within the meaning of the head number of livestock, as opposed to the freshly cast animals as "interest". According to other sources already made ​​in Latin " caput " and " capitalis " a change of meaning by which is understood by " main" in German. "Summa capitalis " was the biggest sum in economic calculations, from which " capital " had arisen.

Capital in the economics

Under capital in the economic sense, one can understand all the means of production involved in the production, ie the stock of production equipment that can be used for goods and services production. This component is also known as capital stock and includes items such as tools, machines, equipment, etc., that is those that were generated in a previous production process.

The capital in this sense, is the third factor of production in addition to labor and land.

But the term is used not only for those directly consumed goods ( physical capital ), but also for money, because money gives power to dispose of this real capital. The cash or money capital thus comprises financial resources available for the renewal and expansion of the capital stock available. It does not matter is from what sources such as savings, corporate profits or capital loans as provided for in the short term is for the formation of real capital only funding, but not a preceding Saving necessary ( net investment). However, planned real capital formation and savings must match in the balance.

In addition to the real and financial capital is still based on the training and education performance potential of the workforce or human capital to call. This term is explained by the high financial costs for training these skills and created thereby profitability. It is assumed that human capital is deliberately produced by the use of resources such as learning and training, but also " learning by doing " is assumed. In this case, the human capital that is formed as a byproduct in the production process.

The formation of capital increases the productivity of other factors of production and thus leads to higher yields, which in turn contribute to the further accumulation of capital, but also the condition of better remuneration of the production factor is labor.

The capital has - as other assets - the property of scarcity. From the scarcity of capital property interest arises. The capital interest rate is the fee of capital. The scarcity of capital may have been generated from natural origin or artificially. The capital will be passed only against a fee, the interest on capital.

Since economic capital (see below) is wealth, it can be on the market on the supply side in a few hands or in one hand concentrates his ( " concentration of capital " ), then so is acting as an oligopoly or even monopoly. This favorable position can be seen as an additional " capital ".

Capital in the national accounts (SNA )

In the national accounts, is less spoken normally the Faculty of capital (eg, net assets, fixed assets, as well as capital stock, gross and net financial assets ). We examine macroeconomic data on " capital " you must therefore seek in the national accounts according to data on " assets ".

Capital in the business administration

Capital has been defined as a central notion of stocks. In business administration, there is another classic and a narrower modern concept of capital. Both versions have their own concept of authority, however, the practical consequences of the term differences are small.

Classic business management concept of capital

The in its first beginnings emerged from the Accounting Teaching Business Administration is strongly geared balance sheets. One of the reason fathers of German Business Administration, Schmalenbach, sees the capital the abstract value sum of the balance sheet as a classical economic concept of capital. The basic structure of a balance sheet can be represented in the form of account. Since the total assets to assets and liabilities is equal to ( assets = capital), the positions are understood on both sides of capital according to different classifications.

On the asset side we find as a stock -related equivalent of operating capital, the assets, which indicates in what concrete forms of capital has been used in the company ( use of funds ). The capacity is the total of all assets and funds used in the company, which are distinguished in fixed and current assets. The fixed assets include the goods that are destined to the company to serve in the longer term and current assets are the assets that are received usually within a short period in the production or will be implemented (inventories, receivables, securities, cash and cash equivalents ).

On the liabilities side you will find the capital as the sum of all questions submitted by the lenders available financial resources, ie it indicates where the money came for the assets ( source of funds ). Usually, it is divided according to its origin in equity ( equity) and debt (creditor capital). The distinction is due to the different legal regulated position of equity and debt capital. Equity refers to those means which are applied by the owners of a corporation to finance or leave it as an economic profit in the company ( self-financing ). The debt, however, is the name given to the reported liabilities of the company ( liabilities and provisions with liability characteristics ) to third parties who are either legally or arising or incurred.

If we take the total capital or assets from the debt ( = debt), we obtain equity or net worth. The fact that capital and assets representing the same event in different points of view, is also in the language expressed by etc tied-up capital or assets or capital for operations or assets is spoken.

Monetary managerial concept of capital

Within the business, capital is usually introduced in the form of funds in an existing or newly created company constituting companies, but can do without the medium of money and bring in the capital in the classical sense in the form of loans or in the form of any other asset. In this case take place - notionally split - the supply of capital on the one hand and binding of a particular principal in Vermögensgut the other hand, in the same process. A model, capital can then be simply regarded as funds that are used within the company. The monetary capital concept is narrower than the classic, because it refers to a particular asset type, the funds, not of the entire assets. It is especially suitable for the discussion of liquidity issues.

Marx's definition of capital

General

According to Karl Marx, capital is an amount of money (G ), which is invested in order to recover a higher sum ( G '). Capital is not used for consumption or hoarding, but invested to return enlarged. Thus, the capital makes cycling, consisting of a circulation process and a production process (both in the Marxian sense). The capital increase is possible through the purchase of labor-power. In the production process results in a value which is greater, the longer the workers work. The worker will be reimbursed as wages only a part of the resulting value. What furthermore produced at value remains with the capitalists as a value ( labor theory of value ).

The reproduction process of capital Marx describes using the following formula:

G money is invested in goods W. The goods W are consumed in the production process P as means of production and manpower to create new goods W '. The dots are to represent in Marx that here the circulation process of commodities is interrupted. By the labor of the value of the goods W is thereby obtained and added an additional value ( value added ). Thus, the value of the goods is W ' higher than the value of W and W the goods ' sold for the equivalent of money in G'.

Forms of capital

Thus, the capital through various forms, it makes different " Metamorphoses " by:

• G money capital
• W capital goods
• P Productive capital
• W ' capital goods
• G ' money capital

For the profit p: p = G '- G

And for the rate of profit p ' is true:

" Wage labor creates capital, that is, manages property which exploits wage labor, and can reproduce only under this condition that it creates new wage labor for fresh exploitation. " These relationships are in Marx's major work explains the capital, his well-known major work on political economy.

The production is under capitalism Collective, but is appropriated private. Wage labor is the basis of capital. Wage labor creates value, it can be used by the capitalist for his personal consumption or as an investment in the accumulation of capital. " A portion of the surplus value is consumed by the capitalist as revenue, another part used as capital or accumulated. " ( Capital, Vol I, Sect 7. Process of capital accumulation ) Although the capital made ​​by the people, the product of human labor is, it seems to the people by the wealth and the power that it gives its owners to have their own powers, much like a fetish towards the people who believe in him, has special powers. Marx speaks therefore of the capital fetish, next to money and commodity fetish.

Specifically, Marx distinguishes yet

• Constant capital, variable capital and of
• Fixed capital from circulating capital

And various compositions of capital:

• Technical composition of capital
• Value composition of capital Of the latter, the organic composition of capital in the capital also summarily called by Marx only composition of capital, a special case.

Another distinction between different types of capital:

• Industrial capital (profit of industrial capital ). This is where the actual production takes place.
• Commercial capital / commercial capital / mercantile capital (profit of commercial capital ) Here Marx distinguishes two more subspecies:

Commercial capital

From the formula for the circulation of capital

Implies that monetary capital G must pass into the form of commodity-capital W by buying the needed goods from the capitalists, and that, conversely, commodity-capital W ' must be sold to money capital G again ' to be.

It is

The production period, which includes the working time. During working hours, the more value is added. It forms

The circulation or circulation time in which goods W waiting to be turned into money G and vice versa. During this waiting no value is added. In the circulation time is buying and selling of goods, purchase of means of production, selling the products, instead. For the industrial capitalists, it would be beneficial if he could immediately sell after the end of the production process, and begin again the same as money received a new production process. It accomplishes this, at least from a microeconomic point of view, when buying and selling as far as possible transferred to the commercial or merchant's capital. In macroeconomic terms, resulting in a cost savings if the commercial capitalists can perform cost-effective than specialists this business as if every industrial capitalist would have to take care of buying and selling of goods. The merchant's capital has money to buy goods from the industrial capitalists, and on goods that need to be sold to customers. Marx referred to the bound in this function capital ( capital goods or money capital) as

• General store capital

The technical aspects of all the industrial and commercial capital arising during financial transactions, stocks of money, cashing, payment, accounting, use of money stocks for buying and payment of outstanding invoices, the bound in these costs of circulation of capital is the

• Money-dealing capital.

Interest -bearing capital

• Interest -bearing capital as opposed to industrial and commercial capital ( fungierendes capital)

Industrial and commercial capital, which Marx, in contrast to interest-bearing capital as " acting principal " summarizes, are themselves part of the circulation of capital, part of the reproduction process of capital. Interest-bearing capital, however, differs from these forms of capital, since capital is capital as a commodity that is bought and sold. The price of this material is of interest. The use value of interest-bearing capital is in profit, which may give its buyers. The interest rate is part of the created value added in the production process.

• Fictitious capital

With the general rate of profit is also a prevailing rate of interest is emerging. Regular income may, at this rate " capitalized " (see capital value). It is calculated that generates capital to this prevailing interest rate the same income stream. This capital is not directly " real capital " compared to, government bonds, for example, often than not, in business there are indeed real capital, but the value is eg of shares or corporate bonds only in a loose relation to the real capital of the Company (the production ). This capital is described by Marx as " fictitious capital " that exists alongside the real capital. Marx also mentions the opinion of some contemporary economists, according to which even the wages of labor can be capitalized as an income stream. It can be a capital value calculated, which would produce a corresponding pay the income stream at the prevailing interest rate. Marx criticizes this approach, according to which the workers also were some kind of capitalist.

Tendencies of capital

Important tendencies of capital in Marx are the

• Centralization and the
• Corporate concentration

The financial capital was published in 1920 by Rudolf Hilferding in Finance capital, in 1910, studied.

Capital concepts in sociology

But capital is not only a term used in economics. In everyday parlance, it says so in cash or kind property which is usually intended for the circulation of goods. However, in the multidimensional cultural sociology of Pierre Bourdieu, there are several forms of capital. He is of the opinion that the exchange of goods is only a certain type under various possible forms of social exchange. Being capital it generally refers to the resources that are available to people for the enforcement of its purposes, ie the conditions which they bring into the fight on the social fields to their position in the social space. It therefore identifies the following forms of capital: economic capital, cultural capital, social capital and symbolic capital.

Economic Capital is institutionalized by which property rights, for example, according to Bourdieu material wealth, eg the possession of money, means of production, stocks and property. That which thus means also in the conventional sense among asset. Bourdieu believes that economic capital is at the present time still plays an important role, but political and social power is also dependent on other factors. For economic capital alone can no longer guarantee position of power, only in conjunction with the two other forms of capital ( social and cultural capital ) can thus be exercised real power.

The cultural capital Bourdieu is particularly important. For him it is the one capital, which has a human because of its formal and non- formal education, so he understands by this term especially education capital. The cultural capital is inherited by family tradition, is thus passed on within a family to the children. With this, a certain habit is connected. Of course, the " ownership " of cultural capital is also dependent on economic capital, as for example, education has to be financed somehow. Bourdieu distinguishes between different sub- forms of cultural capital:

1 -incorporated cultural capital: With incorporation of the internalization of cultural capital is meant; The appropriation of cultural capital in this case is therefore a process that is enrolled in the culture in the body. Thus, these are cultural skills, and forms of knowledge that are the body's bound, ie education. The time factor plays a major role since the incorporation, which is to take place again and again by each individual, will take time. For example, since every family can not invest the same amount in their children's education, this form of capital promotes social inequalities.

2 objectified cultural capital: According to Bourdieu are objectified cultural capital cultural goods meant, such as paintings or books. The acquisition of such cultural goods is of course closely linked to the economic capital. For example, to purchase a painting, economic capital is required; but initially causes only a change of ownership. Only when you understand the real meaning and the meaning of this painting, one can speak of objectified cultural capital.

3 Institutionalized Cultural Capital: The institutionalization of cultural capital exists in the form of academic titles and education certificates, such as high school, high school, university degree (diploma, master ... ). " The academic title is a testimony to cultural competence, its owner transfers a durable and guaranteed legal conventional value" ( Bourdieu, 1983). Institutionalization of academic title is in turn closely linked to economic capital. During the period of training must first lot of economic capital (and time ) will be invested, but after the acquisition of an educational track can be transformed also into economic capital of this cultural capital, since, inter alia, can be expected with higher incomes.

The third form of capital, which introduces Bourdieu 's social capital. Bourdieu means by that the relationships on which an individual can draw upon. This means that you can take advantage of a permanent network, which consists of more or less institutionalized relationships with other individuals. Thus, social capital is a resource that is based on membership of a group and which offers individuals access to the properties of the social and community life, such as assistance, support, recognition. Social capital is purely immaterial and symbolic, so that Bourdieu refers to this form of capital as symbolic capital. The sociological concept of social capital refers to Pierre Bourdieu (1983), the entirety of the current and potential resources which are linked to the participation in the network of social relations of mutual knowing and acknowledging. In contrast to human capital, the social capital refers not to individuals as such, but on the relationships between them. The concept of social capital has been discussed a lot since then; the main contributors are Robert D. Putnam (1993, 2000), James S. Coleman (1987 ) and Patrick Hunout ( 2003-2004).

The symbolic capital is one of the other three forms of capital parent resource in general. They shall be established by social recognition and acts as prestige or reputation. Institutionalized cultural capital in the form of educational titles is always symbolic capital, as it is recognized by the other individuals of the society. Social capital is always symbolic capital, as it is dependent on recognition, to be used as a means of power. The symbolic capital gives an individual in the broadest sense creditworthiness, which one is entitled by virtue of membership of a particular group. Owners of symbolic capital thus enjoy reputation as well as a certain prestige.

According to Bourdieu, the various forms of capital are mutually convertible and transferable.

Further, not coined by Bourdieu forms of capital ( values ​​as a result of increasing blur) lie in information and links:

• Intellectual capital: sum of what a person or a company knows how to use his knowledge and how quickly you can acquire new knowledge
• Human capital: interpersonal relationships
• Structural capital: the entire systems, procedures and strategies that are developed through experience