Economic essays

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Monograph

Identifikator:: 1753623200

URN:: urn:nbn:de:zbw-retromon-136107

Document type:: Monograph

Title:: Economic essays

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1927

Scope:: viii, 368 S.; Ill., graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: The relation between statics and dynamics / John Maurice Clark

Collection:: Economics Books

THE RELATION BETWEEN STATICS AND DYNAMICS 65 12. The Concept of Capital The shift from the static to the dynamic point of view has quite far-reaching effects on many of the fundamental concepts, of which we may take, as examples, the concepts of capital and of production. The term capital really applies to a rather large family of ideas, as can be easily seen. Some writers have attached the term to one of these ideas and some to another, and dynamics must solve their controversies by including all these ideas as parts of the process, or institution, to which its studies are directed. And certain things which no one has included in the definition of capital are still such vital prerequisites that they become essential parts of the picture which the term must convey to anyone studying it from the dynamic standpoint, as a process or institution. One of the essential starting-points is a productive idea. Ideas, knowledge, habits and customs of the shop and market-place, constitute a vitally important form of social capital: possibly the most vital form. Without it, nothing else can have value. It is in the main a common heritage, but differential advantages are elements of private wealth, and the whole is far from being a “free good.” Of joint importance with this is the “waiting” or abstinence of the original saver. And some writers make “waiting,” rather than physical or financial capital, the third great factor of pro- duction, using it for the purpose usually assigned to capital in the general theory of distribution. As the result of waiting, there is a fund of purchasing power destined to investment. Related to this is a fund of lending and investing power in the hands of financial institutions. Being invested, this becomes a quantity of purchasing power in the hands of an entrepreneur who is looking to spend it on productive assets. All these are forms which capital takes, and while only a part of capital is in any of these forms at any one time, it is that peculiarly mobile part by which marginal adjustments are typically made, and thus holds a particularly strategic position. Another obviously essential part of the process is the existence of supplies of “capital goods” or productive assets which the entrepreneur wishes to buy and use. These are, of course, capital in the enterprises that make them; but their availability condi- tions the dynamic behavior of capital in the industries which buy

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