Capital can be defined as “the part of a man’s stock he expects to afford him revenue. Capital is distinct from land in that capital can be increased by human labour. Capital consists of any produced thing that can enhance a person’s power to perform economically useful work –a stone or an arrow is capital for a caveman,who can use it as hunting insturment and roads are capital for inhabitants of a city.

1. Department of Geography
TOPIC : “Capital”
Apoorva Mathur
&
Dr.Kuldeep Yadav

2. CONTENTS:

3. INTRODUCTION
• Capital can be defined as “the part of a man’s stock he
expects to afford him revenue.
• Capital is distinct from land in that capital can be
increased by human labour.
• Capital consists of any produced thing that can
enhance a person’s power to perform economically
useful work –a stone or an arrow is capital for a
caveman,who can use it as hunting insturment and
roads are capital for inhabitants of a city.

4. • Capital is an input in the production function.
• In Marxian economy, capital is money used to
buy something only in order to sell it again to
realize a financial profit.
• How a capital good is maintained or returned
to its pre-production state varies with type of
capital involved.

5. WORKING OF CAPITAL

6. FORMS OF CAPITAL
FIXED AND CIRCULATING CAPITAL
PRODUCTION AND FINANCIAL CAPITAL
INDIVIDUAL AND SOCIAL CAPITAL
SPIRITUAL AND NATURAL CAPITAL
INFRASTRUCTURAL CAPITAL
PERMANENT CAPITAL

7. CIRCUITS OF CAPITAL
Marx identified three Circuits of Capital:
• Commodity Capital: C' – M' – C', in which the surplus value
contains in products is realised in money form by the Commercial
capitalist, and then reinvested in more commodities.
• Money Capital: M – C – P (MP+L) – C' – M' in which Money is
invested in commodities in order to realise surplus value returned to
the Finance capitalist in the form of money with interest, and
• Productive Capital: P (MP+L) – C' – M' – C’– P', in which the
owner of means of production and labour produces a product and
puts it into the market in order to realise the surplus value, which is
re-invested in means of production and labour.

8. • As capital circulates and passes through
the production process, it
undergoes metamorphosis M – C – M’and
passes between the three interconnecting
circuits, each of which is the home of a
sector of the total social capital.
• The successful progress of production of
surplus value and its realisation in the form
of increased money is dependent on the
supply of suitable commodities for
the reproduction of labour power and
creation of means of production in the
market. Thus all three circuits and all three
sections of the social capital mutually
support one another.