Putting Capitalism Back into Capital

21 Pages Posted: 3 Nov 2015

See all articles by Peter Lewin

Peter Lewin

University of Texas at Dallas - School of Management - Department of Finance & Managerial Economics

Nicolas Cachanosky

Metropolitan State University of Denver; American Institute for Economic Research

Date Written: November 2, 2015

Abstract

We agree with the recommendations of Hodgson (2014) and Braun (2015) to shift the focus away from capital as physical production-goods back to the common-sense and historical understanding of capital as money-borrowed for the purpose of acquiring productive resources to produce value. Much controversy, obscurity and confusion might have been avoided with this focus. The colloquial understanding of capital as financial-capital is to preferred to thinking of capital as a collection of physical things. A consideration of the role of time in production brings one to the realization that capital is the result of a process of evaluation, the result of ‘capital-accounting’. It is the ability to use capital-accounting that is in large part responsible for the phenomenal success of capitalism. Productive physical resources are all capital-goods, or preferably production-goods. They are different types of production-goods, human or non-human, and constitute a stock of potential value over time.

Keywords: capitalism, duration, production-function, capital-controversies, capital-as-finance

JEL Classification: B53, E23, E30

Suggested Citation

Lewin, Peter and Cachanosky, Nicolas, Putting Capitalism Back into Capital (November 2, 2015). Available at SSRN: https://ssrn.com/abstract=2685404 or http://dx.doi.org/10.2139/ssrn.2685404

Peter Lewin

University of Texas at Dallas - School of Management - Department of Finance & Managerial Economics ( email )

2601 North Floyd Road
P.O. Box 830688
Richardson, TX 75083
United States

Nicolas Cachanosky (Contact Author)

Metropolitan State University of Denver ( email )

Student Success Building
890 Auraria Pkwy #310
Denver, CO 80217
United States

HOME PAGE: http://www.ncachanosky.edu

American Institute for Economic Research

PO Box 1000
Great Barrington, MA 01230
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
59
Abstract Views
443
rank
355,158
PlumX Metrics