ABSTRACT
To place the concepts of financial capital vis-à-vis production capital and demarking the two, the historical roots of the economic concept of capital are traced out. Juggling with the twin concepts, an intriguing confusion is often seen in economic literature. The fund concept, a forerunner of the recent emergence of the concept of financial capital, was found in the early writings of Barbon (1690), Cantillon (1755), Quesnay (17662), and Turgot (1774). The beginning of the industrial revolution introducing industrial production technology had an impact on the economic concept of capital by refining it in physical dimensions of produced means of production. The classical writers considered capital as both fund (money) capital and physical capital, sometimes with a confusing juxtaposition of the two concepts. In Marx’s concept both the fund and physical concepts of capital were inherent. Later, with the rapid industrialisation in the West, the focus shifted singularly on physical capital or the capital goods and the concept of fund capital went into oblivion in neoclassical economics. In view of the elusiveness of the concept of capital, a dichotomy and a link between the twin concepts are now needed to understand the accumulation of financial capital.
