ABSTRACT
Capital is the root and source of both the terms and the meanings of “capitalist” and “capitalism.” Capital is also a concept. It is thus important to understand “capital” and the relation of “capital” to “capitalist” and “capitalism.” While it may appear obvious, it is not because “capital” has multiple meanings.
In 1906, Fisher wrote “Capital has been so variously defined, that it may be doubtful whether it have any generally received meaning. In consequence, almost every year there appears some new attempt to settle the disputed conception, but, unfortunately, no authoritative result has as yet followed these attempts.” Three years later von Mises added, “The views of scholars on the definition of capital are more divergent than their views on any other point in economics.”
In this chapter, I review the different types and definitions of capital, meaning the different ways in which the term is used, misused, confused, and abused. It is perhaps strange to think of a word being misused, but that is exactly what frequently occurs in economics, sociology, history, and accounting research. Researchers in economics, including Nobel Prize winners in economics, frequently use the term “capital” carelessly to mean one thing, when it actually means something else. This in turn leads to confusion in what is meant by capitalist and capitalism.
