Physical Capital
Physical capital is a term used in economics to refer to the tangible assets that are used to produce goods and services. It is one of the three main factors of production, along with human capital and natural capital. Physical capital includes buildings, machinery, tools, and other equipment that are used to produce goods and services. It is also known as fixed capital, as it is not consumed in the production process and can be used over and over again.
History of Physical Capital
The concept of physical capital has been around since the early days of economics. In the 18th century, Adam Smith wrote about the importance of physical capital in his book The Wealth of Nations. He argued that physical capital was essential for economic growth and development. In the 19th century, Karl Marx wrote about the role of physical capital in the production process. He argued that physical capital was a form of capital that was used to exploit workers and increase profits.
In the 20th century, economists began to focus more on the role of physical capital in economic growth. They argued that physical capital was essential for economic development, as it allowed for the production of more goods and services. This led to the development of the concept of total factor productivity, which measures the efficiency of the production process.
Table of Comparisons
| Factor | Physical Capital | Human Capital | Natural Capital |
|---|---|---|---|
| Type | Tangible Assets | Knowledge and Skills | Natural Resources |
| Role | Production of Goods and Services | Innovation and Creativity | Provides Resources for Production |
Summary
Physical capital is a term used in economics to refer to the tangible assets that are used to produce goods and services. It is one of the three main factors of production, along with human capital and natural capital. Physical capital includes buildings, machinery, tools, and other equipment that are used to produce goods and services. For more information about physical capital, you can visit websites such as Investopedia, The Balance, and Investing.com.
See Also
- Human Capital
- Natural Capital
- Total Factor Productivity
- Capital Accumulation
- Capital Investment
- Capital Stock
- Capital Structure
- Capital Expenditure
- Capital Intensity
- Capital Goods
