Capital

In Supereconomics, capital is anything that creates value through human effort.

Capital + Effort = Value

This is opposed to finished or consumable products or services which represent the value itself.

Modern Economics defines capital as property, machines, money, and equipment that produces goods and services.

However, Supereconomics capital is a bit different that it inclues the skill, personal attributes, relationships, name, reputation, and other non-physical things.

• Capital in Economics is material and physical
• Capital in Supereconomics can be material or immaterial

Two Types of Capital

There are 2 types of capital:

1. Fixed Capital

This yields a revenue without changing owners or circulating any further. Examples are:

• land improvements
• useful machines
• beautiful voice
• good reputation

2. Circulating Capital

This is employed in raising, manufacturing, or buying goods and selling them again. A circulating capital yields no revenue to its employer while it remains with him.

For example:

• the goods in the store give no revenue while they are in the store unsold
• a bank’s monetary reserves does not generate revenue for the bank
  • This is why banks want to have minimum reserves

Four Employments of Capital

The force of capital leads to the use and employment of capital.

1. Extraction

This is the extraction of raw materials for use and consumption.

This includes agriculture wherein the inorganic nutrients from the soil are extracted into organic elements that are useful for industry and human consumption.

2. Manufacturing

This is the processing of the raw materials for immediate use and consumption.

3. Wholesale

This is bringing those finished or processed goods from where they abound to where they are lacking.

This includes Logistics and Storage.

4. Retail

This is the dividing the portions of raw materials or finished goods into small parcels for those who want them.

This includes Distribution such as last mile deliveries.

Each of these four methods is needed by the other three.

Which capitals replace which capital?

The retailer’s capital replaces, with profits, the wholesaler’s capital.

The wholesaler’s capital replaces, with profits, the capitals of the farmers and manufacturers he buys from.

Part of the capital of the master manufacturer is employed as a fixed capital in the instruments of his trade.

The farmer’s capital mobilizes the most amount of productive labour.