Variable: Capital

Capital can have a range of meanings. A narrow definition treats capital as the "durable physical goods produced in the economic system to be used for the production of other goods and services" (Eckaus 1972).

In the human ecosystem framework, capital is defined as the economic instruments of production; that is, financial resources (money or credit supply), resource values (such as underground oil) , and the human ability to manipulate these (human capital).

These instruments of production provide the basic materials for producing (with labor inputs) commodities. Capital is a critical socioeconomic resource; its influence over production, consumption, transformation of natural resources, and creation of by-products (such as pollution) is significant.

Capital often is measured in dollar values, either for commodities produced or the stock of capital on hand. Changes in capital, either in its mix of sources (a new processing plant or mill) or output (a reduction in profits earned by the plant or mill), can alter social institutions as well as hierarchies of wealth, class identities, and other features of the human social system.

 

 

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