At the macroeconomic level, "the nation's capital stock includes buildings, equipment, software, and inventories during a given year.
[6] Critical analysis of the economists portrayal of the capitalist mode of production as a transhistorical state of affairs distinguishes different forms of capital:[6] Adam Smith defined capital as "that part of man's stock which he expects to afford him revenue".
By contrast, investment, as production to be added to the capital stock, is described as taking place over time ("per year"), thus a flow.
Earlier illustrations often described capital as physical items, such as tools, buildings, and vehicles that are used in the production process.
A capital good lifecycle typically consists of tendering, engineering and procurement, manufacturing, commissioning, maintenance, and (sometimes) decommissioning.
Just like material capital goods, they can require substantial investment, and can also be subject to amortization, depreciation, and divestment.
[16] Capital goods, often called complex products and systems (CoPS), play an important role in today's economy.
If a new business cannot afford to purchase the machines it needs to create a product, for example, it may not be able to compete as effectively in the market.
When a business is struggling, it often puts off such purchases as long as possible, since it does not make sense to spend money on equipment if the company is not around to use it.
Trade-in capital goods is a crucial part of the dynamic relationship between international trade and development.
Building on Marx, and on the theories of the sociologist and philosopher Pierre Bourdieu, scholars have recently argued for the significance of "culinary capital" in the arena of food.
Economist Henry George argued that financial instruments like stocks, bonds, mortgages, promissory notes, or other certificates for transferring wealth is not really capital, because "Their economic value merely represents the power of one class to appropriate the earnings of another" and "their increase or decrease does not affect the sum of wealth in the community".
[18][non-primary source needed] Some thinkers, such as Werner Sombart and Max Weber, locate the concept of capital as originating in double-entry bookkeeping, which is thus a foundational innovation in capitalism, Sombart writing in "Medieval and Modern Commercial Enterprise" that:[19] Karl Marx adds a distinction that is often confused with David Ricardo's.
In Marxian theory, variable capital refers to a capitalist's investment in labor-power, seen as the only source of surplus-value.
On the other hand, constant capital refers to investment in non-human factors of production, such as plant and machinery, which Marx takes to contribute only its own replacement value to the commodities it is used to produce.
Austrian School economist Eugen Boehm von Bawerk maintained that capital intensity was measured by the roundaboutness of production processes.
The Cambridge, UK economists, including Joan Robinson and Piero Sraffa claimed that there is no basis for aggregating the heterogeneous objects that constitute 'capital goods.'