Capital Theory

Discipline: Economics

Developed over a period of 250 years by many economists ranging from Adam Smith (1723-1790) to Karl Marx (1818-1883), capital theory analyzes links among the theories of production, growth, value and distribution to explain why capital produces a return that keeps capital intact yet yields interest or a profit which is permanent.

Classical economists interpreted capital as raw materials and the wages fund; Marxist economists saw capital as a social mode of production; the Austrian school maintained that time was crucial to the concept of capital.

The Cambridge view is given under cambridge capital controversies.

C J Bliss, Capital Theory and the Distribution of Income (New York, 1975)
H G Harcourt, Some Cambridge Controversies in the Theory of Capital (Cambridge, 1972)


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