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Capital is any wealth, usually in the form of money, used for the purpose of producing more wealth.[1] The major difference between capital and money is the form of circulation. While money is commonly used for buying commodities for personal consumption (C-M-C),[a] capital is money used to generate more money (M-C-M').[2]
References
- ↑ “The simple circulation of commodities – selling in order to buy – is a means of carrying out a purpose unconnected with circulation, namely, the appropriation of use-values, the satisfaction of wants. The circulation of money as capital is, on the contrary, an end in itself, for the expansion of value takes place only within this constantly renewed movement. The circulation of capital has therefore no limits.”
Karl Marx (1867). Capital, vol. I: 'The transformation of money into capital; The general formula for capital'. - ↑ “The simplest form of the circulation of commodities is C-M-C, the transformation of commodities into money, and the change of the money back again into commodities; or selling in order to buy. But alongside of this form we find another specifically different form: M-C-M, the transformation of money into commodities, and the change of commodities back again into money; or buying in order to sell. Money that circulates in the latter manner is thereby transformed into, becomes capital, and is already potentially capital.”
Karl Marx (1867). Capital, vol. I: 'The transformation of money into capital; The general formula for capital'.
Notes
- ↑ An example would be a worker selling his labour power (commodity) in order to receive wages (money) to buy food (commodity), fulfilling the simple circulation of commodities, C-M-C.