1. Makes the meaning of the noun "capital" unequivocal.
In this sense, capital contributions are made solely by savers, in the sense specified in the previous chapter: individuals and private associations with a non-commercial purpose, exclusively.
2. One implication of this unequivocal definition of capital is also an unequivocal definition of credit.
Let us only call credit financing other than a capital contribution. Later in this chapter, the distinction between capital and quasi-capital leads to the completion of the definition of credit: other than a capital or quasi-capital contribution.
3. "It would be of great advantage to have at least two different words to designate capital depending on whether it is in an active or passive position."
Paul Fabra remarked on this in Various Meanings of the Word "Capital", second appendix to chapter 5 of Refounding Political Economy. "Active position" means: part or all of the investment stock, or asset. "Passive position" means: part or all of the financing stock, or liabilities. However, despite its name, liabilities are economically essential, for two peremptory reasons: 1) Financing is essential for any investment. 2) Inappropriate financing structures lead to exponential over-indebtedness.
The first double-entry accounts were those of customers who started with a duty, in the "Debit" column, after which the settlement is recorded in the "Credit" column. Then came the balance sheet invented a century later, on the side of the inventory accounts whose balance is debit (a customer owes, debit balance), then mechanically took position to the left of the Liabilities, on the side of the inventory accounts whose balance is credit (a supplier has made credit, credit balance).
5. The "Credit | Debit" order is economically more relevant in languages that are written from left to right and from top to bottom.
If this order is completely declined, the "passive" positions (financing) are stated before the "active" positions (investments) – before: above or in the left column. It is economically more relevant.
6. In an enterprise, the most capital form of capital is the financial one.
Whether this permanent financing is contributed in cash, in kind (land, buildings, machinery, goodwill), or in industry (patents, know-how) makes no difference. The objection that this capital is 'merely' financial does not hold. The enterprise is the only institution that exists solely through and for the practice of economic exchanges. It therefore exists solely through and for the financial flows between itself and its suppliers of every kind (including contributors of capital and wage earners) on the one hand, and its customers (who are often or exclusively other enterprises) on the other. Even if all of this were conducted entirely through barter, these flows would retain their financial reality through the unit of value used to account for them — and then to determine whether the enterprise preserves or erodes the savings placed in the capital it operates