Chapter 5 – Capital

In economic science and policy, the term "capital"—used to mean capital, a capital, or some capital—seems at first glance to pose few problems. Upon closer examination, a consistent and unambiguous definition emerges that clarifies its role in the economic landscape, including the modalities of ownership of enterprises (see negotiable versus returnable shares).

Full employment and the avoidance of financial crises depend more than any other magnitude on capital as permanent financing of enterprises. This leads to a system of weights and measures that provides controlling and emancipatory instruments.

Propositions

• 5.1 Let us reserve the term capital for financing that is, strictly speaking, permanent and provided directly to an enterprise by one or more savers.
• 5.2 Strictly speaking, "permanent" is that which lasts until the end.
• 5.3 A univocal use of the noun capital is both possible and desirable.
• 5.4 Let us call Quasi-capital permanent corporate financing that reaches the enterprise other than directly from a saver.
• 5.5 Credit and capital are opposites in many respects.
• 5.6 An enterprise's equity ratio is more important than the amount of its capital.
• 5.7 In an Objective Political Economy, capital is exclusively that of a commercial enterprise.
• 5.8 Let us call refundable shares those whose only method of liquidation is their redemption by the enterprise that issued them.
• 5.9 Let us call Negotiable shares those whose most common method of liquidation is their sale to a buyer.
• 5.10 Capital standards are necessary for the permanent consolidation of the market economy.
• 5.11 The four basic economic regimes