In economics, physical capital or just 'capital' refers to a factor of production (or input into the process of production), such as machinery, buildings, or computers. The production function takes the general form Y=f(K, L), where Y is output, K is capital stock and L is labor. In economic theory, physical capital is one of the three primary factors of production, also known as inputs in the production function. The others are natural resources (including land), and labor — the stock of competences embodied in the labor force. "Physical" is used to distinguish physical capital from human capital (a result of investment in the human agent)) and financial capital. "Physical capital" may also refer to fixed capital, any kind of real or physical asset that is not used up in the production of a product, as distinguished from circulating capital.
Famous quotes containing the words physical and/or capital:
“Adam and Eve, according to the fable, wore the bower before other clothes. Man wanted a home, a place of warmth, or comfort, first of physical warmth, then the warmth of the affections.”
—Henry David Thoreau (1817–1862)
“Industry has operated against the artisan in favor of the idler, and also in favor of capital and against labor. Any mechanical invention whatsoever has been more harmful to humanity than a century of war.”
—Rémy De Gourmont (1858–1915)