Capital is defined as “ All those man-made goods which are used in further production of wealth.” According to Bohm Bawerk, “Capital is the produced means of production.” Capital is one of the three factors of production. The others are land and labor. Goods with the following features are capital goods as opposed to consumer goods or durable goods :
- Goods that can be used in the production of other goods (this is what makes it a factor of production).
- Goods made by humans, in contrast to ‘‘land,’’ which refers to naturally occurring resources such as geographical locations and minerals.
- Goods not used up immediately in the process of production, unlike raw materials or intermediate goods (e.g. machinery).
