20 Examples of Capital Assets

With the name of capital everyone is known goods that in the productive process are destined to the combination with other production factors in such a way as to obtain final goods for consumption.

The capital good constitutes a form of capital, which is the resource from which some people are capable of transforming a series of goods that have no value for consumption (or have it to a certain extent), in final goods that do have it (or have it to a much greater extent than the individual combination of factors). For example: a sewing machine, a hammer, a drill.

The development of capital goods is one of the most important phenomena of the capitalist mode of production, and the fundamental subdivision that Karl Marx, the main critic of it, elaborated on capitalism separates people between those who are owners of capital goods and those who are not: in the productive process, the latter only have their power of job. Capital goods that allow the subsequent elaboration of consumer goods, are produced by the

heavy industry.
Capital good is defined by taking a product (in some cases a raw material of nature, in other cases an intermediate good also elaborated) and transform it into another with different characteristics, which It is usually called a consumer good but eventually it could be another capital good, since obviously some production process determines them. Consumer goods are the last link in the productive chain (produced by the light industry).

In use, capital goods do not always remain the same but, on the contrary, suffer a wear process called amortization, for which they lose a certain value: the production process should not only be enough to compensate for the difference between the value of final goods and raw materials, but must be added compensation for the loss of capital value during the process.

The function of the capital good is, through the productive process, to transform money into more money, which is the equivalent that happens with money investments: This is why the money that receives an interest rate gain is also called capital.

The way in which the capital good is generated is usually easily synthesized through an example, that of the lonely man on the island who he spends his days jumping and lowering 10 fruits from the trees a day, until a week is spent building a ladder and then he can go down 50 per day.

In the aggregate, the synthesis is that of total of what is produced by a society, a part of consumption must be given up if capital goods are to be obtained, which in the future will mean a greater product and then greater potential for consumption (and for the construction of capital goods). This development of capital goods (as well as other forms of capital) is called investment. China is one of the countries in the world with the highest percentage of the product destined for investment, with a fraction close to 50%.

Examples of capital goods