For labor it could be an hour of work time. For instance, if one is going to claim that one economy uses more capital (in relation to labor) than another, there must be some common unit for each factor. Symbolic mathematics begets quantification. The new vision thus raised the uses of machinery over the social role of its owners and legitimated profit as the just return to an indispensable contribution. This notion of capital permitted mathematical expression of the “production function,” so that wages and profits could be linked to the respective “marginal products” of each factor. Capital was reframed as a physical item, which paired with labor to produce output. It was the power that capital gave to capitalists, namely the authority to make decisions and to extract surplus from the worker.Įarly in the last century, neoclassical economics dumped this social and political analysis for a mechanical one. But the essence of capital was neither physical nor financial. Capital could be money, it could be machines it could be fixed and it could be variable. What is “capital”? To Karl Marx, it was a social, political, and legal category-the means of control of the means of production by the dominant class.
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