Monday, May 01, 2006

Capital is a Part of Every Thing in the Economy!

When a tool is used or when a fork is used it is true that we forget that these are capital goods. They represent intermediary goods, goods that facilitate. They are now so well integrated into our lives that they are assumed to be final goods themselves, appearing side-by-side with our other final goods.

The important point that I am making here is that capital is infused into every good that we use or consume. The distinction of being a capital good becomes one of relativity. Some intermediary goods are obviously capital goods since they are early in the production cycle.

Capital is so vital an element in the economy that it is simply inseparable. It is like trying to separate you from your intellect or from your personality or from your soul! This is the premise of the Divine Economy Model ©.

Those who deride capitalism may have a good reason since they do not make the distinction between capital and the corruption that comes from intervention. Corruptions such as corporate and political cronyism exist in a system of intervention. These are the parasites on the capital in the economy. As parasites they are seen closely associated with capital but they are an affliction not an outcome.

Capital exists because people have a vision for the future. Capital is what fulfills that vision. Capital goods are the steps taken in that direction. It is not critical that we recognize a fork as a capital good. What is critical is that we stand tall and boldly counter the biases about capital that are being promulgated in this age of economic ignorance.

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