The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Capital as a Factor of Production

  • K. H. Hennings
Reference work entry


The role played by capital in production has frequently been in dispute: ‘When economists reach agreement on the theory of capital they will shortly reach agreement on everything else’ (Bliss 1975, p. vii). Disagreements are due as much to divergent definitions, or uses, of the term ‘capital’ as to different views about what should be considered a factor of production. But above all there have been differing views about whether, and in what sense, capital can be said to be productive. In particular, there has been disagreement about whether it can be said that a more capital-intensive production method is more productive than a less capital-intensive one. Preclassical, classical, neoclassical and neo-neoclassical economic theory have given different answers to these questions. These will be considered below, but the discussion will be confined to the role of capital as a factor of production. It should be noted in particular that the problem why capital earns its owner an income depends as much on the social institution of ownership and the institutional organization of production as on the role capital plays in production. It is only the latter, in a sense technical, problem which will be addressed here.

This is a preview of subscription content, log in to check access.


  1. Arrow, K.J., and F.H. Hahn. 1971. General competitive analysis. San Francisco: Oliver & Boyd.Google Scholar
  2. Assel, H.G. 1953. Der Kapitalbegriff und die Kapitallehre bis zum Beginn der Neuzeit. Wirtschaft und Gesellung. Festschrift für Hans Proesler zu seinem 65. Geburtstag. Erlangen.Google Scholar
  3. Barbon, N. 1690. A discourse on trade. By N.B.M.D. London: Milbourn for the Author.Google Scholar
  4. Blaug, M. 1974. The Cambridge revolution: Success or failure? London: Institute of Economic Affairs.Google Scholar
  5. Bliss, C.J. 1975. Capital theory and the distribution of income. Amsterdam and Oxford: North-Holland Publishing Company. Innsbruck: Wagner. Trans. as The positive theory of capital, London: Macmillan, 1891.Google Scholar
  6. Bowley, M. 1975. Some aspects of the treatment of capital in ‘The Wealth of Nations’. In Essays on Adam Smith, ed. A.S. Skinner and T. Wilson. Oxford: Clarendon Press.Google Scholar
  7. Cantillon, R. 1755. Essai sur la nature du commerce en général. Londres: Gyles. Edited with an English translation by Henry Higgs, London: Cass, 1959.Google Scholar
  8. Cassel, G. 1918. Theoretische Sozialökonomie. Leipzig: Deichert. Trans. as Theory of social economy, London: Fischer Unwin, 1923.Google Scholar
  9. Champernowne, D.G. 1954. The production function and the theory of capital: A comment. Review of Economic Studies 21: 112–135.CrossRefGoogle Scholar
  10. Clark, J.B. 1899. The distribution of wealth. New York: Macmillan.Google Scholar
  11. Cobb, C.W., and P.H. Douglas. 1928. A theory of production. American Economic Review 18: 139–165.Google Scholar
  12. Corry, B.A. 1962. Money, saving and investment in English economics 1800–1850. London: Macmillan.Google Scholar
  13. Duménil, G., and D. Lévy. 1985. The classicals and the neoclassicals: A rejoinder to Frank Hahn. Cambridge Journal of Economics 9: 327–345.CrossRefGoogle Scholar
  14. Eltis, W. 1984. The classical theory of economic growth. London: Macmillan.CrossRefGoogle Scholar
  15. Fisher, I. 1906. The nature of capital and income. New York: Macmillan.Google Scholar
  16. Fisher, I. 1907. The rate of interest. New York: Macmillan.Google Scholar
  17. Fisher, I. 1930. The theory of interest. New York: Macmillan.Google Scholar
  18. Garegnani, P. 1960. Il capitale nelle teorie della distribuzione. Milano: Guiffrè. Trans. as Le capital dans les théories de la répartition, Paris: Presses Universitaires de Grenoble et François Maspero, 1980.Google Scholar
  19. Garegnani, P. 1970. Heterogeneous capital, the production function and the theory of distribution. Review of Economic Studies 37: 407–436.CrossRefGoogle Scholar
  20. Garegnani, P. 1976. On a change in the notion of equilibrium in recent work on value and distribution. In Essays in modern capital theory, ed. M. Brown, K. Sato, and P. Zarembka. Amsterdam: North-Holland.Google Scholar
  21. Green, H.A.J. 1964. Aggregation in economic analysis. Princeton: Princeton University Press.CrossRefGoogle Scholar
  22. Hahn, F.H. 1982. The neo-Ricardians. Cambridge Journal of Economics 6: 353–374.CrossRefGoogle Scholar
  23. Harcourt, G.C. 1972. Some Cambridge controversies in the theory of capital. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  24. Hennings, K.H. 1985. The exchange paradigm and the theory of production and distribution. In Foundations of economics, ed. M. Baranzini and R. Scazzieri. Oxford: Blackwell.Google Scholar
  25. Hermann, F.B.W. 1832. Staatswirthschaftliche Untersuchungen. Munich: Weber.Google Scholar
  26. Hicks, J.R. 1932. The theory of wages, 1963. London: Macmillan.Google Scholar
  27. Hicks, J.R. 1939. Value and capital. Oxford: Clarendon Press.Google Scholar
  28. Hicks, J.R. 1974. Capital controversies, ancient and modern. American Economic Review 64, May, 307–16. Reprinted in J.R. Hicks, Economic Perspectives, Oxford: Clarendon Press, 1977.Google Scholar
  29. Hodgskin, T. 1827. Popular political economy. London: Tait and Wait.Google Scholar
  30. Hohoff, W. 1819–1819. Zur Geschichte des Wortes und Begriffes ‘Kapital’. Vierteljahrshefte für Sozial-und Wirtschaftsgeschichte 14, 554–74 and 15, 281–310.Google Scholar
  31. Hume, D. 1752. Of interest. Political discourses. Edinburgh: Fleming. Reprinted in D. Hume, Essays moral, political and literary, Oxford: Oxford University Press, 1963.Google Scholar
  32. Jevons, W.S. 1871. The theory of political economy. London: Macmillan.Google Scholar
  33. Knight, F.H. 1933. Capitalistic production, time and the rate of return. In Economic essays in honour of Gustav Cassel, London: George Allen & Unwin.Google Scholar
  34. Knight, F.H. 1934. Capital, time, and the interest rate. Economica, NS 1, August, 257–86.Google Scholar
  35. Knight, F.H. 1935. Professor Hayek and the theory of investment. Economic Journal 45: 75–94.CrossRefGoogle Scholar
  36. Knight, F.H. 1936. The quantity of capital and the rate of interest. Journal of Political Economy 44, August, 433–63, and October, 612–42.Google Scholar
  37. Lauderdale, J. Maitland, 8th Earl of. 1804. An inquiry into the nature and origin of public wealth. Edinburgh: Constable.Google Scholar
  38. Longfield, M. 1834. Lectures on political economy. Dublin: Milliken.Google Scholar
  39. Marshall, A. 1890. Principles of economics. London: Macmillan.Google Scholar
  40. Marx, K. 1867–1894. Das Kapital. 3 vols, Hamburg: Meisner. Trans. as Capital, 3 vols, Chicago: Kerr, 1906–9.Google Scholar
  41. Menger, C. 1888. Zur Theorie des Kapitals. Jahrbücher für Nationalökonomie und Statistik, NF 17(51): 1–49.Google Scholar
  42. Mill, J. 1821. Elements of political economy. London: Baldwin, Cradock and Joy.Google Scholar
  43. Mill, J.S. 1848. Principles of political economy. London: Longmans, Green.Google Scholar
  44. Nuti, D.M. 1970. Capitalism, socialism, and steady growth. Economic Journal 80: 32–57.CrossRefGoogle Scholar
  45. Pareto, V. 1909. Manuel d’conomie politique. Paris: Giard & Brière. Trans. as Manual of political economy, London: Macmillan, 1972.Google Scholar
  46. Petty, W. 1662. A treatise of taxes and contributions. London: Brooke. Reprinted in The economic writings of Sir William Petty, ed. C.H. Hull, Cambridge: Cambridge University Press, 1899, Vol. 1.Google Scholar
  47. Pigou, A.C. 1935. Net income and capital depletion. Economic Journal 45: 235–241.CrossRefGoogle Scholar
  48. Quesnay, F. 1766a. (Premier) Dialogue entre Mr. H. et Mr. N. Journal d’Agriculture, du Commerce et des Finances, June, 61–109. Reprinted in Physiocrates, ed. E. Daire, Paris: Guillaumin, 1846.Google Scholar
  49. Quesnay, F. 1766b. Observations sur l’intérêt de l’argent (par M. Niasque). Journal d’Agriculture, du Commerce et des Finances, June, 151–71.Google Scholar
  50. Rae, J. 1834. Statement of some new principles of the subject of political economy. Boston: Hilliard Gray & Co.Google Scholar
  51. Ricardo, D. 1817. On the principles of political economy and taxation. London: Murray. In The works and correspondence of David Ricardo, ed. P. Sraffa, Cambridge: Cambridge University Press 1951, vol. 1.Google Scholar
  52. Robinson, J. 1954. The production function and the theory of capital. Review of economic studies 21, 81–106. Reprinted in Collected economic papers of Joan Robinson, Vol. II, Oxford: Blackwell.Google Scholar
  53. Robinson, J. 1956. The accumulation of capital. London: Macmillan.Google Scholar
  54. Salin, E. 1930. Kapitalbegriff und Kapitallehre von der Antike zu den Physiokraten Vierteljahrsschrift für Sozial- und Wirtschaftsgeschichte 23, 401–40.Google Scholar
  55. Samuelson, P.A. 1947. Foundations of economic analysis, Harvard Economic Studies, vol. 80. Cambridge, MA: Harvard University Press.Google Scholar
  56. Samuelson, P.A. 1948. Economics: An introductory analysis. New York: McGraw Hill.Google Scholar
  57. Say, J.B. 1814. Traité d’économie politique, 2nd ed. Paris: Deterville.Google Scholar
  58. Schneider, E. 1934. Theorie der Produktion. Vienna: Springer.CrossRefGoogle Scholar
  59. Schumpeter, J.A. 1911. Theorie der wirtschaftlichen Entwicklung. Leipzig: Duncker & Humblot.Google Scholar
  60. Senior, N.W. 1836. (An outline of the science of) political economy. London: Griffin.Google Scholar
  61. Smith, A. 1776. An inquiry into the nature and causes of the wealth of nations. London: Strahan and Cadell. Ed. R.H. Campbell and A.S. Skinner with W.B. Todd, The Glasgow Edition of the Works and Correspondence of Adam Smith, Vol. II, Oxford: Clarendon Press, 1976.Google Scholar
  62. Sraffa, P. 1960. Production of commodities by means of commodities. Cambridge: Cambridge University Press.Google Scholar
  63. Stigler, G.J. 1941. Production and distribution theories. New York: Macmillan.Google Scholar
  64. Swan, T.W. 1956. Economic growth and capital accumulation. Economic Record 32: 334–361.CrossRefGoogle Scholar
  65. Thünen, J.H. von 1850. Der isolierte Staat. Theil II, 1. Abteilung: Der naturgemässe Arbeitslohn und dessen Verhältnis zum Zinsfuss und zur Landrente. Rostock: Leopold. Trans. by B.W. Dempsey as The Frontier Wage, Chicago: Loyola University Press, 1960.Google Scholar
  66. Turgot, A.R.J. 1770. Réflexions sur la formation et la distribution des richesses. Ephémérides du Citoyen, November and December 1769, January 1770. Trans. as ‘Reflections on the formation and distribution of wealth’ in Turgot on progress, sociology and economics, ed. R.L. Meek, Cambridge: Cambridge University Press, 1973.Google Scholar
  67. Uzawa, H. 1958. A note on the Menger–Wieser theory of imputation. Zeitschrift für Nationalökonomie 18: 318–334.CrossRefGoogle Scholar
  68. Viner, J. 1930. Cost curves and supply curves. Zeitschrift für Nationalökonomie 3: 23–46.CrossRefGoogle Scholar
  69. von Hayek, F.A. 1936. The mythology of capital. Quarterly Journal of Economics 50: 199–228.CrossRefGoogle Scholar
  70. von Hayek, F.A. 1940. The pure theory of capital. London: Routledge & Kegan Paul.Google Scholar
  71. von Stackelberg, H. 1932. Grundlagen einer reinen Kostentheorie. Vienna: Springer.Google Scholar
  72. von Strigl, R. 1934. Kapital und Produktion. Vienna: Springer.CrossRefGoogle Scholar
  73. Walras, L. 1874–1877. Eléments d’économie politique pure. Lausanne: Corbaz. Trans. as Elements of pure economics, London: George Allen 1954.Google Scholar
  74. Wicksell, K. 1893. Über Wert, Kapital und Rente. Jena: Fischer. Trans. as Value, capital and rent, London: George Allen & Unwin, 1854.Google Scholar
  75. Wicksell, K. 1901. Föreläsningar i Nationalekonomi, Första Delen: Teoretisk Nationalekonomi. Lund: Berlingska Boktryckeriet. Trans. as Lectures on political economy, vol. 1: General Theory, London: Routledge, 1934.Google Scholar
  76. Wicksteed, P.H. 1894. An essay on the co-ordination of the laws of distribution. London: Macmillan.Google Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • K. H. Hennings
    • 1
  1. 1.