Skip to main content

Accumulation of Capital

  • 199 Accesses

Abstract

The accumulation of capital has been analysed by economists in two very different ways. The most common has been to see it as the expansion of the productive potential of an economy with a given technology, which may be improved in the process. But it has also been understood as the outright transformation of the technical and productive organization of the economy. The first approach leads to analyses based on the idea of steady growth, subsuming the concerns of the second under the heading of ‘technical progress’. Such an approach rests on a conception of capital as productive goods or, in more sophisticated versions, as a fund providing command over productive goods. This is not wrong; it is merely inadequate. Capital must also be understood as a way of organizing production and economic activity, so that the accumulation of capital is the extension of this form of organization into areas in which production, exchange and distribution were governed by other rules. This conception of capital emphasizes the importance of organization; so understood, technology and engineering are not abstract science, they are ways of organizing production, and so have an institutional dimension. Accumulation then implies the transformation of institutions as well as production, and steady growth is not applicable (except perhaps as a benchmark).

This is a preview of subscription content, access via your institution.

Buying options

Chapter
USD   29.95
Price excludes VAT (USA)
  • DOI: 10.1057/978-1-349-95189-5_223
  • Chapter length: 9 pages
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
eBook
USD   7,499.99
Price excludes VAT (USA)
  • ISBN: 978-1-349-95189-5
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
Hardcover Book
USD   8,499.99
Price excludes VAT (USA)

References

  • Domar, E.D. 1946. Capital expansion, rate of growth and employment. Econometrica 14: 137–147.

    CrossRef  Google Scholar 

  • Harrod, R.F. 1939. An essay in dynamic theory. Economic Journal 49: 14–33.

    CrossRef  Google Scholar 

  • Hicks, J. 1965. Capital and growth. Oxford: Oxford University Press.

    Google Scholar 

  • Kaldor, N. 1956. Alternative theories of distribution. Review of Economic Studies 23: 83–100.

    CrossRef  Google Scholar 

  • Keynes, J.M. 1936. The general theory of employment, interest and money. London: Macmillan.

    Google Scholar 

  • Laibman, D., and E.J. Nell. 1977. Reswitching, Wickell effects and the neo-classical production function. American Economic Review 67: 878–888.

    Google Scholar 

  • Lowe, A. 1976. The path of economic growth. New York: Cambridge University Press.

    CrossRef  Google Scholar 

  • Marx, K. 1867–1894. Capital, vols. I, II, III. Moscow: Progress Publishers, n.d.

    Google Scholar 

  • Nell, E.J. 1982. Growth, distribution and inflation. Journal of Post-Keynesian Economics 5: 104–113.

    CrossRef  Google Scholar 

  • Nell, E.J. 1986. Priority and public spending. London: George Allen & Unwin.

    Google Scholar 

  • Ricardo, D. 1817. On the principles of political economy and taxation. Vol. I of The works and correspondence of David Ricardo, ed. P. Sraffa. Cambridge: Cambridge University Press, 1951.

    Google Scholar 

  • Robinson, J. 1956. The accumulation of capital. London: Macmillan.

    Google Scholar 

  • Robinson, J. 1962. Essays in the theory of economic growth. London: Macmillan.

    CrossRef  Google Scholar 

  • Solow, R. 1956. A contribution to the theory of economic growth. Quarterly Journal of Economics 70: 65–94.

    CrossRef  Google Scholar 

  • Solow, R. 1962. Substitution and fixed proportions in the theory of capital. Review of Economic Studies 29: 207–218.

    CrossRef  Google Scholar 

  • Sraffa, P. 1960. Production of commodities by means of commodities. Cambridge: Cambridge University Press.

    Google Scholar 

  • Uzawa, H. 1961. On a two-sector model of economic growth. Review of Economic Studies 24: 40–47.

    CrossRef  Google Scholar 

  • Von Neumann, J. 1937. A model of general economic equilibrium. Review of Economic Studies 13(1945–6): 1–9.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Editor information

Editors and Affiliations

Copyright information

© 2018 Macmillan Publishers Ltd.

About this entry

Verify currency and authenticity via CrossMark

Cite this entry

Nell, E.J. (2018). Accumulation of Capital. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_223

Download citation