Capital accumulation

Capital accumulation refers to the generation of wealth by means of investment in capital assets. The term is often used in economic theories, particularly those related to Marxism, to describe the process by which wealth is concentrated in the hands of a capitalist class.

Overview

Capital accumulation involves the gathering or amassing of objects of value; the increase in wealth through concentration; or the creation of wealth. Capital is invested in new productive forces, made available for productive labor to use. This process creates the economic system of capitalism.

Forms of capital accumulation

Capital accumulation forms can be broadly divided into two main types: real and financial.

Real accumulation is when investment is made in physical assets such as machinery, raw materials, real estate, and technology. This form of accumulation is tangible and can be seen in the physical expansion of industries and businesses.

Financial accumulation is when investment is made in financial assets such as stocks, bonds, and other securities. This form of accumulation is intangible and is reflected in the increase in value of these financial assets.

Capital accumulation in Marxist theory

In Marxist theory, capital accumulation is seen as the operation of capitalist economies that leads to the concentration of wealth. According to Marx, the capitalist mode of production is characterized by the accumulation of capital, where the owners of capital (capitalists) accumulate wealth by exploiting the labor of workers.

See also

• Capital (economics)
• Capitalism
• Marxist economics
• Wealth concentration