Real Capital and Its Relation to Sustainability: The Dual Nature of Real Capital as Biophysical Wealth

Kozo Mayumi () and Ansel Renner ()
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Ansel Renner: Autonomous University of Barcelona

Chapter Chapter 7 in Reconsidering the Privileged Powers of Banks, 2023, pp 149-169 from Springer

Abstract: Abstract This chapter delves into the nuanced relationship between real capital and its biophysical implications for society. Real capital, composed of assets such as machinery and factories, is integral to the production of goods and services. However, its growth carries a significant biophysical burden. The proliferation of real capital amplifies, for instance, requirements for intermediate goods and ongoing maintenance. In this chapter, various theories of capital interest are further explored. A critique of Keynes’s understanding of capital is presented, followed by the introduction of an alternative theory. The chapter makes a careful distinction between financial and real capital, arguing that the former should be minimized. It introduces Georgescu-Roegen’s concept of “process funds” and, lastly, proposes an alternative theory concerning the origin of real capital interest.

Keywords: Real capital; Capital interest; Overcapitalization; Georgescu-Roegen; Planned obsolescence (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-99-6058-3_7

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DOI: 10.1007/978-981-99-6058-3_7

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