In economics, capital, capital goods, or real capital is a factor of production, used to produce goods orservices, that is not itself significantly consumed (though it may depreciate) in the production process.Capital is distinct from land in that capital must itself be produced by human labor before it can be a factor of production. At any moment in time, total physical capital may be referred to as the capital stock, a usage different from the same term applied to a business entity. In a fundamental sense, capital consists of any produced thing that can enhance a person's power to perform economically useful work - a stone or an arrow is capital for a caveman who can use it as a hunting instrument, and roads are capital for inhabitants of a city. Capital is an input in the production function. Homes and personal autos are not capital but are instead durable goods because they are not used in a production effort.
Marxian economics and Classical economics views capital as financial capital (Capital goods being referred to as means of production)used to buy something only in order to sell it again, and for Marx and Marxists, capital only exists within the process of economic exchange - it is wealth that grows out of the process of circulation itself and forms the basis of the economic system of capitalism.
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