This is a question that has always interested me because I have been researching the intersection of consumer and capital goods very closely.
Capital goods are things that a business uses to make an income. These include things like money, stocks, real estate, etc. Capital goods is essentially a term used for all goods that we use to either make money or have some sort of property.
Capital goods are the result of the labor of many workers, so it is not just one person making a product. There are also many people who are involved in the production of goods, and when we talk about capital goods, we are talking about the many people who are involved in the production of capital goods.
It’s all a numbers game in a capitalist society, so it’s important to recognize that the products we buy are only a small part of the total goods and services that we consume. If you look at a box of cereal from the grocery store, you see that box of cereal. You don’t see any cereal itself, but you see a box of cereal and you also see the factory that made the box of cereal.
The fact is that many of the things we buy are actually just the products of a large factory. We all know that the box of cereal that you buy is made in a factory. And we know that the cereal factory is a huge, complex machine that is run by many, many people. But what most don’t realize is that the factory itself is also what we call our personal employer.
The fact is, that the factory itself is the capital. In other words, when a factory is run by a corporation it is actually run by the owner of the corporation. We are all employees of the corporation that owns our factory. As a result, the factory itself is a capital asset – it’s a thing people own.
So how do corporations get capital? By giving people loans. And the reason they do this is because the more loans they take out, the more people they can hire to work at the factory. And when companies loan money to a corporation, they want it to be spent on themselves as opposed to buying capital goods, like cars or factories.
The fact that corporations are owned by people means that they can borrow money. And corporations are like companies in that they are run by a Board of Directors. When a corporation (like a factory) borrows money, the company itself is allowed to raise capital by issuing shares in its own name. In other words, because the corporation is owned by people, it is allowed to issue shares in the company.
This allows for a lot of different business structures. One of the more popular is a cooperative corporation, where the corporation is a member of a larger group of people who all work together for a common purpose. The more common is the stock market. Shareholders in a company are shareholders in the company, and the company is allowed to issue stock (also called “dividends”) in the name of the company.
A stock market is a very similar concept, except it is owned by people who are shareholders in the company (as opposed to corporations). The corporation owns the common shares of the stock market, but the shareholders own the individual shares. The corporation is allowed to issue stock called dividends in the name of the company, but only in proportion to the shareholders’ ownership.