Jesus on Money (23) - Source of Capital

Capital can be obtained in several ways.

1. Make - In traditional societies capital goods are made by the people who use them. Fishermen made their own nets. Noah built the ark himself. Making capital goods is difficult in a subsistence society, because food has to be stores up to live on, while the capital equipment is made.

2. Savings - In the modern, world the most common way to obtain capital goods is to save up the money and buy them.

3. Borrow - The money to buy the capital goods can be borrowed. This is using the savings of other people. The income from using the capital goods would need to be sufficient to cover the interest that would be paid on the loan. Sometime the capital goods can be borrowed directly from the owner, eg renting a truck.

4. Inherit - Some capital goods have long lives. People sometimes inherit them from their parents.

5. Steal - Throughout history, the most common way to obtain capital has been to steal it from the person who made it. Feudal lords gained most of their capital by confiscating it. In recent times, democratic governments have claimed the right to seize capital goods from their owners.