Business organizations involve complex interactions of economic and social forces. We observe and analyze organizations using a combination of economics, ethics, sociology and systems theory.

Capital | Capitalist | Capitalism


Most human endeavour combines human effort from two sources: present and past. Past human effort is often known as ‘capital’, and the term ‘labour’ is usually applied to present human effort. It is usually thought to consist of machinery constructed by past labour, but can also consist of intellectual capital, which includes software as well as information itself.

A tool or machine may be regarded as stored-up labour from the past; it also represents stored-up information, since it captures the knowledge of the tool-maker. But this very knowledge would have been acquired by the tool-maker through education and training, and therefore represents the stored-up learning effort of the tool-maker and the teaching effort of his teachers.

Industrial processes are known as ‘capital-intensive’ if they require more capital than labour, and ‘labour-intensive’ if they require more labour than capital. For many processes, there is a range of possible methods, with different ratios of capital to labour.


The word ‘capitalist’ has three different meanings:

  • A person that ‘owns’ some of the capital input to a particular process, and thereby controls the process.
  • A person that holds certain opinions about the justice of capital ownership.
  • A person who believes that social progress depends on continual increases in the ratio of capital to labour. Mike Cooley refers to the widespread belief (held by many socialists as well as libertarians) that "Computerization, automation and the use of robotic devices will automatically free human beings from soul-destroying, back-breaking tasks and leave them free to engage in more creative work." (Architect or Bee ,p 9)


John Kay, Let's talk about the market economy Financial Times 11 Jan 2012

All materials developed by Aidan Ward and Richard Veryard. We taught these modules as part of a Business Computing degree at City University between 2001 and 2005. Copyright © 2001-2005 Aidan Ward and Richard Veryard. All rights reserved.