Capital is the stuff used to make other stuff. Factories, machines, tools, computers, roads, and software all count. It is not money itself, though money buys capital. Capital is a produced means of production. You build it, then use it to create goods and services.

Economists distinguish physical capital from human capital. Physical capital is equipment and infrastructure. Human capital is the skills and knowledge workers bring. Both matter for growth. A country with abundant natural resources but weak capital — physical or human — will struggle to prosper.

Capital requires investment. Someone has to forgo current consumption to build a factory or fund training. That trade-off is central to economic growth. Too little investment, and productivity stagnates. Too much, and resources get wasted on projects that never pay off. The balance is never perfect.

Forms of capital

• Physical: machinery, buildings, infrastructure
• Human: education, training, health
• Financial: money used to buy physical capital
• Natural: resources like land, minerals, water
• Social: networks and trust that enable cooperation