Capital accumulation is the dynamic that motivates the pursuit of profit, involving the investment of money or any financial asset with the goal of increasing the initial monetary value of said asset as a financial return whether in the form of profit, rent, interest, royalties or capital gains.
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The aim of capital accumulation is to create new fixed and working capitals, broaden and modernize the existing ones, grow the material basis of social-cultural activities, as well as constituting the necessary resource for reserve and insurance.
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Definition of capital accumulation is subject to controversy and ambiguities, because it could refer to:.
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In economics and accounting, capital accumulation is often equated with investment of profit income or savings, especially in real capital goods.
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In Karl Marx's economic theory, capital accumulation is the operation whereby profits are reinvested into the economy, increasing the total quantity of capital.
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Capital accumulation was understood by Marx to be expanding value, that is, in other terms, as a sum of capital, usually expressed in money, that is transformed through human labor into a larger value and extracted as profits.
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Capital accumulation grows in one place to a huge mass in a single hand, because it has in another place been lost by many.
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In Marxian economics, the rate of accumulation is defined as the value of the real net increase in the stock of capital in an accounting period, the proportion of realized surplus-value or profit-income which is reinvested, rather than consumed.
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Capital accumulation argues that the capitalist mode of production requires that people be forced to work in value-adding production for someone else, and for this purpose, they must be cut off from sources of income other than selling their labor power.
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Continuation and progress of capital accumulation depends on the removal of obstacles to the expansion of trade, and this has historically often been a violent process.
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Capital accumulation discovered that capital is not a thing, but a social relation between persons, established by the instrumentality of things.
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