Ages ago, when somebody tried to explain to me the concept of “capital”, it was the version probably most people have heard of: a factor that creates more productive value, or maybe some good that is used in production of other goods, something along those lines. Then you get some examples of “capital” like a tool, a machine, a car… then you hear it’s contrasted with consumptive raw material, non-productive land resource, labor, etc. etc. I always thought it was completely vague and incomprehensible. What things are capital? Why is a tool capital, for example? I’ve got plenty of tools sitting around doing nothing of value most of the time, and when I use them I never produce anything.

Later I realized this was a stupid way of explaining it (or I was just stupid at the time). Capital isn’t a “thing”, it isn’t the physical object at all, it is the usage. Whether something is capital is completely determined by intention, that is, how it is intended to be used, hence the vague definition.

For example a $100 bill, depending on how it is used, can be a consumptive good, a store of value, or capital. If you burn the paper money as offering to the gods, it is a consumptive good. If you keep it under the mattress to buy stuff later, it is a store of value. If you invest it by putting it to use in a productive venture or lending it to somebody whom you expect to do so, then it becomes capital. It’s the same $100 bill, the only difference is intention…
(Read the article)

Comments(0)

I just came across the topic of credit card grace period, and could not find a consistent answer on exactly how it is supposed to apply in more complex situations than a monthly full payment.

On the back of the bill, it is defined thusly

We accrue periodic finance charges on a transaction, fee, or finance charge from the date it is added to your daily balance until payment in full is received on your account. However, we do not charge periodic finance charges on new purchases billed during a billing cycle if we receive both payment of your New Balance on your current statement by the date and time your payment is due and also payment of your New Balance on your previous statement by the date and time your payment was due.

This still is fairly ambiguous. In order to find out how this works exactly, to the cent, I did a simple test and found out.
(Read the article)

Comments(2)