Financial vs Productive Capital

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= a distinction made by Carlota Perez in her book, Technological Revolutions and Financial Capital


Discussion

"In Perez’s view, financial capital “represents the critera and behaviour of those agents who possess wealth in the form of money or other paper assets….. their purpose remains tied to having wealth in the form of money (liquid or quasi-liquid and making it grow. To achieve this purpose, they use …. intermediairies …. The behaviour of these intermediaries while fulfilling the function of making money from money that can be observed and analysed as the behaviour of financial capital. In essence, financial capital serves as the agent for reallocating and redistributing wealth.

Perez goes on to say that “the term production capital embodies the motives and behaviours of those agents who generate new wealth by producing goods or performing services.

Through these distinctions, she clearly delineates the differences between the “process of creating wealth and the enabling mechanisms”; these distinctions are then played out through a number of “surges” or paradigm shifts. An incredible book." (http://confusedofcalcutta.com/2009/06/30/rambling-about-creativity-and-capital-and-content-and-frames/)