Capital (economics)

Capital is a type of good that can be consumed now, but if consumption is deferred, an increased supply of consumable goods is likely to be available later. Adam Smith defines capital as "That part of a man's stock which he expects to afford him revenue". Capital is derived from the Latin word "caput" meaning head, as in "head of cattle". The term "stock" is derived from the Old English word for stump or tree trunk, i.e. something that grows over time. It has been used to refer to all the moveable property of a farm since at least 1510. In Middle Ages France contracted leases and loans bearing interest specified payment in heads of cattle.