Wealth and Capital

Capital is that of wealth which is used for further production of wealth. A commodity having utility, scarcity, marketability and external possession of man is called wealth. But all wealth is not capital. Household articles like chair, table, radio etc. are wealth, but they are not capital as they are not used for further production of goods. But tractor is wealth and at the same time it is also capital because it is used for production of food grains. This shows that both consumers’ and producers’ goods are wealth out of which only producers’ goods are capital. Hence all capital is wealth but wealth is not capital.