John Bates Clark’s Conception of Capital

This paper revisits the economic theory of John Bates Clark, with specific reference to his concept of capital, which seems very little remembered. For Clark, capital is to be distinguished from capital goods and is a resource that is at once immaterial and, in routine circumstances, permanent. Drawing on the original definition of holism in the writings of General the Right Honorable Jan Christiaan Smuts, it is argued that Clark’s conception is holist rather than (as in the case of other concepts of capital and most other economic theory) reductionist. That is, for Clark capital is an emergent property of a market equilibrium in or near equilibrium. This poses questions as to whether the concept can be extended to other economic forms, such as central planning, or indeed can be applicable to a capitalist economy constantly in the process of self-transformative flux.