Financial/Capital Resources
is important to measure capital as an element of national power for three reasons. First, a greater abundance of capital means that societies with higher stocks of it can use more capital instruments in the production of any given good, and this results not only in increased productivity but also in greater consumption and enhanced incomes. Second, a greater accumulation of capital enables broader economic expansion than might be possible otherwise. Third, a greater accretion of capital enables the pursuit of rapid technical change. It finances the discovery of what was unknown before or the adaptation of existing knowledge for purposes of commercial exploitation; it underwrites the costs of restructuring organizational changes as well as provides for investment in new human capital. For all these reasons, capital becomes the principal avenue through which all other determinants, whatever those may be, condition the long-run development and prospects affecting a country’s power.