I (personally) don't like this definition. Capital wears out. Thus
there's really some capital "in" every good (for which capital is an
input into the production process).
This debate really illuminates the difficulties associated with
trying to operationalize apparently-simple theoretical concepts. Is it
any wonder that many (most) principles students experience problems?
Even though we might stress repeatedly that we are working with models
(theoretical abstractions) as opposed to reality, students are surely
going to try to relate the stuff to their (limited) real-world
experience. This debate offers some possible insights as to what
happens when they do so. Furthermore, this would be something that
would occur very early in the course. How impenetrable has the fog
become by mid-term?
Marshall once wrote (in a review of a text) that although a simple book
on economics may be written, economics is not simple and cannot be made
so.
Brian Eggleston
Augustana College