Infrastructural capital (original) (raw)

Infrastructural capital (manufactured capital, manmade capital, or fixed capital) refers to any physical means of production or means of protection beyond that which can be gathered or found directly in nature, i.e. beyond natural capital and that which is not considered as "fluid capital". It may include tools, clothing, shelter, irrigation systems, dams, roads, boats, ports, factories or any physical improvements made to nature. This term can overlap with the notion of internal improvements and public works.

In macro-economics the term "infrastructure" usually refers to the added-value of a nation-state relative to the raw natural capital of its ecoregions, e.g. dams, roads, ports, canals, sewers, border posts, etc. - although it can also be used to describe firm-specific infrastructure such as factories, private roads, capital equipment, and other such assets.

The more generic term physical capital is sometimes used to refer to any combination of either infrastructural capital and natural capital -- recognizing that often an infrastructural improvement, e.g. a dam or road, becomes impossible to differentiate from the natural ecology within which it is embedded. Although it is confusing to consider personal property carried on the individual human body part of an "infrastructure", it is also contrary to refer to joint products of nature and man as being "manufactured" or "built" rather than as being "grown" or "developed", e.g. vines or other plants which grow on a manmade trellis. As both infrastructural and natural capital serve as means of production and means of protection from the elements, macro-economists rarely differentiate the two in their analysis.

However, from a public policy point of view, infrastructural capital is prone to more obvious and significant breakdowns and is usually a cost center:

"It will always be easy to tell the infrastructure from nature. The infrastructure will be the part that doesn't work." - Sean McShane, 1999.