| Capital accumulation is the process of
accumulating resources for use in the production of goods and services. Private capital
accumulation takes place when productive capacity exceeds the immediate needs for
consumption.
For example, a farmer can accumulate capital (stored grains, improved equipment etc.)
during years of good harvests and good farm revenues.
Generally, accumulation is directly linked to profitability: the resources used to make
commodities can be replaced and augmented when the commodity is sold for a profit.
Capital accumulation can also take place in the public sector, where, from a
structuralist approach within a conflict perspective, the state is seen as performing the
function of aiding in the accumulation of private capital.
This function may be performed by the state providing an educated work force (human
capital), building rail lines into resource areas, maintaining a legal system to resolve
contract disputes and providing tax incentives or tax breaks.
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