One of the objectives of Thomas Piketty’s economics bestseller, Capital in the Twenty-First Century, is to estimate the evolution of the capital-income ratio of an economy. According to Piketty, “a country that saves a lot and grows slowly will over the long run accumulate an enormous stock of capital (relative to its income), which can in turn have a significant effect on the social structure and distribution of wealth” (p. 166).
Piketty defines capital—which he calls “national capital” or “national wealth”—as “the sum total of nonhuman assets that can be owned and exchanged on some market” (p. 46). Capital therefore includes all forms of real property (including residential real estate) as well as financial and industrial capital (plants, infrastructure, machinery, patents, and so on) used by firms and government agencies. But capital also includes farmland and natural resources, such as fossil fuels, minerals, forests and any other similar natural capital that can also be bought and sold on markets. In sum,
national capital = farmland + marketed natural resources + housing + other domestic capital + net foreign capital