Capital Accumulation Law and Legal Definition

Capital accumulation means the gathering or collection of objects of value, an increase in the stock of capital goods, or the commencement of wealth. Capital accumulation also refers to acquisition of a large number of shares of a particular stock or mutual fund by an institutional broker or individual investor over an extended period of time. The accumulated capital is generally used by a company to increase its capital base.

Capital accumulation also refers to real investment in tangible means of production, financial investment in assets presented on paper, yielding profit, interest, rent, royalties, fees, or capital gains, investment in non-productive physical assets such as residential real estate or works of art that increase in value, and human capital accumulation.

The definition of capital accumulation is a subject of controversy because the term can carry with it any of the following two meaning:

First, that it can mean a net addition to existing wealth because with the increase in the production of wealth, a society will become richer and the total stock of wealth increases Second, that it can refer to a redistribution of wealth because if some accumulate capital only at the expense of others, wealth is merely shifted from one person to the other and the wealth of society decreases.