Question

Distinguish between remunerative and auxiliary capital.

Answer 1

Remunerative capital and Auxiliary capital can be distinguished as follows:

1. Remunerative capital:

   • It refers to the capital that involves payment made to workers for their contribution to production.
   • Examples include wages, payment of food, clothes to workers.
   • It is essentially the compensation or remuneration paid for labor services.

2. Auxiliary capital:

   • It refers to all the man-made goods such as machines, equipment, raw materials, etc., which help labor in the production process.
   • Examples include machines, tools, raw materials.
   • It assists labor by providing the physical means necessary for production.