Аdam Smith's views and theories on category “fixed assets”

Abstract

This article analyzes Adam Smith's views and theories on the category “fixed assets”; proves that the theory of capital is an integral part of any economic concept that claims to deep theoretical analysis, as in the study of nature of capital and its income it is most clearly traced particular social form of economic theory.

Research of "fixed assets" and Adam Smith's contribution in its determination is of particular interest in the current development of national science.

Heated discussions are conducted around the nature of capital and its role in the development of economic system, which is caused by deep processes of the changing of nature of production in the information society. In Ukraine the fifth technological mode is developing in the form of separate sets of technology, is poorly linked together. To strengthen this connection and to accelerate the formation of a new mode, it is necessary to study the evolution and place of the capital in the transformational economic systems based on expanded concept of national wealth and capital.

The category “fixed assets” attracted and attracts the attention of researchers. Despite the fact that to its study many scientific papers are devoted, but many problems are still the subject of debates, clarification, interpretation and analysis. This is because the category of "fixed assets" is very voluminous and complicated in structure.

Adam Smith was vibrant and versatile personality, his interests were not limited to economics or philosophy, he had broad scientific knowledge in other areas, in particular, he received a Master of Arts and Doctor of Laws.

Adam Smith, introducing the category "fixed assets" in economic theory justified that the elements of capital generate revenue and profits without transition from one owner to another, or without further treatment, and the scientist also noted that fixed assets consist of four articles, firstly, with all sorts of useful machines and tools that facilitate and reduce the work; secondly, of all those profitable buildings which are means of income not only for their owner, who gives them for rent, but for the people who pay for their rent; these are the premises for shops, warehouses, workshops, etc. These buildings differ from residential buildings. They represent a kind of means of production and can be considered as such; thirdly, with improved lands and all that is profitably spent on clearing, drainage, fencing, fertilizing and bringing it to the state, most suitable for processing, and cultivation; fourthly, with the acquired and useful abilities of all the inhabitants or members of the society.

The acquisition of these skills, taking into consideration the keeping of their owner during his education, training or apprenticeship, always requires the actual costs, which are fixed assets. Thus, by Adam Smith's definition, in fixed assets not only the tools and buildings, but "human capital assets are included."

The fixed assets are  inseparable from the social relations within which their functioning. The ambiguity of definitions is caused by changes that occur in modern categorical apparatus of modern economic thought caused the development of market relations and the need for development of information society in Ukraine. It is time to operate the definition where along with the tangible assets of the capital. This view is substantiated by the nature of the movement of their value, according to which the cost of the capital in the process of production functioning and demolishing is gradually transferred to the product.