ELI5: Explain Like I'm 5

Organic composition of capital

Organic composition of capital is a lot like baking a cake. When you bake a cake, you need ingredients like flour, eggs, butter, and sugar. These ingredients are like capital because they have value and can be used to make something, like a cake. Organic composition of capital is the amount of each ingredient that goes into the cake. For example, you may use two cups of flour, one egg, two tablespoons of butter, and two tablespoons of sugar. This is your organic composition of capital for the cake. The ratios, or amounts, of each ingredient (capital) are very important in determining how the cake turns out. Too much of one thing, like too much flour, can make the cake dry. Too little of something, like too little sugar, can make the cake taste too sour. In the same way, the organic composition of capital for a business or economy can affect how well those businesses or economies do. Depending on the amount of different types of capital (like labor, technology, money, etc.), businesses or economies may have different levels of success.
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