---
entity_slug: four_methods_of_employing_capital
entity_type: Principle
vsm_system: S3
type_rationale: This represents Smith's abstract theoretical framework that classifies
  all possible capital deployment into four universal categories, functioning as an
  invariant rule that holds across different economic contexts.
vsm_rationale: This classification system serves as a management tool for understanding
  how capital should be allocated across different economic functions to optimize
  productive labour and value creation.
classified_at: '2026-02-23T11:07:27.753943'
---

# Classification: Four Methods Of Employing Capital

## Entity Type

Principle

## VSM System

S3

## Type Rationale

This represents Smith's abstract theoretical framework that classifies all possible capital deployment into four universal categories, functioning as an invariant rule that holds across different economic contexts.

## VSM Rationale

This classification system serves as a management tool for understanding how capital should be allocated across different economic functions to optimize productive labour and value creation.
