Capital stock is not permanent. As capital wears out or becomes obsolete, it is discarded. To model this situation wemust introduce into the capital system a negative feedback loop accounting for capital depreciation. The more capitalthere is, the more wears out on the average each year; and the more that wears out, the less there wiil be the next year. This negative feedback loop is exactly analogous to the death rate loop in the population system. As in the population system, the positive loop is strongly dominant in the world today, and the world's industrial capital stock is growing exponentially.