To call capital investment the source of productivity is one in a million reasons why our religion of economics must be redefined. Capital may at best be a catalyst. Cause and consequence confounded.
It is not. To call capital investment the source of productivity is merely one testament to the foolishness of classical economics and its many derivatives. There are plenty of other ways in which I debunk our prevailing religion of economics. Our economics of today is soup in a cauldron full of the depravity of reason, stemming from a systematic confounding of consequence and cause—the reason why I call our current economics voodoo science.
The real cause of improved productivity is the belief of an entrepreneur to be able to enhance the evolution of mankind by expanding the fringe of human ingenuity and capacity. Such understanding can then be aligned with trust by investors to accelerate and monetize an expedient exploration of said belief.
There are many examples in which capital merely invests in itself by propping up valuations based on the same asset and sells the increments to the public as the last in the chain of innocent greater-fools. I will share examples in my upcoming video series. Hence the deployment of capital alone is not at all a testament to increased productivity. Capital can be an excellent source of productivity when it is properly applied to the pursuit of evolutionary value.
Innovation is the source of productivity, but not all kinds of innovation are. Only innovation that promulgates a plurality of freedom to strengthen the evolution of humanity can produce renewable productivity to carry a proxy of sustainable value.
And that is where we currently must hold Silicon Valley’s feet to the fire, as its output has become a pageantry of positivity. In most cases delivering quite the opposite of its preached intent, with evolutionary value not by a long shot living up to its lofty valuations.