Capital Allocation Quotes

I believe that companies, as major employers, resource managers, technological innovators, and capital allocators, have a unique responsibility to operate with integrity, transparency, and accountability.

Nature is the greatest capital allocator.

Every tree in every forest is participating in investment activities….. capital allocation, energy flow, resourcefulness, utilization, leverage, information distribution, growth, value creation, and ROI…. Nature is an economy, and every tree is an investor in that economy. Sometimes I just sit in my back yard, observe, and take notes.

Nature is really good at capital utilization, capital allocation and capital productivity.

In a permaculture economy, all capital is productive capital and all resources are efficiently utilized.

Every business problem corresponds to a failure in capital allocation.

Capital allocation is what makes all business processes possible.

Nature is really good at capital productivity and capital allocation. Every leaf on every tree is positioned to maximize photosynthesis. Every root on every tree is positioned to maximize nutrient sequestration. And all of the leaves and all of the roots live in service to each other.

If there are gaps of unproductive capital in the system, everybody loses. And when capital productivity is maximized, everybody wins.

Simply by striving to efficiently utilize all capital everywhere, we will by default solve a multitude of problems in society.

When the human species figures out how to efficiently utilize capital, many of the problems that have haunted us for a long time will cease to exist.

Efficient capital allocation is all about flow.

Capital allocation is about getting resources where they need to be so that they can have the opportunity to be productive. If capital isn't wisely allocated, it can't be productive. And if capital isn't productive, civilization collapses.

What we are doing at Mayflower-Plymouth is facilitating the efficient utilization of capital.

Capital is a lot like people; it needs to be employed.

Logistics management and supply chain management are just different ways of saying capital allocation.

When we talk about capital allocation, we're talking about all kinds of capital - financial capital, social capital, biological capital, human capital, intellectual capital, etc. Capital just means resources, or things capable of producing value.

When we ask ourselves what is an economy; I think the best place to find the answer to that question is in a forest. Go and sit in a forest and observe with all of your sensory faculties, and meditate there. And while you're observing and meditating, ask yourself questions about everything. And if you want maybe hit a few puffs of a certain herb while you're meditating there. And you'll find out exactly what an economy is. And you'll also find out exactly what business is. And all of the economic and business concepts like capital allocation and liquidity and service and profit and growth... It'll all start to make more sense as you sit there meditating in that forest.

At Mayflower-Plymouth, we approach Asset Management from a network and systems perspective as opposed to from just an entity perspective. We learn from nature and we look at how the mycorrhiza network is a manager of Capital and an allocator of Capital, both a means and a method - and we try to operate in the same way.

The accumulation of capital is a good thing. When we look at nature, we see the accumulation of capital everywhere. But accumulated capital usually works in harmony with the productivity of capital. Plots of soil work in harmony with the forest; and each exists in service to the other.

Everything we do at Mayflower-Plymouth is viewed through the lens of capital allocation. Whether it's Blockchain or Quantum Computing or DeFi or Additive Manufacturing or Logistics, we channel that toward helping businesses fulfill solutions and solve problems concerning the allocation of capital.

Every problem that exists in the world exists at least in part because capital was not efficiently allocated.

Look at nature. The most urgent priority is the allocation of capital.

Biological life is simply the continuous allocation of capital within an ecosystem.

What keeps an economy alive is the continuous and efficient allocation of capital.

The way mycelium produces enzymes to break down complex organic polymers into simpler compounds is a case study for how we can upcycle products and materials in our economy.

Understanding needs is an important part of capital allocation.

At Mayflower-Plymouth, our purpose is to help businesses fulfill solutions and solve problems concerning the allocation of capital. And we do that by modelling mycelium fungal networks.

When society as a whole begins to efficiently utilize all capital everywhere on a global scale and and make all capital everywhere maximally productive on a global scale — most if not all of our global scale social problems will be solved.

Every Spring, nature teaches a class on business entrepreneurship. ....We see how capital is re-allocated, currencies are re-directed, growth is re-emphasized, and numerous life forms promote their value with re-vitalized marketing programs that implement flowers or seeds or aromas or habitability or pollination in an effort demonstrate a unique value proposition in a busy economy.

One glance at any government budget anywhere in the world tells the story—the money is always in place, already allocated, the motive everywhere is fear, the more immediate the fear, the higher the multiples.

It means this War was never political at all, the politics was all theatre, all just to keep the people distracted…secretly, it was being dictated instead by the needs of technology…by a conspiracy between human beings and techniques, by something that needed the energy-burst of war, crying, “Money be damned, the very life of [insert name of Nation] is at stake,” but meaning, most likely, dawn is nearly here, I need my night’s blood, my funding, funding, ahh more, more…The real crises were crises of allocation and priority, not among firms—it was only staged to look that way—but among the different Technologies, Plastics, Electronics, Aircraft, and their needs which are understood only by the ruling elite… Yes but Technology only responds (how often this argument has been iterated, dogged, humorless as a Gaussian reduction, among the younger Schwarzkommando especially), “All very well to talk about having a monster by the tail, but do you think we’d’ve had the Rocket if someone, some specific somebody with a name and a penis hadn’t wanted to chuck a ton of Amatol 300 miles and blow up a block full of civilians? Go ahead, capitalize the T on technology, deify it if it’ll make you feel less responsible—but it puts you in with the neutered, brother, in with the eunuchs keeping the harem of our stolen Earth for the numb and joyless hardons of human sultans, human elite with no right at all to be where they are—” We have to look for power sources here, and distribution networks we were never taught, routes of power our teachers never imagined, or were encouraged to avoid…we have to find meters whose scales are unknown in the world, draw our own schematics, getting feedback, making connections, reducing the error, trying to learn the real function…zeroing in on what incalculable plot? Up here, on the surface, coal-tars, hydrogenation, synthesis were always phony, dummy functions to hide the real, the planetary mission yes perhaps centuries in the unrolling…this ruinous plant, waiting for its Kabbalists and new alchemists to discover the Key, teach the mysteries to others…

A lot of folks look to non-profits as platforms to solve major societal scale problems. But the major capital allocators like banks, Hedge Funds, Venture Capital firms and so forth - these are the kinds of ent that have the capacity to affect real change.

A lot of folks look to non-profits as platforms to solve major societal scale problems. But the major capital allocators like banks, Hedge Funds, Venture Capital firms and so forth - these are the kinds of entities that have the capacity to affect real change.

Here is an all-too-brief summary of Buffett’s approach: He looks for what he calls “franchise” companies with strong consumer brands, easily understandable businesses, robust financial health, and near-monopolies in their markets, like H & R Block, Gillette, and the Washington Post Co. Buffett likes to snap up a stock when a scandal, big loss, or other bad news passes over it like a storm cloud—as when he bought Coca-Cola soon after its disastrous rollout of “New Coke” and the market crash of 1987. He also wants to see managers who set and meet realistic goals; build their businesses from within rather than through acquisition; allocate capital wisely; and do not pay themselves hundred-million-dollar jackpots of stock options. Buffett insists on steady and sustainable growth in earnings, so the company will be worth more in the future than it is today.

Every Spring, nature teaches a class on business entrepreneurship. ....We see how capital is re-allocated, currencies are re-directed, growth is re-emphasized, and numerous life forms promote their value with re-vitalized marketing programs that implement flowers or seeds or aromas or habitability or pollination in an effort demonstrate a unique value proposition in a busy economy. Smart entrepreneurs enroll in this class every Spring and take good notes. Whether you're an entrepreneur of a small business or an entrepreneur of a line of business within a large company... learn from nature.

There is only a certain amount of wealth in the world, this thinking goes. Economics is a matter of acquiring and allocating, not creating. This was the view of the world’s smartest people, all top philosophers and not stupid people, for many thousands of years before the age of the enlightenment. It still is.

Every business problem has a correlation to the allocation of capital. To help businesses allocate capital is to indirectly help them solve a variety of other problems.

In essence, the role of a logistician is to efficiently allocate capital.

When supply can't keep up with demand or demand can't keep up with supply, it's indicative of waste in the form of misallocated capital.

All stakeholders should benefit from the capital we allocate in our portfolio.

All stakeholders should benefit from the capital we allocate in our portfolio, on a net value add basis.

For his successor, Buffett emphasized that proven capital allocation abilities would be the key.

In natural ecosystems, the primary role of the mycelium network is the allocation of capital. That's how the mycelium network helps facilitate the success of all other participants in the ecosystem. At Mayflower-Plymouth, we're doing the same thing in business ecosystems.

Every problem that exists in business exists at least in part because capital was not efficiently allocated. Or, at least the problems could be solved by allocating capital more wisely.

The financial markets paid a lot of people extremely well for narrow expertise and a few people, poorly, for the big, global views you needed to have if you were to allocate capital across markets.

Managerialism has become the pretext for creating a new covert form of feudalism, where wealth and position are allocated not on economic but political grounds - or rather, where every day it's more difficult to tell the difference between what can be considered 'economic' and what is 'political.

One of the most important decisions any CEO makes is how he spends his time—specifically, how much time he spends in three essential areas: management of operations, capital allocation, and investor relations.

Every problem in society is caused by or correlated to the inefficient utilization of capital. How do we solve the problems in supply chains? More efficient utilization of capital. How to we solve climate change problems? More efficient utilization of capital. How do we end poverty? The more efficient utilization of capital. How do we improve our education system? The more efficient utilization of capital. How do we transition from fossil fuels to sustainable energy sources? The efficient utilization of capital. Simply by striving to efficiently utilize all capital everywhere, we will by default solve a multitude of problems.

Economics is the art of allocating scarce goods among competing demands. The conceit of Marxism was the thought that in Communism, economics would be "abolished"; this was why one did not have to think about the questions of relative privilege and social justice. But the point is that we still have to think about economics, and probably always will. The question, then, is whether we can arrive at a set of normative rules which seek to protect liberty, reward achievement and enhance the social good, within the constraints of "economics".

In natural ecosystems, the efficient allocation of capital is a prerequisite for all other success metrics. The same is true of economic systems. The efficient allocation of capital is a prerequisite for all other success metrics.

Basically, CEOs have five essential choices for deploying capital—investing in existing operations, acquiring other businesses, issuing dividends, paying down debt, or repurchasing stock—and three alternatives for raising it—tapping internal cash flow, issuing debt, or raising equity. Think of these options collectively as a tool kit. Over the long term, returns for shareholders will be determined largely by the decisions a CEO makes in choosing which tools to use (and which to avoid) among these various options. Stated simply, two companies with identical operating results and different approaches to allocating capital will derive two very different long-term outcomes for shareholders.

The role of soil in natural ecosystems shares striking similarities with the role of capital in economies. Just as soil serves as the vital resource underpinning natural ecosystems, capital is the foundational resource driving economic systems. In both contexts, the effective allocation of resources, whether capital or nutrients, determines productivity, competitiveness, and overall stability.

If you think of capital allocation more broadly as resource allocation and include the deployment of human resources, you find again that Singleton had a highly differentiated approach. Specifically, he believed in an extreme form of organizational decentralization with a wafer-thin corporate staff at headquarters and operational responsibility and authority concentrated in the general managers of the business units. This was very different from the approach of his peers, who typically had elaborate headquarters staffs replete with vice presidents and MBAs.

Science" is itself one of the greatest utopian illusions ever created by humankind. I am by no means suggesting that we should take the path of antiscience—the utopia offered by science is complicated by the fact that science disguises itself as a value-neutral, objective endeavor. However, we now know that behind the practice of science lie ideological struggles, fights over power and authority, and the profit motive. The history of science is written and rewritten by the allocation and flow of capital, favors given to some projects but not others, and the needs of war.

Mandatory allocation of capital between bonds and stocks by mutual funds creates tremendous short-term opportunities for investors.

Private property and capitalism also provide strong incentives to preserve resources for the future, whereas political resource allocation under democracy tends toward immediate gratification.

Investors have a role in shaping the world, because everything is influenced by the allocation of capital. At scale and collectively, investors are most responsible for the allocation of capital. While responsibility is to be shared among all economic participants - As investors, we should have a sense of responsibility, and pride, about the societal impacts of our investment choices.

well-functioning market requires all three types of investors for socially beneficial projects to have access to cheap capital. Value investors allocate capital to its most productive use. Speculators, because they trade frequently, provide the liquidity and trading volume that allows value investors and relative value traders to execute their trades cheaply. They also ensure that information is disseminated quickly.

Murphy’s approach to the roll-up was different. He moved slowly, developed real operational expertise, and focused on a small number of large acquisitions that he knew to be high-probability bets. Under Murphy, Capital Cities combined excellence in both operations and capital allocation to an unusual degree. As Murphy told me, “The business of business is a lot of little decisions every day mixed up with a few big decisions.

stronger education leads to stronger technological innovation, which leads to increased productivity and increased shares of trade, greater wealth, more military power, and eventually the establishment of a reserve currency. Further, having strong leaders, a population that is well-educated and civil with each other, a system that efficiently allocates capital and other resources, access to natural resources, and favorable geography all help a lot, and when they decline, they tend to decline together.

The Chinese government assigns capital to everything. Infrastructure development. Industrial plant buildout. Transport systems. Educational systems. Health systems. Everything and anything that puts people in jobs. Excruciatingly little of it would qualify as “wise capital allocation.” The goal isn’t efficiency or profitability, but instead achieving the singular political goal of overcoming regional, geographic, climatic, demographic, ethnic, and millennia of historical barriers to unity. No price is too high.

Now, obviously, Meredith Whitney didn't sink Wall Street. She'd just expressed most clearly and most loudly a view that turned out to be far more seditious to the social order than, say, the many campaigns by various New York attorneys general against Wall Street corruption. If mere scandal could have destroyed the big Wall Street investment banks, they would have vanished long ago. This woman wasn't saying that Wall Street bankers were corrupt. She was saying that they were stupid. These people whose job it was to allocate capital apparently didn't even know how to manage their own.

However, the typical representation of an investor is someone who mostly looks at prices when planning his or her actions; price-only investors tend to underperform value investors. Effective investors, on the other hand, think like businesspeople, allocating capital within the firm to projects with high expected returns. Allocators—individuals making calculated capital allocations to projects or firms—play a vital role in growing the economy for us all by directing resources to the most effective value-creating organizations. We would all be better off if more investors thought like allocators.

The shareholders who financed the risk taking had no real understanding of what the risk takers were doing, and, as the risk taking grew ever more complex, their understanding diminished. All that was clear was that the profits to be had from smart people making complicated bets overwhelmed anything that could be had from servicing customers, or allocating capital to productive enterprise.

Perhaps the most widely read piece of research that McKinsey has published in the past decade showed that companies that rapidly re-allocate capital to new growth businesses outperform those that take a steady-state approach.21 Yet, the social side of strategy is such that companies still tend to take what is known as a “peanut butter” approach—spreading a thin layer of resources smoothly across the whole enterprise, even though it’s clear that opportunities are far greater in some areas than in others.

The shadow cast by Scipio over his fellow citizens was one that could not help but provoke resentment. The guiding principle of the Republic remained what it had always been: that no one man should rule supreme in Rome. To the Roman people, the very appearance of a magistrate served as a reminder of the seductions and dangers of monarchy. The purple that lined the border of his toga had originally been the colour of kingship. ‘Lictors’ – bodyguards whose duty it was to clear a path for him through the crowds of his fellow citizens – had once similarly escorted Tarquin the Proud. The rods and single axe borne by each lictor on his shoulder – the fasces, as they were known – symbolised authority of an intimidatingly regal scope: the right to inflict both corporal and capital punishment.*2 Power of this order was an awesome and treacherous thing. Only with the most extreme precautions in place could anyone in a free republic be trusted to wield it. This was why, in the wake of the monarchy’s downfall, the powers of the banished king had been allocated, not to a single magistrate, but to two: the consuls.

It means this War was never political at all, the politics was all theatre, all just to keep the people distracted … secretly, it was being dictated instead by the needs of technology … by a conspiracy between human beings and techniques, by something that needed the energy-burst of war, crying, “Money be damned, the very life of [insert name of Nation] is at stake,” but meaning, most likely, dawn is nearly here, I need my night’s blood, my funding, funding, ahh more, more … The real crises were crises of allocation and priority, not among firms – it was only staged to look that way – but among the different Technologies, Plastics, Electronics, Aircraft, and their needs which are understood only by the ruling elite …

It must be understood that a society’s dominant mode of material production, i.e., the “hegemonic” method of organizing the relations of material production (such as manufacturing and food production), conditions the overall character of the society more than any other of its features does. This is because the society is erected on the basis of material production; the first task for a society is to reproduce itself in its specific form, which presupposes the reproduction of a set of production relations. Social relations will tend to evolve that make possible the reproducing of the relations of production. In the spheres of economic distribution, of politics, of sexual relations, of intellectual production, and so on, social structures and ideologies will tend to predominate that are beneficial, “functionally selected” with respect to the dominant mode of production.5 Therefore, a movement that aims for fundamental transformations in society should not limit itself to the sphere of distribution, as do consumer co-ops, credit unions, and housing co-ops, nor the sphere of gender relations, as does the feminist movement, but should concentrate on changing the mode of production (with its correlative property relations), as does worker cooperativism. Such cooperativism on a societal scale, involving “a federation of free communities which shall be bound to one another by their common economic and social interests and shall arrange their affairs by mutual agreement and free contract,”6 is not only a more socially rational way of organizing production than capitalism but also a more intrinsically ethical way (even apart from its potential allocative efficiencies).

Much of the story we have told falls outside the boundaries of modern academic disciplines and their respective histories. Contemporary economics focuses on issues of efficiency in allocation, political science on institutions of governmental power, political theory on questions of justice, sociology on social groups as defined by interactions outside the market. Some division of intellectual labor is of course productive, and the conceptual lenses that each discipline brings to bear may genuinely help us see an aspect of reality that would otherwise remain undetected. Yet those concerned with the moral implications and ramifications of the market--as any self-critical person in modern society ought to be--get a very skewed picture when they view it through only one of these lenses. Seeing the market with the added perspectives offered by the thinkers treated here provides us with a richer and more rounded view.

More specifically, this book will try to establish the following points. First, there are not two great liberal social and political systems but three. One is democracy—political liberalism—by which we decide who is entitled to use force; another is capitalism—economic liberalism—by which we decide how to allocate resources. The third is liberal science, by which we decide who is right. Second, the third system has been astoundingly successful, not merely as a producer of technology but also, far more important, as a peacemaker and builder of social bridges. Its great advantages as a social system for raising and settling differences of opinion are inherent, not incidental. However, its disadvantages—it causes pain and suffering, it creates legions of losers and outsiders, it is disorienting and unsettling, it allows and even thrives on prejudice and bias—are also inherent. And today it is once again under attack. Third, the attackers seek to undermine the two social rules which make liberal science possible. (I’ll outline them in the next chapter and elaborate them in the rest of the book.) For the system to function, people must try to follow those rules even if they would prefer not to. Unfortunately, many people are forgetting them, ignoring them, or carving out exemptions. That trend must be fought, because, fourth, the alternatives to liberal science lead straight to authoritarianism. And intellectual authoritarianism, although once the province of the religious and the political right in America, is now flourishing among the secular and the political left. Fifth, behind the new authoritarian push are three idealistic impulses: Fundamentalists want to protect the truth. Egalitarians want to help the oppressed and let in the excluded. Humanitarians want to stop verbal violence and the pain it causes. The three impulses are now working in concert. Sixth, fundamentalism, properly understood, is not about religion. It is about the inability to seriously entertain the possibility that one might be wrong. In individuals such fundamentalism is natural and, within reason, desirable. But when it becomes the foundation for an intellectual system, it is inherently a threat to freedom of thought. Seventh, there is no way to advance knowledge peacefully and productively by adhering to the principles advocated by egalitarians and humanitarians. Their principles are poisonous to liberal science and ultimately to peace and freedom. Eighth, no social principle in the world is more foolish and dangerous than the rapidly rising notion that hurtful words and ideas are a form of violence or torture (e.g., “harassment”) and that their perpetrators should be treated accordingly. That notion leads to the criminalization of criticism and the empowerment of authorities to regulate it. The new sensitivity is the old authoritarianism in disguise, and it is just as noxious.

First, as I showed in Chapter 5, the term “cultural Marxism” refers to a particular Marxist theory and strategy inaugurated by Antonio Gramsci – working to establish “cultural hegemony” in order to effect socialist revolution. Second, the substitution of special identity groups advocated for by social justice activists for the working class championed by Marxists does not lead to an identical or nearly identical politics. With the working class as a lever, Marxism proposes to overcome its nemesis – the capitalist class, which maintains the class system, including a class-based system of production and resource allocation. Social justice, on the other hand, aims at little more than debunking particular identity groups from atop a putative social hierarchy, knocking them from their supposed positions of totemic privilege, and replacing them with members of supposedly subordinated groups. Third, in Chapter 5, I told why Marxism and postmodernism can’t be equated. I’ll restate it here. While postmodern theory is anti-capitalist, it not only rejects capitalism but also other “totalizing” systems, or “meta-narratives,” including even the major system proposed to counter capitalism – Marxism itself.

This bio-power was without question an indispensable element in the development of capitalism; the latter would not have been possible without the controlled insertion of bodies into the machinery of production and the adjustment of the phenomena of population to economic processes. But this was not all it required; it also needed the growth of both these factors, their reinforcement as well as their availability and docility; it had to have methods of power capable of optimizing forces, aptitudes, and life in general without at the same time making them more difficult to govern. If the development of the great instruments of the state, as institutions of power, ensured the maintenance of production relations, the rudiments of anatomo- and bio-politics, created in the eighteenth century as techniques of power present at every level of the social body and utilized by very diverse institutions (the family and the army, schools and the police, individual medicine and the administration of collective bodies), operated in the sphere of economic processes, their development, and the forces working to sustain them. They also acted as factors of segregation and social hierarchization, exerting their influence on the respective forces of both these movements, guaranteeing relations of domination and effects of hegemony. The adjustment of the accumulation of men to that of capital, the joining of the growth of human groups to the expansion of productive forces and the differential allocation of profit, were made possible in part by the exercise of bio-power in its many forms and modes of application. The investment of the body, its valorization, and the distributive management of its forces were at the time indispensable.

Collateral Capacity or Net Worth? If young Bill Gates had knocked on your door asking you to invest $10,000 in his new company, Microsoft, could you get your hands on the money? Collateral capacity is access to capital. Your net worth is irrelevant if you can’t access any of the money. Collateral capacity is my favorite wealth concept. It’s almost like having a Golden Goose! Collateral can help a borrower secure loans. It gives the lender the assurance that if the borrower defaults on the loan, the lender can repossess the collateral. For example, car loans are secured by cars, and mortgages are secured by homes. Your collateral capacity helps you to avoid or minimize unnecessary wealth transfers where possible, and accumulate an increasing pool of capital providing accessibility, control and uninterrupted compounding. It is the amount of money that you can access through collateralizing a loan against your money, allowing your money to continue earning interest and working for you. It’s very important to understand that accessibility, control and uninterrupted compounding are the key components of collateral capacity. It’s one thing to look good on paper, but when times get tough, assets that you can’t touch or can’t convert easily to cash, will do you little good. Three things affect your collateral capacity: ① The first is contributions into savings and investment accounts that you can access. It would be wise to keep feeding your Golden Goose. Often the lure of higher return potential also brings with it lack of liquidity. Make sure you maintain a good balance between long-term accounts and accounts that provide immediate liquidity and access. ② Second is the growth on the money from interest earned on the money you have in your account. Some assets earn compound interest and grow every year. Others either appreciate or depreciate. Some accounts could be worth a great deal but you have to sell or close them to access the money. That would be like killing your Golden Goose. Having access to money to make it through downtimes is an important factor in sustaining long-term growth. ③ Third is the reduction of any liens you may have against these accounts. As you pay off liens against your collateral positions, your collateral capacity will increase allowing you to access more capital in the future. The goose never quit laying golden eggs – uninterrupted compounding. Years ago, shortly after starting my first business, I laughed at a banker that told me I needed at least $25,000 in my business account in order to borrow $10,000. My business owner friends thought that was ridiculously funny too. We didn’t understand collateral capacity and quite a few other things about money.

These negative-sum games of coercion and extortion lead to highly inefficient outcomes, and they can only be avoided by carefully crafting the ex ante rules to avoid such coercion and extortion. These coercive threats that make negative-sum games possible, and that decrease the payoffs of positive-sum games, cannot be neatly distinguished in practice from innocent externalities: any act or omission of one party that harms another, i.e. any externality, doubles as a threat, whether a tiny threat or a large threat, from which an extortion premium, its size depending on the size of the threat, can be extracted. In order to try to distinguish coercion, and the extortion it gives rise to, from an "innocent" externality that can be cured by efficient bargaining, there are ways to exclude some of these extreme possibilities from the prior allocation of rights. And indeed criminal and tort law do this: they distinguish purposeful behavior from negligent, and negligent from the mere unfortunate accident. But any such ex ante distiction contradicts the claim that the Coase Theorem applies to any prior allocation of rights. Voluntary bargaining cannnot give rise to tort and criminal law. Quite the opposite is true: at least a basic tort law is necessary to make voluntary bargaining possible. Tort law (and the associated property law which defines boundaries for the tort of trespass) is logically prior to contract law: good contracts depend on good tort and property law. Without a good tort law already in place, nobody, including the "protection firms" posited by anarcho-capitalism, can engage in the voluntary bargains that are necessary for efficient outcomes. This is not to claim that the polar opposite of anarcho-capitalism must be true, i.e. that "the government" along the lines we are familiar with is necessary. Instead, a system of political property rights that is unbundled and decentralized is possible, and may give rise to many of the benefits (e.g. peaceful competition between jurisdictions) promised by anarcho-capitalism. But political property rights are not based on a Rothbardian assumption of voluntary agreement -- instead, in these systems the procedural law of political property rights, as well as much of substantive property rights and tort law, is prior to contract law, and their origin necessarily involves some degree of coercion. Political and legal systems have not, do not, and cannot originate solely from voluntary contract. Both traditional "social contract" justifications of the state and the Rothbardian idea that contracts can substitute for the state are false: in all cases coercion is involved, both at the origin and in the ongoing practice of legal procedure. In both cases the term "contract" is used, implying voluntary agreement, when the term "treaty", a kind of agreement often forced by coercion, would far more accurately describe the reality. The real task for libertarians and other defenders of sound economics and law is not to try to devise law from purely voluntary origins, an impossible task, but to make sure the ex ante laws make voluntary bargaining possible and discourage coercion and extortion (by any party, including political property rights holders or governments) as much as possible.

tablespoons, if you’d care to indulge). Will the body composition outcomes be the same? Of course not. Rule #2: The hormonal responses to carbohydrates (CHO), protein, and fat are different. There is no shortage of clinical studies to prove that beef calories7 do not equal bourbon calories. One such study, conducted by Kekwick and Pawan, compared three groups put on calorically equal (isocaloric) semistarvation diets of 90% fat, 90% protein, or 90% carbohydrate. Though ensuring compliance was a challenge, the outcomes were clearly not at all the same: 1,000 cals. at 90% fat = weight loss of 0.9 lbs. per day 1,000 cals. at 90% protein = weight loss of 0.6 lbs. per day 1,000 cals. at 90% carbohydrate = weight gain of 0.24 lbs. per day Different sources of calories = different results. Things that affect calorie allocation—and that can be modified for fat-loss and muscle gain—include digestion, the ratio of protein-to-carbohydrates-to-fat, and timing. We’ll address all three. Marilyn Monroe building her world-famous sex appeal. More than 50% of the examples in this book are of women. Marketers have conditioned women to believe that they need specific programs and diets “for women.” This is an example of capitalism at its worst: creating false need and confusion. Does this mean I’m going to recommend that a woman do exactly the same thing as a 250-pound meathead who wants 20-inch arms? Of course not. The two have different goals. But 99% of the time both genders want exactly the same thing: less fat and a bit more muscle in the right places. Guess what? In these

WaterLess Urinal Swachh Bharat Abhiyan (Clean India Mission) accelerate sanitation coverage in rural and urban areas. Stakeholders and people from all sections of society have welcomed it as a major step to achieve a healthy and hygienic environment for the citizens of India. This is retrofit waterless urinal technology that gets fitted at base of urinal bowl. It consists of an inlet and outlet cartridge through which urine passes and seals the outlet once the urine is drained out. The technology converts conventional urinal into waterless urinal. No need to remove the old urinal bowl. Advantages:- Waterless urinals do not require a constant source of water Can be built and repaired with locally available materials Low capital and operating costs Waterless urinals produce fewer odours than urinals with water flush and also have no problems with urinal cakes (odour and urinal cakes occur when urine is mixed with water) Waterless urinals contribute to water saving at the greatest possible degree Waterless urinals allow the pure and undiluted collection of urine for reuse, e.g. as fertilizer in urban farming (after appropriate treatment, e.g. storage) and can contribute to closed loop economy, or for effective anaerobic treatment by e.g. an anaerobic ammonium oxidation (anamox) reactor Surface water and aquifers are protected from nutrients and pharmaceuticals if the urine is collected separately Special Feature :- One time fitment Hygienic - Dry restroom prevents bacteria cultivation No Flushing Allocation of transport resources, including the management and regulation of existing transportation activities. No Consumables Waterless and Odorless No Recurring Costs Longer Shelf Life Low & Easy Maintenance Just wipe and clean Structural Feature :- Thin-walled lighted weight Low porosity Ease of transportation Modular Design Flexible in design Minimal surface cracking

Your Personal Economic Model One tool we use when discussing the best course of action to secure your financial future is the Personal Economic Model®. Just as a medical doctor would use an anatomical model to convey medical concepts, we use the following model to convey financial concepts. This model offers a visual representation of the way money flows through your hands. On the left, you will notice the Lifetime Capital Potential tank, which illustrates that the amount of money you will control during your lifetime is both large, as well as finite. Most people are shocked to see how much money can flow through their hands in their lifetime. Once earned, your money flows directly to the Tax Filter where the state and federal governments take tax dollars owed from your paycheck. The after tax dollars are then directed to either your Current Lifestyle or your Future Lifestyle. Your management of the Lifestyle Regulator determines where these dollars go. Regulating the cash flow between your current lifestyle desires and your future lifestyle requirements may be the most important financial decision you will ever make. Here’s why. Each and every dollar that is allowed to flow through to your Current Lifestyle is consumed and gone forever. The goal is to accumulate enough money in the Savings and Investment tanks so that when you retire, the dollars in those tanks can be used to pay for your future lifestyle requirements. Retirement planning seems hard for most people to do but it is not rocket science. The best position, position A, would be to have enough in the tanks so that you can live in the future like you live today adjusted for inflation and have your money last at least to your life expectancy. That’s a win, but the icing on the cake would be to accomplish that with little to no impact on your present standard of living, and that is exactly what we strive to help our clients to do. Working with us can help you with the following: Optimize the balance between your Current and Future Lifestyles Identify inefficiencies in your current personal economic model (where are you losing money) Design, implement, and execute a plan to secure your financial future Limit the impact on your Current Lifestyle dollars (maintain your current standard of living)

Zero Line Spender, Saver, Wealth Creator Your financial personality type determines your financial position in life. Let’s say there is a zero financial line that represents a position where you owe nothing and have nothing. Perhaps you can remember those days getting started on your own. So, let us assume you just graduated from college and you’re one of the lucky few who graduated at the zero line, you owe nothing. Pretty amazing considering that in 2013, the debt on student loans exceeded all credit card debt owed in America. But fortunately, you made it out free and clear to the zero line. You’re a “Spender” so you go to the showroom and pick one out. With your job and the car as collateral, you get a car loan and you drop below the zero line. You lifestyle gets more and more expensive and since you are a ‘Spender” you probably take on credit card debt to help finance your lifestyle desires. You are constantly working your way back to becoming a zero, financially speaking. Then, you get married and now there are two in debt working their way back to zero. Eventually, children come along, and the odds of being able to put away enough money to pay your debt and interest and live on the top side of the zero line are becoming virtually impossible. Unfortunately, many Americans live in this position with little or no chance of ever living debt free. When something comes along that requires their savings, they must deplete their funds in order to avoid paying interest and then they must start saving again for their next expense. They are constantly returning to the zero line. The money they have accumulated is compounding interest, giving them uninterrupted growth. Having access to capital allows them to negotiate more favorable loans by collateralizing against their accounts rather than depleting them. They make payments to the lending institution with dollars from their current cash flow, protecting the growth of the money they have saved and invested for their future. Saving and investing with uninterrupted compounding is an important wealth concept for moving further and further away from the zero line.

If someone fixing a broken water pipe says, “Hand me the wrench,” his co-worker will not, generally speaking, say, “And what do I get for it?”—even if they are working for Exxon-Mobil, Burger King, or Goldman Sachs. The reason is simple efficiency (ironically enough, considering the conventional wisdom that “communism just doesn’t work”): if you really care about getting something done, the most efficient way to go about it is obviously to allocate tasks by ability and give people whatever they need to do them.11 One might even say that it’s one of the scandals of capitalism that most capitalist firms, internally, operate communistically. True, they don’t tend to operate very democratically. Most often they are organized around military-style top-down chains of command. But there is often an interesting tension here, because top-down chains of command are not particularly efficient: they tend to promote stupidity among those on top and resentful foot-dragging among those on the bottom. The greater the need to improvise, the more

We do not believe in emperors or queens or free markets or even the dictatorship of the proletariat. We believe in a world where people are equal in dignity, not contempt, and where resources—which under Capital are distributed through the quasi-randomness of a market operating blindly with respect to things which cannot easily be measured—are allocated in a sane fashion by the State.

Berkshire’s operating CEOs are masters of their crafts and run their businesses as if they were their own. My job is to stay out of their way and allocate whatever excess capital their businesses generate. It’s easy work.

Like most PE funds, the CHAMP funds are structured as ten-year limited life funds, during which the GP has five years in which to invest the committed capital. And not until 75 per cent of the fund’s allocated capital has been invested (and/or committed to be invested) is the GP allowed to begin marketing another fund.

Now there is an attempt to reverse the history, to go back to the happy days when the principles of economic rationalism briefly reigned, gravely demonstrating that people have no rights beyond what they can gain in the labor market. And since now the injunction to "go somewhere else" won't work, the choices are narrowed to the workhouse prison or starvation, as a matter of natural law, which reveals that any attempt to help the poor only harms them—the poor, that is; the rich are miraculously helped thereby, as when state power intervenes to bail our investors after the collapse of the highly-toured Mexican "economic miracle," or to save failing banks and industries, or to bar Japan from American markets to allow domestic corporations to reconstruct the steel, automotive, and electronics industry in the 1980s (amidst impressive rhetoric about free markets by the most protectionist administration in the postwar era and its acolytes). And far more; this is the merest icing on the cake. But the rest are subject to the iron principles of economic rationalism, now sometimes called "tough love" by those who allocate the benefits.

The category of small-cap value represents approximately 3 percent of the capitalization of the broad U.S. market.

Passage Five: From Business Manager to Group Manager This is another leadership passage that at first glance doesn’t seem overly arduous. The assumption is that if you can run one business successfully, you can do the same with two or more businesses. The flaw in this reasoning begins with what is valued at each leadership level. A business manager values the success of his own business. A group manager values the success of other people’s businesses. This is a critical distinction because some people only derive satisfaction when they’re the ones receiving the lion’s share of the credit. As you might imagine, a group manager who doesn’t value the success of others will fail to inspire and support the performance of the business managers who report to him. Or his actions might be dictated by his frustration; he’s convinced he could operate the various businesses better than any of his managers and wishes he could be doing so. In either instance, the leadership pipeline becomes clogged with business managers who aren’t operating at peak capacity because they’re not being properly supported or their authority is being usurped. This level also requires a critical shift in four skill sets. First, group managers must become proficient at evaluating strategy for capital allocation and deployment purposes. This is a sophisticated business skill that involves learning to ask the right questions, analyze the right data, and apply the right corporate perspective to understand which strategy has the greatest probability of success and therefore should be funded. The second skill cluster involves development of business managers. As part of this development, group managers need to know which of the function managers are ready to become business managers. Coaching new business managers is also an important role for this level. The third skill set has to do with portfolio strategy. This is quite different from business strategy and demands a perceptual shift. This is the first time managers have to ask these questions: Do I have the right collection of businesses? What businesses should be added, subtracted, or changed to position us properly and ensure current and future earnings? Fourth, group managers must become astute about assessing whether they have the right core capabilities. This means avoiding wishful thinking and instead taking a hard, objective look at their range of resources and making a judgment based on analysis and experience. Leadership becomes more holistic at this level. People may master the required skills, but they won’t perform at full leadership capacity if they don’t begin to see themselves as broad-gauged executives. By broad-gauged, we mean that managers need to factor in the complexities of running multiple businesses, thinking in terms of community, industry, government,

Capitalism allocates resources, generates innovation, rewards effort, and builds affluence with high efficiency, and these are extraordinarily important things to do well in a society. As a system capitalism is not perfect, but it’s far better than the alternatives. Winston Churchill said that, “Democracy is the worst form of government except for all those others that have been tried.”2 We believe the same about capitalism. The

Strategic direction encompasses mission, vision, and strategy. Mission is about what will be achieved, vision is about why people should feel motivated to perform at a high level, and strategy is about how resources should be allocated and decisions made to accomplish the mission. If you keep in mind the what, the why, and the how, you won’t get lost in debates about what a mission is, what a vision is, and what a strategy is. Some fundamental questions about strategic direction concern what the organization will do and, critically, what it will not do. Focus on customers, capital, capabilities, and commitments:

As I near the end of all of that and think back on what I’ve learned, these are the ten principles that strike me as necessary to true leadership. I hope they’ll serve you as well as they’ve served me. Optimism. One of the most important qualities of a good leader is optimism, a pragmatic enthusiasm for what can be achieved. Even in the face of difficult choices and less than ideal outcomes, an optimistic leader does not yield to pessimism. Simply put, people are not motivated or energized by pessimists. Courage. The foundation of risk-taking is courage, and in ever-changing, disrupted businesses, risk-taking is essential, innovation is vital, and true innovation occurs only when people have courage. This is true of acquisitions, investments, and capital allocations, and it particularly applies to creative decisions. Fear of failure destroys creativity. Focus. Allocating time, energy, and resources to the strategies, problems, and projects that are of highest importance and value is extremely important, and it’s imperative to communicate your priorities clearly and often. Decisiveness. All decisions, no matter how difficult, can and should be made in a timely way. Leaders must encourage a diversity of opinion balanced with the need to make and implement decisions. Chronic indecision is not only inefficient and counterproductive, but it is deeply corrosive to morale. Curiosity. A deep and abiding curiosity enables the discovery of new people, places, and ideas, as well as an awareness and an understanding of the marketplace and its changing dynamics. The path to innovation begins with curiosity. Fairness. Strong leadership embodies the fair and decent treatment of people. Empathy is essential, as is accessibility. People committing honest mistakes deserve second chances, and judging people too harshly generates fear and anxiety, which discourage communication and innovation. Nothing is worse to an organization than a culture of fear. Thoughtfulness. Thoughtfulness is one of the most underrated elements of good leadership. It is the process of gaining knowledge, so an opinion rendered or decision made is more credible and more likely to be correct. It’s simply about taking the time to develop informed opinions. Authenticity. Be genuine. Be honest. Don’t fake anything. Truth and authenticity breed respect and trust. The Relentless Pursuit of Perfection. This doesn’t mean perfectionism at all costs, but it does mean a refusal to accept mediocrity or make excuses for something being “good enough.” If you believe that something can be made better, put in the effort to do it. If you’re in the business of making things, be in the business of making things great. Integrity. Nothing is more important than the quality and integrity of an organization’s people and its product. A company’s success depends on setting high ethical standards for all things, big and small. Another way of saying this is: The way you do anything is the way you do everything.

Is the CEO allocating capital in a rational way that will enhance the company’s long-term value? Is the company underpaying its employees, mistreating its suppliers, violating its customers’ trust, or engaging in any other shortsighted behavior that could jeopardize its eventual greatness?

But we will never allow Berkshire to become some monolith that is overrun with committees, budget presentations and multiple layers of management. Instead, we plan to operate as a collection of separately-managed medium-sized and large businesses, most of whose decision-making occurs at the operating level. Charlie and I will limit ourselves to allocating capital, controlling enterprise risk, choosing managers and setting their compensation.

Our flexibility in capital allocation – our willingness to invest large sums passively in non-controlled businesses – gives us a significant advantage over companies that limit themselves to acquisitions they can operate. Woody Allen stated the general idea when he said: “The advantage of being bi-sexual is that it doubles your chances for a date on Saturday night.” Similarly, our appetite for either operating businesses or passive investments doubles our chances of finding sensible uses for our endless gusher of cash.

the ability to make money, save it, and put it into capital (i.e., capitalism) is an effective motivator of people and allocator of resources that raises people’s living standards. But capitalism is also a source of wealth and opportunity gaps that are unfair, can be counterproductive, are highly cyclical, and can be destabilizing. In my opinion, the greatest challenge for policy makers is to engineer a capitalist economic system that raises productivity and living standards without worsening inequities and instabilities.

The analysis of the /General Theory /shows that inflation is a real, not a monetary, phenomenon. It operates in two stages (once more giving a crudely simple account of an intricate process). An increase in effective demand meeting an inelastic supply of goods raises prices. When food is supplied by a peasant agriculture a rise of the prices of foodstuffs is a direct increase of money income to the sellers and increases their expenditure. The higher cost of living sets up a pressure to raise wage rates. So money incomes rise all round, prices are bid up all the higher and a vicious spiral sets in. The first stage — a rise of effective demand — can very easily be prevented by not having any development. But if there is to be development there must be a stage when investment increases relatively to consumption. There must be an increase in effective demand and a tendency towards inflation. The problem is how to keep it within bounds. Some schemes of investment that seem to be clearly indispensable to improvements in the long run, such as electrical installations, take a long time to yield any fruit and meanwhile the workers engaged on these have to be supplied. The secret of non-inflationary development is to allocate the right amount of quick-yielding, capital-saving investment to the consumption-good sector (especially agriculture) to generate a sufficient surplus to support the necessary large schemes. It is in this kind of analysis, rather than in the mystifications of “deficit finance,” that the clue to inflation is to be found. [pp. 110-11]

The sanctity of this property translated directly into political power for the Virginians. The next phase of negotiations among the colonies, to form a more perfect union through the American Constitution, allowed each slave to count as three fifths of a person for purposes of allocating representatives to each state. Propelled by the electoral math of free men and slave property, given that Virginia was nearly as black as it was white, Virginia went on to control thirty-two of the first thirty-six years of the American presidency. Washington’s eight years were followed by four years of John Adams from Massachusetts. Then three more Virginians—Jefferson, his protégé James Madison, and his neighbor James Monroe—would each serve for eight years, extending into 1825. Thirty-six years later, Virginia would again declare its independence, this time from America itself, choosing to preserve its economic interests over the Union.

over the past five years have led me to conclude that three factors are central to building a truly great company. Firstly, the management team has to have an obsessive focus on the core franchise instead of being distracted by short-term gambles outside the core segment. Secondly, the company has to relentlessly deepen its competitive moats over the course of time (I’m talking about decades here). And thirdly, the people calling the shots at the company have to be sensible about capital allocation, i.e. refrain from large bets (especially those outside core franchise) and return excess cash to shareholders if the cash cannot be deployed to good effect by the company.

He also reserved his father’s extraordinary powers, which included the right to allocate profits among partners, arbitrate disputes, fire partners, and determine a fired partner’s departing share of capital. These were the trump cards in a private partnership.

The American West serves as a prototype for examining urban/hinterland relations under capitalism in still another way. Because the most powerful elements in capitalist social relations derive their authority from the ability to control allocative resources, it follows that the most significant places of capital accumulation would be the locus for decisions affecting the tiniest of hinterland outposts. In Appalachia, John Gaventa found that the forces "which propelled the development of a capital-intensive, resource extractive" economy "lay not in Appalachia but in the economic and energy demands of the British and American metropolis." ... Urban areas thus grew in accord with the degree and volume of capital invested in the adjacent countryside.

The longer one owns the shares, however, the more important the firm’s underlying economics will be to performance results. Long-term investors therefore seek answers with shelf life. What is relevant today may need to be relevant in ten years’ time if the investor is to continue owning the shares. Information with a long shelf life is far more valuable than advance knowledge of next quarter’s earnings. We seek insights consistent with our holding period. These principally relate to capital allocation, which can be gleaned from examining the company’s advertising, marketing, research and development spending, capital expenditures, debt levels, share repurchase/ issuance, mergers and acquisitions and so forth.

Beside him was a small employee sweeping the floor, just by Andrei. The cleaner clenched the broom with effort and quick movements. She moved forcefully, with so much vigor that one saw a girl scout. But wrinkles had already formed on her neck, that sweated, moistening her black wig. Andrei stared, noticing she was damn good at her job, but too good. She would bend her legs to sweep the difficult corners of the shop. The woman would adjust the picture frames on the wall and wipe down the chairs, tasks which were not part of her required duties. Whenever her co-workers talked casually, the woman steered the conversation to the topic of the conditions of the store, which she knew, or to certain customers, who she knew, or to how business was, which she knew. She drove back home with a smile, knowing she’d done a great job that day. “They need me! Otherwise, who else would have caught the slip hazard by the trash? No one, not even my manager!” she would say before bed. She was naturally helpful. It was tragic to see that kind employee, happy like a little child, be so great at some stupid shop, when in her pumped a heart large enough to fuel the future, a forest, or a country. There was no structure of life, or invention yet created, whose mechanism could righteously allocate the innocence and love embedded in the warm blood of a human being. There deserved to be. She was sacred. But the world, decidedly corporate, had seized her, eaten her up, devouring what was left of the lively.