4min chapter

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Derek van Bever - The Capitalist’s Dilemma

The Innovation Show

CHAPTER

The Church of New Finance and the Capitalist Dilemma

An unexamined economic assumption is that corporate performance should be focused on and measured by how efficiently capital is used. The metrics that we use to evaluate our innovation decisions promote capital efficiency above all else. Internal rate of return will always drive you to investments that cause you to pull your capital out earlier than later. And very famously, gross margin. Clay used to talk about how different the US Steel story would have come out if US Steel had measured tons of steel that we're producing.

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