Minor Issues Capital Consumption
Aug 9, 2025
Explore the perilous concept of capital consumption as it relates to our modern economies. Delve into how inflation and low interest rates drive entrepreneurs to prioritize immediate consumption over long-term investment. Insights from seasoned investors reveal the hidden dangers of misallocated capital and its effects on economic growth. The podcast discusses the crucial link between maintaining productive assets and avoiding stagnation, painting a stark picture of the long-term consequences of today's economic policies.
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Seed Corn Story
- A farmer eating his seed corn illustrates capital consumption and lost future production.
- Those who didn't eat their seed corn gain relative prosperity later.
Fiat Money Hides Capital Loss
- Capital consumption in a fiat-money world becomes invisible until damage is severe.
- Mark Thornton argues economic theory is necessary to see these hidden processes.
Rick Rule Example
- Mark Thornton cites Rick Rule's podcast explaining capital consumption and political causes.
- Rule connects eating seed corn imagery with democracy-driven institutional incentives.
