Tuesday, February 14, 2017

Engine


The engine of Capitalism isn't profit. Profit can be competed away. The engine is reinvestment. Reinvestment is a sign that something is alive. Even if you are making no profit, but you can consistently make something well for exactly what it costs, and sell it, you will be able to create more and more. If you can then find someone to finance the growth, and consistency is the easiest way to do that, you can build a bigger engine. If you aren't making a profit, and you are doing something well - that is incredibly difficult to compete with. In a world with zero transaction costs and perfect transparency, if people can copy you, they will. If someone can see exactly what you are doing, but it is hard, you are pretty safe. Find something you love doing, do it well. Build something worth building. Reinvest.

Boulton and Watt Engine
(1788)
Steam gets the cycle started
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