Value creation. Wealth creation.
These are really powerful words. Maybe you think of finance, you think of innovation, you think of creativity.
But who are the value creators? If we use that word, we must be implying that some people aren't creating value.
Who are they? The couch potatoes?
The value extractors? The value destroyers?
To answer this question, we actually have to have a proper theory of value. And I'm here as an economist to break it to you that we've kind of lost our way on this question.
Now, don't look so surprised. What I mean by that is, we've stopped contesting it.
We've stopped actually asking really tough questions about what is the difference between value creation and value extraction, productive and unproductive activities. Now, let me just give you some context here.
2009 was just about a year and a half after one of the biggest financial crises of our time, second only to the 1929 Great Depression, and the CEO of Goldman Sachs said Goldman Sachs workers are the most productive in the world. Now productivity and productiveness, for an economist, actually has a lot to do with value.
You're producing stuff, you're producing it dynamically and efficiently. You're also producing things that the world needs, wants and buys.
