Main Stage, Day One: Ryan to Present at NNI Think Tank 2019
On February 6 and 7, graduates of The Nelson Nash Institute’s (NNI) Practitioner Program and their guests will descend on Birmingham, AL to discuss the Infinite Banking Concept (IBC). At the invitation of the board of the NNI, I will present from the main stage on Wednesday, February 6. This is a career highlight for me and a personal honor.
The presentation will be audio and video recorded. I’ll make it available here — hopefully by late February.
I get a full hour! Practitioners will hear my theory on an integrated, Austrian approach to finance. It begins with the founder of the Austrian School of Economics — Carl Menger. Much of what counts for “Austrian capital theory” comes from Menger’s 1871 book Principles of Economics. Unfortunately, when Menger set out to explore capital in particular, he only did so 17 years later in a separate article Des Kapitals (Of Capital). Des Kapitals is still only available to the public in the original German (over 150 years post-publication!).
Fortunately, through private correspondence and the work of Professor Edward Braun, I’ve developed an understanding of the material in Menger’s 1888 article. In it Menger, in the words of Braun, “repudiates” what he wrote about capital in his 1871 book. Instead of a physical, heterogeneous conception, Menger — in his typical, incisive fashion — explains that capital is monetary in nature, and therefore, homogeneous. This constitutes a major departure from the predominant contemporary view of capital within the Austrian School.
One significant implication of this (effectively) new approach to capital, is how it is so strongly distinguished from investment. In short, capital is the value (in monetary terms) of assets that has an acquisitive purpose. Put differently: it’s the value of stuff that an individual intends to use to acquire other stuff. For example, one might use the equity in a home in order to finance the purchase of a vehicle. That equity is capital.
In contrast, an investment is an allocation of resources for a different purpose. The idea is to generate a return, either through a cash-flow (e.g. rent payments) or eventual sale (for a “capital” gain). The dominant view in financial management is that savings should be invested. We pay no attention whatsoever to intentional capital accumulation. Consequently, most individuals approach investment under-capitalized.
People say “you have to have money to make money.” We say this because we are under-capitalized. To “make money” investing, it does matter whether you’ve capitalized. Individuals would be greeted with a categorically different — better — investment experience, were they to intentionally, strategically capitalize first.
I’ll spell all this out and what it means for the public, for the financial community, and for the industry throughout the presentation. Subscribe to my newsletter The Capitalist to see the recording!