The Dao of Capital: Austrian Investing in a Distorted World

Introduction

At the outset, we must think of capital in a new way, as a verb, not a noun. Rather than an inanimate asset or piece of property, it constitutes an action, a means to an end—to build, to advance, to deploy the tools and instruments of a progressing economy. Indeed, capital is a process, or a method or path—what the ancient Chinese called the Dao.

Capital has an intertemporal dimension: Its positioning and advantage at different points in the future is central. Time is its milieu—defines it, shapes it, helps it and hinders it. As we think of capital in a new way, we also must think of time in a new way as we engage this process—our path, our Dao of Capital.

This path is notable in that it is exceedingly and purposefully circuitous—the keyword throughout this book is roundabout—the “going right in order to then go left” that leads first to the means, those strategic intermediate waypoints from which it becomes all the more possible and effective to arrive at the ultimate ends. As evident and ubiquitous as this process is all around us, from the natural world of the boreal forest to the business world of the entrepreneur, all too often we fail to perceive it. We tend to see the destination, but somehow often miss the path. So, we end up playing the wrong game.

This is a lesson that runs deep through many areas of life’s strategic thinking and decision making. But this is a book about investing and, as such, this is my focus. Though I hope to make the point clearly in ...