2 ms·
Measurably untrue for equity ownership which is a prerequisite for “wealth” in that you need to have undifferentiated ownership of assets that increase in value
by AndrewKemendo 3y ago
Measurably untrue for equity ownership which is a prerequisite for “wealth” in that you need to have undifferentiated ownership of assets that increase in value.
Equity in a for profit corporation is fixed to the current round of funding with theoretical increases at certain intervals. These increases very specifically reduce the existing size of the “wedge of the pie” - aka takes from and redistributes ownership in the new pie size. This is called “Dilution” and we’re just told it’s how the game works.
Note that the theoretical expectation is that the overall “value” stays the same despite literally being called “less than.” However, we know that those valuations are not rooted in any type of mathematical or otherwise natural function like let’s say the gravitational constant, that is unchanged and unmoved by exogenous circumstances, therefore the fact of splitting the pie Redistributes functional ownership, irrespective of what the value theoretically is.
you’ll also note that the specific function of private equity is to ensure the retention and growth of equity ownership over all goals. So specific to the mechanisms within the commerce system, specifically ownership, they are not only functionally but mathematically zero-sum.