The Force of Capital Equation

The previous unit explained the Effort Theory of Value which is based on one’s dharma or svadharhma.

F = (V↑ - V↓) / E

• F: Flow or Force (such as the force of capital)
• V↑: high value perception
• V↓: low value perception
• E: effort (toil and trouble) – this is the Invisible Hand Function

Economic activity or flow is highest when there is a difference between value-perceptions, and Effort is minimal. We call this difference as “primary arbitrage”.

Economic flow is lowest when there is no difference between value-perceptions, and Effort is high. Effort is naturally lowest if it matches the dharma or purpose of the entity making the effort.

Example

A person who loves playing guitars will make higher quality guitar music than one who hates playing guitars.

The guitar-lover’s effort is less than the guitar-hater.

Assume society loves guitar music, so V↑ = 10 and V↓ = 2.

• The Guitar Lover’s Effort is 1
• The Guitar Hater’s Effort is 10

F_lover = (8) / 1 = 8
F_hater = 8 / 10 = 0.8

This means the force of capital of:

• Guitar Lover in playing guitar is 8 – He is needs to play a lot because of the high demand and his low effort in playing guitar.
• Guitar Hater in playing guitar is 0.8 – He is so stressed when he plays because his force is very low.

The high demand for guitar music prevents Guitar Lover from being overcapitalized.