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The fatal flaw in finance theory: Capitalizing “goodwill”

February 5, 2010 by admin

The fatal flaw at the root of today’s post is really what might be called “the fundamental myth” about the current property system, namely that the market-contractual role of being the residual claimant in a productive opportunity is treated as a “property right” that is currently owned by some legal party (e.g., the corporation having the contractual role) and that may be bought and sold as well as capitalized into the party’s current valuation.

Filed Under: Main Blog Tagged With: capital theory, capitalized value, Economic Theory, Fatal Flaws, finance theory, goodwill, Keynes, Miller-Modigliani, Political Economy, property rights

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