American “dream” of “making money” in “post-industrial economy” is essentially fake success. Economy that is not creating new value through agriculture, mining and manufacturing is as realistic as communism.

This perspective aligns with a growing school of thought in economics known as Value Theory. You are essentially describing the difference between Value Creation and Value Extraction.

A corporation makes money through “financial engineering” instead of innovation or production. This is often referred to as the Financialisation of the Economy. To many, this isn’t just “fake success.” It is economic rot. It consumes the real economy to feed the financial one.

Creating vs. Extracting: The “Makers” and “Takers”

In her book The Value of Everything, economist Mariana Mazzucato argues that we can no longer distinguish between activities that add value. We cannot differentiate activities that create value from those that merely move it around.

• Value Creation: Investing in research, building a more efficient factory, or training workers. These activities produce a “surplus” that didn’t exist before.
• Value Extraction: Using complex financial instruments, stock buybacks, or monopoly power to capture a larger piece of the existing pie. This makes the “extractor” rich but leaves the overall economy no better off—and often worse.

The Mirage of “Stock Buybacks”

Perhaps the clearest example of “fake success” is the Stock Buyback.

• How it works: A company uses its spare cash. Alternatively, it may take out a loan. It then buys its own shares on the open market. This reduces the number of shares available, which automatically increases the Earnings Per Share (EPS) and the stock price.
• The Result: The CEO’s stock-based bonuses are triggered. On paper, the company looks “more successful.”
• The Reality: No new product was invented. No factory was built. No worker got a raise. In fact, that money was diverted from those productive uses. It is a mathematical trick that creates wealth for shareholders without creating value for society.

“Dead” Money vs. “Live” Money

Money made through production is “Live Money”—it circulates. To build a car, you pay steel workers, engineers, and local suppliers. Money made through financialisation is often “Dead Money”—it is “parked.” The money from a $50 million CEO bonus typically goes into high-end real estate. Alternatively, it may go into art or offshore funds. It doesn’t “trickle down” because it wasn’t generated by a process that required broad human participation.

Why We Call This “Success” Anyway

We call it success because of our current Accounting Logic.

• GDP and Profit: Our metrics don’t care how you made the money, only that you made it. If a company doubles its profit by firing half its staff, GDP goes up. By moving the rest to gig labor, the stock market cheers.
• The Production Boundary: In the mid-20th century, the financial sector was seen as a “utility” that supported industry. Today, the financial sector is the industry. It has moved itself inside the “production boundary,” claiming that its transactions are “output,” even if they are purely speculative.

Comparison: Industrial vs. Financial Success

Feature	Industrial Success (Value Creation)	Financial Success (Value Extraction)
Primary Tool	R&D and Skilled Labor	Stock Buybacks and Arbitrage
Time Horizon	Years/Decades (Building a Brand)	Quarters/Minutes (Trading)
Economic Impact	High (Multipliers across society)	Low (Wealth stays at the top)
Stability	Resilient (Real assets)	Fragile (Prone to bubbles/crashes)

The Deindustrialisation Connection

This is why you noticed the correlation between high pay ratios and deindustrialization. You cannot have a 6,666:1 ratio in a purely industrial economy because production requires cooperation and reinvestment.

You can have it in a financialised economy. The “success” is extracted from the company’s past glory. It also draws on its future survival. A CEO can gut a storied manufacturing firm. They can sell off the real estate. They might buy back the stock and walk away with a fortune. Meanwhile, the factory closes. Under current lingo, that CEO was “highly successful.”