No Free Lunch: Economics for a Fallen World: Third Edition, Revised

Chapter Sixteen: Valuing the Future - Concepts in Capital & Finance 391 PARABLE OF THE TALENTS Matthew 25 14 “For it is just like a man about to go on a journey, who called his own slaves and entrusted his possessions to them. 15 To one he gave five talents, to another, two, and to another, one, each according to his own ability; and he went on his journey. 16 Immediately the one who had received the five talents went and traded with them, and gained five more talents. 17 In the same manner the one who had received the two talents gained two more. 18 But he who received the one talent went away, and dug a hole in the ground and hid his master’s money.” Most of you are probably familiar with the rest of the parable, but the master sends the “worthless slave” out into the darkness, since he didn’t even return the money with interest. This parable may be thought of more broadly as the Parable of Stewardship (as in Bock) . In this stewardship parable, the slaves were supposed to have a broad understanding of the responsibilities of stewardship—not just to return the assets under their care in good shape, but they were supposed to grow the master’s capital. In this chapter, you will be introduced to tools that help you understand whether an investment is likely to grow the business’s capital or reduce it.