The First Fundamental Law of Capitalism: α = r × β I can now present the first fundamental law of capitalism, which links the capital stock to the flow of income from capital. The capital / income ratio β is related in a simple way to the share of income from capital in national income, denoted α. The formula is α = r × β where r is the rate of return on capital. For example, if β = 600% and r = 5%, then α = r × β = 30%.13
