Since as we now understand, investment is the critical tipping point in the allocation cycle (without it there will be no production, no allocation cycle, and therefore no highly-developed economy) we must properly concern ourselves with making certain that we do nothing to discourage this essential activity.

Once the investment has been made in anticipation of a profit to be earned from fulfilling an existing or anticipated demand, the flow of goods and services begins to move clockwise around the allocation circle.

In other words, we witness the flow of tools, raw materials, human energy, and other related services moving into the area of production.

In production, these factors are combined into the production of whatever is the object of the productive effort - let us say for example, refrigerators.

Once the refrigerators are produced, they in turn continue the clockwise flow to the point of distribution.  That is, they are transported to the market and put into the hands of wholesalers, wo in turn put them into the retail outlets where, it is hoped, they will be sold to the final consumer.

When the original investment in the productive capacity to manufacture refrigerators was made, it was only in anticipation that consumers would be willing to purchase the refrigerators at a price that would return a satisfactory profit to the investor.

Thus, when the consumer does purchase the refrigerator, the clockwise allocation flow is completed, and we now see a counter-clockwise flow of money back through the market, to the original investor.

Only when the consumer purchases the refrigerator and starts the flow of money back through the market, do we have the justification for the acts of investment, production, and distribution that preceded the final purchase.

In other words, if consumers do NOT purchase the refrigerators, then the original investment of time, money, labor, and raw materials was not economically justified.