I earned a PhD in economics at UC Berkeley but never got the degree because: I lacked the two languages required at the time, the entire department was in love with Fidel Castro while I was on the campaign staff of Richard Nixon and I had my doubts about many parts of the economics teachings.
I left Berkeley and over the next six months I wrote my doctoral thesis on why economic theory was wrong about ‘capital.’ I wrote a 60 page thesis that ‘capital is really just plain knowledge applied to a specific instance. I used Robinson Crusoe as the model. I submitted my paper to the leading journal, the American Economic Review, where it was accepted for publication. The editor wanted the paper reduced to 40 pages. Being arrogant, I never did the editing. My view of ‘capital’ has become the norm in the succeeding 60 years.
Now I’m ready to correct what else is wrong with economics.
First, the core terminology of economics is wrong. Communism, Socialism, and Capitalism are meaningless empty words. The world operates on commerce. There are three forms of commerce: Trade, Industry and Clientry.
Most of the tribal world is involved in trade. Each trading unit aims to make a single sale with enough margin in the sale price over the original object purchase price to cover the trader’s operating costs until the next object purchase and sale can occur. Sometimes there is credit involved and sometimes there is a three-way exchange. The largest companies in the world, such as Mitsubishi and Sumitomo Trading use three-way trades and credit. 
Industry is a complex hierarchical structure of workers whose goal is to maximize output and minimize costs. Minimizing costs is usually done by operating at scales that economize the operational expenses. Entire nations and societies can be organized to allow as many businesses as possible to operate at efficient scales. Transportation, information, and communication can be optimized for an industrial society.
Lastly, there is clientry. An interstitial form of commerce where businesses are organized to satisfy a small number of customers with highly personalized services for long periods of time. These include lawyers, designers, dentists, and banks.
Capital, as I explained in my 1964 paper on the subject, is highly specific knowledge often embedded in some material form. Small boats coming into the San Francisco Bay have fathometers to measure the water depth along with maps and tide tables. All of those are capital that has replaced strings and sounding. But capital still remains in the form of pilot boats and human bay pilots for large ships where navigation still requires complex and changing human knowledge.
Since John D. Rockefeller created a business in the 1880’s turning crude oil into gasoline, and gasoline and its derivatives have been the prime medium that underlies modern commerce. Since OPEC and the oil producing members throttled the oil production of its members in 1973 the price of oil is demonstrably the foundation of inflation. Standard economic teaching associates U.S. excess of government spending over tax revenue as the source of inflation. This may be true in some cases as post WWI in Germany and in many South American banana republics, and in the 1800's due to gold discoveries but oil price is the modern source of inflation.
Interest rates may be the long term cost of capital in individual investment cases but the interest rate set by national banks can’t be. Many countries in the 1990s and 2000s have had zero or minus national interest rates and Japan had a decade-long deflation. Neither resulted in infinite or massive investment. Interest rate, for investment purposes, seems to be set by banks and investors in an international market place.
There is no capitalism, there is only commerce.
Capital is knowledge in some physical form.
Oil is the basis of modern society and the rise in the price of oil is inflation.
National interest rate is not the time value of long term investments.
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