5 ideas
Once marginal utility theory defined value as whatever a willing buyer pays, the boundary between productive and unproductive activity dissolved, because any activity that earns income counts as creating value by definition. Rent-seeking can then no longer be identified analytically: if you earn it, you must have produced it.
The production boundary is the line statisticians draw between activities counted as adding to GDP and activities treated as transfers of existing value. Where it is drawn is a political and theoretical choice, not a neutral measurement, and moving it changes which sectors appear to drive growth.
Before around 1970, national accountants treated bank interest margins as transfers, which made banking's net contribution look zero or negative. Revisions to the System of National Accounts introduced FISIM, which measures banks' value added as the spread between borrowing and lending rates. As a result, a wider spread, including one earned through riskier lending, shows up statistically as more output.
Value creation means producing new goods and services. Value extraction means moving existing resources around and capturing gains from that movement, for example by charging a toll, earning monopoly rents, or trading assets. The test for any income stream is whether it comes from enlarging the pie or from positioning oneself to take a larger slice of it.
Under shareholder-value maximization, executives are paid in stock and judged on share price, which pushes firms toward buybacks and dividends and away from R&D and long-term investment. Firms then extract value from the productive base that earlier investment built, and they call it efficiency.