* Robert J. Chassell ([EMAIL PROTECTED]) wrote: > Erik Reuter's point does come into play. But I am puzzled by his > restatement of it on 4 May 2005: > > Unfortunately, the overall market is only growing at 6% a year and > now that the company has monopolized the market and implemented > most of the cost savings and efficiency improvements possible, > earnings only grow at 6% a year. The investors who extrapolated > the 30% per year forward take a bath. Doh! > > We are not talking about filling up a market niche, we are talking > about creating many new niches.
Please pay attention to what I wrote. The point is that it is foolish to take a portion of a historical record and extrapolate that portion over an extended period unless you have evidence that the portion of the historical record you are extrapolating can be sustained for an extended period of time. As I wrote, there are a great number of examples where this is not the case. I gave some examples. > Or do you think that the economy > really is zero sum, and that it is impossible to increase it by much? Don't be absurd. Any fool can see the economy is positive sum. It has been growing about 3% real per year averaged over the past 200 hundred years. > Erik, are you suggesting that median per capta income cannot ever grow > to be 3.5 times higher than it is now? No, of course not. I don't see why this is so difficult. You are suggesting that the economy can grow at 5.1% real per year over an extended period of time if the Democrats were in power for an extended period of time. This idea is hardly supported by the data you are using -- you are extrapolating far in excess of the historical data. In fact, if you can find a single economist who thinks that a developed economy can grow at a real 5.1% per year for 70 years, I would be very surprised. > If so, what limits the economy? I don't know of a limit on the total GDP, but the growth of GDP is considered to have a limit by virtually all economists. If productivity grows at 2% per year and working population grows at 1% per year (and hours worked per person is constant), then GDP grows at 3% per year. What causes productivity growth? Capital deepening (i.e., more machines per worker, better equipment, etc.) and more skilled (or more efficient) workers. Can the US sustain a 4.1% per year productivity growth rate and a 1% per year working population growth rate for 70 years if Democrats are continuously in power? The data cannot answer, since we don't have a historical record of 70 years of continuous Democrat rule. But it seems unlikely. No developed country in the world has ever even approached that high a rate for an extended period of time. Certainly the US hasn't at any time over the past 200 years, despite the huge advances such as invention of the railroad, telegraph, electricity, telephone, production line, automobile, airplane, robot, computer, etc. Over that time the US averaged only a bit over 3% real GDP growth rate. -- Erik Reuter http://www.erikreuter.net/ _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
