Friday, January 21, 2011

The expanding economy

I think it's a peculiarity that:

1) The economy is expected to expand continually and forever.
2) Many, many companies are in deep doodoo if their market is not growing pretty rapidly.

You'll notice that everybody panics if the growth in a market is less than the growth last year!

Seeing as how there's a limit to the population, it just seems to be a sucker bet to hang your hat on continual expansion. I think it would be more sound having a business which simply has a stronger foundation.

It's like a big vehicle (a bus for example) which would explode if it ever drove slower than, say, 50 miles/hour. Hey, somebody should make a movie like that, I'd call it "Velocity". Could be a hit.

12 comments:

neeraj said...

There IS already a movie with exactly that plot, but right now I don't remember the title ...

neeraj said...

Now I have found out:

"Speed" (1994)
http://www.imdb.com/title/tt0111257/

Was it a joke from you?

Miserere said...

Neeraj is a bit sleepy today :-)

Eo, now, now, don't start trying to use common sense to run the World economy. We wouldn't want to live in a happy World that made sense and where humans were in harmony with the Earth.

Kent McManigal said...

Fortunately, "the economy" is not a pie where each slice means the rest of the pie is now less. It is a pie that expands and grows naturally if not meddled with. Obviously, governments have a real problem with being addicted to meddling with the pie.

neeraj said...

"Neeraj is a bit sleepy today :-)"

Yeah, my coffee has run out - first I had to buy some ...

eolake said...

Neeraj, spot on.
The little beast in me makes me want to make my jokes less than obvious. :-)


"We wouldn't want to live in a happy World that made sense"

I think that is actually so.
Fortunately we can change what we want. Though it takes time.

ttl said...

.... it just seems to be a sucker bet to hang your hat on continual expansion.

“Economic growth” is a synonym to “development of technology”. The economy grows, and can only grow, through the development of technology.

So, what you are saying is that even though today's cameras are significantly better and cheaper than those of just a few years ago, it would be a fool's bet to assume this trend to continue?

We've reached the pinnacle in cameras and other technology?

eolake said...

Far from it, I'm sure, but we may be close to what most people need. Most people, even many nerds now, just use their phone these days. Heck, I could do that with the iPhone 4, except I like telezoom and low-light capabilities.

But even if tech and the economy continues to expand in general, just watch how much *trouble* there is when the economy stops expanding for a couple of years, so many lay-offs etc. Great panic in the streets.

ttl said...

but we may be close to what most people need

Better technology is always preferable: Cars that consume less, materials that are better and cheaper, and housing that works more effectively.

just watch how much *trouble* there is when the economy stops expanding

Economy grows as long as people continue to innovate, and I don't think there has been any hitches on that so far.

What you are talking about is the boom/bust business cycle and inflation. That is created by monetary policy. It is artificial and has nothing to do with the real economy underneath.

eolake said...

You could well be right. Maybe I should have said "markets" instead of "economy".

Kent McManigal said...

Except that, once again, monetary policy has nothing to do with markets since they are imposed from "above" rather than through consensual, mutually-beneficial exchange between ordinary people.

ttl said...

Yes, and these concepts are also intentionally muddied by TPTB. Newspeak.

But the false economy is coming to an end now pretty soon.