03-02-2003 21:22									#31
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if all it takes is the emergence of new industries, then we have scant need to worry in any case. Biotech alone will feed the beast for the next fifty years.

-=Vel=-

	03-02-2003 21:24									#32
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quote: Originally posted by Tripledoc Surely there must be some upper limit. Military might must be paid for - the largest post being wages. Deficit financing does not add anything of value to the economy if it is just wages. It must be used to invest in productive or wealth generating enterprises. A large well paid army might boost consumption. However armies are not paid to consume are they? The army is not a welfare institution. If the scheme is to instill money solely within the US economy as you stated then surely investment in foreign countries will suffer as the dollar depreciates and nothing will be done to correct the fundamental imbalance in the world economy - trade deficit wise. I simply can't understand all this talk of how the level of consumption is an indicator of economic growth when the financial base for futher increases in consumption is not there and seemingly the demand is not there either.

Tripledoc,

Increased demand increases profits. Then investment takes place.

	03-02-2003 21:26									#33
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Vel,

Maybe so, but eventually there will be no emerging industries. Technological developement will one day be a thing of the past.

	03-02-2003 21:32									#34
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I gotta disagree with you, Duncan.

No emerging industries would imply that:

A) We have perfect scientific knowledge of the world around us

and

B) We are living in a utopian society where all our wants and desires are met.

Personally, I don't see either of these happening, and because I don't believe we'll ever achieve the above, I see new industries constantly being created.

One scientific discovery answers a question, and reveals ten new questions.

As we answer more questions, we find more puzzles.

More puzzles invariably lead to more technologies, which lead to....new industry.

-=Vel=-

	03-02-2003 21:36									#35
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Well said Vel,

Once upon a time the prevailing thought was at the turn of the 1800's to 1900's that science had discovered all there was to discover. Then along came Einstein and set the world of science on its ear.

	03-02-2003 21:37									#36
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We need wage growth inside the US to fuel internal comsumption but wages are depressed due to immigration, but immigration is needed to offset the aging workforce.

We can't count on exports to fuel the US economy.

	03-02-2003 21:43									#37
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Thanks Og....yep....I don't see us running out of questions any time soon....and that's about the only way we'd run out of new industry possibilities.

-=Vel=-

	03-02-2003 22:22									#38
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quote: Originally posted by Ogie Oglethorpe Well said Vel, Once upon a time the prevailing thought was at the turn of the 1800's to 1900's that science had discovered all there was to discover. Then along came Einstein and set the world of science on its ear.

And now people believe that because people keep coming up with original ideas that there are infinite original ideas. The fact is that economic growth is continually slowing. This is evidence of slowing technological growth. The cost of coming up with new ideas for an emerging market will go up so far that they will not be economically fisable. That will be sufficient to cause the fall of capitalism. And what good will capitalism be at that point?

	03-02-2003 22:33									#39
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Have you ever played with factorals?

Amazing critters, especially for a non-math guy.

And what's really amazing about them is that for every one new number (idea) you add to the mix, you generate a HUGE number at the end (combination possibilities).

Technology is the same way. Each new innovation doesn't just stand on its own. It does that, sure, but it can also be combined in innovative ways with EVERY OTHER thing out there.

Some (many) combinations are patently stupid (ie - a cell phone and tuna salad will prolly not net you anything exciting), but many others are not (ie - what if we combined math co-processors with emerging biotech/cybertech stuff, and found a way to implant a math co-processor into a human brain, allowing that person to make use of the chip when performing mathematical calculations).

It's not just new ideas....it's new combinations of ideas.

Ask some of the guys I'm working with on the CB project....I get new ideas faster than I can write 'em down....one of our team took to calling me the "Robotic-Idea-Factory"

The rest of the world is that way too.

-=Vel=-

	03-02-2003 22:36									#40
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Dunkan,

I believe the trend you speak towards, the link of economic growth to idea generation, is faulty. You are looking to much towards the latest recession years and not the exponential growth in general of the 20th century.

I have already stated I believe there are some serious indicators that suggest hard times ahead but concur that the best means to avoid those impacts is through new market generation.

Even if there is a great depression, I think it folly to think it spells the death of capitalism.

	03-02-2003 23:16									#41
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I should have specified and said workable, profitable, means of production reorganizing original ideas instead of just saying ideas.

Don't be tricked by math. Infinity, as far as we know, only exists in mathmatics, and surely seldom if ever exists in reality.

I agree that new techonologies are out there. They probably aren't significant enough to keep us going for 50 more years of capitalism.

Here are examples of the kinds of ways that the means of production need to be reorganized to keep capitalism moving along smoothly.

After the last Great Depression no new emerging industries were developed. Fortunate for those with property, a major war was started postponing the collapse of capitalism. The growth in the economy after the war was very unique. The mentality of consumers had completely changed. They were now willing and able to buy all kinds of new things, and many more women entered the workforce throughout the next few decades. In fact this trend is still continuing, although the effects are slowing.

The economy started having serious problems as the effects of these new industries started to wear off. However, computer and networking technology finally became implementalbe. Although less significant that industrialization, it was significant enough to reorganize the means of production to keep capitalism moving along.

In order for capitalism to continue, we need significant changes to occur within the economy otherwise we face stagnation. Even though we come up with ideas, this is not neccessarily enough. Point is, will these ideas change the economy profoundly.

Ogie,

exponential growth? Are you serious?

	03-02-2003 23:21									#42
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Economic growth has slowed continually through out the 20th century. The long range curve is downward sloping.

	03-02-2003 23:22									#43
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Yes, we're headed towards a major depression. We are also headed towards extinction. Who can say when either will arive or how.

	04-02-2003 00:32									#44
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The very existence of this thread reassures me that we won't have even a second recession.

C'mon people! Unemployment always increases in the first year of a recovery - you don't even have to go back further than 1992 to see that. Last year real GDP was 3.0% - that is a pretty good year. This year unemployment will probably continue to increase for the first half of the year and then start to decline. Businesses have been repairing balance sheets and cutting costs to get healthy, just like they should. Real GDP will probably be about the same as last year, but only because the deflator will be a little higher and negate some of the gain in nominal.

What a ridiculous time to buy gold!

They really need to start making economics manditory study in grade school.

The 1930s depression was partly/mostly caused by the Fed tightening 200 basis points when things were at their worst instead of providing liquidity to compensate for the slowdown in money velocity...

	04-02-2003 01:11									#45
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To sten sture

That is the worst kind of neo-liberal voodoo economics I have ever heard in my life.

The world is not a factory floor.

Pray tell - why was there a 'slowdown in money velocity' in the first place?

To chegitz guevara.

Doom and gloom.
Extinction? No. Soup kitchens and public works, maybe.

It is the third world which must generate new demand.
Supply must be secured through a restructuring - make that a resurrection - of the productive capacity of the post-industrial societies.

The service sector of the western world has become a bloated disaster. It puts educated people in degrading jobs of subservitude. Labour unions must be strengthened and gain influence on par with high finance and corporations. Then their accumulated wealth will be subtracted from these entities and put into the hands of the employees. Their wages fuel demand so their daily economic transactions must surely be just as valuable as any corporate character's decision as to what to invest in - no matter how well versed he might be in supply side economics.

Labour unions are corrupt. Sure. But they can hardly be more corrupt than corporations. The present system allows for some to be more corrupt than others. If everybody is equally corrupt then the collective loss will hardly be a political problem.

New ideas. The technologies for energy saving measures are there! my suspicion is that nations are holding back waiting for an even better technology to invest in. Kind of like the man who want's the optimal computer and puts his buy on hold every six months.

	04-02-2003 01:22									#46
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quote: Originally posted by Tripledoc To sten sture That is the worst kind of neo-liberal voodoo economics I have ever heard in my life.

From the persuasive insight highlighted in the rest of your thought provoking posts, I don't doubt that you are telling the truth.

	04-02-2003 01:48									#47
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I think your analysis of economies is a bit lopsided.

Yes...what you're saying is true IF all possible markets for existing technologies and industries have been fully tapped.

But we both know that's not how it works.

In the third world, there are new, emerging markets for stuff that we still make, but for which demand is dropping off here.

As people grow old and die, they are replaced by new people, and the new people don't just magically get the stuff they need (even if it's staple stuff)....nope....they gotta go buy it (cars, houses, refrigerators, etc). In this manner, even mature industries keep their steam, and so long as there are developing and/or untapped markets to sell the stuff made by mature industries, there is no danger of collapse.

And of course, while all this is happening, there are also entirely new innovations, leading to entirely new industries being born every day.

I think your fears regarding the impending doom of capitalism are misplaced.

It's not gonna go anywhere for the foreseeable future, and that horizon extends a good bit beyond fifty years.

Could something catastrophic happen to prove me wrong?

Absolutely....but at that point, the extinction of capitalism would be the least of our collective worries.....

-=Vel=-

	04-02-2003 01:57									#48
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This year looks like a good one for the US. Europe (especially Germany) and Japan are another matter entirely.

Don't listen to talk radio. It's corrossive to your mind!

	04-02-2003 02:17									#49
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I know a lot of people are already majorly depressed about jobs.

	04-02-2003 02:19									#50
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quote: Originally posted by Tripledoc To chegitz guevara. Doom and gloom. Extinction? No.

You deny that the human race will someday go extinct? That's silly, every species goes extinct. It's not likely to happen today or anytime in the near to mid-term future, but eventually homo sapiens sapiens will be no more. But probably not today.

	04-02-2003 02:20									#51
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quote: Originally posted by DanS This year looks like a good one for the US.

They said that last year.

	04-02-2003 02:21									#52
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Why is everybody moaning about the economy? Things are flying up here...

	04-02-2003 02:40									#53
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They said that last year.

As Super Sten said, the economy grew at a healthy clip last year. For those with jobs, wage gains were high.

I know it's cold comfort to you, but it always takes a while for job growth to kick in, which will make unemployment go down.

Last edited by DanS on 04-02-2003 at 02:49

	04-02-2003 02:49									#54
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2.4% isn't that great, and the last quarter so a massive drop from 4% to .7%.

	04-02-2003 04:01									#55
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Count your blessings. It's a respectable number, and could be revised substantially upward. One of the highest rates of growth in the Western world.

	04-02-2003 04:15									#56
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quote: Originally posted by Velociryx As people grow old and die, they are replaced by new people, and the new people don't just magically get the stuff they need (even if it's staple stuff)....nope....they gotta go buy it (cars, houses, refrigerators, etc). In this manner, even mature industries keep their steam, and so long as there are developing and/or untapped markets to sell the stuff made by mature industries, there is no danger of collapse. And of course, while all this is happening, there are also entirely new innovations, leading to entirely new industries being born every day. -=Vel=-

It doesn't take many workers to produce the neccessary goods for the next generation. The thing that keeps people employed in capitalism is dynamics. Capitalism is very unstable and it has to constantly be driving forward at a good pace. When it's not driving forward in such a way its uglyness starts to become very appearant, because the masses start to suffer.

	04-02-2003 04:29									#57
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Again, you cannot examine either one side or the other though....true, as new and better technology becomes available, it doesn't take as many people in the factory to crank out the next generation's cars.

The people who used to work in those factories, however, now go to work building the robots that replaced them on the factory floor.

Or in servicing the robots.

Or programming and improving them.

Or any number of new (evolutionary or revolutionary) industries.

To zero in on one small piece of the puzzle and conclude that the whole is verging on collapse is to ignore the larger picture.

In that larger picture, we find a vast, untapped pool of consumers (the undeveloped world), who only need our help to modernize (and as they modernize, they'll need to buy goods from those who are already there), and AFTER they modernize, they'll begin to desire "exotic" goods and services.

Capitalism therefore, is not ONLY extended by revolutionary technology, but by tapping wholly untapped markets. If either is happening, capitalism continues. If BOTH are happening, capitalism grows like Kudzu.

Both will be happening for quite some time to come.

-=Vel=-

	04-02-2003 04:39									#58
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Vel,

You are assuming that globalization will be a permanent aspect of capitalism. You are also assuming that every nation will industrialize and develope like the US has. To the first assumption I would say that its an objective fact that its not so. If every nation were to reach the income levels of the current industrialized nations it could only happen once. To the second assumption, if they are to industrialize why haven't they so far. True China may continue to industrialize and depend on imports and foreign investment. Or there could be a global depression this year and their economy would tank along with the other trading nations of the world.

	04-02-2003 04:48									#59
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With regards to industrialization.....it's not their *fault* that they have not...it is ours.

The industrialized world has the responsibility (and in fact, the NEED) to help non-industrialized nations get there. It's the very best method of opening up new markets that we have.

As to industrialization in general....the pattern need not be indentical, however it is certainly true that in general, the patterns tend to be similar.

-=Vel=-

	04-02-2003 05:20									#60
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quote: Originally posted by Velociryx With regards to industrialization.....it's not their *fault* that they have not...it is ours. -=Vel=-

I won't argue with you about that, but I will add something that you may or may not agree with.

The nature of capitalism is competition. By the admission of the neo-classical economists, capitalism works best when agents behave in their own self-interest.

We could easily produce enough goods and services in the industrialized nations to satisfy the entire world. If they were to industrialize it would just add to the fundamental problem with capitalism. Indeed, that problem is competition itself. Nations industrialize to import to the US. As more and more nations industrialize they all face stiffer competition resulting in market glut.

The industrialization of a nation adds needed dynamics to capitalism, but even if they were all to industrialize, capitalism could not be saved by those events.

edit: I should say that we have the ability to supply the world. However, we may have to be satisfied with a McDonalds on every other block instead of a McDonalds AND a Burger King on every block.