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Old 02-12-2009, 08:04 PM   #1 (permalink)
immoral minority
ASU2003's Avatar
Location: Back in Ohio
Infinite Growth based economy

This is one thing with the stock market that causes development and risk taking, but is it possible to maintain it forever? The government and the fed can prop it up by lowering interest rates, lowering taxes or causing people to need to do something. The market can also go down for emotional reasons unrelated to growth or the amount of revenue that is being brought in by the company.

But, it seems that the big item still is if the company meets the price quarterly price estimate and has grown since last year.

Now, does this cause a problem? Are 401k retirement plans not going to work in the next 10-20 years? Are we seeing the effects of more people pulling money out of their retirement accounts instead of in the 80's&90s when people were only putting money into them (because the retirees back then had pensions).

I read this on-line today:
Capitalism is simply not sustainable; industry must continually grow in order to post gains in the Stock Market and keep the economy healthy.
Industrial growth cannot be sustained indefinitely on our finite planet. Sooner or later industry will run out of room and coping strategies and Capitalism will heave its dying breath, with disastrous results for the bulk of the world's population.

"Anyone who believes exponential growth can go on forever in a
finite world is either a madman or an economist."
—Kenneth Boulding
Now, there are a few issues that this has caused. There are a lot of scared 50-60 year olds in my office you have watched their 401k & IRAs go from having enough to comfortably retire on last July, to today where they would go through the money in 10-20 years. And those are the people that have saved a lot. There are a lot of people that haven't saved over $50,000 for retirement. And their home values aren't going up anymore, but at least most of them own homes.
Boomer Wealth: Beware of the Median

The other issue is population growth. Both new births and immigration (legal and illegal) cause prices to rise since there would be more demand on the current supply of an item. Except if the items are free. And that is what I think is the silent player in all of this. There is a growing cheap, frugal, and thrifty class of people. Some out of necessity, others for the thrill of getting a bargain. I think this economy would be in shambles if everyone else lived like I do, yet the quality of life would be just as good or maybe better. If the infrastructure (internet, roads, libraries, parks, beaches, TV, radio, and other things) are provided through taxes (though who pays the taxes?) and you take measures to grow your own food, collect rain water, use solar thermal heat, geo-thermal cooling/heating, and generate some electricity through renewable methods, you can live a very cheap lifestyle that isn't that much different from someone who spends a lot of money. Is this what the retirees of tomorrow will have to do? And what will having millions of people living this way do to the economy? I saw an article talking about how cable companies are fearing high speed internet because people are downloading the shows they want and canceling or reducing the cable programming they get. I don't have cable, but I can watch the Daily Show on-line, and there are a bunch of other free video entertainment websites out there. I use Linux, which is getting easier to use. I run LinuxMint which does everything most people would need for a video/mp3 playing, internet enabled, e-mail machine to do for them. The cost was $0 and it is upgraded every so often. Are we headed for Democratic communism? http://www.modernhumorist.com/mh/000...aganda/mp3.jpg Most jobs will be automated or can be easily replaced by a machine once basic AI gets developed, we can get plenty of stuff for free (more than in the previous attempts at communism), and if religion was kept separate from the state and economy, I wonder how many people would be better off if the took steps towards living a more sustainable life where it doesn't take very much money if any at all to pay for the large majority of items.

Sorry if this post is all over the place, I just thought of a bunch of things and am trying to figure out where the larger economy might be heading from my little world.

Last edited by ASU2003; 02-12-2009 at 08:17 PM..
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Old 02-13-2009, 06:24 AM   #2 (permalink)
braisler's Avatar
Location: Midway, KY
I know just where you are coming from. I too have marveled at the concept of perpetual positive growth for companies and industries. I can understand it from the perspective of a small or medium sized company trying to get larger. Sure they are going to have many, many consecutive positive quarters if they are well run. But for the multi-national mega-corporations... how can they sustain positive growth numbers in an already saturated market. I think of a company like Coca-Cola. Other than introducing new flavors and continued advertising, how is it likely for them to do better than maintaining their market share. Increasing positive growth to infinity seems a pipe dream for a company like that.

I'm also with you on the modern frugal lifestyle. I have always been a very thrifty person mostly due to how I grew up. But now it is increasingly possible for me to spend less and still enjoy much the same lifestyle as someone who pays more for it. However, I don't see this as the end of the economy, just a shift of the economy as we know it. The only people I know who read actual print newspapers anymore are my parents generation. Consequently, more newspapers are going out of business. And that is ok. It is a shift of resources from an unsustainable business to a newer, more streamlined model. People will still want news and commentary, but now they want it online, in real-time, through websites and blogs. So advertisers shift their dollars to online media. At the same time, companies will have to become more thrifty about how they are doing business too. Sustainable living offers some of the same opportunities for a shift in business. As more people want to generate their own power or grow their own food, there will be successful companies that will help them meet those goals. Solar, wind, and microhydro power companies already exist, though they are on the fringe right now. Maybe the next 10-20 years will see them becoming more mainstream and growing quarter after quarter to take up some of the falling business felt by companies that are getting less business... like oil companies if we are lucky .

One of the comically tragic areas where I see businesses floundering around trying to hang on to an outdated business model is the entertainment industry. For a long, long time, the only way for an artist to get music out or their movie made was to get taken on by a major studio or record label. Promotion, distribution, production, was all handled by the label and they got a cut, sometimes a larger than deserved cut, of the revenue. Now we are in an era when artists can more directly interface with their fans, distribute, produce, and promote on their own if that is what they choose. The response of the recording and movie industry has been just appalling. File lawsuits on people who share files of music, movies, or media rather than focusing on producing top-quality product with content that can't be reproduced at home. The example that comes to mind is not my own... The Dark Knight broke all kind of box office records because people actually wanted to see it, and they wanted to see it on the big screen with the intense sound effects and musical score playing all around them. If you are a movie studio and you produce a crap-fest like Pineapple Express, don't get all pissy if people download it via torrent. Those people wouldn't have gone to see it in the theater anyway. They are basically saying, meh, I'll watch that on a Tuesday night if there isn't anything better to do.
You do not really understand something unless you can explain it to your grandmother.
- Albert Einstein
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Old 02-13-2009, 09:04 PM   #3 (permalink)
guyy's Avatar
Location: Cottage Grove, Wisconsin
Found this in the 1934.10.24 edition of the Nation while looking for other info from the Depression:

In the Driftway

THE men’s clothing manufacturers have found a word fcr it.
“Go-withoutism” is the disease that is ravaging the
country-it has reduced the men’s wear business from five billion
dollars in 1909 to a quarter of that sum-and the clothing
industry is ready to spend a million dollars to “stop the trend
toward nakedness.” Plans for the “campaign were made at a
recent conference in New York in which many prominent figures
took part. “Go- withoutism”was attacked on both moral and
business grounds. Mr. J. M. Kraus, advertising manager of an
important uplift organization in Chicago which manufactures
suspenders and garters, described nudism as “the charlenge
barbarism has hurled at civilization,” and’cited, with & fine
disregard of sequences, the example of the Fall of Man in the
Garden of Eden. William Goldman, obviously representing the
left-wing group, indicated his belief that “go-withoutism” was
an apple from quite another tree when he said that its origin was
economic. But bothagreed that direct methods of combating
nakedness were unwise. Direct relief was barred in favor of made
work, sometimes known as publicity. [...]
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Old 02-13-2009, 09:36 PM   #4 (permalink)
immoral minority
ASU2003's Avatar
Location: Back in Ohio
This time around, I don't think we need to go without though. I have plenty of good stuff, I just have nowhere else to put a 4th TV, 5th computer, 4th mp3 player, a 7th week of clothes, 3rd car, etc... I am basically down to food, mortgage (which could be paid off in 5-7 years if I wanted), energy and fuel. And I am even trying to cut back on those expenses, which no decline in my quality of life. Actually, I will probably feel better if I start cooking good food, walking/biking to work, and exercising more.

The Economics of Giving It Away - WSJ.com
$0.00 is a very good price. Expect the shift toward open source software (which is free) and Web-based productivity tools such as Google Docs (also free) to accelerate. The cheapest and coolest computers today are "netbooks," which sell for as little as $250 and either ship with free versions of Linux or super-cheap old versions of Windows. The people who buy them don't load Office and pay Microsoft hundreds of dollars for the privilege. Instead, they use online equivalents, as the netbook name implies, and those tend to be free.

These same consumers are saving their money and playing free online games, listening to free music on Pandora, canceling basic cable and watching free video on Hulu, and killing their landlines in favor of Skype. It's a consumer's paradise: The Web has become the biggest store in history and everything is 100% off.
But can the government force me to spend money? Is it businesses and companies that need to produce a product that I want? But coming out with new innovative things is hard. And the quality I require from new products would mean that they should last for years without a monthly service fee. And it seems that the only companies that are doing ok have one. The car companies could take a lesson from the auto insurance, cell phone company, gas company, and a bunch of other businesses that create a product that people use everyday and would be willing to keep paying for the privilege to continue to use it.
-----Added 14/2/2009 at 01 : 30 : 21-----
Edit: I found a story that describes what I was talking about perfectly. A lot better than I did and you guys should read it.
Philip Slater: Why Free-Market Capitalism Will Follow Communism Into the Trash-Heap of History--Part III:

And I should tell you that I went through my own economic great depression in 2003. I have taken a few risks with money and borrowing after 4 years of saving, but I still am very protective and leery of spending money. Especially when I see who is making the most. There are quite a few months when I saved closed to 50% of my after-tax income.

While I don't think the economy is nowhere close to the outlook and past state of my finances, I think people are afraid it will get there, and are making it so. Then again, my Grandpa went through the great depression in the 1930s and I think it made him live a cheap life. But, the problem today is that my lifestyle and my neighbors are probably similar, but I spend much less, without going without. I may have to work harder, but I worry about too many people becoming like me a little.

Last edited by ASU2003; 02-13-2009 at 10:30 PM.. Reason: Automerged Doublepost
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Old 02-13-2009, 10:58 PM   #5 (permalink)
... a sort of licensed troubleshooter.
Willravel's Avatar
I suspect the hope is that by the time we've reached a pinnacle in growth on Earth we can expand outward into interstellar economic growth. It's all very sci-fi, but it makes sense and it's the free market capitalist version of why we will eventually go into space. Me? I'd like to go because of scientific advancement, but there probably aren't enough people like me to invest in such a pricey adventure. Space-faring will become common when it becomes profitable, assuming we stick to a certain extent to our current economic models.

All that being, said, there are far too many variables in the equation to justify an expectation of continuing, exponential economic growth overall. I know it's fun to pretend that economics is simple, but when you see people with decades of experience and multiple doctorates still getting it wrong consistently, it's okay to admit that it's complicated. It's not okay to go into denial and support economic bubbles, which are the mask behind which the truth lies.

The saddest thing of all is that I'm rubbish with economics. I tried to take a very pragmatic approach in college and ended up arguing with my three different econ professors because a lot of what they were preaching, especially about debt and the monetary system, made absolutely no sense to me. It's not that I was right and they were wrong, nor was it that I was wrong and they right, it's just that I like to simplify things in order to solve them. I probably shouldn't even post in Tilted Economics, all things considered. Take it with a grain of salt, then, when I give the same simple suggestions I've been giving since long before October: get out of debt as soon as possible and do your best to stay out of debt, live slightly below your means and save up what you don't spend, always have at least a few months' worth of paychecks available to spend just in case, invest only what you can afford to lose, treat other people as you would like to be treated (just a good rule of thumb), and you're probably right not to trust other people 100% with your money.
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Old 02-14-2009, 06:23 AM   #6 (permalink)
roachboy's Avatar
Super Moderator
Location: essex ma
it's self-evident and has been self-evident that for capitalism "growth" or expansion is not and cannot be a steady state.

the meme that says (without arguing) the contrary is mostly about conflating capitalist relations with biological entities--so capitalism becomes a Giant Plant. it's hard to be critical about a plant: what are you going to argue against? as for the phases of "growth" attributed to this imaginary Giant Plant, why they're inevitable one after the other. and you can tell it's an imaginary plant because it only grows and never dies.

apparently folk have found something nice in seeing themselves as an element within a Giant Plant: it simplifies one's life because all questions of direction and organization take care of themselves. if pursuit of self-interest is inserted into a general plant schema, then buying shit becomes not only a civic act, but a system necessity because what else do part of plants do but move around, performing their characteristics as aspects of the performance of higher-order systems. and so all existing hierarchies are natural and they kind of have to be. thing that go wrong are always problems of wobble in certain sectors that are attributed to some problem of Essence--the Bad Apple Theory.

there is a long and glorious history of organic division of labor ideas--the last populuxe version was the corporatism of the early 20th century so enthusiastically adopted by nice folk like mussolini.

but hey, we sure knew the difference between the Giant Imaginary Plant of american-style capitalism and older forms of domination--Bad Things Originate With the State and so it follows that being dominated by "private sector" entities is not domination at all, because we all know that the Salient Feature of domination is the state. with this bit of Important Passive Insight in place, folk were able to sail through the past 30 years quite convinced that they were politically free while the reality was that the ideology they consumed and so repeated and so lived through resulted in a wholesale evacuation of the political.

but it was a soft domination.

what i expect to happen that will continue that same heroic american tradition of resisting being-dominated is that we will soon be treated to new narratives about system self-correction, free of any actual agency. Giant Plants: that's how they roll.
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite
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Old 02-14-2009, 09:13 AM   #7 (permalink)
guyy's Avatar
Location: Cottage Grove, Wisconsin
Plenty of people are going without. 1/9 US houses is vacant. That's a lot of people going without their own homes. We all know the situation in health care where Americans go without until they reach a crisis. It's the same with dental care. People were going without filling up their gas tanks and running out of gas... people are going without. I'd say its more low wages than voluntary simplicity.

And to take the plant metaphor one step beyond: plants thrive on horseshit.
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based, economy, growth, infinite

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