G'day Jim, > the "grow or die" tendency of capitalism isn't always realized. "GoD" > leads to over-accumulation either relative to natural constraints (� la > David Ricardo or Mark Jones) or by creating its own barriers (� la Marx). > Accumulation can be blocked by excessive debt accumulation, unused > industrial capacity, and pessimistic expectations (on the demand side) > or by bottlenecks in labor-power or natural-resource or (in the short > run) fixed capital-goods markets or environmental disasters (on the supply > side).
Useful summary, mate. This harbinger of the Great Rethink To Come (which manages to be sobering without recourse to depletion, chronically scarce investment opportunities, and bad debt crunches) just in from Morgan Stanley's Steve Roach (excerpted from http://www.morganstanley.com/GEFdata/digests/20011001-mon.html#anchor0 ): "Increasingly risk-averse investors may be more satisfied to realize moderate, but safe, returns in a less secure world. In economic terms, this could well reduce the preference for leverage and tilt the balance away from the excesses of spending and back toward a long needed rebuilding of saving. The demographics of an aging population have long been pointing in that direction, and The Shock could represent a real wake-up call for saving-short Americans. A similar jolt might effect the risk-taking mindset of entrepreneurs and venture capitalists. Defining moments are all that -- and more. There are many that want to frame the debate in black and white, asking if The Shock represents either a cyclical or a secular turning point. I worry this "either-or" framework oversimplifies the story. To me, it�s both -- a cyclical event with profound secular implications. Business cycles are always a temporary deviation from norms. In that respect, this one is no different. But there is an important twist to what now lies beyond the cycle. When the vigor of any recovery subsides, I believe that America will converge on a new set of norms that is very different from those, which we had become accustomed to. And I suspect those norms will constrain the US economy to a much slower growth potential than we had previously thought. It�s not easy to quantify the new norms that lie ahead. It never is. But I think there are compelling reasons to believe they will be well below those of the roaring nineties. Over the mid-1996 to mid-2000 interval, trend GDP growth in the US economy was 4%. Looking ahead over the next five years, my guesstimate would be for a downshift back into the 2.5% range -- only a slight improvement from the pre-bubble norms of the early 1990s. Like the NASDAQ bubble, I suspect that history will judge the performance of the US economy in the latter half of the 1990s to have been an aberration, not the dawn of a New Era. The Shock is a wake-up call for those still clinging to now-antiquated perceptions of America�s growth dynamic. Call it the end of the New Economy. That suggests a significant re-rating of asset prices still lies ahead."
