Message Number: |
802 |
From: |
James W Mickens <jmickens Æ eecs.umich.edu> |
Date: |
Sun, 9 Sep 2007 19:13:56 -0400 (EDT) |
Subject: |
Re: mind the gap |
> James, I think you're empirically wrong that wealth creation is anything like
> a zero-sum game and I'm working on my response!
I think that the basic laws of economics are against you here. Trixie's
example of market share is a good one. Given a finite number of people
willing to pay for a service, the wealth acquisition of one service
provider is often in direct opposition to that of another. Even if the
customer base is growing, there's no guarantee that there's enough demand
for multiple businesses to run at their full profit capacity at a given
moment. There's certainly not enough room for multiple businesses to
expand at arbitrarily large rates forever. Once the customer base for
widgets reaches its saturation size, consumers will buy widgets from
someone who is you, or someone who is not you. If they buy from you, this
increases your wealth while decreasing that of your competitors, and vice
versa. I don't think that this is a radical idea. CEOs talk about stealing
market share from other businesses all the time. Are they fundamentally
confused about how businesses work?
~j
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