And it's at these external points that brilliant people have consistently shown how they can work together to overcome the limitations imposed by them. For instance, as technology progresses, even "natural scarcity" is removed. For instance, the oil we fail to find today might one day be easily synthesized by custom-built bacteria. That's already beginning. A real example is how genetically modified crops can currently support a population of 12 billion, where before, we could only support say 6 billion. This fits in with the larger trend of the quality of life improving across the board, for every measurable metric, throughout the entire course of human history. Scarcity is not an example of zero sum in the aggregate. It's an externality that has been overcome in the past, and will be overcome even more in the future.
Sorry, of course. Markets are infinitely large, lol. Actually, they are constrained and finite. >For instance, as technology progresses, even "natural scarcity" is removed. Can you name one product/market where all natural scarcity has been removed? >For instance, the oil we fail to find today might one day be easily synthesized by custom-built bacteria. Yea maybe someday possibly. What about the market today? When one company in the energy sector makes large gains, are you saying that it is not at the expense of another company in that market? And what happens should companies derive energy from bacteria? Will they not be competing for a percentage share of the market? I feel like you are ignoring basic economic realities that actual companies have to navigate every day they are in business to talk about theoretical examples and possibilities. Yes, companies can explore new markets in a non zero-sum aggregate manner, but as I already mentioned, those are new markets (iPad is a good example) and the equilibrium state that is moved towards is one where the market demand is met, and the players serving them gain or lose at each other's expense. This isn't to say that innovation can't doesn't reap the obvious rewards (besides allowing companies to serve new markets it reduces costs to serve existing markets), but you can't ignore the larger reality. So you think that Apple's and Google's gains in the mobile market didn't absolutely obliterate Nokia Symbian's and RIM's bottom line? This is real life. Not internet forum theory.These companies are competing for a finite slice of the pie, and when one makes strides, another loses, and loses big: http://www.nytimes.com/2011/07/26/technology/round-of-layoff... To say that they could just innovate or overcome 'constraints' and keep all those workers while iOS and Android grew to the size they did is to not live in the real world. The pie is only so big, and when Apple and Google took their piece, well, no amount of overcoming 'constraints' is gonna help them. Finally: >The fact is, markets grow and shrink organically, and are not set in stone at some pre-determined, arbitrary size. Don't know what you're talking about with that 'organically' business, but nobody ever claimed that markets don't shrink and grow, but you're wrong in thinking that the are not a finite size. They are, at any given time. The challenge for businesses is to figure out what that is, and how do they serve it. Just because we don't know the value doesn't mean it doesn't exist (obviously). I also never claimed that the size of a market is 'arbitrary'. Demand determines that.
...The so-called “real” market is non-zero-sum only during expansion phases while a generation of new technologies (often birthed by war) matures. Innovation unfortunately is a punctuated equilibrium process rather than one that adds value steadily. In mature markets, leading up to the next technological paradigm shift, the market behaves more like a zero-sum game where market share is won or lost driven by fluctuations in the distribution of natural resources, random fashion trends and advertising rather than fundamental increases in value. Found in akkartik's G+ stream.