I propose that we call this the Scarface effect: "The world is not enough."
Entrepreneurs are in this game to create more and more economic value from the same finite resources. Take time: people have roughly the same time now than they had 40 years ago. Yet, we create way more economic value out of this time than 40 years ago, because our productivity has gone up.
Resources are finite, economic value is potentially infinite. Therefore, yes, you can have virtually infinite growth of economic value.
Do you mind explaining how? I'm not sure I understand.
http://freakonomics.com/2014/01/24/can-economic-growth-conti...
I'm not saying this is right or wrong, just trying to explain the thought.
The concept of infinite substitutability was presented as a "principle" in a 1976 paper, itself trying to argue out of the all too obvious implications of Limits to Growth (1972).
"The Age of Substitutability", H. E. Goeller and Alvin M. Weinberg, The American Economic Rrview, Vol. 68, No. 6 (Dec., 1978), pp 1-11 https://www.jstor.org/stable/2951003?seq=1
Somehow this hypothesis has been raised to the level of a scientific law of economics, trumping thermodynamics, physics, chemistry, and 216 years of actual experience of the Industrial Revolution and subsequent industrial periods, as well as economics' own law of diminishing returns.
There's nothing here but wishful thinking.
https://books.google.com/ngrams/graph?content=infinite+subst...
So yes, there is a ceiling in available resources (although there's a whole lot of resources that we can tap in the solar system alone), but as long as you don't see a ceiling in productivity improvement, you don't see a limit to growth.
For productivity, virtually all of the Solow residual disappears if you add energy as a factor. R. U. Ayres and Charles A. S. Hall are two (and independent) authors among many who've demonstrated this. Ping back if you'd like me to dig for specific references.
Orthodox economics of course ignores this.
With that model, saying that economic value is "potentially infinite" is equivalent to saying that there will always be a way to improve someone's life.
Georgescu-Rogen, Daly, Soddy, Bohm-Bawerk, Marshall, Smith.
Imagine if moores law continues going strong, until we have computer's powerful enough to simulate realities. Now anyone can have whatever they want, only limited by computer processing power.
Also, just becuase resources are "finite" doesn't mean we are anywhere close to the limit.
You could just as easily respond by paying "Sure, the universe is finite. Let solve inequality by limiting the amount of resources a person can use to 1 galaxy per person. Nobody needs more resources than an entire galaxy!".
Until we get to that point, we aren't anywhere close to "finite" growth.
A computer isn't a perpetual motion machine. It runs under the laws of physics just as everything else does.
How much energy do you think you would need to truly simulate a galaxy at quantum levels of resolution?
But what if you don't need quantum levels? Then you're into a more subtle argument - confusing an economy of resources with an economy of experiences that can be created using those resources.
It might seem "obvious" how that makes it possible to use less of everything, but if you think it through in detail it really isn't. You still need practical infrastructure, power, and even if everyone is in VR 24/7, you still need nutrients and waste disposal.
You can't start by assuming infinity because Moore's Law, and then pretending it makes all the hard problems go away. It doesn't.
The point is, if you can be millions of times more productive with the same quantity of resources, your reserve of economic growth is gigantic. Not truly limitless, of course, but limitless for all intents and purposes.
There is a lot of energy out there and a lot of technological growth to go before we hit a "finite" limit.
I prefer to phrase it as "potentially asymptotically endless growth of economic value". Lording over all of this are the (as far as we currently know) iron laws of thermodynamics. Until the economy is majority fad/fashion-driven and ascribes value literally upon human whimsy, it must derive ground truth value out of those laws, and as far as we know there does not exist an infinite supply of energy. We are a long ways from reaching the asymptote, but even "virtually infinite" will literally cook the planet with an economy using ideal Carnot efficiency-based engines.
This is brilliantly clarifying, thank you.
> Until the economy is majority fad/fashion-driven and ascribes value literally upon human whimsy, it must derive ground truth value out of those laws.
I would disagree with that, but I'm happy to reconsider if you care to explain more. Economy is based on our preferences, as economic agents. The rationality of our preferences is irrelevant to the economic system. In this way, there is no "ground truth". That's supply and demand, not a cost-driven economy. There is no economy outside of interacting economic agents performing transactions, this is what an economy is.
Stock markets are speculative, so investors trade on the story and the fundamentals on a sliding scale, in the case of twitter it's fundamentals aren't strong without a road to profit, one that they are also quite far away from, and in terms of story being compared to FB which now has 4x more users and continues to grow doesn't allow it to create a story that investors can rally behind or support it.
Ultimately the main issue with Twitter was lack of leadership and decision making and the failure to acquire Instagram.
If Instagram was a part of Twitter then they would have a secondary social network, that today (although with FB integration) has already outpaced them in terms of user numbers and continues to grow.
That failure is why they are where they are currently. They haven't been able to do a large strategic acquisition that really pushed their company forward and the ones that they have done were mainly add-ons and smaller in comparison that were never able to stand on their own.
Kudos to Mark and Facebook for being decisive and pulling Instagram from out under Twitter, but if Twitter want to get the deal done they should have led with a Billion not $500MM and the deal would have been theirs.