3 ms·

> If growth is so important and defines success then eventually is will plateau due to limited resources and no longer be successful which is obviously not true

by robzyb 12y ago

> If growth is so important and defines success then eventually is will plateau due to limited resources and no longer be successful which is obviously not true. That is actually untrue. One theory says that a business should grow with GDP.

jrs235 12y ago
There are limited resources so defining success on growth will eventually lead to a point of no more growth and no longer be successful by a growth definition. Comparing to GDP gets tricky. Is GDP growing due to actual output growth and wealth generation or due to inflation? I suppose we need to first agree on what were looking at defining what a successful business based on a non moving target or defining success based on comparing it to other businesses. Do I think a businesses revenue should grow with GDP? Yes. Does the profit margin need to? Not necessarily. To be more successful at investing you definitely want businesses that have higher ROIs. However, are we discussing successful investing or successful businesses? Edit: typos
- robzyb 12y ago
  > There are limited resources so defining success on growth will eventually lead to a point of no more growth and no longer be successful by a growth definition. Growth depends on resources AND technology. Its quite possible to have growth without any change in resourcing. > Comparing to GDP gets tricky. Is GDP growing due to actual output growth and wealth generation or due to inflation? It doesn't make a difference. In this case we are definitely talking nominal growth. My bottom line would be that a business would generally(!) not be classed as successful if it is not growing. Of course there are other factors that might make a stationary business considered a success.
- dredmorbius 12y ago
  Is GDP growing due to actual output growth and wealth generation or due to inflation? "True" GDP should be inflation-adjusted, hence you'll see real GDP growth in adjusted statistics. Measuring inflation is its own kettle of worms. The more relevant challenge IMO is that GDP is a highly flawed measure. NNP (net national product) corrects for some of this via accounting for externalities, but both are still cash flow measures, when what would be more appropriate as a net measure of wealth would be a capital growth account -- equivalent to a businesses balance sheet. Sadly, this is one area in which macroeconomics has been stubbornly and persistently lacking.
dredmorbius 12y ago
One theory says that a business should grow with GDP. That presumes that 1) GDP can grow without limit and 2) that GDP is itself an accurate measure of real economic growth.

by robzyb 12y ago

jrs235 12y ago

There are limited resources so defining success on growth will eventually lead to a point of no more growth and no longer be successful by a growth definition. Comparing to GDP gets tricky. Is GDP growing due to actual output growth and wealth generation or due to inflation? I suppose we need to first agree on what were looking at defining what a successful business based on a non moving target or defining success based on comparing it to other businesses. Do I think a businesses revenue should grow with GDP? Yes. Does the profit margin need to? Not necessarily. To be more successful at investing you definitely want businesses that have higher ROIs. However, are we discussing successful investing or successful businesses? Edit: typos

robzyb 12y ago
> There are limited resources so defining success on growth will eventually lead to a point of no more growth and no longer be successful by a growth definition. Growth depends on resources AND technology. Its quite possible to have growth without any change in resourcing. > Comparing to GDP gets tricky. Is GDP growing due to actual output growth and wealth generation or due to inflation? It doesn't make a difference. In this case we are definitely talking nominal growth. My bottom line would be that a business would generally(!) not be classed as successful if it is not growing. Of course there are other factors that might make a stationary business considered a success.
dredmorbius 12y ago
Is GDP growing due to actual output growth and wealth generation or due to inflation? "True" GDP should be inflation-adjusted, hence you'll see real GDP growth in adjusted statistics. Measuring inflation is its own kettle of worms. The more relevant challenge IMO is that GDP is a highly flawed measure. NNP (net national product) corrects for some of this via accounting for externalities, but both are still cash flow measures, when what would be more appropriate as a net measure of wealth would be a capital growth account -- equivalent to a businesses balance sheet. Sadly, this is one area in which macroeconomics has been stubbornly and persistently lacking.

dredmorbius 12y ago

One theory says that a business should grow with GDP. That presumes that 1) GDP can grow without limit and 2) that GDP is itself an accurate measure of real economic growth.