WHERE FUTURE PROFITS WILL COME FROM (2)

Steve Kurtz, Ottawa, Canada, responds:

My view is that younger folks (from pre-schoolers to maybe 50) will always be tempted by new styles and gadgets. What will slow down production of new items might be the costs of R&D. As energy and material bottlenecks (on top of debt loads) result in boom/bust cycles becoming more recovery/bus cycles, scarcities will result in a swing to more GDP throughput producing necessities (food, medicine, fuels, water,) and fewer toys.

[Ed: I agree with this but my original point concerned the absence of new "heavyweight" consumer items -- such as radios, washing machines, cars and TV -- for which ordinary folk saved hard for months and years to buy in the last century to "keep up with the Joneses". These days, there seems to be little time or space for any uniquely new products. By far the most consumer spending is today spent on fashionable embellishments of the basic set of consumer products of the last century which then drove economic growth. I agree that the proportion of spending on basic necessities will grow remorselessly in future years as the baseline of energy costs rises. Even if consumer products of amazing new properties were to be invented or desired there will be a decreasing amount of discretionary income available to buy them -- average real incomes in all developed countries having declined for the past 25 years.]