"No strategy succeeds forever." (Kenneth Arrow). It's not just something he said, it's something he proved.

Hi Ondelette.

I looked up Arrow's Law, but only found Arrow's Theorem. From Wikipedia

"In social choice theory, Arrow’s impossibility theorem, or Arrow’s paradox, demonstrates that no voting system can convert the ranked preferences of individuals into a community-wide ranking while also meeting a certain set of reasonable criteria with three or more discrete options to choose from"

Is this what you were referring to, or something else?

Like DaveL, I have trouble believing he proved that "no strategy succeeds forever". Succeeds at what, and how do you define success?

Doesn't the PacMan pattern disprove Mr. Arrow's contention?

Again, he made the fortune on one stock. Like, Scuzz claims (not me), most wealthy people did.

-- DaveL

Link?

It's always good to back up your claims, but I don't think this one needs it. Perhaps "most" is a stretch, but there are a LOT of people who made their wealth from substantial ownership of stock in a single company.

The Fords (Ford Motor Company), the Waltons (Walmart), the Busches (Beer), the Rockefellers (oil), Bill Gates (Microsoft), etc., etc. I bet most people can think of a lot of examples like this.

I know a number of people personally from the Boston area where I live who made small (1-2 million) to large (more than 50 million) fortunes when their companies were sold/went public. The tech start up game is big out here. I think it's mostly a crapshoot, but it has definitely made many people a lot of money.

One might just as well state that financial collapse causes the economy to stop growing. Cause and effect are entangled.

One can state anything, of course. You have to do the analysis to see which statements are valid, and which ones are crap.

Interestingly, financial collapse will indeed stop economies from growing, at least temporarily. Look at the Great Depression. But the economy eventually recovered and returned to sustained growth because there was still a vast amount of natural resources left to exploit.

The current financial collapse is one of the causes, probably the main cause right now, for economic contraction. However, the natural resources of the planet are now stretched thin and overexploited, which puts an upper bound on economic activity. This means that there will be no lasting recovery, no return to the growth era.

Also, you wrote that inflation can be used to create debt obligation. Perhaps it is more accurate to view the response to the current financial troubles as creating a future debt obligation in order to pay off a current one with the hope that some long term inflation can partially relieve the effect of the future debt.

I don't recall writing anything about inflation, merely that our economy requires the creation of new debt obligations in order to function normally.

As to the point you make here, that sounds reasonable. Many debts are services with fresh credits, and future inflation would certainly make the new debt easy to repay. I'm not willing to make a prediction about that, however. You might be right, I just don't know.

As I recall, the proof has to do with the fact that value is determined by trade. So if a strategy were to succeed totally, all wealth would concentrate in a single player, ending trade, and devaluing the wealth so accumulated. Something like that, it's been a while since I looked at it.

This makes more sense to me now. Sounds like the law refers to trading strategies in the stock market. Perhaps it's more general that that, but anyway, thanks for the clarification.

First off, I loved the WSOP reference.

Someones' gain is always someone else's loss.

That isn't true at all. If markets are rising generally, then the seller can make a profit and the new buyer might get one too. Even if a stock goes down in value, it might still be a good deal for the buyer if dividend payments make up for the loss in value.

When real wealth is expanding, everyone can "win", in the sense of being better off next year than this year.

Some resources are now scarce. There is plenty of energy, with appropriate technology. And with enough energy, ways can be found to use what is available. So I would not give up on growth yet. But I would be in favor of a more carefully managed earth.

I agree that energy is a master resource, and with enough of it most problems can be solved.

However, I disagree in the strongest terms about energy abundance.

I'd be interested in your reasons why you feel we have plenty of energy. What sources are you referring to? Fossil fuel energy, nuclear energy, renewables? Something else?

LOL

I love Tom Tomorrow. Thanks for the link.

Sorry for the rant.

I enjoy your posts, OT or not, and the rants. No need to apologize for them - I would prefer you keep 'em coming.

well said.