What happens to the market

[Gumba Masta]

What happens to the Market when everyone has a car or two, a TV and a dishwasher?
Does it collapse?
Is'nt economy the biggest Ponzi sheme, always requiring more consumers, an even bigger market and subsequently a bigger collapse?

[MrBogosity]

No, because wealth is unlimited. When everyone has a car, a TV, and a dishwasher, it means that we've gotten so good at making cars, TVs, and dishwashers that we can make them with very few resources and capital. This frees up resources and capital to be used for newer and better things.

[Gumba Masta]

I'm terribly sorry, but that "Wealth is unlimited" sounds like an utopia being described by an stary eyed optimist at best or a scoundrel selling snake oil at worst. Few things are unlimited,  resources,  living space,  farming space and we can't just make more when you reach the limit. You can, to some degree, refine the way we extract ore, breed plants that grow better in arid enviroments, cattle that yields more milk, eggs and meat to satisfy the need of an ever growing human society. But there are physical limits to it, just like a tree who when it outgrows it's roots withers and dies..well it withers and dies sooner than it would normaly. But that is my major concern

[MrBogosity]

No, it's a basic principle of economics. Resources are limited, space is limited, but desires are unlimited. Since desires are unlimited, wealth always increases as people figure out new and more efficient ways of arranging those resources to give people what they want. In other words, it's not how many resources you have; it's what you do with them. The excellent essay "I, Pencil" describes this beautifully:

http://fee.org/library/books/i-pencil-2/

[Gumba Masta]

Duhuhuhu, he wrote "rapeseed"....Sorry.  ;;>_>

[Gumba Masta]

Anyway, I maybe, somehow, under some circumstances, probably could, to some degree, in a way, perhabs *Hnnnnnnnng* agree with your argument there.

[AHPMB]

Isn't this just another way of expressing Jevon's Paradox?

[MrBogosity]

Yes, except it's not a paradox. The increased efficiency resulting from the technology results in real prices dropping, meaning that more people can afford it, and people can afford more of it; so naturally, consumption increases.