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Re: <nettime> joxe's empire of disorder (etc)
Doug Henwood on Sat, 7 Dec 2002 15:16:42 +0100 (CET)

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Re: <nettime> joxe's empire of disorder (etc)

Kermit Snelson wrote:

>I disagree with Ken here.  Knowledge-based parts of the economy
>(aerospace, pharmaceuticals, software, telecoms, etc.) are characterized
>by increasing returns on the margin, not by the decreasing returns
>characteristic of resource-based industries (agriculture, mining, etc.)

Yeah that was the line during the boom, but how true is it? Boeing 
has a profit margin of 3%, which is five times better than GM's, but 
only a fifth Merck's, and not all that great. (And Boeing gets 
subsidies from the Pentagon, which never hurts.) Pharmaceuticals have 
long been the most profitable industry. Software isn't immensely 
lucrative, either; sure Microsoft is vastly profitable, but we 
learned the other week that it loses money on everything it sells but 
Windows. The rest of the software industry isn't gushingly 
profitable. Telecoms is the scene of one of the biggest disasters of 
modern times. So this general principle is looking empirically rocky 
- though as David Laibman once told me, you can't refute a theory 
with empirical evidence, but only with another theory.

Doug Henwood
Left Business Observer
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