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outside world. This also means that the blow which GNP
receives will be considerably softened.
These considerations are particularly relevant to the present
situation of a reduced long term growth rate in face of
inflexible profit mark-ups (_X) • The budget softens the blow.
This is small consolation for the long term structural effects
on industry of a reduced investment activity. The ossification
and senescence of industrial structures and the shift of
interest from production to finance has a devastating influence
on the innovative powers and the technical advance of industry.
If we compare, finally,the flexibility of the profit margin
in the one or the other direction - up or down - we see that
there is considerable assymetry. There is a kind of ceiling,
determined by the limit of the growth rate (given by bottle
necks, ultimately by the limits to the speed with which a
society can learn). But there is hardly a well defined floor.
Is the inflexibility of profit mark-up - down wards - absolute?
It would hardly seem plausible even with widespread oligopolistic
structures; since long term growth rates, within the historical
experience, for example in America, were in the range of 4 or 5
to 0 p.c. it would seem that changes in (long-term) utilization
would have had to be rather large to accommodate them. But
there is, of course, the budget deficit which, as explained
above, may contribute a lot though probably not all to the