16 
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