Eris, you're missing an important component of business, however. Expansion! A business' goal is to acheive greater market
share. This may be done in innumerable ways a few of which may be by decreasing a less productive work force or increasing a
more productive one, or a combination thereof, or none of the above.
I admit that my little model was oversimplified, but it still has the basic elements: an increase in market share means more people spending their money on your company which means less people spending their money elsewhere. Somebody still has to pay at the end of the pyramid scheme.
You cannot say that the amount of money moving through the economy is finite, in that it's constantly changing through new sources
of revenue, new people added to the population to buy things, new resources needed, new resources found...ah...the list is endless.
Again, my model is oversimplified but contains the correct fundamental elements. Yes, the gross number of monetary units can change over time (but not by much - the Federal Reserve tries to recall the same amount of bills they release). Economics is still driven by an essential limit on how much there is, and what it is doing. A recession hits (partly; again, an attempt to concisely express a complex subject) because people start saving their money, not spending so much. It's sitting in their bank account or COD or whatever, then not enough is circulating. Businesses aren't getting the people's money, and they start to suffer. If money was not finite, it would be infinite, which would make it meaningless and worthless because everyone would have as much of it as they wanted. It's only useful as a unit of financial power if it's part of a finite amount; and necessarily an amount which does not quite satisfy the sum of people's desires for it. Therefore, any money I have or earn is at the expense of someone else: someone foots the bill for my services, and for all of our services. The money doesn't just appear, it belonged to someone else before, and they had to give it up in order for you to have it. That's all I was attempting to say.
Money/economies are not at all the same as mass and energy. Money/economies are subject to constant change. Mass and
energy are bound by principals of nature.
Yes, but I was referring specifically to the principle of conservation. More here means less there. I can cite references on my meager understanding of economics, but tomorrow, after I sleep. I found most of them after reading "Engines of Creation" which deals with nanotechnology and how scientists hope that will change economics completely, forever.
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