Friday, April 05, 2002

In The Long Run

The central fact of the information technology-driven marketplace is transparency. And the key derivative of transparency is the breakdown of price discipline. Put simply, barring scarcity, it is harder and harder to raise prices on almost everything.

This makes it ever more difficult for corporations to increase profitability, year in and year out. Which is why so much money remains on the sidelines of the stock market, despite what on paper would seem to be the beginning of another upward bounce. Philip Coggan has a good piece on this in today's Financial Times, which you can read by clicking here.