It's true, the margin crunch of capitalization is only half
the story. Profits are in fact (margins x volume sold), and this
volume sold part is the point you have raised.
Of course it is possible for profits to go up even as margins
contract; expand the volume sold. This is the miracle of economic
growth. If you cut prices to compete, your total revenue falls unless
you sell more to make up for it. Markets, markets, markets!
What you have rather neatly illustrated for us is the reality
of what happens when a system dependent upon sustained growth finds
itself with nowhere to grow to; the restrictive or set-aside issues
of env mgmt do nothing to the system that wouldn't happen to it anyway
as it hits the wall. Ie those who reach a limit of their capacity to
expand total product are crushed. Those who can get big, do- the
others get out.
Still, it doesn't quite do to say that this "isn't a
capitalization issue," on the contrary, the restrictive issue *forces*
the capitalization issue rather sharply because now profits are squeezed
from two sides; the margin and the volume. So the problem of what to
do about overcapitalization becomes more important than ever.
-- ___________________________________ @@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@ @ KRONSTADT 1921- NIKOGDA NE ZABYVAEM @ @@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@