russ_watters said:
Again, why? Because in 4 billion years the sun will swallow the Earth and vaporize the markets? You're being very vague, yet expressing a highly certain fatalistic view about this claim of yours.
There are an infinite number of possible values that aren't zero and you need to explain why zero, specifically, is inevitable.
Because as long as the market has a higher value than the transaction cost, it will keep functioning. When I say zero, I mean less than the transaction cost.
Markets express chaotic behavior. As soon as someone figures an expression for the market value, it feeds back into the market and changes the expression. Thus market value has a large random component.
That means the value of the market will climb and fall. In an infinite time it will reach zero at some point. At that point the market ceases to function and goes away.
There are a large number of real events that can drive a market to the zero point. In addition to random psychological action, transaction costs can increase dramatically. Theft is usually cheaper than bargaining, and it's only social control that keeps transaction costs low. War, famine, disease, and lawlessness all raise transaction costs.
This is in addition to changing values due to changing desires, technological innovation, and changing physical needs.
Suppose for example someone expands the digital currency idea and forms an efficient digital stock market with tighter controls on graft. Transaction costs are driven down, so people stop using old markets like the NYSE. Without people using it, the NYSE can no longer afford maintenance, so it closes. This is just one example of millions that can drive a market to zero.
Humans have used many forms of social control/government historically. Now we are reaching an era when we start to question just what it is to be human. It is difficult (impossible) to foresee all eventualities, but it's safe to say tomorrow won't be like today.
So no, I can't be specific about how and why a market will reach zero.
) Something is worth what people are willing to pay for it. And this amount changes through time. Should conditions change, value changes. It doesn't matter is the change is for the worse, like a government seizure, or for the better, like railroads replacing wagons. The world changes and value changes with it. There is more call for tulips today than there is for the more "tangible" wagon freight business of yesteryear.
