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This chapter is from the book

The Culture of More

We have truly been conditioned to expect more and more in this culture and we are bombarded by the hyperbole everyday. The World's Largest Bookstore. Billions and Billions Served. Now even Google, the popular Web search engine, is puffing it up on its home page: "Searching 3,000,000,000 Web Pages!" There is only one direction: Up. There is only one quantity: More. Our perspective on revenue growth is no different. In many ways, our view toward our economy has largely been warped since World War II, and why not? We continue to deliver record revenues. We continue to deliver record earnings. Incredibly, we expect our winning streak to continue ad infinitum.

Just when we think we have seen the greatest golfer of all time, along comes Tiger Woods. Just when we thought we've seen the greatest woman's tennis player of all time, along comes Serena Williams. Just when we thought we've seen the greatest home run output of all time, along comes Mark McGwire, and two years later Barry Bonds. Because of such rare feats, we think that there are no limits; there is nothing that we can't do.

Our optimism abounds, and that's not a bad thing. We look at any slowdown as temporary, any shortfall as an aberration. In fact, we measure the health of our economy not on what we sell but on what we produce, and even that measure has steadily eroded over the last quarter-century. We are a highly educated and rational society, yet we most often look at business and its promise with childlike enthusiasm, emotionally and irrationally.

We are problem solvers. We intently study each problem and come up with solutions, and we have solved a lot of problems, from bad breath to grass stains, to getting from point A to point B, to communicating with someone across the street or around the world.

We have flooded the domestic market as well as international markets with thousands of product categories over the last quarter-century. We sell everything to everyone, everywhere, yet we still believe that we can convince a consumer in Des Moines to drink one more Coke a week. In many ways, we have tapped out the planet. Those who have the means and access essentially have everything that they need, in any quantity in which they need it. Those without the means are currently not prospective buyers of Lucky Charms. Sure, China is a vast untapped commercial market, but even China has its limits.

For the first time in history, we might be facing the stark reality that there are limitations to consumption, and that just kicks demand square in the teeth. There are no longer any new consumers entering the categories of toothpaste, soft drinks, or breakfast cereals. Therefore, gains come from fractional shifts in market share that cost marketers billions in investment spending each year.

We have super-sized and line-extended ourselves into a corner of saturation where volume is flat and price is powerless. There's an excess of industrial capacity in the United States that makes raising prices virtually impossible. This is an economy of slumbering demand, increased inventories, and dangerously declining rates of revenue growth. We must wake up to that reality. This change in our economy is fundamental in nature. It is real, it is here for a while, and if you are part of the business world, you are dealing with it. To make matters worse, you will have to deal with it in what will likely be an unstable geopolitical climate for the foreseeable future.

You can thank the generations that went before you because they accomplished what they set out to do: innovate, build, and push the boundaries of progress. Introducing countless new products, expanding distribution to every corner of the world, acquiring every possible company. Ever since the end of World War II, the world has increasingly sought to drive record sales, post record revenues, and to deliver record earnings. By any measure, the mission was a huge success, but over the course of the struggle, capitalism's best friend died.

This is why there will be no economic turnaround and no getting back on a growth track. Not the way some think, anyway. The ambition of many generations that pushed for more has unwittingly killed demand. The lifeblood of capitalism is dead, the victim of hundreds of years of progress. A century ago expectations were low and sacrifice was high. Now, in the first decade of a new century, expectations are high and few in developed countries have ever experienced real sacrifice. It's never been harder to increase revenue or to reduce costs.

In some ways, the curtain is still coming down on a century of remarkable progress that spins the head. It just may be that because of that progress, the world's economy will simply turn at a slower pace. Like an aging man who has successfully negotiated the hills in the past, our easy climbs are behind us, and our tough climbs are just beginning.

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