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Second the idea of compound interest which is the basis of calculating present value only makes sense in a capitalist economy. In this type of system money is invested and what is required in return is interest. Some societies still prohibit the charging of interest. In addition compounding implies that interest received periodically can be reinvested at the same terms as the original capital. This assumes continual growth, something which is not a forgone conclusion as we enter into an era of resource shortages.

Well said.

Diversity is the key to economic and political evolution.

by Cat on Tue Sep 23rd, 2008 at 11:18:58 AM EST

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