ABSTRACT
Conventional economic theory proceeds from a simple starting point: the rational
individual with given, limited resources and multiple objectives, deciding how to allocate
the resources to best achieve the objectives. Prices and outputs follow from the
interaction of large numbers of such individual calculations mediated by the market,
which converts them into expressions of current costs and demands. This may make
sense in a largely static world, or a world in which growth takes place only in the form of
conquest and geographical expansion, where the same system covers more space. In an
economy growing in all sectors, however, especially when the growth is transformational,
business has to plan its prices with an eye to covering the capital charges required by its
projected investments. It also has to plan its prices so that it can expand into new markets.
