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This was an excellent addition.




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Postings not related to the writing of the Manifesto or policy chapters
are likely to be summarily rejected. Thanks for your understanding. IPI
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Dear Puneet,

Just came across this reply of Prof. Guptara. I think his views are
excellent and complement what I had said. Hope you are now perfectly
clear about the issue in question. Sanjeev

On Sun, 10 Jan 1999 prabhu.guptara@ny.ubs.com wrote:

>      SEveral things drive stock prices, INCLUDING expectations of future 
>      earnings yes, but also demand for stock (not always related, witness 
>      technology stocks and Amazon.com etc at present), and so on.
>      
>      However, Equity prices cannot in the long run rise much faster than 
>      corporate profits and the latter cannot forever rise faster than the 
>      national income.  
>      
>      This is why it is unwise to consider expenditure on education and on 
>      welfare simply as a negative.  Education might more properly be 
>      consider an enabler of future earnings, and welfare is best thought of 
>      as an insurance premium against anti-economic acts such as theft, 
>      vandalism, violence, smuggling, drug-taking and so on.  These are not 
>      only harmful in themselves but also vitiate the whole environment in 
>      which productive economic activity takes place.
>      
>      
>      Professor Prabhu Guptara
>      Director, Executive and Organisational Development
>      Wolfsberg Executive Development Centre
>      (a subsidiary of UBS AG)
>      CH-8272 Ermatingen
>      Switzerland
>      Tel: +41.71.663.5605
>      Fax: +41.71.663.5594
>      e-mail: prabhu.guptara@ubs.com
>      INTERNET: http://www.wolfsberg.com
>


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