[teyc]

The author is only partially right. The mistake is in defining a closed system that is in fact not closed, and then curve fitting.

For instance a great part of growth in the last 100 years has been from man's ability to harness energy from fossil fuels. If your time line is narrow enough, you can disregard the point that fossil fuels is not unlimited, and project continued rise in extraction.

Another example is the baby boom, and the introduction of women into the paid work force which led to continued rise in property prices.

One more is the introduction of laws which suddenly compel people to invest in the stockmarket. It leads to short term asset inflation but generally makes worse investment all round.

That said, it is fitting that an economy is well modelled using the principles of hydraulics. See http://en.wikipedia.org/wiki/MONIAC_Computer