companies really have got to be okay with stagnant profits. what is wrong with earning the same amount every year? why does it always have to be more? it’s not sustainable. there are only so many people on the planet you can profit from 😭
This is the thing. If there are only so many people they can profit from, and they demand to see profits go up every year, they will have to steal more out of the pockets of the little people each year, either by paying less, or by charging more. And that is the problem. Because that is exactly what is happening. And the rich get richer. And the poor are getting so poor that it is coming to a crisis point. They seem to have forgotten what happens at the crisis point though: people who have nothing to lose, will rise up and fight.
Cancer: a malignant tumor of potentially unlimited growth that expands locally by invasion and systemically (Merriam Webster)
See also: Capitalism
But also, “increasing profits every quarter” is a relatively recent thing. It’s new since the 1980s! In the 1980s, Reagan heavily promoted the economic theories connected with the Chicago school of economics. (“Reaganomics” is basically the Chicago school ideas dumbed down to fit in soundbites.) The Chicago school is, among other things, responsible for such wonders as “all regulation in the marketplace is always bad” “monopoly is good because it’s efficient” and “trickle-down economics.” When those ideas became mainstream, and were adopted wholeheartedly by Wall Street, they spawned the idea that the most important measure of a company was its stock increasing in value. Not how much business it was doing, not how well its customers liked and valued it, not how stable it was for the long-term. Is its stock increasing is the only measure of value.
Prior to that point, a business–even large corporations!–were valued more on how reliable they are. If I invest in this business, will it still be there five, ten, fifteen, twenty years from now? Businesses were good if they were profitable and stable. Increasing profits was wonderful! But they understood that that is not infinitely sustainable, and that if you wanted to maximize long-term profits for individual investors and for the economy as a whole, you did not want flash-in-the-pan trendiness, and you didn’t want a business cannibalizing itself, you wanted a business that was stable and took good care of its customers so they’d keep coming back.
The reason that businesses have to grow forever to be successful now is that the people who own the businesses don’t make a significant portion of their money from profits. They don’t care about profits for themselves; those profits are chump change. They don’t make their money from the value of the business. They make their money from the increase of value of the business.
The wealth these people have is measured by how much more their stocks are worth now than when they bought them. That is, how much the business has grown. If someone owns a bunch of $1,000 stocks that they bought for $990 each a year ago, and a bunch of $100 stocks that they bought for $10 each a year ago, those $100 stocks are a better investment. Most of their money comes from stock trading, and securities and loans that are based on the strength of that stock portfolio. A stagnant business is a waste of money because it’s tying up money that you could be putting into more profitable businesses.
So your $100/stock company is far safer than your $1,000 stock company in the above example. Because your $1,000/stock company is almost stagnant and risks collapsing because investors might pull out to invest in a faster growing company. That company survives by becoming more valuable, which usually means increasing profits, and it doesn’t matter if those profits are in the tens of thousands, or the millions, or the billions – what matters is that they go up as much as possible so the stock price doesn’t collapse. When profit increases slow down, the company is at risk. Companies that are happy with regular profits don’t get big enough to really affect the economy because high-level investors see them as dead weight. Companies that are large and want to be happy with regular profits will die.
This is why late stage capitalism is a problem. It’s not a just question of Bezos and Zuckerberg and soforth being arseholes. It’s the inevitable conclusion of how money and value works in a system like this. (The assholery of billionnaires is still relevant re: their ability to affect government policies and regulations, direct international wars, etc., to worsen the problem, but again they are dangerous because they make the system worse; the system is the problem.)
1. Feverishly calculating the body mass of your dragon species, spent 5 hours last night researching the origins of steel, losing sleep over horseshoes, 20 tabs open, should a cockatrice be warm-blooded?, will die if they don’t immediately figure out when honeybees were first domesticated
