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"""Yes. You need to find/create more markets.""" Actually you don't "need" anything. There are tons of examples of profitable companies that do one thing / pro

"""Yes. You need to find/create more markets.""" Actually you don't "need" anything. There are tons of examples of profitable companies that do one thing / product, or several things / products and do it for a century or more, with thousands of employees that do not look to expand on other markets. Even more so for companies with less employees. """If I invest 100 dollars in you, I want to receive a percentage back after a certain while. You need to be able to give me 103 dollars back the next year just to beat inflation, i.e. for this to not have been a complete waste of my time.""" Yeah, that's why the stock market promotes cancerous growth of companies.

phillmv 15y ago
I don't mean to be adversarial, but could you provide examples? >Yeah, that's why the stock market promotes cancerous growth of companies. I have troubles with this sometimes. I lie awake at night and think about the little I know about finance and economics and I wonder - is this all a zero sum interaction? Abstractly, the earth is a closed system, right? Of course, value and money are also abstractions and so aren't directly pegged to any physical constants, so maybe in real terms it doesn't matter either. Anyhow, my understanding is that the narrative I used above works for stock markets and single shareholder companies. I have a fixed amount of hours/year to invest in my company/enterprise. Let's suppose it's profitable and yields oh 250k in profit/direct wages to you, the single shareholder. If your total amount of profit remains constant, you're losing money just via diminished purchasing power. Your employees will demand raises, which means you have to raise prices and/or squeeze more productivity out of your company, yadda yadda yadda. If you don't keep growing… you end up finding yourself in a position where you will begin to contract, and it's easier to go down than to go up.
- jchrisa 15y ago
  I've been reading Sacred Economics: http://www.realitysandwich.com/homepage_sacred_economics http://www.realitysandwich.com/homepage_sacred_economics It's the clearest explanation of this I've heard in a long time. However it's a bit long and deep, if you want an essay length version of the argument, it is here: http://www.realitysandwich.com/money_and_crisis_civilization http://www.realitysandwich.com/money_and_crisis_civilization
- dextorious 15y ago
  """I don't mean to be adversarial, but could you provide examples?""" Well, clothing and accessory companies, restaurant chains, publishing houses, film studios, etc, even software houses (has EA made anything else than games --anything substantial to their bottom line, that is?). But don't think brand names. Think of the tons of companies we don't necessarily know by name, but exist and serve their markets: construction companies, package delivery companies, etc.
- gammarator 15y ago
  "I wonder - is this all a zero sum interaction? Abstractly, the earth is a closed system, right?" No, the amount of value in the world is not fixed [eg, 1]. [1] http://www.paulgraham.com/wealth.html http://www.paulgraham.com/wealth.html ("The Pie Fallacy")
- brc 15y ago
  My suggestion is stop laying and wondering and start reading. Economics and finance is a fascinating topic if you want to truly understand the history and theory of money and finance. I don't mean boning up on company reports (though the ability to read and understand them is a good life skill) but rather truly trying to understand what money is, what it means, why so many apparent paradoxes exist. To wit; wealth is not a zero sum game. Hard numbers like valuations come about just from an agreement at a point in time, which are just the opinions of two people at a flash in history. Even the value of a dollar in your wallet is a massively volatile thing in terms of what you can purchase with it. A good jumping off point is Niall Fergusons 'The History of Money' (book or video). Get through that and then decide which of the sub-themes you want to delve into further.

phillmv 15y ago

I don't mean to be adversarial, but could you provide examples? >Yeah, that's why the stock market promotes cancerous growth of companies. I have troubles with this sometimes. I lie awake at night and think about the little I know about finance and economics and I wonder - is this all a zero sum interaction? Abstractly, the earth is a closed system, right? Of course, value and money are also abstractions and so aren't directly pegged to any physical constants, so maybe in real terms it doesn't matter either. Anyhow, my understanding is that the narrative I used above works for stock markets and single shareholder companies. I have a fixed amount of hours/year to invest in my company/enterprise. Let's suppose it's profitable and yields oh 250k in profit/direct wages to you, the single shareholder. If your total amount of profit remains constant, you're losing money just via diminished purchasing power. Your employees will demand raises, which means you have to raise prices and/or squeeze more productivity out of your company, yadda yadda yadda. If you don't keep growing… you end up finding yourself in a position where you will begin to contract, and it's easier to go down than to go up.

jchrisa 15y ago
I've been reading Sacred Economics: http://www.realitysandwich.com/homepage_sacred_economics http://www.realitysandwich.com/homepage_sacred_economics It's the clearest explanation of this I've heard in a long time. However it's a bit long and deep, if you want an essay length version of the argument, it is here: http://www.realitysandwich.com/money_and_crisis_civilization http://www.realitysandwich.com/money_and_crisis_civilization
dextorious 15y ago
"""I don't mean to be adversarial, but could you provide examples?""" Well, clothing and accessory companies, restaurant chains, publishing houses, film studios, etc, even software houses (has EA made anything else than games --anything substantial to their bottom line, that is?). But don't think brand names. Think of the tons of companies we don't necessarily know by name, but exist and serve their markets: construction companies, package delivery companies, etc.
gammarator 15y ago
"I wonder - is this all a zero sum interaction? Abstractly, the earth is a closed system, right?" No, the amount of value in the world is not fixed [eg, 1]. [1] http://www.paulgraham.com/wealth.html http://www.paulgraham.com/wealth.html ("The Pie Fallacy")
brc 15y ago
My suggestion is stop laying and wondering and start reading. Economics and finance is a fascinating topic if you want to truly understand the history and theory of money and finance. I don't mean boning up on company reports (though the ability to read and understand them is a good life skill) but rather truly trying to understand what money is, what it means, why so many apparent paradoxes exist. To wit; wealth is not a zero sum game. Hard numbers like valuations come about just from an agreement at a point in time, which are just the opinions of two people at a flash in history. Even the value of a dollar in your wallet is a massively volatile thing in terms of what you can purchase with it. A good jumping off point is Niall Fergusons 'The History of Money' (book or video). Get through that and then decide which of the sub-themes you want to delve into further.