6 ms·

While I actually agree with you personally that not everything should have to grow forever, a business that "just" delivers a consistent profit every year is co

by xp84 3y ago

While I actually agree with you personally that not everything should have to grow forever, a business that "just" delivers a consistent profit every year is considered a failure by those who expect YoY capital appreciation (at some multiple of the interest rate on a savings account), i.e. shareholders. Such businesses usually get sold to someone with a "growth" plan for them, which is usually some combo of combining overhead expense by merging it with another business, cost-cutting, as well as the more toxic short-term tricks such as selling all their owned land and leasing it back to goose profits for a few years. Oh, and share buybacks.

FredPret 3y ago
I'm sure that's true for many shareholders; anecdotally I'm a very happy US Steel shareholder (especially after today!). There are many folks who are long-term-value oriented who would much rather own a healthy and sustainable business than something that looks good short-term but is getting IBM'ed long-term. Case in point: Warren Buffett and See's Candy. I like the steady accumulation of equity or dividends paid out to me. The business doesn't need to go to the moon for that to happen.
- lavajava 3y ago
  Can you please explain how Warren Buffett has IBM’ed See’s Candy over the long-term?
  - FredPret 3y ago
    I meant the opposite. Warren Buffett is letting See's Candy is happily chug along, staying true to their identity (as far I hear, I'm not a customer), whereas another investor might have insisted on quick quarterly results and ended up IBMing them.
4ggr0 3y ago
> While I actually agree with you personally that not everything should have to grow forever nothing should have to grow forever. especially not amounts of natural resources, or basic necessities like food and beverages.
- FredPret 3y ago
  We've barely scratched the surface of the planet, literally. The deepest mines are 4km deep; mineral deposits are likely to get richer as you go deeper. With desalination, nuclear + solar + geothermal, we can feed an essentially unlimited number of people. There are always second-order effects to everything, including growth. But I find it interesting that we have such a huge runway ahead of us, without even considering resources and energy elsewhere in the solar system.
  - 4ggr0 3y ago
    well, you know. climate change is a tiny example of what can happen after you start treating resources like they're limitless. we can use the solar system, of course, but just discarding earth because other planets are available, seems a bit wasteful.
    - FredPret 3y ago
      More intensive resource use is also the answer to climate change. The problem is CO2 & friends, not growth itself. A knee-jerk response against growth is hardly going to fix the situation. We can drastically reduce our footprint while growing the economy even faster by building more nuclear + solar power, and digging deeper, improving our water treatment ability, etc.
      - 4ggr0 3y ago
        what about lowering our usage? or more efficiently use what we have, even if it means less growth for the economy.
        FredPret 3y ago
        I don't think it's practical to lower or keep it at the same level. - what do we say to poor people? Sorry your life sucks, but the economy is big enough now? - even if we did say that, perish the thought, nobody's going to accept that. Africa, India, China, the rest of Asia, and South America have tons of poor people who want their turn. Why shouldn't they also get to be as rich as us? That implies a huge and growing demand for more and more energy and resources, regardless of what the US and Europe think of growth/degrowth/the environment. Therefore I think it's much better to instead accelerate, and do it using clean technologies. By building clean tech in rich countries, we can make it better and cheaper until it's the default option for rapidly growing poor nations. By demonstrating a commitment to growth, we also show them that our way is something to emulate, because growth is what they want and need. Degrowth is going to win you exactly zero friends in the poor world. Nations like Russia and China can easily go to Africa and make the West look like self-centered rich fools who should be ignored. If that happens, there goes your environmental ambitions.

by xp84 3y ago

FredPret 3y ago

I'm sure that's true for many shareholders; anecdotally I'm a very happy US Steel shareholder (especially after today!). There are many folks who are long-term-value oriented who would much rather own a healthy and sustainable business than something that looks good short-term but is getting IBM'ed long-term. Case in point: Warren Buffett and See's Candy. I like the steady accumulation of equity or dividends paid out to me. The business doesn't need to go to the moon for that to happen.

lavajava 3y ago
Can you please explain how Warren Buffett has IBM’ed See’s Candy over the long-term?
- FredPret 3y ago
  I meant the opposite. Warren Buffett is letting See's Candy is happily chug along, staying true to their identity (as far I hear, I'm not a customer), whereas another investor might have insisted on quick quarterly results and ended up IBMing them.

4ggr0 3y ago

> While I actually agree with you personally that not everything should have to grow forever nothing should have to grow forever. especially not amounts of natural resources, or basic necessities like food and beverages.

FredPret 3y ago
We've barely scratched the surface of the planet, literally. The deepest mines are 4km deep; mineral deposits are likely to get richer as you go deeper. With desalination, nuclear + solar + geothermal, we can feed an essentially unlimited number of people. There are always second-order effects to everything, including growth. But I find it interesting that we have such a huge runway ahead of us, without even considering resources and energy elsewhere in the solar system.
- 4ggr0 3y ago
  well, you know. climate change is a tiny example of what can happen after you start treating resources like they're limitless. we can use the solar system, of course, but just discarding earth because other planets are available, seems a bit wasteful.
  - FredPret 3y ago
    More intensive resource use is also the answer to climate change. The problem is CO2 & friends, not growth itself. A knee-jerk response against growth is hardly going to fix the situation. We can drastically reduce our footprint while growing the economy even faster by building more nuclear + solar power, and digging deeper, improving our water treatment ability, etc.
    - 4ggr0 3y ago
      what about lowering our usage? or more efficiently use what we have, even if it means less growth for the economy.
      - FredPret 3y ago
        I don't think it's practical to lower or keep it at the same level. - what do we say to poor people? Sorry your life sucks, but the economy is big enough now? - even if we did say that, perish the thought, nobody's going to accept that. Africa, India, China, the rest of Asia, and South America have tons of poor people who want their turn. Why shouldn't they also get to be as rich as us? That implies a huge and growing demand for more and more energy and resources, regardless of what the US and Europe think of growth/degrowth/the environment. Therefore I think it's much better to instead accelerate, and do it using clean technologies. By building clean tech in rich countries, we can make it better and cheaper until it's the default option for rapidly growing poor nations. By demonstrating a commitment to growth, we also show them that our way is something to emulate, because growth is what they want and need. Degrowth is going to win you exactly zero friends in the poor world. Nations like Russia and China can easily go to Africa and make the West look like self-centered rich fools who should be ignored. If that happens, there goes your environmental ambitions.