3 ms·
> How did we enter a world in which the only given fact that must be held true is that "the business profit will grow unceasingly for all time, no matter the co
by quickthrowman 2y ago
> How did we enter a world in which the only given fact that must be held true is that "the business profit will grow unceasingly for all time, no matter the consequence”
The Federal Reserve (or central banks in general) has a dual mandate to stabilize prices and maximize employment. The Fed uses monetary policy to manage inflation and attempt to keep a slight amount of inflation without having too much inflation or any deflation. If your profit growth is lower than the rate of inflation, you’re be making less money every year this is the case. Shareholders generally want to achieve a return that is higher than the rate of inflation, aka a ‘real return’.
Tl;dr - Central banks using monetary policy to achieve a constant low rate of inflation is why profit must keep growing forever to remain in business.