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The difference between capitalism wanting growth and requiring growth is huge. All ecnomic systems should want growth, but that is different from requiring it.

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The wish to increase in market share does not require an increase in the market share or the size of the market, which is what you claimed was required. Capitalism can work just as well with two or three equally large entities sharing a market as several dozen unequal entities in a similar market.



Little guys are not capitalism? How did the big companies come into being as giants?

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With friends like Guido, you will not have enemies for long.

“Intellect is invisible to the man who has none”
Arthur Schopenhauer

"The difference between genius and stupidity is that genius has its limits."
Albert Einstein

Capitalism requires growth because workers want higher wages, businesses compete with each other, increasing costs have to be paid for, and investors want the best returns on their investment.

Ultimately, this is achieved by increasing production, and that increase can be taken only from profits (which requires growth) or loans (which, with interest, can only be paid through growth).

That's why production of various goods and services, extraction and use of resources, and money supply have been increasing worldwide for decades.

Now, you can probably imagine a capitalist economy where people don't want growth. But when that happens, there will be minimal profits to capitalize or additional revenues to pay for loans. There will be an attempt to keep costs low, which is the case for state capitalist systems like those of Cuba and North Korea. Given such circumstances, one can only hope that some catastrophe leading to, say, a significant drop in food production will not take place, as the country will now have to rely on the surplus of other countries.

All economic systems would want growth, but that still does not make it a requirement. If capitalism required growth it would not survive the first stagnation of the economy, much less a recession or depression. The fact the system survives all three instances proves the requirement claim is false.



No, neither requires growth. Both can be undertaken without growth, which results in lower profit as the costs would be taken as expenses.



Not really, since the premise is flawed so must the conclusion also be flawed in this case.



If these are classified as capitalist systems, you have again given evidence of the false nature of the claim of required growth.



So, a catastrophe will not impact a "true" capitalist system and cause a similar event? This does not follow any logic of which I am aware.

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With friends like Guido, you will not have enemies for long.

“Intellect is invisible to the man who has none”
Arthur Schopenhauer

"The difference between genius and stupidity is that genius has its limits."
Albert Einstein

Capitalism requires growth because it involves a profit which is either lent to another with interest or re-invested in a business to increase production.

You cannot earn a profit or pay a loan with interest without economic growth.

Why does capitalism require a profit? Because that's the source of capital re-invested in businesses or used to pay for previous loans.

That's why business people in capitalist systems require increasing production, and in free market or mixed capitalist systems increasing profits.



You cannot increase production and claim that no growth has taken place. The fact that production increased is already growth.

You cannot borrow money and then pay it back with no growth, because you need to earn more than what you borrowed to pay back the loan plus interest.



Check the information for consumption of various resources, especially oil. Also, check money supply. They have been increasing worldwide.

Also, look at news regarding a growing global middle class, especially in BRIC and emerging markets.



http://en.wikipedia.org/wiki/State_capitalism

http://en.wikipedia.org/wiki/Economy_of_North_Korea

https://en.wikipedia.org/wiki/Economy_of_Cuba

These are state capitalist systems. Note GDP growth.



That's not my point. Rather, a capitalist system should have enough profits (and in the case of countries, forex reserves) to purchase food products from another country. Notice, too, that the other country should have a surplus of food produced (again, part of economic growth) to sell to the first.

To recap, the claim is that capitalism does not require continual growth, and it requires only private ownership. Actually, it requires both. For more details, view

http://en.wikipedia.org/wiki/Capitalism

Again, note the key points in the first paragraph alone:

- private ownership (actually, private ownership of means of production)

- profit (there's your growth)

- capital accumulation: again, derived from profit, and grows as profit is re-invested in businesses, leading to more production, and with more sales, more profits

- competitive markets: notice the connection between this and more production: in order to compete with other businesses, one has to increase productivity or efficiency, which means lower costs, but because there's a limit to lowering costs, then the only way to compete is to increase production given the same amount of costs, which means

- price system: one can keep prices low (because costs per unit go down) or make more profits per unit sold

Now, why continuous growth? There are many reasons:

1. laborers who want higher wages;

2. investors who want better returns;

3. consumers who want cheaper products;

4. competition;

etc.

Again, note these in light of the key points given above.

Can capitalist economies experience de-growth? Absolutely, given economic crises, but they eventually make up for losses by a return to economic growth. That's why economic growth via increasing money supply, resource consumption, etc., has been growing worldwide in sum and per capita. That's why various economies are also keen on looking at annual GDP growth.

Wiki sources are not valid for anything other than getting the opinion of those who contribute or to use the actual research links.



Profit is not growth it is the difference between selling price and cost, nothing more.



It can, but it is not a requirement in order to have capitalism.



It seems the concept of supply and demand was never expalined to you. If you produce too much more than the demand the price will drop because there is no reason to pay as much since there will be someone willing to make a little less profit in order to have a cash flow.



That would tend to disprove the claim of growth being required in order to have a capitalist system.



Still does not provide evidence of the REQUIREMENT for growth in order to be capitalistic.

http://www.encyclopedia.com/topic/capitalism.aspx

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With friends like Guido, you will not have enemies for long.

“Intellect is invisible to the man who has none”
Arthur Schopenhauer

"The difference between genius and stupidity is that genius has its limits."
Albert Einstein

Wait. What? When a capitalist system enters stagnation, recession, or depression, it isn't capitalism anymore?

Sounds like you're confounding profit with growth. One can profit without growth in a capitalist economy. In fact, one can even do so while shrinking.

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That is a readily accepted definition and there are references at the end. Even the source you give at the end of your post reveals the same.



Profit is growth for painfully obvious reasons and is part of a country's GDP, which is used to measure economic growth. It is also used as a criterion to show that a business is growing.



There's no other way to capitalize business except by using profits or borrowing (same as asking investors to participate).

Well, there's theft, but it's obviously not legal, so we should not consider it.



This is based on the assumption that most people worldwide already have what they want and need. But that's not the case.

Instead, we see businesses looking for ways to meet expanding markets. That's why you have a growing middle class worldwide (especially in BRIC and emerging markets), why per capita people in rich countries consume more resources than the global average, why sales for cars, cell phones, appliances, etc., grow worldwide, why you have multinational corporations trading across different economies, why you have a global economy with economies locked with each other and trade for all sorts of resources.

In addition, notice how resource consumption has been rising for several decades in rich countries, as more resources are needed to maintain a middle class lifestyle. For example, the U.S. has less than 5 pct of the world's population but must consume up to a quarter of world oil production to maintain its middle class lifestyle. For the rest of the world to copy what the U.S. is doing we will need several earths. And we're now seeing signs of that, with increasing resource demand from BRIC and emerging markets.



Actually, it's the other way round, unless you think there are other ways to give employees raises or offer investors better returns on their investment (or any return) without growth.



Read the sections on economic growth rates and income distribution (especially sub-points such as surplus production and automation) and connect them to everything I've said so far.

Again, economic growth rates can only take place given more sales of more goods and services sold, exports, and investments (or spending) by government and the private sector. In short, GDP. That means more profits from various businesses, more resources used, etc.

One reason why the "masses" support capitalist systems is because more earnings trickle down to them, thus lowering the poverty rate and increasing prosperity, leading to a growing middle class. Again, that's part of capitalism, as businesses can only continue growing as more people buy more goods and services. If a certain market is saturated, then more markets have to be opened.

To recap, in capitalist systems businesses need to make a profit. Otherwise, they will not be able to expand production, pay loans and interest, or satisfy investors who want a better deal. And the need is even greater given competition. The result is the formation of large corporations, which is what we now see (and following the section on competition and laissez-faire in the entry) and with greater need for profits to keep investors happy. Again, that's growth.

Finally, the source you shared is more than forty years old. It does not even refer to peak oil or global warming at the end, or obviously the current economic crisis.

I guess the ugly monkey head forgot you, Fos. He also forgot about Herman Daly's Steady State Environmental Economics, which is a form of capitalism, too.
Ditch the stupid monkey, or baby orang, ralfy-----PLEASE!!!!!!!!

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"With every decision, think seven generations ahead of the consequences of your actions" Ute rule of life.
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What actual reference source makes such a definition? Not the encyclopedia, dictionary, or any text books I have read. If my source actually makes the claim, please quote it, but if you believe it infers that definition that is another matter.



No, you can have growth without profit and you can have profit without growth. They often go together, but it is not a requirement as has been claimed.



Yes, but having profits does not mean one is growing, just that the sale price to cost ratio is more in your favor. That is not always the case with growth because the additional overhead costs generated may result in a negative impact on net profit.





No, it is based on supply to demand ratio, which is basic business economics and if you do not understand that you should not be trying to have this discussion. If the supply of an item exceeds the demand there will be surpluses of unused/unsold items which have a cost. In order to recover the cost those with surplus inventory will reduce the selling price and thus make less profit in the attempt to at least have some profit. If enough of the product does not sell the net profit may be zero or even a negative number, so even selling at a loss is better than not selling at all in many cases.



Except when there is a global recession or depression and the expanding markets are largely gone. The only markets that will always expand with population are those required for survival.



Which really has nothing to do with the discussion at all.



You can do that without growth. You have started with a false assumption and it confuses you. Companies can provide raises without growth if they choose to make less profit. This is not uncommon in a workforce with specific skill sets. This is why companies in bad financial shape often hire leadership with much higher costs than the norm. You can also provide a better ROI even without growth, just by reducing costs. That is why the stock market is showing records when unemployment is so high. You just have trouble doing both at the same time. It is not impossible, just harder.



Connecting them is far from the requirement as you have stated. If they are required, why does it not state that as such and not require the assumption?



Yes, economic growth requires growth. Capitalism does not.



Again, not a requirement of capitalism.



Yes, but expanding production, taking out loans, or providing an increasing ROI is not required. If production is tuned to the market demand and is capable of meeting said demand there is no need for expansion. If there is no need for expansion there is no need for capital loans. If the ROI is sufficiently high there is no need to make it higher. There may be a desire to do so and expand, but that is not a requirement.



You keep thinking profit is growth, which means you lack the basics of business economics which is required for such a discussion.



So? Capitalism has been around a lot longer than forty years unless you are saying the requirement for growth is a recent addition to capitalism.

_________________
With friends like Guido, you will not have enemies for long.

“Intellect is invisible to the man who has none”
Arthur Schopenhauer

"The difference between genius and stupidity is that genius has its limits."
Albert Einstein

WS: " Capitalism has been around a lot longer than forty years unless you are saying the requirement for growth is a recent addition to capitalism."

Well, it is somewhat true that when LBJ and cohorts switched SSIAs into the General Fund in 1965, it forced a growth only economy. Other countries followed the practice. A completely unsustainable economy that will eventually fail. Maybe sooner than expected and without much warning before the banks close. Spending more than taken in for too long has got the debt so bad that the interest alone is a crushing burden that is accelerating toward devaluation of the dollar. Of course the government hides things, like the fact that there are now 55 million working age Americans out of work, from the latest jobs report.

_________________
"With every decision, think seven generations ahead of the consequences of your actions" Ute rule of life.
“We do not inherit the earth from our ancestors; we borrow it from our children”
― Chief Seattle

You're implying that participants in a capitalist system deliberately work to enter a state of "stagnation, recession, or depression," and that they intend to stay in such a crisis!



You're confusing profit by a few with growth for the economy as a whole! Of course, one can profit while the economy that one is in does not, but does that mean that those who do not profit wish to remain in such a state?

A steady state economy is in no way connected to a capitalist system, unless you are fantasizing about everything being state-owned, absolutely controlled by a central group, with no surplus of production required because everything else will be in a steady state, too.

Keep dreaming.

Stupid and ugly monkey? That says a lot about you.

http://en.wikipedia.org/wiki/Capitalism#cite_note-1

onward.

This is a good definition, again from the same references:

http://www.dictionaryofeconomics.com/ar ... 08_C000053

Again, notice that the point that capitalism merely refers to private ownership of the means of production is wrong. It gets worse when you consider state capitalism.



You cannot have growth without profit, unless by growth you are referring to something else, like feeling good about yourself as your business is falling apart.

You cannot have non-growth without profit because your profit is the net income of the firm, which means its wealth grew. That's painfully obvious.

Perhaps you are referring to comparisons of sales across two years. In which case, you can have profit without growth as your revenues decline from year to year while remaining higher than your costs, but if you cannot reverse the trend, then your profits will reach zero.



Any additional overhead costs are supposed to be part of your total cost. Your net profit is the difference between your total revenues and your total costs.

If you need to pay for additional costs after filing tax documents, then you need to add them to your costs for the next fiscal year.

If you want to maintain or increase your profits for the next fiscal year, especially to pay for those additional costs, then you have to increase either prices of goods sold or production. Given competition, you will very likely do the latter.



Indeed, which is why capitalism is not sustainable. As I explained to you many times, capitalism requires growth, and that essentially leads to expanding markets. If resource availability compounded by environmental damage and global warming cannot meet the demands of those markets, then prices start to go up, made worse by unregulated financial speculation (another quality of free market capitalism). And when resource availability starts dropping, the situation worsens.



Actually, they do, as those are your expanding markets, and deflates your simplistic view of supply and demand.



Less profit is not the same as no profit.

You can reduce costs but only to a certain point, after which you need to raise production. It gets worse when your competitor decides to reduce costs by increasing production. In which case, he can meet expanding markets, which you can't. And when he does start reducing costs, he does so while getting a larger market share than you do. This will entice people to invest in his business and not in yours even as the ROI may be the same.

In which case, don't expect the phenomenon of "the stock market...showing records when unemployment is so high" to last. That capitalist system will eventually fall apart.



Because you have to figure it out yourself. Why is there a need for economic growth (i.e., an increase in GDP) for various capitalist economies? Why do businesses want to profit? Why the references to automation and the desire for higher-paying jobs?

Don't expect to be spoon-fed on this issue. You need to look at more comprehensive sources that are not found online.



The first sentence is a circular argument.

Capitalism requires growth for reasons I've explained to you earlier.

Don't assume that given a depression, recession, businesses losing money, capitalists cutting down on wage costs, etc., then capitalism doesn't require growth. It's not as if participants in such a system deliberately want these to happen.



Again, a requirement of capitalism, as the same "masses" are essentially the consumers of goods manufactured and sold.



You're referring to a state capitalist system where producers work with each other and are "tuned to the market demand and is capable of meeting said demand," which is why "there is no need for expansion" except given an increase in demand.

But that's not what we're seeing, no? There is increased pressure for more surplus resources, if not a middle class lifestyle, even in countries like North Korea and Cuba, kept in check by dictatorial control. And even as these two countries and others experience what you might call "additional overhead costs," other countries have to help them by sending food, medicine, oil, etc.

Globally, we are also seeing a global middle class, with more people in BRIC and emerging markets wanting more beef, pork, eggs, medicine, electricity, cars, appliances, electronic gadgets, infrastructure to support them, and more.

Perhaps in some computer-generated fantasy world where producers are perfectly "tuned" to demand which doesn't increase significantly might be true, but the real world is far different from what you imagine.

In the end, what will stop that world of "expanding production, taking out loans, or providing an increasing ROI" will not be producers/overlords who will work in perfect sync with demand and even keep that demand in check but resource limitations coupled with long-term effects of environmental damage and global warming.



But it is for obvious reasons!

To go back to your previous examples, when the stock market is going up, then that means people are profiting from sales of stocks. What else happens when you buy shares at a certain price and get to sell them at a higher price? And what do you think those who bought stocks want to happen? Hope that the market goes down?

When firms reduce costs by laying off people, then their net profit goes up. But they can't do that continuously, especially if their consumers essentially include more people who are now unemployed!

Do you see? Everyone wants to see economic growth, and that ultimately means more profits.



No. What I'm saying is that U.S. oil production started peaking only two years after the article was published, global oil production per capita peaked eleven years later, and conventional oil production peaked in 2005. Meanwhile, the requirement for growth has increased readily, with increasing demand from BRIC and emerging markets during the past two decades or so:

http://en.wikipedia.org/wiki/BRIC

In which case, one is better off not fantasizing about some steady state global economy with a central government taking full control of production and demand of goods.