EnviroLink Forum

It is indeed up to us ... You definitely have that right. But we will never find our piece or peace in any movement, whether socialism or whatever .. ad infinitum ...

If we are to be honest ... and we must be honest,.. it is up to ourselves alone.

Which one EXACTLY has this requirement. If you cannot support your claim I am not digging through a list of references looking for what I know does not exist.



This is an abstract for a paper on the subject of capitalism rather than a definition, so there will be more depth and nuance, but I do not see the critical requirement for contiual growth listed. If it is such an important part of a definition and one you have been asked to show any referenced support, I would expect a "good" definition to have that necessary aspcet clearly listed. Yet I do not see it, but I do see a reference to private ownership.

Capitalism is a unique historical formation with core institutions and distinct movements. It involves the rise of a mercantile class, the separation of production from the state, and a mentality of rational calculation. Its characteristic logic revolving around the accumulation of capital reflects the omnipresence of competition. It displays broad tendencies to unprecedented wealth creation, skewed size distributions of enterprise, large public sectors, and cycles of activity. Whereas students of capitalism traditionally envisaged an end to the capitalist period of history, modern economists show little interest in historical projection.




You seem to be clueless. You can grow and still not make a profit on that growth. You can also grow and remove the profit you had at a previous level. It has been done in the past and can be found today. You can also have profit without any growth. That has been done in the past and can also be found today. Growth is not required for profit and profit is not required for growth, it is that simple. The former can be sustained but the latter cannot. The problem is sustainibility is not required in the general statement you made.



Now you seem to be using a completely different definition of "growth" than before.




You seem to assume that without growth as you had previously defined it (not the new adding wealth to the company via profit) there must be decline. This is also false. A steady state of sales will generate the same range of profit potential as growth. You can increase the profit by reducing costs. You can maintain the same profit by keeping the same cost to selling price ratio so any cost increases result in proportional selling price increases. You can also have less profit if you increase the costs without the same ration of selling price increase.



Yes, that is the definition of net profit, but that is not the only definition of profit. Gross profit is also called profit and that is the differential between selling price and cost.



If you do not increase costs or selling prices and do not decrease the selling price, you will maintain the same profit as in the previous period. If you want to increase your profit, you can increase the price, increase the volume, add new products or services, or decrease the costs. All are possible in the current economy.



Using your flawed definition, but that is why we disagree on the definition.

.

You mean growth as in profit? That is different from the growth in wealth you switched to earlier. In either case your logic is flawed as there is not such requirement. It is a goal for many groups, but NOT a requirement for a capitalistic economy.



Which would happen with any economic system, would it not? Your argument does not track with any logic with which I am familiar and with the lack of supprting evidence and changing definitions it seems said logic is not supportable.



They may be expanding markets, but they are not required specifically for a capitalistic economy so they do not apply to the REQUIREMENT you claim is part of capitalism.



It is a good thing I did not make such a flawed claim.



Or raise the selling price. The whole supply and demand aspect still eludes you. If there is an equilbirium between production (supply)and and the market (demand) the increase in production will not increase profit in the segment as a whole. An individual company may ncrease production if they capture more of the market share than before. If not the profit will decline because there is additional costs of materials and production for unsold product, which either must be sold at a discount or stored.



Then the selling prices would decline and the profits for all would decline UNLESS there is the expanding market you claim always exists. The problem is there is no requirement for increasing production to increase profit because those running businesses have a better grasp of economics than do you.



Assuming there is an expanding market, but then again the use of circular logic would be a small step in your flawed logic.



Increasing production does not reduce cost if the production levels are not below that which the current managment can handle, materials costs are reduced by increased volume rather than increasing due to greater demand, and a bevy of other variables.



The one you envision, maybe. The one we have in the real world? Not, likely at this point.



That makes it more of an unsupported opinion rather than a clear definitional requirement.



Wanting to grow is not the same as being required to grow. It seems we have changed the definition of "growth" again.




You mean like working for a Fortune 100 company for a couple of decades, starting my own company, and running it for a couple of decades? Direct responsibility for profit and loss counts right? You know that only a small percentage of companies survive the first five years and to survive for an extended period generally requires more than basic knowledge of business and econimics, right?



Yes, but you still used it didn't you. That is the only way you can claim the increase in GDP is required because there has been an increase in GDP.



Except your explanation is based on flawed logic and unsupported assumptions as we have expalined to you earlier.



Wanting something to happen is not the point, you claimed growth is a requirement. If there is no growth the requirement is not met and capitalism fails and disappears .... except it did not.



No, repeating the claim does not support the claim. The "essentially" connection show how weak your attempt to make the connection really is.



No, I am not. I am speaking of the system in the US. If the companies produce the appropriate number of widgets the market consumes, there is no reason for any increase by the industry in general. Consumption of widgets is not infinite and if you increase production in excess of consumption you will decrease the profits more so than was reduced by the capital investments.



I am not sure what you are seeing. You seem to bounce around changing definitions back and forth in the attempt to support the false claim made previously.



That would not be the same with another ecnomic system that provided similar products and the ability to obtain them?



Really? Why do manufacturers not slow production as demand drops if your model is correct? You grab anecdotal points in making general statements which are seriously flawed.



And off you go on a tangent ....



No, it is not unless you change the definition of growth as you have done a few times in this post.



If you short sale the stocks, yes. You can short sell and make a profit on stock prices which drop.



If there market is sufficiently large, yes they can.



Yes, people WANT growth, but that does not make it a REQUIREMENT as we have been telling you all along.



So your beliefs in the specifics of one economy refute the generalization of a capitalistic economy because you wish it to be so, but any specifics that refute your generalizations are not important. Do you not see a double standard in this position?



No, that is your straw man, not my position.

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See below. I will not spoon-feed you for the rest.



It is not an "abstract for a paper" but an abstract for a dictionary entry. You will not find a source online that is suitable for your needs unless you pay or look for published sources.

The reason for the growth requirement was explained to you numerous times: the profit earned from sales is plowed back into the business or in another business (if it's deposited in a bank). That's the capital needed to purchase capital goods, etc., and increase production.

The scenario that you are looking at is what resembles state capitalism, with authoritarian control over production and even demand, and likely based on the assumption of self-sufficiency (e.g., no need to import resources). This is the situation that takes place in countries such as Cuba and North Korea, except that they cannot ensure self-sufficiency, which means if devastating weather during one year destroys crops or oil prices go up, then the country is forced to seek surplus production from other countries.



Notice that the only way to avoid "accumulation of capital" is to remove "competition." In short, your vision of capitalism is one that doesn't involve competition, such as a very centralized state capitalist economy with insignificant imports, and very likely authoritarian control over the populace.



You need to bring in competition, "additional overhead costs," etc.

For example, you can continue to increase production while increasing costs, which means flat or no profits. That's what you mean by growth without profits. But if your competitor can increase production as well while keeping his costs low, then he can sell the same goods as you do at a lower price. Soon, more will buy from him and not from you. He can also increase his production and sell to markets that you cannot reach, giving him a larger market share.



Growth can mean a profit, an increase in profit from the previous year, or an increase in production from the previous year. What state capitalism requires is an increase in production from the previous year to meet demand. For free market capitalism, businesses need to ultimately increase profits, even if it means sacrificing it to gain market share. Otherwise, as pointed out above, they will lose to their competitors.

National economies look at GDP, which consists of investments and spending. In order to attract foreign investors and to receive better lending terms, governments need to show positive GDP growth rates. I think the WB recommends a growth rate that is at least three times higher than the birth rate in order to maintain present spending levels. But if citizens want more houses, cars, better health care, roads, etc., then the growth rate has to be better.



A "steady state of sales" can take place as long as there's no competition. In this case, centralized control ensures that all businesses selling goods work together and produce only what is demanded. In a free market capitalist economy, however, some businesses may try to sell more goods as a lower price to increase market share, etc.



I am referring to net profit, because that's the one you can use to increase production, and if you keep your overhead costs the same, lead to lower prices of goods sold.

Given that, you only need to hope that there's either no competition or that your competitor will not make a net profit.



Meanwhile, your competitor can choose to sell goods at a lower price and thus control a larger market share. He can also use his profits to increase production and reach a market that you can't.

I think what you have been trying to do is ignore competition and imagine some steady state economy guaranteed by some centralized, authoritarian control.



Keep in mind that "a global recession or depression" is something that capitalists do not like. If any, you just proved my point.



Actually, I gave a concise definition. Your definition is flawed because it assumes that capitalism doesn't involve competition, and thus there is no need to profit, etc.



Again, don't be confused. I am referring to net profit, not gross profit.

It is a requirement for a capitalist economy because the net profit is the source of capital needed to increase production, either to meet increasing demand in state capitalist systems or because of competition, as seen in free market capitalist economies.

Several examples were already given, and even your own examples--concerning the stock market, etc.--are shown to be part of the same. Do you remember? I mentioned them in my previous message.





Definitely? Are you arguing that because these happen for "any economic system" then it doesn't apply to capitalism?




The ability to access expanding markets is not required if your are talking about a centralized, state capitalist economy with no competition, full control of production and demand, no need to import any resources, and no possibility of shortages due to natural calamities, etc. Otherwise, even countries like Cuba and North Korea will have to produce surplus goods for trade.



I am referring to net profit and not gross profit. Remember, net profit is what you need to increase production, something important given competition, but not for the capitalist fantasy you envision.



While your competitor does not. The issue isn't that "the whole supply and demand aspect still eludes" me. It's that you are imagining some closed system with no competition which makes your simplistic view of supply and demand possible.

Your last sentence is obvious. I'm not sure, though, if you are imagining some scenario where even businesses do not take risk.



Why do you think businesses spend significant amounts of marketing and advertising, employ built-in obsolescence, and try to sell the same goods worldwide? Why do you think the demand for cars, sports shoes, cell phones, etc., are generally rising worldwide? Why do you think sales for these goods keep going up volume-wise worldwide?

Apparently, those running businesses have "a better grasp of economics than you do" as they realize that there's a growing global middle class that wants to copy what citizens do in rich countries, and are trying to meet the demand. Why "trying"? Because ultimately, what will cause production to decrease is not the absence of an expanding market but the lack of resources.

Thus, we have an economic system (capitalism) that requires growth and a planet that cannot meet that requirement.



Actually, there is an expanding market, as seen in consumption of various resources in BRIC and emerging markets.



It does because it lowers the fixed cost per unit produced.



The next point, then. ;-)



Or a supported conclusion based on a concise definition of capitalism.



You can choose to "want to grow" as long as your competitor feels the same, or as long as you imagine some centralized capitalist economy as explained above.



What I mean is understanding how competition and other factors lead to the growth requirement in capitalism.



As explained above, there are different reasons why economies want an increasing GDP.



No, it's not. It's based on competition, the reality that even state capitalist economies need to import resources, etc.



It did not? What is "it"? Can you give an example of a capitalist (mixed or otherwise) economy that did not experience growth for decades and remains? Please look at GDP, because that's what is used to measure economic growth.

If you are referring to the global economy, can you show that it has not grown for several decades? In this case, please refer to global GDP.



Are you saying that manufactured goods are not sold to the "masses"?



I am referring to the global economy. The demand for goods continues to grow worldwide, even with a global financial crisis caused by unregulated financial speculation.

The problem is that conventional oil production has not been able to catch up with demand, leading to higher prices for food and various "widgets". That is what's dampening consumption and not some deliberate choice by businesses to decrease consumption.

With that, "infinite" consumption will be the least of our worries because I don't think even consumption during the next two decades can be sustained. As the IEA puts it, just to maintain global GDP growth, we will need the equivalent of one Saudi Arabia every seven years. That's not possible.



Your views of capitalism are based on a simplistic perception of supply and demand, with a capitalist economy self-sustaining, with no competition, and with centralized control of production and consumption.

After that, you mentioned that you are referring to the U.S. economy, which complicates matters further, as it is a reserve-currency economy with incredible levels of resource consumption (e.g., less than 5 pct of the world's economy consuming up to a quarter of world conventional oil production).



You're missing the point. Your claim that there is no expanding market is wrong.

Why do you keep talking about "another economic system"? If you keep doing, you will keep shooting yourself in the foot, e.g., claim that all economic systems require growth, and in another paragraph argue that capitalism does not.



Because in the real world demand for various goods and resources continues to grow globally because of a growing middle class in BRIC and emerging markets.

Remember, we're not just talking about the U.S. economy...or your computer-generated economy.



Actually, that's what's leading to a decrease in production, especially conventional oil, and not the claims that you made.



That's because there are different types of growth: gross profit, net profit, volume of goods manufactured, etc. For capitalism, what you want is net profit, because that's what you need for capital.



But the one who has to buy the stocks from you loses, and he has to wait for the price to go up again so that he can recover. For that to happen, the stock market has to go up once more.

What happens when the stock market goes on a permanent decline, which is what I imagine you mean by a capitalist system that doesn't require growth? Do you think you will be able to continue making money through the stock market in the long run?

Thus, what you want is a stock market that keeps going up, even if there is an occasional decline.



The global market is sufficiently large. In fact, it is too large given resource availability.



Again, we're back to your fantasy of a centralized economy with full control of production and demand. Thus, people need to survive, which means what is manufactured is what will allow them to survive. Any profit is made only to meet any increasing demand due to an increase in population or to produce surplus goods as a buffer against emergencies such as natural calamities, etc.



Specifics of one economy? I'm referring to the global economy, which encompasses individual ones!

Actually, what you just wrote refers to YOU: either the specifics of the U.S. economy or some fantasy centralized economy refuting what is currently happening in the global economy.

In short, since U.S. companies are making profits by laying off people and earning through financial speculation, then that means the U.S. (by "U.S.," do you mean the majority of citizens or only a few?) can profit without growth (e.g., low GDP increase?).

And that's proof that a "steady state economy" works?



How else can I explain your simplistic views of supply and demand, businesses producing just right to meet demand, demand always sufficiently met by production, the absence of competition (which no longer needs over-production), and with no need to import resources?

An interesting discussion on Herman Daly's work:

"Beyond growth or beyond capitalism?"

http://climateandcapitalism.com/2011/01 ... apitalism/

with a comment by Daly himself:

http://www.paecon.net/PAEReview/issue54/Daly54.pdf

where he mentions that he talks about a "steady state economy," which he believes is neither capitalism nor socialism. Daly also argues that unlike SSEE, capitalists and socialists argue that their systems would ensure growth. Finally, he states that the "evils of capitalism" are real.

Finally, it is asked at the end of the first link, if SSEE is neither capitalist nor socialist, then what is it?

My guess is that it is part of environmental economics (well, those are the last two words in the phrase describing the system!) and will take only elements of various economic systems, e.g., private ownership from capitalism but concern for people and the environment rather than profits from socialism. It is market-driven only to the point of meeting people's needs rather than the use of market forces in capitalism to meet both needs and wants.

Ultimately, it is environmental in nature because care for the environment is the only way to ensure availability of resources to meet people's needs. But how to make sure that people will not move to wants (i.e., things they don't need)? Presumably, knowledge of the environment (e.g., resource depletion, the effects of pollution) will minimize that. In short, protecting the environment will make sure that people get what they need and encourage them not to seek more than what they need, as seeking more may lead to more resource depletion and pollution.

With that, I completely agree with Daly's views and with what Blindpig wrote. I would also like to add that others have similar views, usually in reference to localization and transition communities. For example, see

http://www.resilience.org/

This also serves as my last message in this forum, as I do not think I have enough energy to debate on this issue.

As long as I do not have to make a leap of faith to a conclusion, such as reading between the lines or making an assumption unsupported by the information presented, that should work. If there is no such support you will be conceding your error?



An abstract for a dictionary entry? I have never seen a dictionary whose entries were as long as the abstract, much less long enough to need one. I believe you are reading too much into the title of the site.



Yes, but that starts with the premise that production must be increased in capitalism, which is not a requirement either.



No, it is the system we have here in the US if you knew half as much about is as you seem to believe you do. There is never unlimited demand for anything including survival necessities.



This never happens in a capitalistic economy? Capitalist never import food from say the US?

That is why Canada, Japan, and the EU were destinations for the largest export of ag goods the US had for over 20 years? China is now at the top, but those three are still there too.



I see your problem. It seems to be reading comprehension or logical progression because there is no way to get your statement from that abstract. Nothing limits accumulation of capital in other systems or that competition removal is the only way to prevent such accumulation. This also belies the understanding of history of capitalism where the ultimate goal of some companies was to control all aspects of a market thus creating a monopoly to increase their profit. A monopoly by definition is the lack of competition and using your flawed logic should have avoided the accumulation of capital .... except it did not.



No, the version of which I spoke is the version with which I work every day.



I did include them, just like in the real world.



If the competitor can? If frogs had wings they would not bump their butts on the ground. If the competitor cannot the example stands. I did not make the sweeping generalization you did, so it does not have to cover every aspect, just enough to disprove your claim, which it did.



Where exactly does this ability to produce more product cheaper end? Or are you also assuming that does not happen so we have a second competitor undercutting the first and a third undercutting the second until we are paid to take the product and the company is making obscene profits .... in theory.



So you are using different definitions interchangeably thus making the discussion useless.



Assuming there is an increase in demand, which is false. The buggy whip market for example has not seen much growth for a century now.



It needs to increase profit even if it means sacrificing profit to gain market share? Talk about a contradictory statement. It would be more correct to indicate the desire rather than the assumption of a need.



Someone has to lose to a competitor if one increases their market share. The share has to come from someone who, according to you, needs to increase profit in order to be part of the capitalistic economy.



Investors do not invest in national economies per se, they invest in particular companies. For national level borrowing the only requirement is for there to be a perceived relative stability and ability to repay the loans in order to receive the better terms. Rates are relative to the market as well.



People always want things they do not need, and the problem is that you claimed a requirement which is not related to wants.



No, it can take place with competition when the competitors all have the relatively same technology and costs, which is far more common than you seem to believe.



That is always the desire of any company because production of products without demand means costs of those items ties up capital which can only be recovered through the sale of the product, usually at a heavy discount and possibly at a loss.



They may, but selling more at a lower price does not equal increased profits unless a certain amount is sold. In fact my example of increased production giving the same profit is more easily attained in this case.



If you CAN keep your overhead costs the same, which is not possible with any significant increase in production in the real world.



HUH?



If they sell at a lower price they will make less profit unless they can ramp up production and take a large enough section of the market, which is not probable in the real world. It is a gamble that will more likely result in lower profits or at best stagnant profits, which according to you is opposite to the requirement.



How if he does not make more profit than before? You seem to be dealing with some fantasy economy.



No, it is you that does not understand competition. Competitors generally have similar costs, technologies, etc. so the profit margins are similar. If this is not the case the competitor with the edge on costs quickly drives the competition out of business. That is what happened to the four competitors I had when I started my company. I also purchased the equipment of two of them as surplus equipment sales. In a steady competition, this is not the case unless and until some new technology or cost variable comes into play.



No, because "not liking something" does not make the inverse a requirement. That seems to be your problem in leaping to absolutes which are not logically supportable.



No, my definition makes no such assumption because it is built on the present system with examples from the real world economy to refute your claim of a requirement.



But you use at least three definitions of growth interchangeably:






Assuming there is a need to increase production in this circular logic. Capitalism requires profit for increased production, capitalism requires increased production to maintain profit, and neither is shown to be a true requirement in the real world.



I remember them an even understand them, which seems to be part of the problem in that you do not.



No, just trying to understand if there was a point here and it seems there was not.




No, your attempt to create straw men out of my statements do not work. The US economy with competition has the same criteria.



Important is still not required and the capitalist fantasy in which I am working and basing my examples upon is called the US of A 2013.



No, I am not dealing with a closed system, but the real world. Notice that when a major airline has a price increase, most of the others also follow with similar increases? How and why do you think that happens given your claims on just increasing production? The competitors should hold the prices the same and enjoy the increased sales in your world, but in the real world the costs have probably increased to the point that ALL of the competitors are in similar conditions.



Business IS a risk just by operating.



And the market for mustache wax, buggy whips, AM radios, cassette tape players, etc. are growing? There are limits to every market in the real world.



That would be an oxymoron since I am also running businesses so I must now know more than myself?



No, the requirement is still a flawed statement. Some of the businesses WANT such growth but it is still not required as much as you try to repeat it into existence.



Would you care to purchase a buggy whip manufacturer to capitalize on that expanding market? (pun intended)



Which ignores the overhead costs and the increases in the cost of materials due to increased demand, as I stated in the post. Switching back and forth between definitions in order to try to confuse is a sure sign of a weak argument, BTW.




Only if you also change the definition of "supported", "concise", and "definition" to something other than the currently accepted versions.



The competitor may not have much of a choice as is the case in the real world economics.



So I just need to not know reality and believe this assumption? Not hardly.



Wanting is NOT a requirement by any means, yet you still try to equate the two. This leap of logic is evident throughout your presentation.



As do non-state capitalist economies, the competition is there but not as flexible as you envision.



Capitalism, the subject which required growth but did not get it.



No, because there has been growth in population, which would cause ANY economic system to show growth. Can you give an example of an non-capitalist economy that showed no growth for decades? If it showed growth would it not then be capitalistic?



Correlation is not causation nor does it provide evidence of a requirement.



No, I am saying your "connection" between the two aspects is flawed, just as I stated.



Every economy is capitalistic and the US is not?



Which has nothing to do with a requirement or not.




No, that is your straw man presentation of my real world examples.



So, it is not capitalistic? I suppose if you are changing definitions you can do so until something fits.



NO! I am claiming there is no REQUIREMENT for an expanding market, which is far different from your straw man presentation.



I do not claim they REQUIRE growth, but that they WANT growth, which is a clear and precise difference.



So you claim that manufacturers do not slow production as demand drops because you believe demand never drops?

http://money.cnn.com/2009/01/22/news/ec ... el_output/

NEW YORK (CNNMoney.com) -- Worldwide crude steel output dropped 1.2% in 2008, as global demand for manufactured goods fell in the second half of the year, according to an industry report released Thursday.

The World Steel Association said production of crude steel fell 24.3% in December, compared to December 2007, marking the fourth straight month of year-over-year declines



And you are still just as wrong.


.

How many definitions do you use for the same term?




That second person does not have to make a profit. Your example was that without growth there is no profit and this shows where a profit can be made without increases.



Now the example must be a continued process to be valid? That sound you hear is goal posts moving.



Yes, WANT, not required.



The global market for buggy whips is that large? No, you are interchanging the definition of total market with product market just as you do with the term growth. The use of multiple definitions used inconsistently shows you have no ability to support your position with actual evidence but have to resort to trickery.



No, I was referencing your post. "Do you see? Everyone wants to see economic growth, and that ultimately means more profits."



I fail to see how an I-pad is critical for the survival of many people, but then again that is the case with most of your position.



Companies produce more I-pads in case there is natural calamity?



You are referencing several things at the same time it seems, no clear definition follows through your discussion at all. The definition changes randomly as does the reference.

.

So the global economy is capitalism now? The US is not capitalism but the world is? Can you be more wrong in the use of changing definitions?



It is proof growth is not required for a profit in a capitalistic economy.



By not misrepresenting my position would be a good start. That is the real definition of a straw man.

_________________
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

To recap:



Growth which is used without reference but may be defined at any time as:



or



And capitalism is defined as being the world economy and not the US economy because the world economy is capitalistic even though many of the individuals countries are not,



such as the largest single economy in the world, the US.



I hope this is now as clear to everyone else as it is to me. Clear as mud.

_________________
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

Didn't you see? The monkey gave up. Next!

_________________
"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
“Those Who Have the Privilege to Know Have the Duty to Act”…Albert Einstein

Sorry for the delay, but I decided to review what you said, and I think you are referring to articles like these:

Business Competition Has Not Gotten Fiercer

which explains every point you raised, such as companies having similar technologies, becoming more profitable (which means there's less competition), little need to innovate, etc.

The problem is that the article refers only to the U.S. economy, and probably the U.S. consumer market, where there is not much growth in demand for goods and services.

For the world economy, however, the demand is soaring because of a growing global middle class. This is what I mean by an expanding market: that class is expected to make up almost half of the world's population by next year, and reach almost 5 billion a decade after.

This market, consisting of BRICS and over forty emerging economies, has a combined population that exceeds those of OECD markets, and is hungry for all sorts of middle class conveniences, from not just cars but even EVs, and not just appliances but also all sorts of smart gadgets, processed food, and more.

According to economists like Reich, since the early 1990s various U.S. businesses have set up partnerships with counterparts in some of these countries while others have been purchased. Meanwhile, more companies from these countries have begun to dominate markets, starting with Japan, followed by the Asian tigers, and now China.

Many of these economies are capitalist, and frequently banks and investors refer to their GDP growth, sales of various products of businesses located there, etc., and these are sometimes linked to stock market, currency, and bond performance, credit ratings, etc.

At the same time, many of these economies have young populations, with many graduating from school and eager to work in expanding businesses, and becoming part of the same growing global middle class that wants cars, smart phones, houses, etc. Investors who fund expanding businesses that provide these middle class conveniences plus needs ranging from medicine to processed food expect high returns.

This explains my point of why capitalism requires growth: workers (and consumers), business owners competing with each other and finding opportunities in expanding consumer markets, investors who want better returns, all want to earn more, and to do that they need to be more productive, sell more goods and services (so that they can buy goods and services that they need and want), and even borrow more from banks (which need to lend more so that they can earn more). All that credit is churned back into the system to capitalize more production and consumption. And given the size of the population in the developing world, the demand is definitely there.

Now, this phenomenon is likely irrelevant to someone insulated in the U.S. and operating a small business in competition with a few others in a small city, and where credit is made possible through a military-backed petrodollar, but that doesn't mean that it's not taking place. There is growth, competition, market expansion, and more worldwide, and the possibility that the global economy will become multi-polar is significant. As it is, many products that our insulated U.S. entrepreneur is using is made in countries like China or involve extensive supply chains crossing thousands of km and many countries. Those supply chains and JIT systems involve growth on an incredible scale, and probably even coupled with economies of scale (imagine trying to, say, meet the needs of a third of the global market, whether it involves zippers or hard drives).

And then there's planned obsolescence. It's easy to imagine that businesses don't have to be innovative because they have similar technologies and costs, but what happens one they deal with competitors from other countries, and what happens if they want the business cycle to continue? That means they are forced to innovate, coming up with products that are "new and improved" or some "game changer" so that consumers will come back for more. Again, this points to the drive for growth.

Thus, the claim that growth is not a requirement for capitalism might apply to certain circumstances, e.g., late capitalist economies with aging populations like those found in OECD countries (and, in the case of countries like the U.S., probably mitigated by immigration), but not in the "real world," and by that I literally mean "world." That is, a large portion of the world's population that is young and hungry for needs and wants that counterparts have in industrialized countries. And logically investors in the latter will capitalize on that as that is their career (to invest and re-invest).

Finally, how is this related to the thread title? Well, in order to meet that very large consumer market, we will need resources that will definitely go way beyond what the biosphere allows. And yet capitalists will ignore that because what else would they do? That's the very occupation of capitalists: to capitalize on opportunities to earn more by producing and selling more.

With that, collapse is inevitable on a significant scale involving multiple crises, and likely driven by a combination of the effects of limits to growth and ecological damage, including the effects of global warming.

One more point: I got angry after I read several phrases that to me were personal attacks or insults (like questioning my reading comprehension), and I wanted to reply with the same, but decided not to do so, and instead posted this, which I hope is considered civil. I guess my conclusion is that it was a misunderstanding. You are correct, but I think you are talking about the U.S. economy. I was referring to the global economy, which I think is very different.

FWIW, I think we're both right, i.e., given the HBR article. That is, late capitalist economies like those of the U.S. experience less competition and more corporate profits. However, most economies worldwide are like those of 19th- and early-20th century U.S., i.e., driven by higher levels of competition and lower corporate profits as they jockey to dominate a very large consumer and even labor market populated mostly by young and ambitious individuals.

And since we are comparing capitalism with nature, I only thought it logical that both referred to the world and not to a particular country.

Not necessarily, as many resources can be recycled and some are not limited in our biosphere by any means. There cannot be an exponential growth of markets forever, but there does not have to be because even finite markets can be profitable.




It is civil and completely acceptable especially after a six year cooling off period.



The global economy does not include just capitalism as a component, but also communism, socialism, and a variety of economies which are composed of mixtures.

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Given ecological footprint, the amount of resources needed to meet this growing global middle class will be equivalent to another earth or more.

Also, this assumes that the population will not increase further, and that pollution as well as global warming will not lead to loss of various resources, economic destabilization, etc.

I think finite markets can be profitable as long as there are markets outside it that continue to grow. In this case, one can imagine someone operating a small business somewhere in the U.S. and assume that that business and his society are self-contained and not dependent on others. And yet many of the products that he uses are made elsewhere or involve components from dozens of countries. Just imagine the extensive supply chains and JIT systems needed for computers, among others, not to mention the two weeks' worth of food, fuel, and medicine found in various towns and cities and transported across thousands of km.

That does not resemble a finite market. If any, it relies on incredible levels of economies of scale and investments, and in various cases on a global scale. In order to sustain such, something like exponential rates of increase are likely. That reminds me of Albert Bartlett.



Thanks for understanding. It's a good thing I realized that you were referring to the U.S. economy. I assumed that the topic thread is about the world economy, which is very different. But as pointed out above and earlier, even economies like that of the U.S. that appear to be self-contained are the opposite: they rely on a global economy with extensive supply chains to meet ever-complex industrial civilization, which includes manufacturing products like computers needed to access this forum. Even the petrodollar used to buy those computers needs to be backed by a military industrial complex consisting of, among others, hundreds of military bases dotting the world to protect U.S. interests.



That's certain, as they are mostly mixed economies, but their main goal is growth. That's because many of them are found in the developing world, have large but young populations, and are eager to industrialize in order to ensure basic needs such as medicine and food security.

The largest group consists of BRICS and over forty emerging markets, which combined have a population that makes up 60 pct of the world. Because of population momentum coupled with population aging in developed economies, that percentage will likely increase together with the world population itself (around 9 to 11 billion). Some argue that this large group led by BRICS will soon overshadow OECD economies.

Given that, we face incredibly large markets with very high opportunities for profit. This is obviously advantageous to capitalists, as that gives them a lot of room for investing and earning substantial returns from such. This is clearly seen in a growing global middle class, which is expected to almost triple in only two decades. As the article points out, Asia alone will have a market of at least 3 billion people, which will be ten times larger than the population of NA and five times larger than that of Europe.

Altogether, these points reveal how capitalism, which is the main driver of global industrialization, requires growth: growing populations need more jobs and resource use, investors want returns from businesses that create those jobs and produce goods and services using various resources and then re-invest those returns via financial instruments leading to more growth, and the potential demand is certainly there.

The catch, as revealed in the thread title, is that this growth can't continue. Even with recycling and various game changers, the world population is simply too large to be covered by biocapacity, and that growth, which is premised on increasing availability of middle class conveniences ranging from passenger vehicles to smart devices, will ultimately be limited. And when those limits are reached, one should expect societal breakdown across the board, e.g., shortages as those two weeks' worth of food, fuel, medicine, and other goods delivered across thousands of km to various towns and cities worldwide dwindle, more resorting to violence as they fight their neighbors, police, and the military which attempt to secure resources for their own operations, increased vectors for the spread of disease as sanitation and public utilities start falling apart coupled with increased human migration as more flee from increasing conflict, etc.