The Myth of Constant Growth
In our capitalist system there is a myth of constant growth. It is based on the assumption that growth can be constant and that it is good.
While financially speaking the stock market has been a good investment over the course of the last 100 years this idea of constant growth comes at a cost. In order for a market to continue to grow the companies in that market must capture more customers, failing to do so they must offer a broader range of products. A great example of this, and the dangers that come with it at least on a somewhat micro-scale is Facebook.
Facebook is a good example because the timeline of events is incredibly short and the impact on the world is rather large. Facebook started as a place to connect with friends, specifically other people who went to your Ivy League university. Within a matter of months it had spread outside of Harvard and unto other campuses, soon teenagers around the country started signing up and within a few years Facebook had blown past the hundred million user mark and within nine years they had over a billion registered users. As of 2019 there were 4.5 billion internet users and almost 2.5 Facebook users.* Facebook stock has done well because their user base has continuously grown and therefore the value of the information they gather and the ads they sell. Yet, even with this growth Facebook has consistently butted up against an inevitable wall. There are only so many people on earth and in Facebook's case it's attracted a good number of them to the product and it's unlikely to continue at this growth rate much longer. They know this, Instagram, WhatsApp, Oculus and dozens of other less flashy purchases have helped Facebook slurp up an even larger slice of the pie. By acquiring, expanding and broadening the offering a company only kicks the can so far down the road but eventually growth stagnates.
Facebook is only a kind of meta example because of course the 2.5 billion users aren't actually customers but it's an illustrative example of a company that has rapidly grown from a modest sustainable business to an eight headed monster eager to gobble up any and all competition in the never-ending elusive quest for constant growth.
By definition constant growth is not sustainable in almost every meaning of the word. It is not sustainable from an economic standpoint, an environmental standpoint or a social standpoint. Chasing it only results in a net harm. This is only hastened by quarterly earnings reports which create extremely shortsighted incentives to inflate earnings any way possible. Sometimes this is by decimating the environment with new pipelines, new mines or clearcut forests. Sometimes it's by artificially inflating the value of a product or service as was the case with Enron or Theranos Labs. The worst part is in the case of a publicly traded company these decision makers are tasked with what is called a "fiduciary duty", the financial responsibility one has over the assets of another party. The search for constant growth leads to short term gains for a small number of people and long term detrimental effects for everyone.
In a purely theoretical exercise, one company could out maneuver, out preform, buy out, steal and run out of business all competition. Becoming the very antithesis of what so called "campions of the free market" so loudly decry but privately seem to encourage with a subtle wink: a massive all encompassing monopoly. A Monolith Corporation. Having achieved this status the Monolith Corporation could raise prices to whatever economic point made the most sense, driving whatever portion of the population couldn't afford to pay into abject poverty overnight. And still, growth would grind to a halt because resources on this planet are largely fixed.
The Monolith Corporation would never occur in practice but so many companies attempt it in their own industries, because of the myth that continuous growth is good.
Is growth actually good? Growth is more relative than good or bad. Studies have been done† indicating the relative happiness that increased wealth brings. Up to about $75,000 or $80,000 every salary increase brings greater happiness however after $80,000 the happiness tapers off. As our essential needs are met our joy in the money we earn decreases and we have to start looking outward for increased happiness. So one could argue that salary growth is good up to about $80,000, and there is room in there to go further even a lot further, but at some point the accumulation of more money moves the needle so little that the costs really aren't worth it.
It is the same with business, if a company can't pay its founder then growth up to the point where the founder can make a full time paycheque is good. Even hiring employees, expanding, becoming renowned for producing a great product in a city or state all this could be considered "good" but why is there a need to grow beyond that? As stated above only so much happiness can come from accumulating more wealth, and it is the same with market share.
Growth at all costs creates an incentive to cut corners, to harm people and the planet, to ship inferior products faster and to more people. A far more sustainable model is simply trying to be good at what you do build products that respect customers and the environment.
†Time