Explain Like I'm 5 (ELI5)

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ELI5 why is perpetual growth "inherent" to capitalism? Is it? (lemmy.world)

submitted 10 hours ago* (last edited 10 hours ago) by ivanafterall@lemmy.world to c/eli5@lemmy.world

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Why can't I, in theory, start a business, grow it until it's successful, then just...be content and stop growing? Why do people talk about it as inherent to the system to grow like cancer? What about capitalism causes that and why can't we avoid it? Like, technically speaking?

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[–] Steve 4 points 7 hours ago* (last edited 7 hours ago)

Lots of people look at our current economic system and call it and everything with it capitalism. But it's not really. Nothing in capitalism requires infinite growth. That's just a byproduct of the public stock market. Public shareholders buy shares in the hope they will be worth more in the future. If the shares of one company aren't, people won't buy it. And since the assigned value of that company is tied to its share price (kind of a silly idea if one really thinks about it) that company will have an apparent value of nothing.

So in order to avoid that zero dollar share value, a company must appear to be growing.

But nothing in capitalism requires a public stock market to begin with.