Was just trying to explain to someone why everything is going to shit, specifically companies, and realized, I don’t fully get it either.
I’ve got the following explanation. The sentences marked with “???” are were I’m lost. Anyone mind telling me, if they’re correct and if so, why?
The past few years, central banks were giving out interest rates of 0% or even negative percentages. Regular banks would not quite pass this on, but you could still loan money and give it back later with no real interest payments.
This lead to lots of people investing in companies. As long as those companies paid out more money than those low interest rates, it was worthwhile. But at the same time, this meant companies didn’t have to be profitable, because they could pay out investors from money that other investors gave them???
This has stopped being the case, as central banks are hiking interest rates again, to combat inflation???
Literally money. More specifically, the financial need under a capitalist system for businesses to constantly grow and increase profits, and to focus on shareholder profits over making a good product. Most businesses on any sort of large scale today aren’t in it to do a good job at making whatever it is they make, they’re in it to make money. Their actual ‘business’ is just an incidental stop on the way to making more money.
You see this literally everywhere. Remember Odwalla? They made these great, super-thick bottled smoothy-like juices. Easily the healthiest thing you could find to drink in most of the places they were sold. Then Coca-Cola bought them out, changed the name to Naked Juice, and watered them all down. What we have now, as a result, is a pale imitation of what we once had.
Why? Because Odwalla was profitable, so it was profitable for Coca-cola to buy up a competitor for shelf space. But once they were bought up, there’s no incentive to deliver the same quality of product. They have no remaining competition, so they can release a shittier version and we’ll basically just suck it up because it’s still healthier than soda.
Our reward for worshiping currency is for everything ever made out of love of a craft or an art to be exploited and turned into a shittier version of itself.
The solution, to my reckoning, is to start making things you love because you love to make them and to refuse to sell out when they come knocking.
There’s only one thing I would alter in your statement. You said:
…and to focus on shareholder profits over making a good product.
I would say, "and to focus on shareholder profits over
making a good productanything else, including life itself.It’s more profitable for a health insurance company to deny someone’s claim than to pay for their healthcare in the US. The insurance company won’t care if that ultimately leads to the person’s death - they have to answer to their shareholders.
It’s more profitable for Nestlé or Google to siphon water from countries in the global South than it is to have sustainable practices that don’t exacerbate climate change. So what if that means that millions of people will die in the years to come? That’s their problem for being poor.
We need to bring about the kind of change that has politicians recognize that there is more to human life than a dollar amount, and that poverty is not a moral failing on the part of the individual. But until that happens, poverty is akin to a death sentence.
Ok but what you are asking is to crash the market, that will lead to more harm than good. Any better less drastic idea?
If the market can’t survive without being detrimental to human life on a large scale, it deserves to crash.
Sounds exactly what an evil super villain would say.
Is it evil to prioritize human life over the state of the market?
Is it good to prioritize the economy over human lives?
I wouls just add that it’s all about making profits and increasing them year per year, but always focusing on the short term. To the CEOs, shareholders and other directives, it doesn’t matter if the company goes bankrupt 10 years from now, as long as they suck in all the profits they can now.
Even if the company is very successful, with a very good product(s) and they could just go into easy-ride mode continuing to provide those products. They only want to make as much money as quickly as possible and once they get their hands on the company, the enshitification for the sake of quick profits ensues.
This is why I feel bad about any company releasing their “best product ever”, because it’s all downhill from there. The only thing left for the shareholders to do is cut costs, worsening the product.
See also: craft brewing
What you describe is the basic structure in our economy that drives this, but the answer to why the enshittification has been accelerating, is technology. Advances in technology, particularly information technology, progressively enable corporations to be more efficient at all this, including more efficient at gaming the political system and manipulating users and customers.
If you look back nostalgically at some time decades ago when things were less bad, it’s because things were less efficient and humanity was more likely to sometimes get in the way of the machine that we’ve built having it’s way with us.
Cause 1% of people own 99% of everything. That’s never going to not be a shitty situation.
But also shit has been bad for marginalised groups since like forever. Now we’re all just getting a taste of that as our masters pull the ladder up from under them.
It’s cyclical and it’s been happening for thousands of years. It’s part of our human nature.
We all work together and build systems, societies and civilizations and do great things. We become wealthy and then slowly concentrate that wealth to smaller and smaller groups of people. Eventually the majority of the wealth is controlled by a very small group of people and everyone else has nothing. The system at this point can not sustain itself and collapses. Then the whole human system restarts again from the bottom.
It’s happened many many times throughout human history.
We are just at the height of one of those cycles.
Maybe this can change in the software space with the advent of foss.
It kinda is I suppose, even if very, very slowly.
What exactly do you mean by system collapsing and restarting? How does it look?
Oooh! I got this one! There’s an excellent YouTube channel called “Fall of Civilizations” that show all the different ways this happened in the past.
I think the overall picture is accurate, wealth typically concentrates in good times, and spreads out in bad ones. However, we in the West are still nowhere near the all-time highs of inequality, and while it’s cyclic it’s not in a predictable way like that. I don’t think it’s even clear that highly unequal societies must become unstable.
The trouble is that we can’t apply the same speed of development or collapse to our civilization as to those in the past.
We have nuclear weapons, mass communications, global internet and interconnected multinational financial systems that all work at real time speed all across the world at the mass level and individual level.
We are capable of developing in so many ways at such great speed compared to the past … but we are also capable to destroying ourselves instantly through nuclear warfare, or within a century through our ignorance of climate change.
Yeah, technology is really different. Ideology is also new; agricultural civilisation had versions of feudalism for thousands of years until the American and French revolutions, and it seems like they’ve actually made a huge difference in how things go. It’s pretty much the sole reason I think we could break the cycle.
- EremesZorn ( @EremesZorn@beehaw.org ) English4•11 months ago
Entropy. Plain and simple.
Most of these businesses operated at near unsustainable levels with almost negligible interest rates on loans, and now they’re panicking because their business model is shit and they’re trying to recover however they can by enshittifying everything.
I think it’s cultural. An entire generation has now been raised to believe that capitalism is inherently oppressive. Therefore they unconsciously or consciously believe that they must oppress their customers as part of the money-making ritual. And since capitalism doesn’t inherently produce that oppression, they have to add it in the form of products getting worse.
I personally think that everything has always gone to shit. But in the downfall, new things will take over until that goes to shit. Or maybe because there are new things the old things will go down.
Take the example of video stores. They used the be the best thing ever. Rent all the movies you would like to see for a small fee per movie. Then downloading and streaming came along. Streaming was cheaper and more convenient. Result: video renting business went to shit.
Then the streaming services started to raise their prices. It started going to shit. Soon new ideas/companies/services will swoop in and the cycle will repeat again.
Yip. Everything is always going to shit, but manure makes good fertilizer.
That is an awesome sentence. I will use that one some time.
Worldwide economic growth is coming to a halt and what we’re seeing is the ripples it causes.
The tail end of this ripple is large corporations death grip on increased profits every quarter. But the reality is that at some point you can not successfully grow profits past the peak without destroying everything. We are in the initial phase of the destruction onslaught.
The problem is that money is permited to generate money. So the more you have beyond the threshold to sustain yourself the more you can generate without labour. The business with no interest loans accelerates things but it isn’t the problem. It is that the system rewards idle investors at the expense of those whose labour actually generates value.
Capitalism wasn’t fine until someone broke it. The core concepts behind it are flawed.
I’ve said this plenty of times but it bears repeating, the problem isn’t capitalism or the type of social structure, the problem is people. Capitalism is a simplistic and ultimately ineffective solution, because it doesn’t account for the human problem.
People will always try to game the system. We need a system that recognises and accounts for that.
But capitalism is so much easier to game than, for example, market socialism.
Everyone giving you simple one-word explenation is most probably wrong.
“that’s capitalism” is the new “the devil did that”
This is like reprimanding every weather effect as immediately climate-relevant (‘but it rains’, ‘winter exists’). Whole empires shattered because of over-simplification and maladaptation, visible in the knowledge display of some contemporary heirs and politicians.
Capitalism, its bubbles and inflations.
I think as we get older we just notice more and more. Things are bad but relatively things are also good. Take the bad and the good. Others here are explaining the economy stuff, that explains housing and our tech woes, blah blah blah
Stay informed, fight the good fights, but also take the small moments to stop and think about the positives in your life too. Your family, friends, what you find solace in. There are a lot of negative things, and social media really likes to focus on the negatives, but remember your personal positives too.
Neo-liberalism
But at the same time, this meant companies didn’t have to be profitable, because they could pay out investors from money that other investors gave them???
Few, if any, of the big tech companies were playing out any kind of dividend to investors. It was more that they were content for companies to maybe someday make money as opposed to actually making money,
Most bizarre financial decisions can be put down to greed, or stupidity. Usually both.
lemme tell you about a special gorilla from Cincinnati
Our societies have been built around our economies. The underlying premise of our economies is that they must always grow in the long term to sustain itself and generate returns.
Permanent growth is not sustainable. Nothing in this universe just grows forever without significantly changing state. Not even the universe itself or imaginations do that.
Resources are finite and at some point, the costs outweighs the returns. The choice then is how quickly to shrink. A sudden collapse is the most dangerous option but possibly the fastest before returning to growth, a slow shrink is less destructive but for a much longer duration and it may not be fast enough to prevent outright collapse. This is where we are right now, and why banks are tinkering with rates.
The question for me is: Will tinkering with our economies slowly be fast enough to outpace our outstanding environmental debts and the interest accruing on that.