Mike Hudack

Lawmakers were wrong to repeal the Depression-era Glass- Steagall Act in 1999, Reed said. At the time, he supported overturn of the law, which required the separation of institutions that engaged in traditional customer banking services from those involved in capital markets. “We learn from our mistakes,” said Reed, who wrote an Oct. 21 letter to the editor of the New York Times endorsing a division of banking activities. “When you’re running a company, you do what you think is right for the stockholders. Right now I’m looking at this as a citizen.

Reed Says ‘I’m Sorry’ for Role in Creating Citigroup - Bloomberg.com

This is the exact problem with Western capitalism and something I suspect I’ll harp about for the rest of my life. Our form of capitalism requires it’s companies to constantly be making more profit than before. Simply making as much of a profit as the previous quarter is considered a failure. It’s not possible for their to be endless growth in a world with fixed resources, capital and labor. It can be achieved temporarily, but never permanently. This principle destroys companies, economies and society with it.

(via tedr)

I don’t think this is because of “Western capitalism”. It’s because of inertia. If you strive to manage the status quo you will naturally begin to collapse — your company will die. Profit margins will begin to erode, volume will decrease, employees will become unhappy.

You make another mistake. Resources are not finite. They grow over time. That is to say that we become more efficient. There may be a finite amount of nickel (for example) in the Earth, but over time we become better at mining it, we become better at preserving it, we become better at recycling it. Also, human labor becomes more productive over time thanks to increased knowledge, computers, robotics, et cetera.

Companies that don’t grow eventually die. Not because of “Western capitalism.” Simply because this is the way of the world.