Growth is a mind cancer
manuelmoreale.com
manuelmoreale.com
Does anyone really believe this company is viable in 2024? In this scenario, Apple is dead.
The author is free to change his mind about what product he wants over time... but there's something wrong with a company that changes products over time? Companies must be free to adapt to the changing preferences of customers. The alternative is corporate death.
Adapting is necessary for any company to survive, growing not necessarily.
Growth is new business, its evolving old ones. If you don't know whats going to work you try more than one thing. Growth is the measure of adaptation.
It's obviously not a perfect analogy. But in complex natural systems stability without growth is rare.
And for the record: trees and plants mostly stop growing if you put them in a pot with limited space.
What I mean is, it's absurd to expect companies not to behave the way they have always did.
There was a time not long ago and for the majority of human life that the modern concept of a equity based corporation with distinct split between owners and labor didn’t exist
So I’m not sure if always is accurate grounding or the base rate that should be compared against
Those who payed attention and had been keeping their options open went on to other jobs.
I don’t think “job stability” is ever really a thing in a changing world, more of a fantasy, and those who invest everything in it are really investing in their eventual discomfort.
Death is not a "couldn't hack it" outcome. Death is an evolved and persistently retained pattern in all living systems that have arrived here to share spacetime with us (the exceptions that are sustainable are vanishingly small, and those unsustainable are synonymous with approaching-death, aka cancer)
Death is adaptive to systems. With very few exceptions, all living things DIE. We've been selected to DIE. Things that don't die, kill their ecology. They are terrible neighbors, and so are selected for extinction.
So your "would apple survive" question feels like it's missing the point.
All agents must eventually die for the larger performance to thrive. But no actor* will ever choose that, the system does. (Governments often plays this role in the noosphere, as a corporation won't.)
*Humans seem different in that we can model a system, and think like systems. We are an actor, flirting with being a system. I'm open to the fact that we can maybe decide to choose death, even when we have put other options on the table ("defeating death"). So far as a collective of supposedly smart agents, we're kinda failing to realize the adaptive nature of death, and are mostly driving for increased longevity.
(All of the above is informed by complexity science or complex systems, if anyone finds the above trains of thought interesting.)
Currently, the inevitability of death ensures a natural cycle of change within companies, as departing leaders make way for new visions and ideas. This turnover allows for evolution, adaptation, and sometimes, necessary redirection. However, the integration of AI into these leadership roles introduces the potential for an 'immortal' rigidity.
If AI were to maintain steadfast control, it might anchor organizations to a static set of principles or strategies, lacking the organic, transformative shifts that human mortality inadvertently guarantees.
This challenges us to consider how we might embed adaptability and growth into systems that, by their nature, could become inflexibly eternal.
Customers don't necessarily want a successful product to change. Much of that desire for change is engineered via marketing so that there is an opportunity for growth.
If Apple decides it will stop growing, it will plow 100% of its profits in share buybacks (I bet op loves those!) and work hard to squeeze costs down. This happens routinely under private equity ownership. It's not as fun as you'd think.
The view expressed by the author is naive and shortsighted. Growth is required for society to function. If it doesn't come from Apple, it must come from somewhere else.
Therefore to ask someone to surrender money today, they have to give you more money to return it to you next year.
This isn’t the same as growth (ie you’re doing a job, but next year they expect you to make 25% more sales, or else…)
Yes, but this is the noncompetitive growth of a single industry, which is monopolizing trade and labor. This is actually the opposite of social growth, and it's the reason we have anti monopoly laws.
> Capital flows into the places where it can be best put to work.
It also flows to places which it can return the most to capital owners, not necessarily that means best put to work. Financial markets decouple productivity from value, the cryptocurrency market is not even close to be productive but has massive capital inflows; the housing market collapse of 2008 was not money being put where it could be best worked. Money flows to where returns are expected, that's about it, the more decoupled that returns became from actual productivity and improvements to society (and mostly by the hyperfinancialisation of economies since the 80s) the less that statement is true.
This is still just growth (in share price).
I would say that the real alternative to growth is dividends. Plenty of grocery store chains are happy to putter along paying a solid quarterly dividend with meager yearly growth.
1. Dividends and share buybacks are the exact same thing, just with a different tax treatment.
2. A share buyback should not in itself produce an increase in share price. You decrease the $ of shares on the market by the exact amount you decrease the $ on your balance sheet.
3. An increase in share price is not business growth.
That depends on the percentage of shares that are liquid. Shares can be locked up in options or other contracts so a buyback disproportionately affects the liquid capitalization rather than the fully diluted capitalization--a pretty significant difference from dividends.
> A share buyback should not in itself produce an increase in share price. You decrease the $ of shares on the market by the exact amount you decrease the $ on your balance sheet.
Decreasing supply while demand remains constant would in fact produce an increase in share price. Of course, demand doesn't remain constant, so it's not a guaranteed increase, but the general principle of supply and demand does apply here.
> An increase in share price is not business growth.
Agreed, but that's sort of the problem--it's supposed to be. One of the flaws of our stock market is that share price is so manipulable in so many ways that it's divorced from the value the company actually creates.
I don’t even know what those are. I don’t invest, I know nothing about that world.
My email is public on my site if you want to discuss my naive and shortsighted views.
Well I'm not so sure about "more" as much about "keep making". And here lays the problem in almost every business on this planet. Everyone needs money to survive and if those money are obtained by selling produce, if that produce doesn't sell, they don't survive. So what do you propose instead?
No, it's a gross gain. And probably a small one, honestly. Whereas the associated costs to society are in the billions or trillions of dollars when we measure the environmental and social effects of mandatory-growth-culture. So it's a net loss.
Just want to point out that this isn't necessarily a causative effect.
Make a product so good that people would choose to switch.
I bought a Mac M1 2 years ago. I did some really shitty research when buying it - I didn't have that much money available at the time tbh, even thought at the time they were cheaper in my country (don't ask) than in the US - and went for the lower end of the MacBook Pro. That's a decision I regretted almost immediately, and then end of last year I decided to go for an M3 with better specs.
With this machine, the only thing that is probably going to make me change - besides it breaking down - is probably blazing fast IA capabilities (As in, real-time LlaMA stuff, or similar).
Otherwise I plan to use this machine for as long as I can keep using it. Same applies to my iPhone 13; unless I see a real need for changing it, I'm keeping it - that is if I don't decide to go back to middle tier Samsung phones that in my opinion are better than iPhones.
I'll give you all your money back for you M3, and give you the M1 you have/had only at a maxed out spec.
Would you take the deal?
It sounds good, but progress is a thing. That AI workload you want to run, isnt going to do so hot on the m1 (it doesn't have the right floating point systems).
Its likely that the current m3 will remain usable as a laptop for a few more years due to extra ram and storage, but it has a shelf life for high end workloads...
Isn't that my point exactly? (Sorry if I miss explained myself, not a native speaker and I didn't quite proofread my comment either)
What I want to say is, I have the feeling my M3 is going to provide good service for probably a longer time than Apple is expecting to, and the only reason that'll make me change is having the need - and the money - for a better option.
And I do think one of the biggest reasons as to why I might not make the switch is due to how incredible well this machine is engineered.
As I'm kind of Apple's target pop - I did buy, afterall, 2 machines from them in a very short span of time - the previous point I made plays against them.
> I'll give you all your money back for you M3, and give you the M1 you have/had only at a maxed out spec.
> Would you take the deal?
Depends on the deal, but very likely yes. Maxed out M1's are incredible capable machines in my opinion.
Thanks for your comment!
2. Hardware isn't their only product.
Anyway, infinite growth is impossible, so the comparison to a local business is moot. Also, it should be legally required for Apple to make products that last 10+ years from an environmental standpoint.
They could be more generous and friendly to their consumers, and would probably have an even happier fanbase as a result. But it would likely not be more profitable, so they won't.
The point here is that more profitable every year is not necessary for survival or for a company to be strong. It's simply a way to make shareholders very rich. That doesn't make it good for society. This is not about companies surviving. This is about companies needing to grow and grow and grow...
And as the author says, there is no real end state. You keep growing until you buy out every one of your competitors? And when you have a stranglehold on the market, you can severely cut costs and reduce quality to continue growing profits without needing to find more customers. This shit really happens in a number of industries! It's not good for society.
Sure, survival applies to small companies, startups, mom & pop shops. But many of these massive companies are operating at a completely different level, and "needing money to survive," is not at all what they are trying to do. They are trying to grow profits every year, to make the shareholders happy and wealthy. Not to help them or the company's employees survive. (We all know these companies are very happy to do a layoff if that's what will move the needle on profit growth.)
If they continue to do things that hobble their products, people will stop buying them and that will put a natural break on Apple's growth. Of course there is also the question of monopolistic practices, and that's where it's appropriate for governments to step in, as the Biden administration is attempting with their recent lawsuit against Apple.
I sense from progressives a growing sense that shaming people, corporations, organizations, governments, is the most effective means of social change. From what I can see, it accomplishes very little.
Growth mindset is a good thing overall. And sometimes you get growth through pretty shitty means. I can't really throw out "growth" altogether just because a lot of companies employ accountants, MBA executives, and lawyers.
I don’t hate growth in general. I hate it when it’s the only driving force.
Growth mindset is a bit good thing overall. We might disagree on that. As a byproduct of other drivers, like innovation, sure, I’m cool with that.
But I find it difficult to separate these just on the idea of growth being a bad mindset. Lack of ethics or quality mindset might be the better thing to go after here, since that seems to be where most of the disagreeable actions come from.
It’s human nature. If one stops doing it someone else will take their place.
I just hate the state of the world in this specific context.
And again, I don’t have anything against growth itself. Growth is a byproduct. I have an issue when growth becomes a motivating force. Because it pushes well intentioned people in wrong directions.
The entire enshittification of the web is a testament of that.
There was a time when companies, local ones, were happy to have reached a steady state. You make a product people want, you’re earning more than you’re spending, you’re employing a bunch of people and that’s fine.
That entire concept seems to be forgotten because of this silly growth at all cost mindset.
That’s what bothers me.
So they have to create the illusion of growth, new title, a few inconsequential responsibilities, maybe some small salary bump. You get the idea.
OP certainly thinks fondly of things built to last, and that’s admirable - but you should question the extent to which they actually value them. Let’s say OP is 30 and will buy one $3000 laptop per decade until age 70. If OP truly values things that last then they should be willing to pay at least $16000 today for a laptop with a 40 year lifespan. But that’s obviously silly! In reality OP values things that last to some extent but is willing to trade it off (newer, faster, lighter, cheaper) - they will undoubtedly choose to replace their laptop in the next 40 years.
The same with quality, I can almost always offer you a higher-quality product - but at a certain point you will not be willing to pay for it.
I’m against growing just for the sake of growing.
I’m 35 btw, so your example is not too wrong. I do value things that last. And again, I don’t have issues with price increases.
And if you price me out, so be it. But if you price me out because you want to make more and more money then I’d argue that’s a shitty way to run a business.
Although I'm pretty sure the pressure to grow doesn't solely come from the outside-in perspective. It feels like internal politics, incentives, and the individuals desires to make their mark results in a shift in priorities in otherwise settled product lines as well.
At this point it feels right to switch from calling it growth, to neutrally 'drive'. Assuming some sense of drive not only is useful, but is an necessary feature of humans producing... then if priorities are not oriented directly towards maximizing usability or the quality of product for the end user, it will result in a product being reasonably propelled away from maintaining those. And so it seems to me, it is the priorities not the existence of drive or growth that is the issue to be focused on. I feel trying to establish a culture without drive would be net counter productive.
When your profits aren't up 20% for the tenth year in a row, you cut costs somewhere, and it's always the workforce that suffers most, due to layoffs. Other things suffer too, like product quality (maybe using cheaper materials maybe built-in obsolescence).
If you're a rank-and-file employee at the company, no amount of dividend payout on your shares (if you're lucky enough to be given any) is going to make up for the fact that the CEO has decided that he'd be able to buy a new beach house with the bonus he'd get from closing your division. Slightly enhanced earnings-per-share won't make up for the fact that you no longer have an income or benefits, and the fact that the local economy has just lost an employer. And yet, that's what will happen, because the CEO has more shares and can make that decision.
We make the assumption that only a select few can possess the ability to be motivated by profits as expressed by increases in share value, and that, to an extent, is true: only a few shareholding employees have enough equity to see real benefit. That's only because we make it that way.
If you spread out the shares over more employees and involved them more in these decisions, they would still be motivated: they would want higher profits for their own benefit. It'd just have to be expressed as some other store of value than stock shares, and this doesn't feed the ego of the executive class. Imagine Elon Musk being told he's now effectively a public servant to Tesla who has to play politics with a far larger group of employees if he wants to keep his job, and that he'd have a very limited equity advantage over anyone else at the company. He'd walk out the door and not come back.
Of course many tech companies already give substantial equity to employees as part of their compensation. Maybe there are government policies to encourage this to be more wide spread, but I'm not sure what those policies would look like.
If you are on the path towards decline and you have a lot of money, you can then go buy a lot of power, and then you can make the ramp you are declining down point in a different direction.
So besides the bagholders, it feels like there's very few mechanisms for society to protect itself from massive companies that faced with pressure to grow or die decide to use their money and influence in ways that are net-negative to society.
Or something. You'll get there anyhow, so best to start working on the next clever derogation now.
The "solution" -- should you perceive a problem with all this -- is destabilizing the large such that the small find more opportunities. Hating on growth isn't compatible with this, however: you must be capable of tolerating the small enjoying growth.
There is no system or ecology that can support infinite growth; as long as we're stuck in the "coasting is dying" mentality we'll see productive entities develop dysfunctions as they outgrow their ecosystems or kill themselves trying to expand. If coasting leads to gradual decline then over expansion leads to catastrophic failure.
Emissions decreasing while economies grow: https://time.com/6632271/climate-emisisons-and-economic-grow...
IP is a type of property that can infinitely increase in value without consuming more resources.
Not to mention all this assumes that we are stuck on Earth, which isn't true.
There is a difference between keeping your car going 55 and letting your foot off the gas entirely.
In this case it’s being suggested that the former is better than continuously accelerating as long as possible.
In some ways we have that now, it's just not flashy. There's countless websites (think Craigslist) that pull in predictable and reasonable income for the folks that run it.
I'd prefer a world full of those versus a bunch of megacorps using tactics of the KGB to try to increase their revenue by X% every year.
There's also the matter of people - people like to work on big, important challenges. The best people don't tend to want to work at companies that are stagnant. If you're the leader and you lose the best people because you decide to stagnate and throw off revenue, then suddenly you're going to have trouble maintaining your market position because the best people are now at competitors working to take your market position.
Honestly, their hangup on that last point is perplexing, because as long as the big shareholders get a decent cut in a long enough horizon to hedge or exit positions, they don't care if the company goes kaput. See GE. Jack Welch basically parted out the company like a corporate raider. It was obvious what would happen: at some point, there would be nothing left to sell and the company could not continue as an independent going concern. But you could mark the sale of a division as income for the quarterly report, and it made them meet projections, so it was seen as visionary.
I would be happy with a vast economy of Mittelstand type businesses, each producing ball bearings or gear wheels, not trying to eat the whole planet, just existing at a sensible level. It's not like they can't grow if the opportunity arises.
Aside, Apple going into services is incentivizing them making durable devices which are used long-term. Without services Apple may "not be happy" that you use a 9 year old Macbook. But with services they do want a large install base, new devices and old, so they can sell Apple TV and Music and Apps.
Easy to complain about in the abstract. Hard to answer how we restructure society to determine when a company or individual salary is too large, without allowing each company or individual make that decision for themselves.
For any firm larger than perhaps a single person, you have to have some monetary growth in order to continue to exist. Eventually employees leave and new hires demand more money, equipment wares out and new equipment is expensive, your customers may demand more so you must invest in R&D. Unexpected expenses arise. A growing company can cope with change or rising costs.
Ecosystems have limits; you can't grow past the absolute maximums of supply and demand.
We only have so many minerals and so many humans which means that growth has hard caps. Even if we manage to colonize the solar system the same cap will still exist on humans and minerals. Eternal growth is demonstrably false and if we ignore these bounds then we encourage companies to grow through increased generation of negative externalities.
This is a straw man. No one is suggesting that Apple should sell an iPhone to every person alive, and then a second for good measure.
You are essentially both holding up a straw man and arguing to absurdity.
My argument is that some growth is required and a precondition for existing in the future, not that infinite growth is required or possible.
It's a problem the market is perfectly capable of sorting out, with some government intervention for cases like monopolistic practices.
Like the author says, at a certain point, you've saturated the market. Everyone who wanted M2 Macbook Pro has one, but still, the institutional shareholders come knocking, demanding more money so that retirees can move into that villa on the golf course in Florida and consume until the dementia sets in.
So what do you do to keep the shareholder returns coming? You expand into new markets, or create new markets, or create new products. Thus, you grow in scale.
Again, to them, this is not a problem. Most of the people involved in the actual workings of this system - executives, fund managers, financiers, etc. - are getting more money out of it than they could ever hope to spend in a lifetime. There is no downside the system produces that their wealth cannot overcome. The rest of us... well... we're annuities.
There are also the taxpayers that need the government pension funds to make good on investment assumptions, lest taxes have to go up.
Edit:
Politician A: I will remove all deferred compensation schemes, but have to increase taxes to pay the employees with money today
Politician B: I will pay the employees with deferred compensation, and keep taxes lower than politician A, and let future taxpayers deal with any problems of underfunding and corruption
Politician B wins every election.
Progress does not just happen out of thin air when a bold mind in their ivory tower has a great insight. Progress requires (wo-)manpower. And that power in turn needs to be freed from more mundane tasks.
In other words: We, as a society, don't want Apple to become ever bigger and make ever bigger profits. We want them to continue making MacBooks and to need fewer and fewer people to make them. Because we want these people to cure cancer or drive spaceships to the outer system or develop artificial meat.
Unfortunately, this simply won't happen if we take out the unsatisfiable desire for more, more, more.
We collectively create the expectations under which "growth" is a meaningful thing for a company to do. We can change those expectations such that "number go up" for the company translates to more of the particular thing we want and less of the particular thing we don't. We just need a bit of incentive redesign.
We translate our desires for particular things and not others, by what we purchase or don't purchase.
Maybe I wouldn't have bought it anyway, I should still be able to demand that it not poison my water.
It's like we have the upvotes figured out but are lacking the downvote feature.
The late novelist Kurt Vonnegut informed his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history.
Heller responded – “Yes, but I have something he will never have . . . enough.”
I agree with the author's sentiment, that such growth has a cancerous end-game, but it's important to understand that this mindset is the result of systemic pressures. It's as inevitable as the Tragedy of the Commons (1833!), but even more complicated to address.
Game Theory is an exceptionally useful lens to analyze these systematic behaviors. If a company isn't growing, that means they're not adapting to the market. That leaves the opportunity open for a competitor, who will take over. Then the "ethical" original is dead, and you're left with a "cancerous growth" actor, again.