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Comment by quadrangle | Hacker News Reader

Capitalism is itself based on constant growth. There is a fundamental misunderstanding with this article (and most of our society) and that is the conflation of capitalism and a free market. A truly free market is not necessarily capitalist, and actually capitalism doesn't lead to free markets. This confusion is messing up everyone's thoughts. What we like is the free market, the natural bottom-up interactions that help determine prices and such. Free markets have nice features.

Capitalism is about profit and growth and the instant you think it isn't going to fail, everyone might as well speculate like crazy (why not? if it isn't going to fail…). The only way for capitalism to work is for everyone to realize that it is inherently unstable and likely to fail. And that realization is true also.

We can still advocate for market freedom without advocating capitalism.

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>Capitalism is itself based on constant growth

That's not quite true. Capitalism is based on the principle that "the accrual of wealth (capital) is a virtue unto itself". This does not entail any level of growth.

Free-marketism is a bit lighter, based on the principle that "making a profit is an indicator that you are providing social goods efficiently".

It's really neoliberal capitalism (largely via neokeynesianism - but notably not what Keynes said himself, necessarily) that has espoused growthism. The austrian school does the best at presenting a critique of this neoliberal capitalism, but unfortunately the ranks of austrianism are also populated by people who don't believe in limited resources and environmental catastrophe, and don't talk enough about how growthism really screws over the poor via inflation. And also the austrian school is polluted by crazy goldbugs, who have the story half-right but run like hell with the wrong half.

    "Capitalism is itself based on constant growth."

No, constantly increasing profits or shareholder value are based upon constant growth. Capitalism does not require constantly increasing growth of profits to be "capitalism".

This "corporations must constantly grow" is, along with "corporations must, by law, sociopathically seek profit", the major reason that American style capitalism isn't viable. It eats it's young.

There's other structural issues beyond just legal obligations of corporations (which are a problem). A debt-based economy, especially a debt-based currency, requires a constant level of growth to stave off economic catastrophe.

Of course, these are really one and the same: The unifying principle is that if inflation is to be maintained, we must provide an easy avenue for average joe to feel secure against the rolling treadmill, so we create legal entities like 401ks and mutual funds and IRAs and the like - which, in order to maintain a return, require the government to create legal obligations on the corporations, and when they DO fail, pump up the corporations whose stocks, and so on and so forth (and this pumping is financed through inflation), and so we have unsustainable spirals and the periodic retrenchments which, of course, hurt the poor harder.

>> A truly free market is not necessarily capitalist

Can you elaborate?

Capitalism is an economic system based on private ownership of the means of production and capital goods, and the production of goods and services for profit in a market economy.

Not sure where you got this idea on "constant growth," considering that production is dependent on raw resources, and raw resources are finite, and this fact itself is within the system of capitalism, which increases prices practically in a mechanism you may know as the supply/demand curve. As price increases, demand decreases, thus slowing growth inline with diminishing supply.

If you want to discuss any other elementary-level economics in a condescending tone that treats the reader like a misbehaving child, just reply with a comment that ignores everything about the article or the thread's content, and continue building up the conceptual walls to buttress your ego, preferably with sweeping, general statements spoken as if indisputable fact.

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