Comment by pjmlp
2 days ago
What about the usual capitalism point of view?
If their business isn't sustainable they should go bankrupt, and close shop.
2 days ago
What about the usual capitalism point of view?
If their business isn't sustainable they should go bankrupt, and close shop.
Capitalism makes more sense if it's thought about purely in terms of individual self interest as supposed to something that leads to an efficient market on aggregate.
The CEOs making big calls across the economy have already negotiated golden parachutes in the event of their failure.
The financiers and lawyers getting a chunk of each bond deal they close have every incentive to raise more than what's actually needed. Investment funds flush with ZIRP dollars have every incentive to plow it back into investments to show that "the money is at work".
Yeah self interest is how we end with world we have today at the edge of destruction through various mechanisms.
Except the 7 firms make up >30% of all market growth, and move more capital than entire countries. Yes, they are hemorrhaging cash with every new customer, and burdening taxpayers by eating community electrical and water infrastructure.
In terms of business, it is not sustainable:
https://www.youtube.com/watch?v=t-8TDOFqkQA
The hype-cycle is nothing new =3
"Memoirs of extraordinary popular delusions and the madness of crowds" (Charles Mackay, 1852)
https://www.gutenberg.org/files/24518/24518-h/24518-h.htm
Boom and bust hype cycles have always been a feature of capitalism, especially for advanced technology. Perhaps the only way to know the limit is to overshoot.
And then take the whole economy with it when blows up.
Not just the economy. We usually deal with these busts and crisis collectively through the public sector as well.
There's also a hidden opportunity cost in regards to hype cycles. So much energy, attention and money flows into the hype, while other businesses or entire sectors get overlooked and underappreciated.