Win / KotakuInAction2
KotakuInAction2
Sign In
DEFAULT COMMUNITIES All General AskWin Funny Technology Animals Sports Gaming DIY Health Positive Privacy
Reason: None provided.

There is absolutely nothing about capitalism that says there must be "infinite growth".

The idea that capitalism must have infinite growth is based on the denominator of the value of a company equation of: D/(r-g) where g is equal to dividend growth. g can be 0 in the equation and the equation works.

Stocks for example do not need to grow in value. If stocks merely pay a dividend and have no capital appreciation, that can work. Investors will still earn an expected return on their capital.

r exists because of the risk of earning D. It's not free D. There's a chance the company fails. That's why r exists.

Imagine this. A company says if you give them $100 they will give you a $15 dividend every year. That's a 15% return on your equity or an r of 15%. They didn't say your dividend was going to grow. And nothing about it requires it to grow. You're fine with $15/yr with your $100 investment.

Capitalism does not require infinite growth. Not at all.

200 days ago
1 score
Reason: Original

There is absolutely nothing about capitalism that says there must be "infinite growth".

The idea that capitalism must have infinite growth is based on the denominator of the value of a company equation of: D/(r-g) where g is equal to dividend growth. g can be 0 in the equation and the equation works.

Stocks for example do not need to grow in value. If stocks merely pay a dividend and have no capital appreciation, that can work. Investors will still earn an expected return on their capital.

r exists because of the risk of earning D. It's not free D. There's a chance the company fails. That's why r exists.

Capitalism does not require infinite growth. Not at all.

200 days ago
1 score