Originally Posted By: eddie1261
Originally Posted By: Notes Norton
A private company only needs to make enough money to pay for the employees and the owners, and keep up with inflation.


You missed "and make a profit." <...snip...>


The profit comes in the "Pay for the owners" part.

I know of quite a few mom-and-pop businesses that do fine without ever-increasing perpetual gains.

My mechanic of about 30 years runs a 6 bay shop, makes enough to pay his employees and operating costs, and makes enough profit to pay his mortgage, put his kid through school, and take is boat out fishing.

Being that he isn't a corporation, he doesn't need to make more and more and more and more profit every quarter to feed the non-participating stockholders with endless profits.

Same for the guy who runs his pizza restaurant (he does good work).

And the gal who owns her core-fitness business.

And the gal who runs the yoga studio Mrs. Notes has been going to for decades.

They get along just fine without perpetual growth. More profits are always welcome, but as long as the employees and owners get paid a living wage/profit, there is no need to make more this quarter than the last, and the next quarter after this, and the next quarter after that, ad infinitum.

My sisters run their own accounting businesses. Pay for the office rent, pay the employees, and make enough profit to make a decent living. No need for perpetual growth, just enough profit to live a comfortable life. Any more is extra, but not life-or-death.

I have two small businesses myself. My duo and my BiaB aftermarket business. I make enough to pay operating costs, I don't have employees but I make enough to pay my subcontractors for the work they do, and Mrs. Notes and I paid off our mortgage, have zero debt, and aren't rich but live modestly.

We've been in this duo since 1985, we've had good years and bad years, if we needed to feed stockholders who do not material participate in the workings of the business and expect to see an increase in profits every quarter, we'd probably have to work 3 gigs a day, 365 days a year by now to keep them from jumping ship.

The problem with a corporation is that perpetual growth is needed, and perpetual growth in a closed system is impossible. Almost half the people owning stock do nothing to participate in that corporation. They want their stock to be worth more each quarter than the last, each year than the one before, each decade than the previous one, and so on.

How many more widgets can a company keep making? OK we sold a million this year, next year we need to sell 2 million, the year after that 3 million, the year after that 4 million, 5M for the next, etc. Where are we going to find the new customers? We've saturated the market? Ok now we have to figure out new ways, cut operating costs, make the products' life span shorter, and so on.

I'm not anti-capitalistic, but I am thoughtful enough to know both the blessings and curses of a corporate economy. Personally, I think communism has different but worse problems. If I were smart enough I'd figure out a system that is somewhere between the two extremes, and I've given it a lot of thought, but haven't come up with the answer, and probably never will (it's not my area of expertise).

I do hope Sweetwater doesn't fall into that mode.

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