It is generally accepted that the growth of a firm is desirable for both itself and the economy as a whole. This is a completely erroneous assumption. In fact, in the process of growth, many quite stable firms die, which is bad for themselves, for their employees, and for the economy as a whole.
Imagine that there is a company that serves 10 customers per day. It works perfectly, communications are established, everything moves along a streamlined track, long-term contracts of employees are signed with the employer, employees are confident in the future, take consumer loans, partners know exactly what to expect, customers also know for sure.
Now, suddenly, the manager decided to grow by all means. Significant funds were taken from turnover or capital (already undermining reliability), embedded in advertising (overflow of funds into industries that by themselves create nothing, some kind of parasitic magazines, newspapers, radio stations in which content is zero, and the main sight – on advertising, the existence of which is always very shaky – still a big minus). Advertising is successful, everyone is happy. Now the company receives daily requests from 30 clients. And they never trained to serve so much! They do not know how, and they have to rebuild completely, from top to bottom. It is necessary to hire new telephonists, for example, new managers, to expand accounting. For this you need a new office. Leasing a larger office is a multifaceted problem — familiar communications are considerably affected (many customers find it inconvenient to have a new office, there is no convenient bank office with which everyone is used to working, so look for a new bank, switch to an electronic banking system, a lot of mistakes, a huge, unpredictable heap of problems. Then the server cannot cope with the load, the site needs to be optimized, the reservation system needs to be optimized, we need to look for sysadmins who can do this, one will come everything will break, another will come to correct and will break again.
It is necessary to increase the number of suppliers – there are unreliable suppliers who are beginning to break deadlines and quality … It would take me a few pages just a simple listing of problems. It is not surprising that many firms simply can not cope with all this. The problem becomes even more serious if the firm … succeeds! After all, then everyone is happy, full of pride, Napoleon’s squint of eyes appears, and the company, of course, begins to grow further. Those who have experienced another growth, even less. And those who survived – they have become richer, their requests are growing, they want to be richer and richer, still rise in ratings, give interviews. Owners like they could live already quite comfortably, but they are bored, because their life is essentially insignificant, they have no interests other than work. They simply have nothing to do if they do not rush like mad from morning to evening. And they grow further and further, and fewer and fewer survivors remain. Banks are more and more willing to lend them, because they are now large and successful. Now they can borrow and grow more and more quickly, buy a new office, not rent, give more advertising, grow, grow … and then everything falls apart, and new grebes emerge, which in the same way see the only meaning in growth.
Often, enormous resources are often spent on competing with other companies that also want to grow rapidly, and this further undermines the survival of growing companies – they do not just grow rapidly, they also do so in the face of fierce competition, resorting to risky ones, and even very risky steps.
This is not beneficial to anyone – neither the state, nor the employees, nor, in fact, business owners.
Therefore, in a country where they want to control this mental illness of rapid growth, it is necessary to limit the enthusiasm of entrepreneurs. Not so, of course, as for example in France – wham and 75% of taxes … no one wants to work. But the scale of taxation nevertheless should be slightly progressive (that is, the% of taxes paid should grow slightly as the company’s profits grow) – to the extent that the growth of the company does not become an end in itself, so that many people choose to do business calmly with a calm, so-called “Organic” growth without risky leaps into the unknown.
In the US, for example, the tax system is designed so cunningly that the rich pay … less! Just because tax laws are incredibly complicated, there are countless legal ways to minimize taxes, so rich citizens, rich corporations simply feed an army of lawyers who minimize taxes to the minimum, to indecently small, if not to almost zero size. But middling hard workers pay in full. Europe is also not lagging behind: in Germany, for example, tax legislation is also so complicated that few people prepare their tax returns themselves, and very many are forced to use tax lawyers. The profession of tax lawyer is considered one of the most well-paid … real parasitism
This is one of the ways corporations dominate the world, and until recently they believed that this was a successful strategy. In fact, it is not. The growing gap in incomes creates insurmountable contradictions – a socialist-communist contagion arises, tensions in general grow, and evenly throughout the entire volume of society. Emerging social turbulence, fueled by huge income gaps, threatens to collapse and rich. Alternatively, look at South Korea. Here there is a very high degree of equality of incomes of the population – not because of a stupid leveling, but because of a very competent approach to the tax issue, and because of accessibility for people to education, advanced training, and because of a competent social policy, when protrusion of wealth becomes more likely bad tone, etc.
Why do some countries admit, however, these games are in chaotic inflation of bubbles with subsequent disasters? At first, the United States was fond of it, now the Chinese are playing the same games, and in smaller countries people also inflate their local bubbles. I think this is because power and corporations are very closely connected. See who sits in the US presidents? One representative of a powerful dynasty replaces another. Several families pass power from hand to hand, and who can go against their money, their connections? Large corporations and rich people, of course, have an incomparably more stable position. If every citizen loses 50% of his money, the poorest will no longer be enough for food, the average will no longer be enough to buy a car, and the rich will have 15 dollars instead of 30 million dollars. And how will this affect his standard of living? No way, if he himself, like an idiot, did not get into loans. Moreover. Smart riches get richer during crises, because they can buy both land, real estate, and normal businesses for nothing. So it was from time immemorial. Therefore, the power of the rich, inextricably spliced with corporations, is even interested in the nature of the economy when a crisis follows a crisis. The main thing is that it is not too often, that they buy up the assets they need, and then earn on the increase in their value. Moreover, when the masses are impoverished, this is again beneficial for the rich, because wages are sharply reduced – people are willing to work for much less money than before. This means that the cost of production drops sharply. So, their old and newly acquired businesses will grow again and again.
This whole system will continue to work until the plutocracy is replaced by a meritocracy. And will it change at all? It will gradually change, and for the same reasons, for which the wild capitalism of 100-200 years ago, when the workers worked in unrealistic conditions, was replaced by “civilized” capitalism (as we understand it now).
So in the future, capitalism will acquire even more human features, and the above distortions will gradually be eliminated, and the psychology of “growth at any cost” will go into oblivion just as many other concepts, which seemed unshakable a hundred years ago, will disappear.