• BehindTheBarrier@programming.dev
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    11 months ago

    I think the key fault lies in that most companies are publicly traded stock companies.

    It challenges what corporations are at the heart. A company owned through stocks is controlled by those stock holders, and exist to make the stock holders money. It’s expected for the stock to be worth it by growing, not paying out dividends. (but that is also another layer)

    But that’s not why a company should exist, it should turn a profit but ultimately it’s about being a source of income to its workers. But stocks go against that, since stocks seek to extract money to the non-working owners. Well paid workers is rather contrary to the goal of the stock owners, as long as you can keep going.

    The advantage of stock companies were getting investment to start and grow, but it forever shackles the company bar some rich maniac buys the whole thing for his own crazed ideas.

    Private companies aren’t guaranteed to be good either, but if they are set up right they at least aren’t just a funnel of money for the people at the top.

    Its because so much money can be gotten out of the perpetual invest, grow, squeeze and sell that things are as they are today. You’re not a worthy company if you just increase your cash flow in line with inflation.

    The need to grow also comes back as enshitification, planned obsolescence (or just made as cheap as possible), high focus on consumable products or subscriptions to ensure a steady flow of income. Making a product lasting for life? One and done, you’ll grow until the market is saturated and then collapse because the cash flow simply won’t be there.

    Its especially noticeable when the economy takes a hit, all things go from being good investment objects to being something that needs to turn profit. So all the future profit is dropped, tons of layoffs, and rapidly increasing subscription costs. All to counter the reduced demand. Take streaming, the market fragmented, interest rates spiked so holding debt is bad, consumers have less money to spend easily. So the big ones take steps, more ads, crack down on sharing, layoffs, reduced selection and cancelation of various shows and projects. And then stock holders can be happy they once again have a good year and good growth of profit despite turbulent times.

    Edit: By contrast a private company is not beholden to any requirement to cancerous growth. It too will be hurt by not having steady cash flow, but they don’t need to grow until they are so big that they need constant growth to stay alive. But a private company can be steady for years without problem.