Prosperity without growth

[Michael]

This is a topic I've been thinking about for years, but have never addressed in any forums.

Here are a couple of articles that discuss the concept.

Article (http://www.ft.com/cms/s/2/5be351c4-d568-11de-81ee-00144feabdc0.html)

Article (http://www.independent.co.uk/arts-entertainment/books/reviews/the-constant-economy-by-zac-goldsmith-1789028.html)

One way of looking at this issue that helps to make sense of it is to look at a company like Coca-Cola (for example). This company sells millions of beverages every year, employs thousands of people with good jobs, pays taxes and makes a healthy profit. But if they don't increase their profits by 5% next year, this company is considered an absolute failure and capital ought to be withdrawn from this enterprise.

Although I understand the capitalist logic behind this, I have a hard time rationalizing the sociological outcome of this. It makes no sense from a human productivity or social capital point of view.

[Daktoria]

Depends on growth or value is the priority really. Value investment is a defensive strategy that is only optimal when growth opportunities are hard to discover and realize. This is because of how even a defensive strategist needs to realize that resource pools don't last forever, so growth is required to recycle obsolete enterprises into novel ones.

It's also a valid strategy for investors who primarily care about the short term because they want to get as much out of the little time they have available by cashing out on their chips and not exposing their investments to undue risk.

Sociologically speaking though, we can't persist in value investment else we concede to a willingness to inevitably decay and perish. Growth is vital for innovation, and without said innovation, both maintenance and attentiveness will corrode over time. Maybe we can be happy until we completely corrode into nothingness, but I don't see what's healthy about a society that dies.