Edit: This question attracted way more interest than I hoped for! I will need some time to go through the comments in the next days, thanks for your efforts everyone. One thing I could grasp from the answers already - it seems to be complicated. There is no one fits all answer.

Under capitalism, it seems companies always need to grow bigger. Why can’t they just say, okay, we have 100 employees and produce a nice product for a specific market and that’s fine?

Or is this only a US megacorp thing where they need to grow to satisfy their shareholders?

Let’s ignore that most of the times the small companies get bought by the large ones.

  • UndercoverUlrikHD@programming.dev
    0·
    11 days ago

    Assume you’re saving X amount of money each month for your retirement.

    Your options for storing that money is either:

    1. In cash which will “lessen” in value as time goes by due to inflation
    2. In a savings account with middling interest rate
    3. Or you could invest in the stock market which will typically offer better return.

    Assuming you go for option 3, would you choose to invest in a company with zero growth meaning your retirement fund won’t grow, or would you choose a company that is constantly growing?

    Nobody would choose to invest in a company with zero growth or which doesn’t return money back in the form of dividends.

    You’re objectively better off investing in companies that grow since those are the companies that will grow your investment.