The main thing I hate about our economic system, which is more or less shared by Europe, Japan, Australia, etc., is that the only way a company is measured is by its ability to grow. The quality of the product is only important insofar as it affects business. This is, of course, caused by all those money grubbing shareholders out there that want to put in a little money and get back a whole lot. I don’t blame the shareholders, I blame the system. Constant and infinite growth is unnatural and completely unsustainable. Worse, the system happily produces CEOs that make $100 million salaries, and the other members of the boards of directors are pocketing a lot, too. In a better system, this is money that could be used on R&D and quality. Perhaps it really takes $100 million to secure the services of someone that can make a company constantly grow, but it certainly doesn’t require that much to find someone who can simply keep a company on an even keel.
It should be a company’s goal to maintain its current business and to grow only if consumer demand truly exists. My solution is probably naive and simple-minded but I would get rid of the stock market and replace it with a mass lending situation. In this setup, shareholders would be replaced by a lot of little lenders. For example, instead of buying $1,000 in Disney stock and holding onto it for however many years, possibly losing all $1,000 or possibly earning $1,000,000, I would fork over my $1,000 to Disney for some predetermined period with some predetermined interest rate. I realize this is called a bond, but how many bonds mature in just one year with a 1% interest rate? Companies would sell the bonds with a correlation between duration of loan and interest rate and everything would be under control. If you know that you’re putting in $1,000 for five years and you’ll get $250 for your troubles, you can’t constantly pressure your company to expand. And as with any loan, there’s still a chance the company will fold and default on your loan. But them’s the breaks. At least in this system companies won’t go bankrupt BECAUSE they were overextending themselves trying to impress shareholders.
For this system to work, many nations would have to adopt the system as countries keeping the old system would have an advantage. So, uh, let’s get to it. I’ll go talk to the UN about it and probably get kicked out.