We can all agree to blame Jack Welch as shorthand though, I think.
There's also risk in investing in very long-term things that may not pan out.
WAI, in other words
The only major example I can think of is Amazon dot com which famously reinvested all its profits into itself for well over a decade.
The fact that investors didn't punish Amazon dot com was seen as befuddling in the press.
> Companies routinely lose money for years in pursuit of long term growth.
No, I don't think this is true at all because you used the word "routinely". I would claim it is very rare.
I mean, I agree that such companies are over-represented in thinking about small businesses if that's what you mean. Normal companies have to be profitable quickly for sure.
It feels like tons of companies get valued based on userbase or revenue or theoretical breakthrough rather than ever having to really think about breaking even, but I know that's just because those folks get all the press.
Some money is lost to push up this valuation or valuation based on some future sales, or market share or anything...
But much of that long term growth now is just the company growing to displace competitors in existing markets, often by subsidizing prices and dodging regulations - see: Uber, Lyft, Air BnB, etc.
We've all seen the playbook a dozen times now: move into a market, keep prices artificially low until the existing competitors are displaced, then the raise prices to return the initial investment and more. That kind of growth-by-displacement is genuinely necessary sometimes but in these cases it's more like a fungus than a plant, just metabolizing an existing system.
It's not the same thing as actually expanding a market or investing in concrete assets (steel mills, power plants, boats, railroads) or R&D that compounds future growth. When the actual investment is just spent artificially lowering prices there's no actual efficiency gains and the consumers ultimately pay the price and more when the company hits the peak of the existing market and shift to enshittification mode to really extract wealth.
100 years ago clothes were expensive items. Which is why they were class signals - less because of fashion and more because if you were poor you needed to buy long lasting fabrics. Clothes for the poor were expensive as well as the rich.
You can buy those same quality items today but nobody will because we expect clothes to be cheap and not have to repair them.
Take flights... For all the complaints about lack of legroom etc the price of a flight 50 years ago was the same as first/business class today. And yet how few people will pay for it. They'll grumble about small seats and bad snacks but hardly anybody will fork out for the upgrade. Not because they can't actually afford it but because they believe it should be cheaper.
When Sears was looted by management, how were consumers supposed to continue purchasing quality stuff from a historic company?
You've got your cause and effect backwards. American companies fired everyone who was paid enough to afford good stuff, and replaced them with workers in other countries, and then those people didn't really have a choice but to buy the junk because it was the only option left on the market and they couldn't afford anything else
What happened was that American business theory abandoned the American worker.
Is it all being demolished, or is 95% of it being moved into?
Because all those ghost cities that China was building that the news kept bitching about... Are now all full.
Meanwhile, in the West, we have a housing shortage. Who looks the fool now...
I would. It's showing the weaknesses and limitations of its ideology.
> You’d have to be blind to ignore the massive overbuilding of property in China, which they are now demolishing. All of that wasted capital.
So what?
> Authoritarian regimes with controlled media always seem successful… Up until the USSR collapsed there were many prominent people in the West saying it was the superior system.
The West is literally de-industrializing and can't seem to built shit except slowly and expensively. Industry after industry gets hollowed out as China takes the lead.
Do not make the mistake of reasoning about US vs China from the experience of US vs USSR. China doesn't have a command economy, outproduces the US, and controls many key industries. The US is resting on its laurels, and its people cope by thinking of the few industries where it's still ahead, but those are dwindling.
> The market test - meaning floating prices and the response to them - is a superior way of allocating capital.
That's not truth, it's a dogmatic assumption.
China has been able to exploit a dogmatic belief in the free market to siphon the real capital out of the West and into itself (industry and know-how) in order to achieve dominance. The US elite is content to have paper. We'll see how that works out.
> We need to see how all of this plays out
If you're rooting for China. If you're rooting for the US, by then it will be too late to course correct.
Isn't the same now happening with the US with the massive overbuilding of AI capacity? Seems like a tightly centralized capitalist system is not that different from a communist one.
Private ownership of means of production: On an atomic, legal level of course. But if point at an NVIDIA based compute rack at a US based random datacenter, can someone tell me actually who owns it? I am interested in the actual natural person who has an ownership share of this capital asset, not the myriads of layers of corporate and financial networks of equity delegations through investment banks, but the actual owner?
Profit oriented: Of course, it is said so. But do really companies, entrepreneurs do things to maximize the profits of the actual owners, shareholders? Are the executives and boards really that keen on putting forward the interest - of the previously referenced unknown - actual owner of the capital assets?
Free market based: This has also multiple sub-characteristics, but most importantly something about competition, or rather the lack of collusion and that economic actors (including consumers, (natural person) investors) are all fully informed. How much is this true in the West?
I think we are very much lost in labels.
"Forgetting to look up" implies a desire or intent to do so. The United States - former leader of the collective West - made the choice decades ago to sacrifice everything on the altar of quarterly profits. All that remains are the consequences of that decision.