I've heard it stated that in order for a company to survive it must expand but it has never really been explained to me why that is.
I've heard it stated that in order for a company to survive it must expand but it has never really been explained to me why that is.
The most successful companies use debt and investment capital to grow. Your bank and/or investors want their money back plus some, so in order to make that happen your business must grow. If you don't do this, you'll typically lose market share to the business that grows instead of yours.
Tiny businesses have different rules. You can maybe set something up that's economically sustainable in theory, but eventually inflation is gonna catch up to you from all the debt/investment the real multimillion/billion dollar corporations are doing and something will need to change.
I am economically illiterate. Could you please explain why does inflation exist at all?
There are many sources on this topic but off the top of my head:
All the loans given out by private banks to companies and investors, often leads to those loans not being able to be repaid in time. Then, in order to be given more liquidity for them to keep on playing their game, the central bank owned by the state prints money in order to help them.
Printing money leads to more money existing and therefore lower value of the currency.
So in the end, the whole economy suffers as a sacrifice so that the rich can keep on doing their thing, hoping that it will eventually pay off and be worth it (or lead to a market crash).
I don't think this is necessarily a good explanation. Inflation doesn't necessarily have anything to do with more money being printed. No money could be printed and inflation could still happen.
All inflation means is the average price of goods is rising. That could be because workers are unionizing leading to higher wages and capitalists decide to raise prices to keep profits similar, it could be because unemployment is down and a similar effect occurs, it could be because of supply line problems, capital strikes, a whole myriad of things.
Yeah that's very true
Billionaires also pull money out of the economy to put in untaxed hordes in off shore bank accounts
In addition to the more technical answers you got it also serves to incentivize consumer spending or investing. If you put your money in a bank you get interest, or you invest in stocks and increase the value of your investment over time.
If you cash your paycheck and throw it in a box for 20 years the real value of your money (how many goods you can buy) will have decreased. Therefore the peak value of that money is usually right when you get it. It serves to keep money going back into the economy. Silly example: you have 5 dollars. A can of beans is $1. You can get 5 cans of beans. In 5 years due to inflation that can of beans is now $1.25. Now that $5 is only worth 4 cans of beans.
The rich look down on the paycheck-to-paycheck consumers but really they kick a lot of money right back into the economy when it's at peak value.