Something I've noticed a lot in tech is that companies will spend a huge amount of money to push new features that aren't core to the business and to launch new products that frequently fail. I've always viewed these as attempting to prevent competition from emerging rather than trying to compensate for inflation.
There is a massive, blinding, focus on quarterly profits and dividends.
This leads to all kinds of hype cycles and cargo cults to try to goose the stock price, no matter how hail mary or unhealthy it is for the corporation in the long term.
Current projections estimate that population will peak at 8.7 billion in 2055. Nearly all of that growth will occur in "developing" countries. Yuval Harari makes the case in Homo Deus that the world is quickly reaching a point where the less developed areas of the world will be mostly ignored and left behind in the coming years, as the developed world has reached a sort of critical mass that it makes more sense -- economically -- to keep investing there.
As technology continues to get more and more efficient, it is quite possible we are near peak energy consumption.
Interest rates have been around 0% for quite some time.
To me, it's interesting to wonder if we live in a world that might "objectively" be getting better, but we don't see the verification with the same type of economic growth that's occurred in the past.
[1] - https://ourfiniteworld.com/2012/08/29/the-long-term-tie-betw...
this is related [1].
[1]: https://dothemath.ucsd.edu/2011/07/can-economic-growth-last/
Add to this the fact that deflating currency makes loans hard to service and biases the lending market toward default. This further decreases the incentive for those with a lot of currency to lend it since the probability of losing it to default becomes higher.
The ideal is probably a little bit of inflation. I think it's possible that we have too much, and that we are misinformed about that because we are measuring the wrong things. I'm not positive but I seem to remember that the CPI does not include things like rent and college tuition, which if true is utterly insane and makes it a bogus statistic.
https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...
So let's say everyone moves to a smaller house because housing costs are so high, that's not a sign of inflation?!
If you mix "hedonic adjustments" into every number then there is zero value in the numbers. There is no meaningful way to quantify a "hedonic adjustment". Is a smartphone a positive or negative "hedonic adjustment" relative to a landline? Lots of people would say it's positive. Lots would say it's negative. Nobody knows the actual answer because smartphones have only existed for a few years.
That's true of growth investors, but rarely represents the entire investment community.
Bond investors (whose market is an order of magnitude larger than stocks) want fixed yield - they could care less if the business grows or languishes during that time, as long as the coupon checks keep coming. Real estate investors (whose playing field is also orders of magnitudes larger than public equities market) also usually sign up for a preferred fixed yield, growth being secondary.
Even within the equities markets not everybody is a growth investor, with a lot of people buying for value or dividend yield.
Removing inflation wouldn't stop people from chasing growth. People want to make more money. 2% annual inflation changes the calculations a bit (towards more proactive investing), but in a world of 0% inflation people would still want to make money. They would just be a bit more conservative since there's no penalty for holding.
And yes, slow growth is a bad thing. Our population is growing. The pie has to be grown if we don't want living standards to nosedive.
This is literally Finance 101.
Our econonomic system is predicated on continual growth but inflation has been incredibly low since the late 1990s in most western economies, 0-2% compared to 10% or more in the 1970s and 80s.
I'd also say there really isn't any such thing as a steady state for businesses not because of inflation but due to the need to keep pace with general human progress and invention in order to stay competitive in the market place.
Bigger investors can have more direct force, either in voting power or in assigning their own director to the board.
My thinking is that we're constantly being pushed to work harder because no business today can reach a successful steady-state -- it must keep growing. The reason businesses must keep growing is that investors demand it. Investors demand it because they believe that wealth sitting around not making more wealth is a waste. Inflation, I believe, is a big component of this view. What would happen if we keep inflation near-zero? Is slow growth really a bad thing?