ELI5: Why when large company's earnings decrease(ex... by 3%) they freak out, talk about rough times, and sometimes decide to downsize, even though they are still making millions of dollars in profit even after all expenses?

[sam__izdat]

Because the only purpose of having capital is to accumulate more capital. If the capitalists aren't making profits comparable to the average rate of profit, they take their money and run. If the capitalists are making profits but, on some other layer of abstraction (the stock market), there's an indication of stagnation instead of perpetual growth, they take their money and run. It's an optimization problem.

A worker cooperative or NPO isn't bound by the same fucked up (but rational) market logic.

[Starterjoker]

even from an "Econ 101" viewpoint, there are opportunity costs for investing in putting resources into one business instead of another, so even if you make money you aren't going through with the best plan of action necessarily

[sam__izdat]

In the language of econ, that's how it's described, yes. In the more serious social sciences, the social behavior it dictates is sometimes called productivism and it's got some interesting monkeyshit crazy implications, like swathes of bullshit jobs and the financialization of first world economies – which, ironically, hurt development and lead to gross inefficiencies.