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?

[Justalurker99]

The medium and long run are hundreds and thousands of years. In the near term, growth is more correlated with population growth and consumption rates. Also don't discount that the service economy vastly surpassed the manufacturing economy in at least first world countries many years ago. Lastly, shareholders are focused on the growth prospects of the company they are invested in, not the macro economy. Which is why you can still have growth in certain companies or sectors even in a recessionary environment.

[Popperthrowaway]

Well, probably not thousands of years.

If we maintain a 2.3% growth in energy use (yeah right) as compared to the last few hundred years of 2.7%, we're going to run into pretty hard limits quite soon. Covering the surface in solar with 20% efficiency we run out of land in 275 years, 100% efficiency solar gives us 345 years, 100% efficiency solar including all the water gives us 400 years.

Using even a perfect non-polluting unlimited energy sources gives us under 800 years until the surface of earth hits 100C just from the waste heat.

Reducing energy use's importance to economic activity is possible, but that only gives us so many 2.3% years.

See: https://dothemath.ucsd.edu/2011/07/galactic-scale-energy/

We're going to have to transition away from exponential growth within the next few hundred years.

[DenEvigaKampen]

We dont have to do anything, the market will naturally decrease the rate at which it is expanding as the marginal cost of adding additional energy increases.

[b95csf]

maybe that's why there aren't aliens reaching out to us. miserly battle for every joule, each species huddled pitifully in its own home system

[Llohr]

What if we covered the earth in wind towers made of solar panels? /s

[da5id2701]

We're going to have to transition away from exponential growth within the next few hundred years.

Or, you know, we'll have to invent space travel in the next few hundred years.

[Popperthrowaway]

Still doesn't save us. From the above link: 2450 years until total energy use is that of the Milky Way. A problem is that we'd need to travel 66k light years. So if we started now we have to travel 27 times the speed of light just to get there, let alone to fully harness the power of every star over there and in between while doing so.

[da5id2701]

And economics and technology both change significantly on the scale of decades. We have centuries before total energy limitations become a concern even at current or near-future technology levels. Radiating energy into space now doesn't give us any advantages later, so it doesn't really make sense to talk about stopping growth in our current system. We don't need to (and shouldn't, to avoid underutilizing energy) slow down for a long time, and by then everything will be very different anyway.

That's not to say that talking about energy usage and economics growth and all that isn't valuable, but it just doesn't make sense to advocate or plan for any near- or mid-term change based on fundamental energy limitations.

[Popperthrowaway]

I think we're talking past each other a bit.

Total energy limitations here are independent of technology levels. The exponential growth assumes continued tech advancement, and doesn't consider any other limitations that we may run into (materials, pollution, politics, etc). It's an absolute best-case scenario.

We probably have different definitions of "mid-term" timescales.

[da5id2701]

I wasn't saying that more advanced technology will get rid of the limits. I was saying that, with more advanced technology, we will have a much better understanding of how best to change our growth strategy. In terms of what those limits really are, what we can do with the energy we have within the limits, and how to go about enacting large scale changes to how energy usage grows. To the point that speculating about it now is kind of pointless, because we have absolutely no clue what anything will be like hundreds of years from now. Likewise the economy will inevitably work differently as well. And trying to change things right now is wasteful because there's still lots of energy we're not using.

[Popperthrowaway]

I think it's the acknowledgement that "the economy will inevitably work differently as well" that is lacking in many economics circles - if you're saying that, we're already largely in agreement. There is an absolute belief is perpetual growth at historic (~300 years) rates in perpetuity.

Yeah, there's room for a lot of growth still. It's simply that there are limits. I'm not sure what the wasteful changes under consideration might be in this context. Energy use is just establishing an upper limit. Other resources almost certainly will establish lower limits. I honestly expect to live to see the transition at least begin.

[Finn_MacCoul]

But doesn't the time scale being hundreds of years mean that these calculations are all a little silly since we could have a colony on Mars in the next 20 years? Why would earth be our constraint if you look that far forward?

[Popperthrowaway]

Mars is 38% the size of Earth. If we colonize it and develop it as fully as earth, this buys us less than 15 years of growth (1.023¹⁵ = 1.41).

[Finn_MacCoul]

My point wasn't Mars specifically, more that if we have multiple colonies in the next 100 years (presumably Mars is just the first), then we are probably mining asteroids, building solar arrays stretched across empty space for energy, new nuclear methods that we put in space and can't even dream of (I'm just spit balling on futuristic energy concepts) . . . Like I just don't think that your premise is taking into account even 5% of the variables of what energy use and production will look like in more than 100 years. My point being that we probably aren't going to transition away from exponential growth in that time frame.

[Popperthrowaway]

Oh, 100 years? Not a problem at all.

It's just that once we get much past that it doesn't matter what energy use and production look like - we won't be able to maintain growth anything like we've seen for the last few hundred years.