this post was submitted on 05 Jul 2026
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Explain Like I'm 5 (ELI5)
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You are not wrong if you consider companies still owned by people who work inside the company and thereby have a certain connection to it.
The problem gets introduced at latest by shareholders and investors. They have no connection to the work of the company and literall just paid a certain amount of money to own a part of the company. Now why would they do that? To earn more money. And how do they decide whom to give their money to? To those who show the most promise of more money. (You could say its the product of possibility of payout times the amount of payout. Higher payout makes people more likely to take higher risks. Greed destroys reason after all). So those companies that promise to cut spending by 10 % and give more money to the investors are thereby more interesting to investors than company B that just says: we will not lay off people. And you nearly always need investors in order to tackle bigger projects.
How do you start a company? For most people who don't have the funds themselves (and if you do, you very likely already profited yourself from the parasitic side of capitalism) You get somebody to invest in your idea. And those investors want to have something in return for their money of course. Some countries have governmental investment funds in order to alleviate the parasitic influence of the shareholders a bit, but its not enough.
That completely disregards the whole political side of capitalism. Money is power and a few people with more money can thereby influence the political landscape in their favour to get even more money.
So in basic principle: its greed, simple as it sounds. Rich people are NEVER satisfied with their amount of money. It seems to be pathological, why else would you even reach a billion Dollars? Normal people would peace out and enjoy life.
Is "capitalism, but without the stock market" an existing arena of thought? It has never occurred to me until now, probably sadly.
Honestly, I'm not sure myself.
In principle it was that way at certain points of time in our history, as private people were owners of the means of production but there was no stock market to invest in. But as bubbles in the market show again and again, its not rational behaviour.
And capitalism should in principle work without the stock market, but the big question is still: how do you control those elements that are too greedy for the system to sustain. Some socialist elements like wealth tax are still needed. Because even without the stock market: if you are rich, you can invest more money into your own business and grow it. Slower than if you could get investment from outside sources, but still you will grow faster and stronger than somebody without your money in the beginning. Meaning the wealth of the society will still get funneled into the hands of the rich elite.
Case study is AI, that needs so much capital that it's not possible to raise it with stock and is raised with virtual money and agreements between companies without moving money. Yep there's several data centres being built, but the most expensive parts are already being spent before those constructions began.