If we acknowledge that the world is approaching an apocalyptic zero point, where capital accumulation has become more and more so many bad loans or scraps of paper being traded back and forth – it is time to seriously rethink capitalism. There are many alternatives, but one which we might consider is the idea of a capitalism where growth no longer exists. What would this look like?
It seems to me that one way of having a zero or negative growth economy where investment still allocated capital efficiently would be to set inflation quite high. This would encourage investment (since holding onto money would not increase its value), and if the inflation rate were set above the mean rate of return on investment, the growth rate could remain negative without stopping investment. Investors would all be willing to lose money on accumulated capital – since this would be better than losing even more through inflation.
However, I think this would create problems of commodity-hoarding. Rather than hoard money, one could simply hoard beans or gold. The commodity, if the demand were stable enough, would return up to a 0% net growth rate – better than investing could do.
For this reason, a no-growth yet healthy capitalist economy seems implausible – but I’m open to suggestions!