alt Hacker NewsPerhaps you realize this, but the way the economy grows 2.5% is through lots of entities growing faster than that.
Growth comes from innovation, and innovators get rewarded with faster growth as non-innovators decline.
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> Growth comes from innovation...
I suppose it depends on how broadly you define "innovation".
Lots of companies grow because of, among other things: regulatory capture, regulatory arbitrage, questionable use of other people's IP, offshoring, misclassification of employees/contractors, profit shifting and transfer pricing, subsidized predatory below-cost pricing, dark patterns, aggressive collection and monetization of user data, acqui-hires to stifle competition, implementing high-switching costs to create vendor lock-in, round-tripping, channel-stuffing, business models that intentionally externalize costs, outright fraud.
If so many entities are declining, why shouldn't I expect that my entities will also decline? Why should I expect them to be the ones that go up?
I would say it slightly differently: The average rate of growth comes from the average of the successful and unsuccessful innovators and non-innovators.
Bill Gates' wealth grew much more after he left Microsoft than while he was CEO. Was that wealth earned through innovation? No. He simply owned something that became more valuable as other people labored to innovate.
Growth does not ONLY come from innovation. It can come from bad actor or even simply non-innovaive strategies such as acquistition (which can lead to monopoly, as capital tends to amass in large centers / the hands of the few, per Marx). Other bad faith / anti-competitive / non-innovative strategies include regulatory capture, lobbying, doing illegal things (and hoping to not get caught / paying a slap-on-the-wrist fine that would be impossible for smaller companies), etc.
No mention of Piketty or r>g?
Look, I know this is a tech forum and we don't claim to be good at the social sciences, but this is a central debate and r>g, the idea that the rate of return to capital tends to exceed economic growth over the course of history, is a major result from Piketty's Capital In The 21st Century that people interested in "grow the pie" vs "trickle down" really ought to be familiar with. Even if you disagree, you ought to be able to articulate why, and "the average includes winners and losers" ain't it.
"But life has improved, r>g couldn't have been true forever" -- last time the inequality bubble popped because of a great depression and two world wars. The capital was incinerated, metaphorically and literally. It's a cautionary tale and we should aspire to do better.