Was just trying to explain to someone why everything is going to shit, specifically companies, and realized, I don’t fully get it either.

I’ve got the following explanation. The sentences marked with “???” are were I’m lost. Anyone mind telling me, if they’re correct and if so, why?

The past few years, central banks were giving out interest rates of 0% or even negative percentages. Regular banks would not quite pass this on, but you could still loan money and give it back later with no real interest payments.

This lead to lots of people investing in companies. As long as those companies paid out more money than those low interest rates, it was worthwhile. But at the same time, this meant companies didn’t have to be profitable, because they could pay out investors from money that other investors gave them???

This has stopped being the case, as central banks are hiking interest rates again, to combat inflation???

  • @[email protected]
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    671 year ago

    Cory Doctorow (pluralistic.net) has a number of stories now on the concept of “enshittification”. Basically businesses start off being good to customers but eventually get to a point where, if they’re dominant the drive for endless profit results in them turning to squeezing suppliers, customers, everyone.

    Tech enables new forms of exploitation.

    • Square Singer
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      181 year ago

      And the bad economics right now enforce simultaneous enshittification in a huge amount of products. I guess that might also be a big point to why it’s so apparent right now.

    • @[email protected]
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      11 year ago

      There’s got to be a more scholarly name for that trend which has existed long before the invention of the word “enshitification”. What is it?