💾 Archived View for tilde.team › ~smokey › logs › 2022-01-26-companies.gmi captured on 2023-11-14 at 08:13:16. Gemini links have been rewritten to link to archived content
⬅️ Previous capture (2022-06-11)
-=-=-=-=-=-=-
There is a decent comparison to be made between biology and economy. Its easy to forget that buisness and the economy are as much natural systems as the water cycle or an ant colony. Because living things came together to create it, it takes on some characteristics of life through emergent behavior.
Buisnesses can be likened to organisms competing for limited resources (money) and territory. Reproduction and expansion is an integral part of the survival of a species as well as companies. limited resources, ever changing enviroments, and competition are but a few commonalities. No doubt, many answers are shared between the questions of "why do companies grow?" and "why do populations grow?"
One of my favorite lines from Ghost In A Shell is this:
"life perpetuates itself through diversity, and this includes the ability to sacrifice itself when necessary. Cells repeat the process of degeneration and regeneration until one day they die, obliterating an entire set of memory and information. Only genes remain. Why continually repeat this cycle? Simply to survive by avoiding the weaknesses of an unchanging system." - Puppet Master
If there is one truth to the universe, it's that death is inevitable. Not just for living things, but the systems which living things create. this includes among other things, companies. Even universal systems. the sun will one day die, as will eventually every star. Matter itself "dies" when it fully decays into cosmic background radiation. Eventually, the universe itself will become cold and empty as it turns into a state of maximum entropy.
The closest thing to immortality the universe has come up with (as far as we know) is the continuation of life and its many species through reproduction, diversity, and self-competition. Its easy to forget with all our physical and cultural differences, but all humans are almost identical clones of eachother as far as DNA is concerned minus some special exceptions like genetic deformities. While the individual clone may die the human species as a whole lives on perpetually through reproduction. In that sense, species as a whole are able to trancend mortality for a little while.
Interestingly, most species alive today share huge blocks of genes due to sharing common ancsestors evolutionarily speaking. For example, Fruit flies share nearly 60% of human genes. Let that one sink in.
If a species does not reproduce more than it dies, it will eventually go extinct. If life did not diversify rapidly, it would take one single major change in the enviroment or a really effective super-virus to wipe it out completely full stop. over 90% of all species ever to exist on earth are already extinct, you have diversity and adaptation to thank for the few percent that stuck around which eventually lead to us. If we ever go thermonulcear apocolypse on the surface of the earth you can at least rest well knowing that tube worms and bacteria will still be feeding off geothermal vents at the bottom of the ocean for millions of years to come.
George Carlin Comedy Skit On Species
Back to companies, these same concepts still apply. The vocabulary used might be different but the same underlying principles apply. If a buisness does not expand, it will inevitably shrink.Expanding too quickly is just as bad, but for different reasons.
The benefit of a huge company is "the ability to sacrifice itself when nessesary" which in buisness terms means layoffs and liquidating excess stores. Small mom and pop stores dont have many options to layoff and cut corners when the economy takes a dive.
During the pandemic, which buisnesses survived and which ones died? The ones that were big survived, because they could take the economic hit and adjust acordingly. The small mom and pops are the ones which dropped like flies. The bigger the buisness/species as a collective, the more individual hits it can take before a critical point of collapse. While there is always a risk in expanding too quickly, its even riskier to not expand enough. Risk management is a part of buisness too.
The final, somewhat distantly connected thing I would like to discuss is population dynamics and the logistic map. As it turns out, biologist have wondered about the nature of population growth and have been trying to create accurate models of it for a long LONG time. The most basic toy model of population growth is this:
x(next) = Gx(1-x)
where x is the current population, x(next) is the next population, G is the growth rate, and (1-x) is the death rate as a decimal value from 0-1. What this equation tells us is that next years population is equal to the growth rate multiplied by the current population and subtracted from the total death rate. This model is too simple to accurately describe even a single species, yet its general enough to say something about all species and many more non-linear dynamical systems.
I want to stress one thing the logistic map tells us: If the growth rate is less than 1, a population will ALWAYS die out eventually no matter the starting size. Growth is all that stops a population from extinction.
When I stated earlier that "a decent comparison can be made between biology and economy" this was more than just a bit of clever simile. There is a very real yet highly abstract connection between the two. Both are dependant on iterative processes which feed back onto themselves. To quote John Gribbin's book 'Deep Simplicity' (which I highly recommend reading):
"Feigenbaum (1945-) showed that the period doubling route to chaos is not some special feature of the logistic map equation, but that it is a product of the iterative process by which the system feeds back on itself - whether the system is an animal population, an oscillator in an electrical circut, an oscillating chemical reaction, or even (in principle) the business cycle of the economy. What mattered was that the systems had to be 'self-refferential'."
The logistic map includes MANY MANY MANY natural processes from biology and chemistry, to electrical analysis and thermodynamics, to the economy. There is something connecting them all together in a deep, fundimental way. If you have time, please watch the video linked below on the Logistic Map by Veritasium, it explains things in much greater detail with awesome visuals.
Veritasiums video on the Logistic Map
Ew0k offers a rhetorical question in their article: "At what point or under which circumstances does a company have to grow to survive? When could they just settle for where they are?" The non-rhetorical answer I would like to provide is this: "At all points, under every circumstance. Settling where they are is inevitably a death sentence one way or another." Survival requires growth, stagnation is not a viable option even in the theoretical abstract world of math. Due to ever-changing variables of the economy, and the fact that critical catastrophy can strike at any moment, growth is the only logical combatant to assured oblivion. At some point that stagnation will cost dearly and probably lead to the death of the buisness.
.
I dont like conglomerations and franchises any more than the next guy, but removing emotion and bias from the equation allows us to see that they are the natural conclusions of the economy. They are the buisness version of the human species. Apex predators too big to fail until limited resources are used up and that growth collapses under its own weight. Until then, they will keep growing and growing until they collapse like a bubble expanding until it pops. Thats the statistical nature of continued existance.