AskHistorians

Capitalism will collapse without growth. It has to do with how money is created and then devalued over time. If that growth stops, debt cannot be depreciated through inflation in the same mechanism. Then interest rates skyrocket and everything collapses.

There are very few places where real growth is possible. In truth, the problem is that we are all misers that will not spend money unless we are forced to. Traditionally, the only exception to this rule on large scales is military spending. All of us have existed in a very unusual era. Unlike all of the rest of history, we have lived in the one era when a civilian industry grew faster than the largest military in the world. Silicon chips are the most expensive exponential growth of any commercial endeavor in human history. It is specifically the combination of extreme precision tooling and a product that is only fancy rust on a fancy shard of glass. The expense of all the nodes involved and the speed at which they have progressed is more money than the US military has had available for research and development. This is why the US pivoted to venture capital. William Shockley recognized how silicon would play out in the long term until physics stopped the progress. This pivot is why the US grew an economy that the Soviet Union could not match. They were still lead by military research and development. They did not see the significance of the silicon industry or how economic growth is a military strategy in relevant depth. The cold war was won in Silicon Valley.

Our culture(s) largely remain ignorant of this critical part of history. Venture capital seems normal and everywhere, but that is a very naïve and convoluted understanding that largely reflects an ignorance of just how expensive chip fabs are and how business works at this scale.

If you have an economy that is very lopsided and need to inject money into the general population to encourage local growth, your methods and strategies are pretty limited. This is what lead to stuff like WPA. In our timeline, every effort has been made to stay on the path of venture capital as long as possible, but there is no replacement for silicon chips with their barrier to entry and cheap final output along with the premium price tag people will pay initially for the bleeding edge. This initial price is actually what is paying for the tooling and fab. So we are now 10 years away from the last fab nodes, but the actual new designs on the bleeding edge are always 10 years lead. That means we are actually at the end already. The military will now start shifting to the front of growth and all of the wars and conflicts that happened throughout most of history will return. This form of government and economy will shift in values quite a bit and will return to an era more like Roosevelt's eventually, although we'll have several Taft's like right now. Typically government likes to deal with simplicity. It is simple to manage a few generals at the top, or a few key oligarchs. When complex problems are addressed with intuitive oversimplified solutions, famines tend to kill millions of people. If food is disrupted for 3 weeks, millions will die. Millions have died this way.

So in the very recent past, VC is basically the military but only on the short leash of silicon growth.

Once world economies are lead by military spending, how do you exit a massive recession by injecting money into the economy and get it to the people in ways that cannot be abused by those you're effectively taking it from. This was the reason for creating such a program. Look at other attempts like how the collapse of the Soviet Union was handled with vouchers and how that lead to the oligarchy there. It is actually a hard problem to solve. On another issue/scale, China openly stated it was investing in EVs heavily back in 2014. The US government gave GM 6 billion dollars to develop EVs in 2017, and GM spent all of it doing a stock buyback with executives cashing out on it through stock options. Capitalism is the choice to live with criminals and pirates freely as the lesser evil to authoritarianism and the succession crisis that always follows. Intelligence and competency is never inherited. So in this paradigm, it is quite difficult to distribute money well throughout the populous and especially to more rural areas and common people. It is even harder to do so in a sustained way like with employment. The antithesis is something like the Doge Terrorist.