ABSTRACT
Ultimately the distinction between growth maximisation and profit maximisation is largely explained by the firm’s fundamentally different existential context rather than the horizon of its decisions. Growth maximising firms’ behaviour stabilises their environments and further results in systemic stability because that stability is exported to the environment. This is through varying institutional arrangements from wage-setting and price-setting (Eichner, 1976) to the power that firms impose on consumers, the state, etc. (Galbraith, 1967), all underpinned by the virtuous cycle of technical efficiency and growth (Shapiro, 2011; Dunn, 2011). In sharp contrast, profit maximising firms construct a degree of stability within an environment characterised by fundamental instability, and with which the firm has to repeatedly interact, for example, credit markets, and in which their own actions can be internally destabilising in the domains in which they operate.
