David Harvey Contradictions

Most people do not well understand the mathematics of compound interest. Nor do they understand the phenomenon of compounding growth and the potential dangers it can pose” (Page 222). In Chapter 15 of his 17 Contradictions, David Harvey argues that endless compound growth is a dangerous contradiction. “In the later stages of compounding the acceleration takes one by surprise” (page 226). The example of compounding given was one about an Indian king. The inventor of the game chess asked the King for one grain of rice on the first square and double the amount from one square to another, by the time the game got to the 21 square, more than a million grains was required. There isn’t enough rice in the world to finish. Compound interest rises slowly
then at the end starts to quicken. There have been times when the growth rate has been negative or open for discussion. Compound interest is problematic and it is easy to misconstrue its abilities. Capitalisms requirement for continuous growth comes from the structure of our market and financial systems. The mathematics of compound growth makes continuity nonviable.