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The rise of the corporate colossus is a giant problem

economist.com

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Re: The rise of the corporate colossus is a giant problem

#21

Post by throwaway729 »

sharemywin wrote: post #8

In 1990 the top three carmakers in Detroit had a market capitalisation of $36 billion and 1.2m employees. In 2014 the top three firms in Silicon Valley, with a market capitalisation of over $1 trillion, had only 137,000 employees.

Gvien the forum we're on, it's worth pointing out that today's white collar laborers are capturing one or two orders of magnitude less of the value they're creating than the blue collar workers of 1990's detroit.

360 billion* divided by 1.2 million = 300000 "per employee". Typical salary to 40,000ish-100,00ish range for laborers/engineers. The disparity in those numbers isn't so bad at all.

Conversely, 1 trillion divided by 137000 = 7,299,270 "per employee". Typical salary of engineers in those firms is closer to 100,000 to 200,000, and that's just for the golden child software engineers. And without accounting for massive cost of living differences between 1990 Detroit and modern day SV.

Which wouldn't be so bad if there were some engineers earning close to or more than the "per employee" numbers, but I've never heard of anyone making even close to 7 figures as an engineer at a big firm...

* I think you meant 360 bn, not 36 bn, right?

Re: The rise of the corporate colossus is a giant problem

#22

Post by mbillie1 »

throwaway729 wrote: post #21
sharemywin wrote: post #8

In 1990 the top three carmakers in Detroit had a market capitalisation of $36 billion and 1.2m employees. In 2014 the top three firms in Silicon Valley, with a market capitalisation of over $1 trillion, had only 137,000 employees.

Gvien the forum we're on, it's worth pointing out that today's white collar laborers are capturing one or two orders of magnitude less of the value they're creating than the blue collar workers of 1990's detroit. 360 billion* divided by 1.2 million = 300000 "per employee". Typical salary to 40,000ish-100,00ish range for laborers/engineers. The disparity in those numbers isn't so bad at all. Conversely, 1 trillion div…

Don't think you needed a throwaway for that, that's a cogent point.

Re: The rise of the corporate colossus is a giant problem

#23

Post by jcfrei »

BurningFrog wrote: post #20

A libertarian explanation is that in the age of the Regulatory State, it's often more important to be the biggest lobbyist than to make the best product. "In the Game of Crony Capitalism, you lobby or you die."

A much more probable explanation might be the increasing importance of economies of scale (software is a prime example).

Re: The rise of the corporate colossus is a giant problem

#24

Post by distances »

jsprogrammer wrote: post #19
distances wrote: post #12

> It means making it easier for consumers to move their data from one company to another I think this would be absolutely brilliant. The ability to readily move data from one service provider to another would provide a much-needed boost for competition in the digital space. I don't know how common it is, but at least in Finland one can move their mortgage from one bank to another if they get a better deal elsewhere […

What type of data are you wanting to move? Would you just want a huge movable block of space that you could mount somewhere?

All data associated with my user account, perhaps with some kind of a schema if applicable. Other services could then implement data import features for this, or for just the part of the data that concerns the service they are providing.

Basically, it should be clear that all data connected to a person is irrevocably theirs. Any provider can build services for taking advantage of the data -- but it'd be the user's right to migrate it at their pleasure.

Re: The rise of the corporate colossus is a giant problem

#25

Post by klank »

aetherson wrote: post #9
ashark wrote: post #4

> But better the grind of multilateral negotiation than moves such as the European Commission’s recent attempt to impose retrospective taxes on Apple in Ireland. Uh, isn't that "move" enforcement of the results of multilateral negotiation (the EU and its rules)? What exactly will or should happen when parties of these multilateral negotiations and agreements the column champions violate the rules? I'm guessing it'll…

The EU isn't multilateral. Multilateral would be the EU + the US + Japan + China + other smaller economies, or at least the majority of those players.

In this context the EU is most certainly multilateral. The laws being evaluated were agreed upon by 28 member states.

Re: The rise of the corporate colossus is a giant problem

#26

Post by [deleted] »

throwaway729 wrote: post #21
sharemywin wrote: post #8

In 1990 the top three carmakers in Detroit had a market capitalisation of $36 billion and 1.2m employees. In 2014 the top three firms in Silicon Valley, with a market capitalisation of over $1 trillion, had only 137,000 employees.

Gvien the forum we're on, it's worth pointing out that today's white collar laborers are capturing one or two orders of magnitude less of the value they're creating than the blue collar workers of 1990's detroit. 360 billion* divided by 1.2 million = 300000 "per employee". Typical salary to 40,000ish-100,00ish range for laborers/engineers. The disparity in those numbers isn't so bad at all. Conversely, 1 trillion div…

[deleted]

Re: The rise of the corporate colossus is a giant problem

#27

Post by jhayward »

BurningFrog wrote: post #20

A libertarian explanation is that in the age of the Regulatory State, it's often more important to be the biggest lobbyist than to make the best product. "In the Game of Crony Capitalism, you lobby or you die."

It would be helpful if you would supply the Libertarian explanation for the Facebook, Google, Microsoft, and Amazon monopolies as products of the regulatory state and crony capitalism.

Re: The rise of the corporate colossus is a giant problem

#28

Post by imgabe »

forrestthewoods wrote: post #7

Growth is globalized. Global companies get a disproportionate share of growth. Therefore giants will become increasingly large relative to non-global entities. I'm not sure what the specific problems are. Which makes prescribing a fix impossible.

One specific problem is that global companies are currently able to engage in tax arbitrage where they get to shuffle their profits around the world to wherever the most favorable tax rate is. This leaves many of the countries that actually host these companies and provide services to them - like educated employees, transportation infrastructure, and a judicial system - without any tax revenue from the company.

Re: The rise of the corporate colossus is a giant problem

#29

Post by nonameface »

throwaway729 wrote: post #21
sharemywin wrote: post #8

In 1990 the top three carmakers in Detroit had a market capitalisation of $36 billion and 1.2m employees. In 2014 the top three firms in Silicon Valley, with a market capitalisation of over $1 trillion, had only 137,000 employees.

Gvien the forum we're on, it's worth pointing out that today's white collar laborers are capturing one or two orders of magnitude less of the value they're creating than the blue collar workers of 1990's detroit. 360 billion* divided by 1.2 million = 300000 "per employee". Typical salary to 40,000ish-100,00ish range for laborers/engineers. The disparity in those numbers isn't so bad at all. Conversely, 1 trillion div…

That is a direct quote from the article. The article states $36B as well, not $360B.

"None of this helps the image of big business. Paying tax seems to be unavoidable for individuals but optional for firms. Rules are unbending for citizens, and up for negotiation when it comes to companies. Nor do profits translate into jobs as once they did. In 1990 the top three carmakers in Detroit had a market capitalisation of $36 billion and 1.2m employees. In 2014 the top three firms in Silicon Valley, with a market capitalisation of over $1 trillion, had only 137,000 employees."

Re: The rise of the corporate colossus is a giant problem

#30

Post by rayiner »

BurningFrog wrote: post #20

A libertarian explanation is that in the age of the Regulatory State, it's often more important to be the biggest lobbyist than to make the best product. "In the Game of Crony Capitalism, you lobby or you die."

The problem with the libertarian explanation is that it contradicts the actual facts. The "age of the Regulatory" state started in the 1930's. It has been in decline for decades--with major sectors of the economy being deregulated in the 1980's and 1990's. In the 1950's and 1960's, regulatory agencies often had the power to directly exclude potential competition and set prices for goods. They have a fraction of those power today. Surely, that decrease in regulatory authority would be linked to a decrease in consolidation. But consolidation has increased during that time.

Moreover, there is a difference between a plausible theory and showing actual causation. How is lobbying helping Amazon and Wal-Mart to replace smaller retailers? Point to something concrete. Because it looks like the real explanation is the massive efficiency advantages those big firms possess.

Looking at other sectors of the economy: why are Apple and Samsung taking almost all of the profits in the smartphone industry? Are they better at lobbying the "Regulatory State" than HTC or Nokia?

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