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There is so much wrong with this article I hardly know where to begin. First, it presumes a 19th-century separation of "capital" and "labor" where "capital" is

There is so much wrong with this article I hardly know where to begin. First, it presumes a 19th-century separation of "capital" and "labor" where "capital" is a bunch of greedy pigs trying their damndest to exploit labor, with little crossover between the two groups. The modern reality is way more complicated. Almost every member of "labor" has some form of pension, 401(k), IRA, or personal stock holding, and even if they don't, their governments do. Huge pension funds like CalPERS are heavily invested in the stock market, which matters because (a) many state employees rely on them for income, and even if you don't work for the state, (b) your taxes are directly tied to the investment performance of these funds. Bottom line, it's complete folly to suggest the stock market is a "rich person's problem" even if you're poor. Anyone invested in the S&P 500 is going to have a large position (relatively) in Apple. Second, this article makes no mention of Google's hiring of Ruth Porat or the recent moves to put better capital allocation processes in place. I, for one, wish Google would behave more like Apple. I think it shows admirable restraint that Apple can pay so much cash out without wasting it on dumb things. Third, it's just a sloppy article in general. They make no mention of whether the "performance" of the two includes the cash thrown off by dividends, which in Apple's case, is significant. They also didn't mention the complex back-story of why the Irish subsidiary is used [1], nor any of the academic finance research suggesting that "Short-term" decision making actually benefits investors long-term. [1] https://stratechery.com/2016/apples-eu-tax-problem-how-apple-pays-taxeseventually-everyone-is-a-loser/ https://stratechery.com/2016/apples-eu-tax-problem-how-apple...

mfringel 9y ago
You seem to be asserting that anyone who owns any stock is completely aligned with the interests of the respective corporation, regardless of proportionality. To wit, If I own (say) $5k of Amazon stock as the result of being invested in a mutual fund, that is not sufficient cause for me to take time out of my day to call my representatives and actively lobby for Amazon.
- digi_owl 9y ago
  Never mind that owning stock via pension funds etc gives one little say in corporate operations.
BeenThere888 9y ago
Why should the poor give a damn about the stock market, though? Every time a bubble pops, they're the one's left holding the tab. How many of those 401ks and IRAs were wiped out and the "owner" left with nothing after Madoff, housing bubble, etc. IMO, it's a fools errand as a figurative little person on the totem pole to babysit the wealth of the rich who leave them dangling in front of the fan that just had shit splatter all over it.
- alasdair_ 9y ago
  >How many of those 401ks and IRAs were wiped out and the "owner" left with nothing after Madoff, housing bubble, etc. I assume almost none of them. People with most of their wealth in a 401k probably didn't have a lot of money in Madoff's hedge fund and the housing bubble also likely didn't wipe out retirement funds for the people that just left their retirement alone.
- holdthetab 9y ago
  why would the people who have no money to give be the ones held to account? if your political views can't pass a simple sniff test like that, what hope do you have of enacting them?
chrismealy 9y ago
What percent of Americans have zero dollars in stocks and bonds? What percent of asset markets are owned by the 1%?
jmull 9y ago
Uh-uh. This is an excellent article because it accomplishes 100% of what it set out to do: Put the words "Apple" "vs." and "Google" in the headline to generate some pretty good clicks. The rest of the words are just to fill the rectangle the headline sits over. They just need to be formed in a way that doesn't distract from the main purpose.
- rhizome 9y ago
  Pretty cynical, but The Atlantic has indeed taken a turn that supports your analysis, at least since Jeffrey Goldberg was made EIC.
frgtpsswrdlame 9y ago
80% of the value of stocks are held by the top 10%. The fact that 401ks which were initially retirement plans for executives have permeated labor is an indictment of the system. Capital owners have removed defined benefit plans forcing labor to jump into the same boat. But make no mistake about who really benefits from that convergence and who forced it in the first place.
- eldavido 9y ago
  For my money I would much, much rather own shares of stock in my retirement plan than have a state- or corporate-backed pension. Have you seen the movie Casino? That actually happened, the Teamsters pension fund came under control of the mob. What about Illinois, which is facing a $120 billion pension shortfall due to decades of accounting gimmicks? What about the UAW guys, who were counting on pensions from the big 3? All I'm saying is, look at how it _actually_ works, in practice, vs. how it _could_ work, in theory. The reality is, DB plans are getting phased out because they're too expensive to service, and too risky for employees. You can make the argument that people aren't getting compensated enough, and maybe that's true, but that's not an argument about DB vs. DC. The point is, there are no certainties in this world, and if someone tells you there are, they're lying.
  - frgtpsswrdlame 9y ago
    Sure but if you look at how 401ks and IRAs _actually_ work you'll see people being broke in retirement as well and the idea that DB is more risky than DC for employees is just totally backward. The fix here is more transparent DB, not shoving people into DC plans which were never meant for them.
  - Retric 9y ago
    And I vastly prefer the reverse. Pensions avoid the classic hopping you die before you run out of money. Further, money enough to cover the basics is vastly more important than 'extra'.
    - haltingthoughts 9y ago
VikingCoder 9y ago
> Almost every member of "labor" has some form of pension, 401(k), IRA, or personal stock holding Citation needed. I believe "almost every" is pure hyperbole. A quick search found a poll indicating 52% of Americans own stock. http://www.gallup.com/poll/190883/half-americans-own-stocks-matching-record-low.aspx http://www.gallup.com/poll/190883/half-americans-own-stocks-... If you have better information, I'd like to see it, please.
- eldavido 9y ago
  Without a citation, that seems right, in the narrowest sense of "owning single shares in a company". Keep in mind that "owning stock" isn't well-defined though, that could mean (a) own individual shares (narrowest), (b) owns shares or ETFs (broader), (c) owns mutual funds. But that still doesn't address my point. It's a lot bigger when both private sector, and public, pensions are included. This issue is near and dear to my heart because I grew up in Illinois (now living in California) and am watching the budget battle unfold there. They have a huge pension funding gap, and the returns of the stock market are going to have a very direct, real effect on how much tax the state has to collect to fund the pensions.
  - arcbyte 9y ago
    Born, raised, and living in Illinois and I'm seriously looking at leaving the land of Lincoln. Chicago is ruining this state.
    - tomjakubowski 9y ago
      I was born and raised in Illinois too, but live in California now. Mind explaining how the third-largest metro economy in the country is ruining our state?
      - Tettrox 9y ago
        How about having a massive murder rate? Having a great train system is great, but it's not exactly something to brag about and definitely something someone is going to overlook the murder rate for.
objectivistbrit 9y ago
This is a really weird comment. I re-read the article and it only mentions labour vs capital once, in passing. Mostly it talks in terms of owners vs managers, and the principal-agent problem. You refer to "greedy pigs" and exploitation making it sound as though the author is anti-capitalist, but that does not seem to be the case). (I was curious enough to look him up. He's a finance professor at HBS. That probably explains the different slant compared to other Atlantic articles).
- 2close4comfort 9y ago
  It think it was more that the author is a supporter of real capitalism where you actually have to possess a conscience. But I think the population has a whole has abandoned this notion either out of ignorance or apathy. This is my lament for the current and future state of capitalism.
dustingetz 9y ago
Given the state of the IPO market its not obvious to me that you are right about public markets. MSFT is trading at 30000% IPO price. Facebook, having delayed its IPO to the last possible minute so private equity & VCs can maximize their returns, is trading at 500% IPO, so will need to grow 60x for the common man to see similar returns as MSFT, is that possible in any amount of time? I'm no economist and my analysis is surely bunk but am i in the ballpark? Income inequality is a tricky issue and parent analysis doesn't even come close to a compelling argument in either direction.
emodendroket 9y ago
> Almost every member of "labor" has some form of pension, 401(k), IRA, or personal stock holding Objectively speaking, it does not seem like that is the case for even half of workers. https://www.ebri.org/publications/benfaq/index.cfm?fa=retfaq14 https://www.ebri.org/publications/benfaq/index.cfm?fa=retfaq...
- ensignavenger 9y ago
  That data is almost 20 years old now. I don't know how much it has changed since then, though. It also only deals with 'private sector' labor, whereas the OP specifically mentioned state employees in the pool of 'labor'. EDIT: Wait... The chart title says 1979-2013, which is what the chart says... but the source citation says it came from 1979-1998... which is why I thought it was 20 years old... not sure where they got the rest of the data from.
  - eu90h 9y ago
    The data from 1999 onward is estimated from a few sources, as explained at the bottom of the page here: https://www.ebri.org/publications/benfaq/index.cfm?fa=retfaqt14fig1 https://www.ebri.org/publications/benfaq/index.cfm?fa=retfaq...
  - emodendroket 9y ago
    It also doesn't factor in the unemployed, which seems just as relevant a factor in the opposite direction, if you're going to claim everybody's interests are one in the same with business owners'.
ue_ 9y ago
>First, it presumes a 19th-century separation of "capital" and "labor" where "capital" is a bunch of greedy pigs trying their damndest to exploit labor, with little crossover between the two groups. If you're talking about Marxism, you're misunderstanding the division between bourgeoisie and proletarians; stocks, pensions, 401k, whatever, does not count as means of production; the division is between the proletarians, who almost always have nothing to sell but their labour-power and the bourgeoisie, i.e a class of people who own the means of production. Further, you're using "exploit" as a prejorative, which it isn't necessarily; Marx's idea of exploitation is removed from what we think of as exploitation (in a negative sense); it's exploitation just as you'd exploit a car or something like that - you make use of it, use it up. Machines are also exploited in the same way. Nevertheless, the goal of the Marxists and indeed Communists in general is to abolish this exploitation. Your simplification does not make the anti-capitalist plight any weaker, and in fact it just goes to show how much the ideas of the Communists are miscommunicated and misinterpreted. It could be said, with the shrinking of the number of people who are self-employed (actually, things like freelance programming forming an exception) that the model of proletarians and bourgeoisie is just as relevant if not moreso today than it was in the 19th century. I advise you to read modern Marxist works, such as Spectres of Marx, The Society of the Spectacle by Guy Debord, and particularly almost all of Zizek's work (in particular The Sublime Object of Ideology), which I must recommend. Of particular note is The Culture Industry by Adorno, commonly associated with the Frankfurt School.
- eldavido 9y ago
  Thank you for this comment. I'm sorry it got downvoted and I disagree with much of what's written, but I appreciate the thoughtfulness and general tone. I have actually read and thought about the Communist Manifesto quite a lot, but not the later works you cited. I'll add them to my reading list. The biggest problem I have with classical Marxism is that it presupposes a sort of material capital that can be accumulated. While there are certain sectors in which "assets" in the traditional sense, whether physical ones like timber, rental real estate, etc. or the softer "intellectual property" play a dominant role, this doesn't seem to be what's driving the world forward today. I think "reputationism", or maybe "Hollywood capitalism", is a better descriptor for how Hollywood or SV work today. Witness the sky-high compensation of CEOs, athletes, actors, real estate developers, financiers, and others whose reputations give them access to opportunities most traditional "labor" can only dream of. In fact, if you read Piketty, he makes the point that capital's share of income relative to labor has actually decreased in the past decades, even as very highly compensated labor's share has skyrocketed. The real enemy, IMO, is "empty suits" with no skin in the game (borrowing from Taleb) - people like analysts, non-founding CEOs, private equity/VC managers who commit only 5% of the capital of their funds, and others in positions of "heads I win, tails you lose". I really admire people who stick to their beliefs and bet with their own money/credibility (like this http://longbets.org/362/ http://longbets.org/362/) - I have much less respect for the guys blabbing on CNBC every day who just talk, talk, talk.
2close4comfort 9y ago
Pensions have largely gone away, replaced with 401k's which for the average person will not have the yield a pension would and just makes business' look like they care without actually making any real investment in a person's future. The stock market is largely a rich man's game as you have to have the money to invest so their are only the ones' on top who really have the money to put into a system and can afford others to manage it to ensure financial gain. The 401k is worthless if you don't know how to manage it and the employer is only to eager to outsource that to lowest bidder who taxes people with fees for doing nothing and promising even less.

mfringel 9y ago

You seem to be asserting that anyone who owns any stock is completely aligned with the interests of the respective corporation, regardless of proportionality. To wit, If I own (say) $5k of Amazon stock as the result of being invested in a mutual fund, that is not sufficient cause for me to take time out of my day to call my representatives and actively lobby for Amazon.

digi_owl 9y ago
Never mind that owning stock via pension funds etc gives one little say in corporate operations.

BeenThere888 9y ago

Why should the poor give a damn about the stock market, though? Every time a bubble pops, they're the one's left holding the tab. How many of those 401ks and IRAs were wiped out and the "owner" left with nothing after Madoff, housing bubble, etc. IMO, it's a fools errand as a figurative little person on the totem pole to babysit the wealth of the rich who leave them dangling in front of the fan that just had shit splatter all over it.

alasdair_ 9y ago
>How many of those 401ks and IRAs were wiped out and the "owner" left with nothing after Madoff, housing bubble, etc. I assume almost none of them. People with most of their wealth in a 401k probably didn't have a lot of money in Madoff's hedge fund and the housing bubble also likely didn't wipe out retirement funds for the people that just left their retirement alone.
holdthetab 9y ago
why would the people who have no money to give be the ones held to account? if your political views can't pass a simple sniff test like that, what hope do you have of enacting them?

chrismealy 9y ago

What percent of Americans have zero dollars in stocks and bonds? What percent of asset markets are owned by the 1%?

jmull 9y ago

Uh-uh. This is an excellent article because it accomplishes 100% of what it set out to do: Put the words "Apple" "vs." and "Google" in the headline to generate some pretty good clicks. The rest of the words are just to fill the rectangle the headline sits over. They just need to be formed in a way that doesn't distract from the main purpose.

rhizome 9y ago
Pretty cynical, but The Atlantic has indeed taken a turn that supports your analysis, at least since Jeffrey Goldberg was made EIC.

frgtpsswrdlame 9y ago

80% of the value of stocks are held by the top 10%. The fact that 401ks which were initially retirement plans for executives have permeated labor is an indictment of the system. Capital owners have removed defined benefit plans forcing labor to jump into the same boat. But make no mistake about who really benefits from that convergence and who forced it in the first place.

eldavido 9y ago
For my money I would much, much rather own shares of stock in my retirement plan than have a state- or corporate-backed pension. Have you seen the movie Casino? That actually happened, the Teamsters pension fund came under control of the mob. What about Illinois, which is facing a $120 billion pension shortfall due to decades of accounting gimmicks? What about the UAW guys, who were counting on pensions from the big 3? All I'm saying is, look at how it _actually_ works, in practice, vs. how it _could_ work, in theory. The reality is, DB plans are getting phased out because they're too expensive to service, and too risky for employees. You can make the argument that people aren't getting compensated enough, and maybe that's true, but that's not an argument about DB vs. DC. The point is, there are no certainties in this world, and if someone tells you there are, they're lying.
- frgtpsswrdlame 9y ago
  Sure but if you look at how 401ks and IRAs _actually_ work you'll see people being broke in retirement as well and the idea that DB is more risky than DC for employees is just totally backward. The fix here is more transparent DB, not shoving people into DC plans which were never meant for them.
- Retric 9y ago
  And I vastly prefer the reverse. Pensions avoid the classic hopping you die before you run out of money. Further, money enough to cover the basics is vastly more important than 'extra'.
  - haltingthoughts 9y ago

VikingCoder 9y ago

> Almost every member of "labor" has some form of pension, 401(k), IRA, or personal stock holding Citation needed. I believe "almost every" is pure hyperbole. A quick search found a poll indicating 52% of Americans own stock. http://www.gallup.com/poll/190883/half-americans-own-stocks-matching-record-low.aspx http://www.gallup.com/poll/190883/half-americans-own-stocks-... If you have better information, I'd like to see it, please.

eldavido 9y ago
Without a citation, that seems right, in the narrowest sense of "owning single shares in a company". Keep in mind that "owning stock" isn't well-defined though, that could mean (a) own individual shares (narrowest), (b) owns shares or ETFs (broader), (c) owns mutual funds. But that still doesn't address my point. It's a lot bigger when both private sector, and public, pensions are included. This issue is near and dear to my heart because I grew up in Illinois (now living in California) and am watching the budget battle unfold there. They have a huge pension funding gap, and the returns of the stock market are going to have a very direct, real effect on how much tax the state has to collect to fund the pensions.
- arcbyte 9y ago
  Born, raised, and living in Illinois and I'm seriously looking at leaving the land of Lincoln. Chicago is ruining this state.
  - tomjakubowski 9y ago
    I was born and raised in Illinois too, but live in California now. Mind explaining how the third-largest metro economy in the country is ruining our state?
    - Tettrox 9y ago
      How about having a massive murder rate? Having a great train system is great, but it's not exactly something to brag about and definitely something someone is going to overlook the murder rate for.

objectivistbrit 9y ago

This is a really weird comment. I re-read the article and it only mentions labour vs capital once, in passing. Mostly it talks in terms of owners vs managers, and the principal-agent problem. You refer to "greedy pigs" and exploitation making it sound as though the author is anti-capitalist, but that does not seem to be the case). (I was curious enough to look him up. He's a finance professor at HBS. That probably explains the different slant compared to other Atlantic articles).

2close4comfort 9y ago
It think it was more that the author is a supporter of real capitalism where you actually have to possess a conscience. But I think the population has a whole has abandoned this notion either out of ignorance or apathy. This is my lament for the current and future state of capitalism.

dustingetz 9y ago

Given the state of the IPO market its not obvious to me that you are right about public markets. MSFT is trading at 30000% IPO price. Facebook, having delayed its IPO to the last possible minute so private equity & VCs can maximize their returns, is trading at 500% IPO, so will need to grow 60x for the common man to see similar returns as MSFT, is that possible in any amount of time? I'm no economist and my analysis is surely bunk but am i in the ballpark? Income inequality is a tricky issue and parent analysis doesn't even come close to a compelling argument in either direction.

emodendroket 9y ago

> Almost every member of "labor" has some form of pension, 401(k), IRA, or personal stock holding Objectively speaking, it does not seem like that is the case for even half of workers. https://www.ebri.org/publications/benfaq/index.cfm?fa=retfaq14 https://www.ebri.org/publications/benfaq/index.cfm?fa=retfaq...

ensignavenger 9y ago
That data is almost 20 years old now. I don't know how much it has changed since then, though. It also only deals with 'private sector' labor, whereas the OP specifically mentioned state employees in the pool of 'labor'. EDIT: Wait... The chart title says 1979-2013, which is what the chart says... but the source citation says it came from 1979-1998... which is why I thought it was 20 years old... not sure where they got the rest of the data from.
- eu90h 9y ago
  The data from 1999 onward is estimated from a few sources, as explained at the bottom of the page here: https://www.ebri.org/publications/benfaq/index.cfm?fa=retfaqt14fig1 https://www.ebri.org/publications/benfaq/index.cfm?fa=retfaq...
- emodendroket 9y ago
  It also doesn't factor in the unemployed, which seems just as relevant a factor in the opposite direction, if you're going to claim everybody's interests are one in the same with business owners'.

ue_ 9y ago

>First, it presumes a 19th-century separation of "capital" and "labor" where "capital" is a bunch of greedy pigs trying their damndest to exploit labor, with little crossover between the two groups. If you're talking about Marxism, you're misunderstanding the division between bourgeoisie and proletarians; stocks, pensions, 401k, whatever, does not count as means of production; the division is between the proletarians, who almost always have nothing to sell but their labour-power and the bourgeoisie, i.e a class of people who own the means of production. Further, you're using "exploit" as a prejorative, which it isn't necessarily; Marx's idea of exploitation is removed from what we think of as exploitation (in a negative sense); it's exploitation just as you'd exploit a car or something like that - you make use of it, use it up. Machines are also exploited in the same way. Nevertheless, the goal of the Marxists and indeed Communists in general is to abolish this exploitation. Your simplification does not make the anti-capitalist plight any weaker, and in fact it just goes to show how much the ideas of the Communists are miscommunicated and misinterpreted. It could be said, with the shrinking of the number of people who are self-employed (actually, things like freelance programming forming an exception) that the model of proletarians and bourgeoisie is just as relevant if not moreso today than it was in the 19th century. I advise you to read modern Marxist works, such as Spectres of Marx, The Society of the Spectacle by Guy Debord, and particularly almost all of Zizek's work (in particular The Sublime Object of Ideology), which I must recommend. Of particular note is The Culture Industry by Adorno, commonly associated with the Frankfurt School.

eldavido 9y ago
Thank you for this comment. I'm sorry it got downvoted and I disagree with much of what's written, but I appreciate the thoughtfulness and general tone. I have actually read and thought about the Communist Manifesto quite a lot, but not the later works you cited. I'll add them to my reading list. The biggest problem I have with classical Marxism is that it presupposes a sort of material capital that can be accumulated. While there are certain sectors in which "assets" in the traditional sense, whether physical ones like timber, rental real estate, etc. or the softer "intellectual property" play a dominant role, this doesn't seem to be what's driving the world forward today. I think "reputationism", or maybe "Hollywood capitalism", is a better descriptor for how Hollywood or SV work today. Witness the sky-high compensation of CEOs, athletes, actors, real estate developers, financiers, and others whose reputations give them access to opportunities most traditional "labor" can only dream of. In fact, if you read Piketty, he makes the point that capital's share of income relative to labor has actually decreased in the past decades, even as very highly compensated labor's share has skyrocketed. The real enemy, IMO, is "empty suits" with no skin in the game (borrowing from Taleb) - people like analysts, non-founding CEOs, private equity/VC managers who commit only 5% of the capital of their funds, and others in positions of "heads I win, tails you lose". I really admire people who stick to their beliefs and bet with their own money/credibility (like this http://longbets.org/362/ http://longbets.org/362/) - I have much less respect for the guys blabbing on CNBC every day who just talk, talk, talk.

2close4comfort 9y ago

Pensions have largely gone away, replaced with 401k's which for the average person will not have the yield a pension would and just makes business' look like they care without actually making any real investment in a person's future. The stock market is largely a rich man's game as you have to have the money to invest so their are only the ones' on top who really have the money to put into a system and can afford others to manage it to ensure financial gain. The 401k is worthless if you don't know how to manage it and the employer is only to eager to outsource that to lowest bidder who taxes people with fees for doing nothing and promising even less.