5 ms·

I find this worrying. I know this is market valuation and it's not comparable, but this is nominally more than the GDP of 168 countries in the world. The fact

I find this worrying. I know this is market valuation and it's not comparable, but this is nominally more than the GDP of 168 countries in the world. The fact that 5 enormous companies are owning the future through tech is an astounding fact that can't lead to any positive outcome for our global society.

swarnie_ 8y ago
Is it any different to the last 100 years where "enormous companies are owning the future" could be applied to railways or oil giants. Tech is just the latest iteration and these 5 companies are our front runners. Will something else come along and dethrone them? Maybe, who knows. The only difference i see here is these large companies are generating wealth for a much larger group of people via employment or shares. I'm willing to bet Microsoft and google have made far more millionaires then Rockefeller adjusted for inflation.
- lotsofpulp 8y ago
  Their products and services also obviate many more people, contributing greatly to the wealth and income gap in my opinion. Office can do the work of many secretaries, Amazon can do the work of many retail establishments, Google lets people do work quicker with instant information, airline/hotel websites cut out the need for most travel agents, Apple's and others' devices cut out the need for 10 different devices and package it into 1, Netflix and streaming services remove the need for "TV channels" and all the people that worked in that field. Much of these productivity gains due to the scalability of software solutions result in fat margins for those companies, hence the high pay for people in the tech field, but the remainder also goes to the capital owners who get more productive workers.
ttoinou 8y ago
It's good news (if you believe those valuation mean something). There would even be more companies competing with each other "owning the world and the future" only if states didn't gave them so much advantages (taxes, intellectual "property", entry barriers etc.)
Numberwang 8y ago
In general, corporations make better decisions than countries. Do not worry.
SoWhat2019 8y ago
Those countries are still pretty much USA. So nothing changes.
buybackoff 8y ago
MSFT gross margin is 72B, this number better matches GDP and its c.70 rank by nominal GDP. Interestingly, Luxembourg has $69B GDP with 590K population, MSFT's "population" is 131K. Each MSFT citizen is 4.5x more productive. And Luxembourg is the top country by nominal GDP per capita.
- sytelus 8y ago
  It’s not that MSFT citizen is 4.5x productive but rather they are able to create product that is inexpensively and infinitely replicable. On the other hand majority of Luxembourg citizens probably are mainly just renting their time which is highly limited resource. I would actually expect much bigger ratio.
- Traster 8y ago
  Is Gross Margin closest to GDP? In GDP when I sell Paul a loaf of bread for £5 I'll probably make £4 gross margin but my revenue is £5. GDP measures the total cost of the output, not the output minus the costs (in fact for the GDP of the whole system it's output PLUS costs since the costs count as outputs of other people in the economy) I think a better comparison would be revenue surely?
  - buybackoff 8y ago
    Company costs are revenues to someone else (even payroll is then spent on goods & services). Revenue will double count. Also I just did a very quick number lookup without pretending for scientific correctness, just became curious after reading the parent comment. GDP is C + I + G + NX. In MSFT 10-K R&D are after the gross profit, so I is there. C attributable to MSFT is sales less costs to avoid double counting. G are taxes which are also there. We should also add D&A and Capex normally as a part of I, but for software companies it's mainly R&D that is allowed to be recognized as cost (which gives huge tax benefits and should stimulate R&D activity, in theory).
- btown 8y ago
  The MSFT campus is practically a utopian city. I actually think that if you included contractors, support, restaurants, city utilities, etc. you’d have a reasonable basis for a high-producing self-sustaining economy.

swarnie_ 8y ago

Is it any different to the last 100 years where "enormous companies are owning the future" could be applied to railways or oil giants. Tech is just the latest iteration and these 5 companies are our front runners. Will something else come along and dethrone them? Maybe, who knows. The only difference i see here is these large companies are generating wealth for a much larger group of people via employment or shares. I'm willing to bet Microsoft and google have made far more millionaires then Rockefeller adjusted for inflation.

lotsofpulp 8y ago
Their products and services also obviate many more people, contributing greatly to the wealth and income gap in my opinion. Office can do the work of many secretaries, Amazon can do the work of many retail establishments, Google lets people do work quicker with instant information, airline/hotel websites cut out the need for most travel agents, Apple's and others' devices cut out the need for 10 different devices and package it into 1, Netflix and streaming services remove the need for "TV channels" and all the people that worked in that field. Much of these productivity gains due to the scalability of software solutions result in fat margins for those companies, hence the high pay for people in the tech field, but the remainder also goes to the capital owners who get more productive workers.

ttoinou 8y ago

It's good news (if you believe those valuation mean something). There would even be more companies competing with each other "owning the world and the future" only if states didn't gave them so much advantages (taxes, intellectual "property", entry barriers etc.)

Numberwang 8y ago

In general, corporations make better decisions than countries. Do not worry.

SoWhat2019 8y ago

Those countries are still pretty much USA. So nothing changes.

buybackoff 8y ago

MSFT gross margin is 72B, this number better matches GDP and its c.70 rank by nominal GDP. Interestingly, Luxembourg has $69B GDP with 590K population, MSFT's "population" is 131K. Each MSFT citizen is 4.5x more productive. And Luxembourg is the top country by nominal GDP per capita.

sytelus 8y ago
It’s not that MSFT citizen is 4.5x productive but rather they are able to create product that is inexpensively and infinitely replicable. On the other hand majority of Luxembourg citizens probably are mainly just renting their time which is highly limited resource. I would actually expect much bigger ratio.
Traster 8y ago
Is Gross Margin closest to GDP? In GDP when I sell Paul a loaf of bread for £5 I'll probably make £4 gross margin but my revenue is £5. GDP measures the total cost of the output, not the output minus the costs (in fact for the GDP of the whole system it's output PLUS costs since the costs count as outputs of other people in the economy) I think a better comparison would be revenue surely?
- buybackoff 8y ago
  Company costs are revenues to someone else (even payroll is then spent on goods & services). Revenue will double count. Also I just did a very quick number lookup without pretending for scientific correctness, just became curious after reading the parent comment. GDP is C + I + G + NX. In MSFT 10-K R&D are after the gross profit, so I is there. C attributable to MSFT is sales less costs to avoid double counting. G are taxes which are also there. We should also add D&A and Capex normally as a part of I, but for software companies it's mainly R&D that is allowed to be recognized as cost (which gives huge tax benefits and should stimulate R&D activity, in theory).
btown 8y ago
The MSFT campus is practically a utopian city. I actually think that if you included contractors, support, restaurants, city utilities, etc. you’d have a reasonable basis for a high-producing self-sustaining economy.