4 ms·

In defense of the article (not agreeing nor disagreeing), the article then includes reasons why it is concerned with market capitalization: >But if it continue

by wpasc 5y ago

In defense of the article (not agreeing nor disagreeing), the article then includes reasons why it is concerned with market capitalization: >But if it continues, the waning of Europe’s business will bring consequences. Big firms invest in innovation, which boosts economic growth. Left to regulate only foreign groups, Europe’s ability to shape global business norms—on privacy, say, or the uses of artificial intelligence—will look weak. European policymakers’ cries for “strategic autonomy” will come to nothing without corporate backing. >Europe’s smaller firms now find themselves competing against global behemoths with inbuilt advantages. Large firms can afford to buy and try new technology, borrow at cheaper rates and absorb fixed costs more efficiently. They tend to spend relatively more on research and development. The dearth of big companies helps explain why European spending on research, at 2.1% of gdp, is below the average of the oecd, a group of mostly rich nations. I have no certainty about few, big corps vs. heterogenous medium sized corps, but I think the point has about Europe's ability to influence global norms/best practices has validity. Europes influence could be negatively affected without strong, global presence by local companies in sectors it cares about influencing.

sildur 5y ago
We prefer to influence global norms/best practices via our democratically elected governments, instead of via corporate behemoths who probably don't have our interests in mind. On the other hand, contrary to the US, in Europe we generally trust in our governments. Since we do not have huge corporations here, it's more difficult to influence government decisions, specially at Europe level.
- j_wtf_all_taken 5y ago
  I just hope it stays that way. I fear that all the cynics blaming everything that's bad on politicians and the EU (instead of the voters putting those politicians in power) will eventually degrade trust in that in itself nicely working system ... and then, what's the point defending that system against the populists and fascists wanting to take over? They can't be that much worse ... :-(( [same with media that does a good job in Europe]
  - imtringued 5y ago
    > I fear that all the cynics blaming everything that's bad on politicians and the EU (instead of the voters putting those politicians in power) Yes. Last year I started playing an browser game about running your own commpany and got interested in economics. If capitalism can be fun inside a game, how come it isn't fun in real life? After all a game that disenfranchises new players and prevents them from playing the game is going to die over the long term. People would quit the game the same way they quit their job. There must be a fundamental difference in how the game has designed its economy vs how we designed our real economy. For example, unlike real life it's possible to win a video game. It's possible to have produced everything everyone else could have possibly wanted. At some point there is simply too much stuff and not enough buyers. The game would die from deflation. The game devs have strategically placed market maker NPCs that buy products at an extremely low price that is never worth it unless there is sufficient deflation. It's basically a job guarantee, it's demand side stimulus. Dumping your resources into the MM will cause inflation, which will raise the price of your resources until it makes more sense to sell your resources on the market to other players. Even if there are large players dominating the market and dumping prices to rock bottom rates, it will always be possible to earn some money until those prices are no longer rock bottom. The point isn't that politicians should implement a job guarantee (it would certainly help though). It's that politicians have the power to design a working economic system. I always was under the impression that these politicians simply didn't understand the economy but that's not the case. They aspire to a certain form of capitalism that is good over the long term but just happens to suck over the short term right now and people willingly vote for them. Things are guaranteed get better once China, Eastern Europe, Africa, South America have caught up with the US and rich part of the EU but how long is that going to take? 40 years? You just need to break the chain for 8 years, get things back in order over the short term. Biden is doing it. The EU has to follow similar actions but that requires voters to not choose right wing populism or the same old party they voted for 20 years straight, they need to vote for parties that actually want to help them.
    - j_wtf_all_taken 5y ago
      > The EU has to follow similar actions but that requires voters to not choose right wing populism or the same old party they voted for 20 years straight Yeah, but it seems like voters tend to vote for the same party so long that it kind of kills the competition (if I know that I'll be re-elected no matter what, why behave?), and then suddenly voters get pissed because they don't get ... something, whatever, not sure they know themselves ... and vote for populists. But every now and then the times are just right that some competent government is elected that implements some well thought-through laws, that have sufficient positive effects over decades to compensate for all that. At least until now.
eecc 5y ago
OTOH megacorps rarely "innovate" from within, they're too bureaucratic and management stakes are too high for fast risk-taking. What they usually do is to buy out smaller entities that have somewhat proven the concept and pretend they're geniuses for having found a truffle.
- j_wtf_all_taken 5y ago
  Also they have no reason to innovate if they got a monopoly. Sometimes they buy that small innovative company and then that nice idea somehow just dies ... maybe cause it'd hurt their business model?
  - imtringued 5y ago
    Solar city was basically a series of acquisitions. It ended up being bailed out through the Tesla acquisition but once Musk bailed out his own Solar city stock/bonds he gutted the Tesla Energy (Solar City rebrand) branch and basically pretended that it never existed in the first place. The solar roof was just some hyped up product to get the acquisition through.
    - j_wtf_all_taken 5y ago
      > The solar roof was just some hyped up product ... Musk style. Still not sure if all the hype is worth the results.

by wpasc 5y ago

sildur 5y ago

We prefer to influence global norms/best practices via our democratically elected governments, instead of via corporate behemoths who probably don't have our interests in mind. On the other hand, contrary to the US, in Europe we generally trust in our governments. Since we do not have huge corporations here, it's more difficult to influence government decisions, specially at Europe level.

j_wtf_all_taken 5y ago
I just hope it stays that way. I fear that all the cynics blaming everything that's bad on politicians and the EU (instead of the voters putting those politicians in power) will eventually degrade trust in that in itself nicely working system ... and then, what's the point defending that system against the populists and fascists wanting to take over? They can't be that much worse ... :-(( [same with media that does a good job in Europe]
- imtringued 5y ago
  > I fear that all the cynics blaming everything that's bad on politicians and the EU (instead of the voters putting those politicians in power) Yes. Last year I started playing an browser game about running your own commpany and got interested in economics. If capitalism can be fun inside a game, how come it isn't fun in real life? After all a game that disenfranchises new players and prevents them from playing the game is going to die over the long term. People would quit the game the same way they quit their job. There must be a fundamental difference in how the game has designed its economy vs how we designed our real economy. For example, unlike real life it's possible to win a video game. It's possible to have produced everything everyone else could have possibly wanted. At some point there is simply too much stuff and not enough buyers. The game would die from deflation. The game devs have strategically placed market maker NPCs that buy products at an extremely low price that is never worth it unless there is sufficient deflation. It's basically a job guarantee, it's demand side stimulus. Dumping your resources into the MM will cause inflation, which will raise the price of your resources until it makes more sense to sell your resources on the market to other players. Even if there are large players dominating the market and dumping prices to rock bottom rates, it will always be possible to earn some money until those prices are no longer rock bottom. The point isn't that politicians should implement a job guarantee (it would certainly help though). It's that politicians have the power to design a working economic system. I always was under the impression that these politicians simply didn't understand the economy but that's not the case. They aspire to a certain form of capitalism that is good over the long term but just happens to suck over the short term right now and people willingly vote for them. Things are guaranteed get better once China, Eastern Europe, Africa, South America have caught up with the US and rich part of the EU but how long is that going to take? 40 years? You just need to break the chain for 8 years, get things back in order over the short term. Biden is doing it. The EU has to follow similar actions but that requires voters to not choose right wing populism or the same old party they voted for 20 years straight, they need to vote for parties that actually want to help them.
  - j_wtf_all_taken 5y ago
    > The EU has to follow similar actions but that requires voters to not choose right wing populism or the same old party they voted for 20 years straight Yeah, but it seems like voters tend to vote for the same party so long that it kind of kills the competition (if I know that I'll be re-elected no matter what, why behave?), and then suddenly voters get pissed because they don't get ... something, whatever, not sure they know themselves ... and vote for populists. But every now and then the times are just right that some competent government is elected that implements some well thought-through laws, that have sufficient positive effects over decades to compensate for all that. At least until now.

eecc 5y ago

OTOH megacorps rarely "innovate" from within, they're too bureaucratic and management stakes are too high for fast risk-taking. What they usually do is to buy out smaller entities that have somewhat proven the concept and pretend they're geniuses for having found a truffle.

j_wtf_all_taken 5y ago
Also they have no reason to innovate if they got a monopoly. Sometimes they buy that small innovative company and then that nice idea somehow just dies ... maybe cause it'd hurt their business model?
- imtringued 5y ago
  Solar city was basically a series of acquisitions. It ended up being bailed out through the Tesla acquisition but once Musk bailed out his own Solar city stock/bonds he gutted the Tesla Energy (Solar City rebrand) branch and basically pretended that it never existed in the first place. The solar roof was just some hyped up product to get the acquisition through.
  - j_wtf_all_taken 5y ago
    > The solar roof was just some hyped up product ... Musk style. Still not sure if all the hype is worth the results.