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You don't even have to envision this next scenario: Matchgroup owns 45 different dating apps. Does your logic still apply? [Edit] In theory all profits could

You don't even have to envision this next scenario: Matchgroup owns 45 different dating apps. Does your logic still apply? [Edit] In theory all profits could be split amongst the owner and the workers, without any leftover profits. Like pirates and their captain split a bounty.

geonineties 3y ago
It does, but it looks wierd because the product of match group isn't apps, it's money. Essentially match group is a holding company whose workers aquire other companies. Since they are public their owners are you and me who invest our limited assets in the hope the profits grow them. Regarding your split: Essentially that's what happens in real life. Profits that are not spent(paying wages is one way to spend them) or paid as tax get added to the balance sheet of the business. That increases the "book value" of the business so the value of the business increases and hence the return on investment increases. It's a bit more complicated because hoarding cash isn't usually a great use of profit (inflation) so owners would typically like to hire more people and grow the business if they can.
- EchoChamberMan 3y ago
  Thus reaffirming profits are unpaid wages.
geonineties 3y ago
Replying twice, but you might be interested in the history of joint stock companies (what we call corporations). They started to deal with losses at sea, so a lot of your maritime piracy analogies are strangely fitting. This is the first o e https://en.m.wikipedia.org/wiki/Dutch_East_India_Company https://en.m.wikipedia.org/wiki/Dutch_East_India_Company The fundamental thing I think silicon valley got right is to make the employees shareholders and owners. Co-ops get that right too.
- EchoChamberMan 3y ago
  It's hilarious the first example is also, in the first paragraph, a monopoly. I don't have a problem with theoretical capitalism, but people would much rather use their resources to squash a competitor, or in this case, legally prevent, competition on talent. [Edit] People love to espouse the free market, but I'm not sure it ever existed.
  - geonineties 3y ago
    I would say that the monopoly granted to EIC was more like the monopoly granted to patent holders. The risks to life and capital of the venture were extreme.

geonineties 3y ago

It does, but it looks wierd because the product of match group isn't apps, it's money. Essentially match group is a holding company whose workers aquire other companies. Since they are public their owners are you and me who invest our limited assets in the hope the profits grow them. Regarding your split: Essentially that's what happens in real life. Profits that are not spent(paying wages is one way to spend them) or paid as tax get added to the balance sheet of the business. That increases the "book value" of the business so the value of the business increases and hence the return on investment increases. It's a bit more complicated because hoarding cash isn't usually a great use of profit (inflation) so owners would typically like to hire more people and grow the business if they can.

EchoChamberMan 3y ago
Thus reaffirming profits are unpaid wages.

geonineties 3y ago

Replying twice, but you might be interested in the history of joint stock companies (what we call corporations). They started to deal with losses at sea, so a lot of your maritime piracy analogies are strangely fitting. This is the first o e https://en.m.wikipedia.org/wiki/Dutch_East_India_Company https://en.m.wikipedia.org/wiki/Dutch_East_India_Company The fundamental thing I think silicon valley got right is to make the employees shareholders and owners. Co-ops get that right too.

EchoChamberMan 3y ago
It's hilarious the first example is also, in the first paragraph, a monopoly. I don't have a problem with theoretical capitalism, but people would much rather use their resources to squash a competitor, or in this case, legally prevent, competition on talent. [Edit] People love to espouse the free market, but I'm not sure it ever existed.
- geonineties 3y ago
  I would say that the monopoly granted to EIC was more like the monopoly granted to patent holders. The risks to life and capital of the venture were extreme.