> Today, the world’s biggest companies not only wield monopolistic power and exert considerable political influence, but in many cases have market capitalizations exceeding the GDPs of entire countries.
Comparing market capitalization to GDP makes no sense. Comparing revenue to GDP would be more appropriate.
It's just an analogy, to show the vast scale of modern multi-national corporations. It's like when they say "If you lined up all of [X] in a row, it would encircle the Earth [N] times." Nothing more than an analogy. [X] never actually encircles the Earth. Some people are taking this analogy a bit too seriously.
The point is that these corporations have an unprecedented amount of market power, and as a result, political power too. Which makes it even more problematic that corporations are inherently non-democratic and don't answer to anything except profit: "By design, the corporation is not a democratic enterprise. Its management is hierarchical..."
Corporations are not exactly like authoritarian countries. Nobody is dumb enough to think that. It's just that there are some troubling similarities.
It's a bad and misleading analogy, because most readers will understand it as "companies are richer than countries"--which is probably exactly the feeling that Jacobin wants to evoke. I wouldn't accept such an analogy from a right wing news source (Fox News, say), and I won't accept it from a left wing news source.
To build on your analogy, it's like saying "if you laid all the people in the world in a line it would circle the globe N times" but not mentioning the fact that you're lining them up belly to back instead of head to toe.
No, I'm not. Most people don't understand the details of either corporate or national accounting, and the very important difference between an annual production measure like GDP vs a total market value measure like market cap will be lost on them, especially in passing.
In any case, it's not clear why interpreting Adam Smith (1723-1790) is an appropriate criterion here. Of course, I don't grant without evidence that you possess a correction interpretation of Adam Smith. FWIW (not much) I read The Wealth of Nations many years ago, though I don't claim to be a Smith scholar, and I have no wish to debate the matter with you. I just find it strange that you feel the need to drag him into this discussion.
The claim was "I've had enough Jacobin readers misinterpret Adam Smith to me to form an informed opinion." So the question is, how many do you believe is enough to justify the claim that your opinion is informed? Otherwise it would appear to be an unjustified overgeneralization based on extremely limited anecdotes.
"The print magazine is released quarterly and reaches 75,000 subscribers, in addition to a web audience of over 3,000,000 a month." https://jacobin.com/about
I would guess that the number you've had Adam Smith specific conversations with is one, possibly even zero, but unlikely more than two. After all, since you're an "Only in passing" reader, it's unclear how you would get into large numbers of conversations of any kind with large numbers of Jacobin readers, much less specific conversations about Adam Smith interpretation.
Obviously it's crucial, because keep avoiding it, refusing to answer, while defensively asking why it's crucial instead of simply answering. It's not like I'm asking for your social security number here.
I did actually explain why, though: "Otherwise it would appear to be an unjustified overgeneralization based on extremely limited anecdotes."
I read it as saying, “there are state economies that, even surrendering all of the goods and services they’ve created and provided in a year, cannot exchange them for the full market value of some companies.”
Hasn't that been the case for at least a hundred years? I'm no economy historian, but I'd expect e.g. Liechtenstein's or San Marino's economy to be smaller than some company's market value since essentially their independence.
All that comparison really does is acknowledge that there are countries of vastly different size and wealth. Large companies from a giant nation will be much larger than a tiny country.
The size of some companies can be taken for granted. Living in a western industrialized country with many large companies, it’s easy to lose a sense of scale. The comparison widens the lens and grounds business organizations within the context of other human organizations e.g. the state. The comparison is also a setup for the next paragraph:
> One reason that’s significant: if many multinational companies actually were countries, they would be authoritarian dictatorships more ruthlessly efficient than any in existence. At many such companies, managers wield virtually unchecked power over subordinates and, thanks to modern technology, increasingly practice advanced techniques of monitoring and surveillance as well.
Yeah, but it compares companies from a state/economic zone of 300m or 450m people to a state of 4m people.
Sure, yeah, but that's like comparing a city of a 1million to one of 10k inhabitants and pointing at the much larger usage of construction material in absolute terms. Technically correct but ultimately useless.
If there's a company in the US that has a larger market cap than the US, that would make it more interesting. But even Apple is barely a tenth of it, and that's comparing the expected total future wealth of Apple to a year's worth of output of the US.
I'm not sure what comparing a year's amount of oranges to all future apples really tells us.
It’s useful in the argument that (1) states, as they’ve grown in size have also been reigned-in due to the power that comes with their size, and (2) that companies, as they grow in size, must be reigned-in due to the power that comes with their size (anti-trust, anti-monopoly).
Metaphors are useful but they can also just confuse the issue through unnecessary abstraction. The fundamental question is already there at the surface: it’s not about market capitalization or about gdp, but about the power that size in either metric represents. That’s the characteristic binding these two dissimilar ideas together.
The missed distinction, of course, being that companies like Amazon don't send workers to penal colonies for forced labor, don't built walls to prevent them from leaving, and don't kill dissenters.
So not much like an authoritarian dictatorship at all.
Using those three characteristics as necessary conditions for authoritarian dictatorship excludes many actual historical authoritarian dictatorships as well.
Of course, in the context of layoffs, Amazon does effectively deport workers who are on employment-tied visas. In a sense, Amazon is sentencing them to "transportation if you can't find a job in a bad job market."
That may be an accurate way to read it, but I’d bet that people just casually reading through it will breeze past that comparison and take away “these companies are bigger than most countries”.
Which, of course, is a comparison that Jacobin is more than happy to let slide. Jacobin’s own description of itself is “Jacobin is a leading voice of the American left, offering socialist perspectives on politics, economics, and culture.”
Maybe, but I’m cautious about assuming my own superiority, i.e. that my lonely cohort and I are the only ones able to read and infer the proper meaning from writing, and that others are too easily misguided.
It seems this is how they are generally compared by economists? Revenue vs GDP doesn't really tell a good story. Wal-mart does not wield remotely the same influence as Apple, but have like 5x their revenue.
> If those companies were countries, they would be authoritarian dictatorships.
Although there are some fair points in the article, the main thesis that companies are countries is incorrect. Governments have a monopoly on physical force. Being fired is not the same as being thrown out of a country.
> Thanks to current US labor law, many union elections are about as democratic as those held in banana republics — and that’s assuming workers are even able to initiate a union drive in the first place.
The NLRB has been trying to end “secret ballot” elections for decades, which is a scary name for “going into a voting booth and privately voting”. The reason being they want the name of each person who voted against the union so they can pressure them into voting with threats. Doesn’t sound very democratic to me!
One thing I think is missing in this write-up is the element of autonomy. Yes, it's undeniably degrading that Amazon employees piss in bottles to make sure they meet their quotas. But: they aren't forced to take that job, or to piss in bottles (notwithstanding that getting fired often comes with serious consequences).
And I fully understand that putting food on the table (especially when it's for your kids) and putting a roof over your family's head is important, and needing to satisfy those needs is much easier than adhering to principles of not being subjugated, demeaned, and degraded. "Do I take the shitty Amazon job or do we move a few hundred miles in hopes of a better life" is a tough decision.
> One thing I think is missing in this write-up is the element of autonomy. Yes, it's undeniably degrading that Amazon employees piss in bottles to make sure they meet their quotas. But: they aren't forced to take that job, or to piss in bottles (notwithstanding that getting fired often comes with serious consequences).
How is it missing? It's right there in the article, almost word for word: "The inevitable rejoinder to all of this is that employment is ultimately voluntary: an Amazon employee who dislikes stringent work quotas or a supermarket cashier who refuses to perform their company’s spirit dance can always find gainful employment somewhere else."
Multiple employers doesn't mean multiple jobs. It's not a cornacoupia where the average joe can just walk down an aisle and be like "hmmmm maybe delivery driver?"
in a lot of places it's starbucks, subway, walmart, amazon, or piecemeal construction work, and if those jobs are filled then you're SOL killer.
There is some dark humor if one is again forced to look at the opportunities and finds many familiar places left previously.
Back when Dutch government was pretty much the only job agency companies offering such "opportunities" would be scrubbed from the list. If they send people there they just come back looking for work again. Not something the institution was willing to spend resources on.
I imagine one could explore something like a credit score with taxes that reflect what great employer you are. A piss bottle tax could bring in hundreds of millions in tax revenue. Perhaps it should be applied as a percentage CEO wealth, income and land tax. Or call it the asshole tax.
Sure, the solution is easy. Provide workers with more protections. Whether that is done through regulations, unions, or something else can of course be debated, but this is a very solved problem in most of the first world.
What would alternative be? Worker run cooperatives have not been particularly successful so far. Serf had no choice of "changing a job" but a modern worker presumably has a lot more freedom to choose their employer.
On personal level, I would say FU money is a must - this should be the retirement plan goal for everyone, have enough for your life stile in liquid investments, so you can move to another country quickly if need be…
On corporate level, maybe breaking of those de facto monopolies is not a bad idea, like breaking Ma Bell, Standard Oil, etc…
Please note, this is not a financial advice, as I can provide advice to accredited investors only….
The alternative would be to actually enforce antitrust laws and ensure that companies don't become as big and powerful as countries.
The basis of capitalism is competition. The theory depends on no single company having the power to move the whole market, but this theory is getting decimated by the empirical reality of consolidation and monopolization.
We all forget, because 9/11 happened literally a few days after it was announced, but the new Bush administration decided to give a wrist slap to Microsoft instead of breaking it up, which was the proposal of the Clinton administration. That's essentially when antitrust laws ceased to exist, and in the wake of the failure to do anything about Microsoft, mega-corporations and monopolies have thrived.
The basis of capitalism is private ownership of production, by definition.
The basis for why this is at all acceptable as a system to organize society is that competition, government restrictions, etc, whittle down private power to somewhat tolerable levels. There must surely be a better system which we haven't thought of yet though.
Many people, especially Americans seem to confuse capitalism with 'trade', 'competition', 'markets', etc, whereas I mean it as the private ownership of production, the profit from other people's work, etc. That seems fundamentally immoral in some ways from the very start.
Eg, I read an article about working with Elon Musk recently (https://www.businessinsider.com/working-for-elon-musk-spacex...), where they said "If there are employees not aligned with that vision, he will chew them out and he will do it in a vicious way, which is his right as owner.". I mean, no, we really should not be enshrining that, or even really tolerating it, in a decent society.
The question then is how should we allocate resources (capital), how should we incentivize risk, innovation, hard work, etc, What kinds of ownership are moral, etc.
I suspect we'll be stuck with some form of capitalism for a while though - like democracy, it's the worst system, except for all the others, for now.
Even with an egalitarian wealth distribution, who would want to invest only in the company they work for? That'd be putting all their eggs in one basket for no good reason. There are sensible reasons for outside investment to be a thing.
Not many success stories so far. A startup can be a cooperative but there will be no stock to grant. One worker = One vote. You can probably see why these things are not really popular.
Every startup is worker owned before it takes outside investment capital. Being worker-owned means either being limited to organic growth, or being forced to incur debt which is generally worse than giving up equity. It can totally work in sectors where capital intensity is very low, but it's a non-starter for businesses that are inherently dependent on large amounts of capital or predicated on quick initial growth.
A notable success story is the Mondragon Corporation. It's a federation of worker-owned cooperative businesses, and is the 7th largest company in Spain with billions in yearly revenue.
From the Wikipedia link: "At the end of 2016, it employed 74,117 people in 257 companies and organizations in four areas of activity: finance, industry, retail and knowledge. By 2019, 81,507 people were employed."
The right wing characterization isn’t entirely unfair. The fact is if you remove all incentives for the investment of capital and still want growth from investment you need to centrally control capital to allocate it. This does create a large centralized authoritarian regime and while perhaps it doesn’t have to descend into meaningless elections it does seem to control the kinds of things we generally don’t want 51% of the voters to do the other 49%.
They only gave Amazon as an example. I was suggesting the other three much larger corporations that it did not give as examples that I'd like to see covered.
You put a period after Amazon, and then immediately listed three other names separated by commas. It's really easy to mis-see that as a list of four items separated by commas.
The article leaves me with an impression of trying to defend socialism and attack capitalism.
Yet when I read the text - it says that certain right-wing corners portray socialism as leading to authoritarianism, while at the same time being blind to the authoritarianism in corporations. But if authoritarianism in corps is bad, it's even worse at the scale of whole nations. So the final message seems to be "capitalism is bad, but not as bad as socialism"?
> So the final message seems to be "capitalism is bad, but not as bad as socialism"?
The message is that the power of individual corporations needs to be reined in.
First sentence of the article: "Some multinational corporations are now larger and more powerful than individual nation-states."
Later: "You could argue that in the earliest days of capitalism, something like the concept of free enterprise actually existed: firms of various sizes competed, with even the largest dwarfed in both size and influence by most nation states."
Also: "Unions can act as counterweights to the sometimes terrifying power held by management."
"an increasingly small number of ever-expanding corporate conglomerates dominate the labor market"
don't the big unions have some of the same power/control issues because of capitalism? a rich CEO of a union corp on a private jet seems almost worse than a rich tech monopoly CEO?
> don't the big unions have some of the same power/control issues
There's a potential for corruption in any human organization, even democratic organizations. Witness corruption in politics, for example. That's mostly unavoidable, humans being what they are.
The difference is that union leaders are still elected by the union members, whereas corporate CEOs are elected by the stockholders, not by employees. So even given some corruption, union leaders still represent the interests of labor better than CEOs do.
It's Jacobin, the only possible solution is always socialism. Which is okay, but it's really not that interesting once you've heard it a few dozen times, so I'm not surprised people aren't jumping on it as if it's some new javascript framework.
“ If the theory of your publication is to herald the formation of a United States for white people only (or whatever is on the Breitbart masthead), that is not analogous to if you were, as Jacobin, explicitly socialist.”
Both ideologies result in death camps, so they have that in common. Rabid left wing is only more tolerable than rabid right wing if you are an ideologue.
Comparing market capitalization to GDP makes no sense. Comparing revenue to GDP would be more appropriate.