Apple and Google embody two alternative models of capitalism
theatlantic.com
theatlantic.com
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...
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).
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=retfaq...
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.
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.
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.
Further, money enough to cover the basics is vastly more important than 'extra'.
Which is why I get really mad when the current Australian government tries to spin it that retirees are 'bludgers' and are a drain on the system when they draw their (paltry) pensions. No, these people paid 40 years' worth of taxes to the government, and being supported by the government after they retired was part of that deal.
You can't offer to pay me tomorrow for a hamburger today, and then when I ask for my money tomorrow, call me a beggar.
Any retirement plan dependent on government means that you will get less value out than you put in. Think about “management fees” on an index fund – a fraction of a percent generally. Think about the de facto management fee taken by government – orders of magnitude more. Not to mention your return on “investment” is rather low and you can’t pass on a government pension to your children. So if you die at 50, the government keeps all that excess you “paid in.” That isn’t fair. People ought to have the freedom to opt-out.
A compromise might be to require paying in to a system, but you get to direct where that money is invested. Somewhat like a mandatory IRA. In the US, you are forced to pay into social security – why not “force” people to have an IRA instead? However I think the real reason that doesn’t work is that it would make people less dependent on particular political parties – because the government no longer has as much power over your survival. “Vote for us or else <the other party> will cut your benefits and make you starve.
Unfortunately, with all the talk of freedom, it’s mostly just talk. Actual freedom means being able to make your own decisions as well as living with the good or bad consequences of those decisions.
We now have mandatory superannuation contributions which work pretty much how you're suggesting, and the government is pushing towards getting rid of pensions in future.
1) there's spartan explicit connection between the taxes paid then and the pensions paid now: most governments did not put that money in an explicit infrastructure or investment fund, the revenue from which explicitly pays for pensions. Additionally, we generally do not (in Australia) connect how much you paid in with how much your taking out, so we have no way to even ethically or materially judge whether someone really is our isn't "taking out more than they put in"
2) in the real economy, pensions are not paid for by your past taxes, but from future income derived from the level of capital investment and infrastructure and the labor force at the time of your retirement. The Australian pension system contracts a population of post boomer children to pay a debt they were never party to agreeing to pay: and chicken the general demographic numbers, aren't liable to be able to pay it given the relative size of the two populations.
3) from a normative point if view, the Australian system is quite generous (not as generous as some of the European ones). It is, dare I say it, unsustainable. Not only do you have to adjust for the pensioner discounts and additional payments offered to get it's true value, but it is much greater in volume compared to all other dole payments. With no means testing for your primary property, it's both a subsidy to the rich, encourages over investment in property, and has basically set us up to escalate inter generational war fare.
My advice to everyone is to assume it won't be there for anyone not already collecting it.
Don't get me wrong, I have some sympathy for the boomers who thought it would be available. But, they got to effectively overconsume by not putting sufficient away to invest for it, and in a competition between economic reality vs "what I'm supposed to get on my defined benefit pension", reality will win every time. Government isn't god.
I'm not sure I follow your third point. The pension system is far from generous - it's ~72% of after-tax minimum wage. Pensioners generally live in the same house they've lived in for decades, if they haven't downsized, and it's only the primary property that's not means tested so it's not like they're hoarding investment properties.
And they didn't get to 'overconsume by not putting sufficient away' - they did put that amount away, as part of their tax payments. What the government did with the enforced payments is a different matter.
To get an accurate view of the value of the pension though, you have to take the dollar face value and apply both pensioner discounts (practically everywhere in Aus, you will get discounts on your rates and utilities at the very least, in practice substantially more such as transport and consumables). In addition most also get to consume their imputed rent.
Don't get me wrong, I'm not saying all pensioners are "living it large". It is miserable to be a pensioner that doesn't own their home. But their true consumption possibilities are several multiples in practice of all our other social security payments, say for the unemployed or people on minimum wage for example, who don't own their own homes.
Given the demographic boom of the boomers, we are effectively paying living wages to the group that statistically hold the most wealth of any age group, and that we don't means test against the primary store of that wealth, I predict this system cannot last.
The government can enter into a defined pension scheme that proclaims it will be summer forever, and people can complain that they were promised that it would be summer forever, but a wise man knows that winter is coming...
> Pensions aren't portable - in the modern labor market
> where people are expected to have multiple emplyers and
> possibly even career arcs, that's a pretty limiting.
It also represents a huge tax on people who want to be able to change jobs. I would prefer a world where people feel more free to leave jobs that suck or aren’t good fits for them. Locking them down with pensions, options plans, or 401k matching programs that vest over time are all mechanisms for employers to recapture what would have been paid out as wages from employees who leave early (who often tend to be younger).
A UBI that puts you somewhere above the poverty line supplemented with a forced savings program seems like the best move. It gives you portability, simplifies the system and administrative burden, and offers a hedge against the vagaries of the market.
Such as?
Even ones that still offer pensions, if the support isn't there then it's in conflict with how a pension matures it's benefits. Many companies treat workers as interchangable cogs and don't provide/encourage for any exceptional wage or career growth or training. So to move upward one has to change companies - dropping (or at best pausing) the pension.
Not all companies are like this, but many (most) are. I thought this all was pretty widely understood?
I guess that's a reason other than pensions, technically.
Employer and pension are not tied together in a great deal of countries - for example: state-controlled. So even if you switch jobs, the plan remains the same. (Also relevant is that most countries have a single state, so state-controlled means you can actually move anywhere inside the country and keep the same plan).
A) guaranteed life
B) guaranteed life of you or your spouse
C) guaranteed life with a return of the unused amount
D) guaranteed life with a guaranteed x year certain
Of course the different options you choose affect your monthly payout.
Reference please. The Revenue Act of 1978 created a provision, section 401(k), for employees to defer income as future compensation.
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.
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.
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/) - I have much less respect for the guys blabbing on CNBC every day who just talk, talk, talk.
Can you explain what you mean by this? If you own stocks, pensions, 401k, whatever, you pretty definitionally have more to sell than just your labour-power right? I guess I don't understand how it's not gradated ownership over the means of production.
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-...
If you have better information, I'd like to see it, please.
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.
What percent of asset markets are owned by the 1%?
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.
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.
https://hbr.org/2010/04/the-myth-of-shareholder-capitalism
[pdf] http://scholarship.law.cornell.edu/cgi/viewcontent.cgi?artic...
It's as trite as saying "there is no historical basis for the idea that getting a higher salary is the primary concern of an employee." What would that add to a discussion about wages?
If you think corporations should do something differently, why not just say so, and say what?
The question of what a company "ought to do" is obviously a question of values, not fact.
It's just tiresome to rebut opinions with "you can't prove that!" or "does the law say so?" Of course there's no natural or human law that proves blue is my favorite color. So what?
My original comment is a rebutting of popular opinion with law, is it not?
Like arguing that "there's no law that says the main character in a movie should be relatable."
Technically, of course, you're right. Yet I suspect stressing that fact is a straw man argument.
Who really believes companies are legally obligated to maximize shareholder value?
Having investors dominate, as Apple does, is a good way of handling one principal-agent problem: getting managers to do right by their owners.
See:
>Consider first Friedman’s erroneous belief that shareholders “own” corporations. Although laymen sometimes have difficulty understanding the point, corporations are legal entities that own themselves, just as human entities own themselves. What shareholders own are shares, a type of contract between the shareholder and the legal entity that gives shareholders limited legal rights. In this regard, shareholders stand on equal footing with the corporation’s bondholders, suppliers, and employees, all of whom also enter contracts with the firm that give them limited legal rights.14
From the previous pdf. Basically these false ideas about the relationship between shareholders and corporation have almost totally permeated modern business discussions. Correcting that misunderstanding may lead to a political discussion (you bring me there later in this comment) but it isn't political in itself.
>It's as trite as saying "there is no historical basis for the idea that getting a higher salary is the primary concern of an employee." What would that add to a discussion about wages?
I think it would if you also linked some interesting articles about labor movements and how we became disconnected from this history. I understand if you don't find the information interesting [ :'( ] but I did and thought it might add some context to the debate between the two management styles in the article.
>If you think corporations should do something differently, why not just say so, and say what?
I wasn't sure if my opinion was relevant and was truly just trying to correct an extremely pervasive false belief. However if you want to know, I'd like to see management compensation become more seperated from share value. In my mind a CEO compensation package would involve a base salary and then components that reward the CEO when share prices increase relative to an industry benchmark, when median wage in the firm increases or when employees report more satisfaction or maybe the firms labor retention rate increases? Something that incorporates workers although I'd have to think harder about exactly what metric. And also maybe a component that incorporates some sort of consumer rating. Corporations have responsibilities to their workers, their customers and their shareholders, the idea that the individuals in a company get rewarded for helping only one of those groups in a big problem with our system today (imo).
One thing I would suggest you may want to add for clarification: certain agents of corporations have fiduciary responsibilities to act in the best interest of the shareholder, which generally means to not lose money. So while "maximizing" shareholder value has no legal basis, increasing shareholder value year over year is a legal responsibility, although this is definitely a gray area.
Offhand I think it's a combination of globalization (requiring businesses to be "tougher") of both capital and customers, the increasing financialization of the US economy, and the birth of modern PE firms and other activists capable of putting more pressure on admittedly pretty lazy and nest-feathering managers. (Have you watched Mad Men? Two martini lunches? I wouldn't want employees at my company doing that!)
Please folks, stop posting comments if you don't have the slightest concept of how businesses work.
OK, let me demonstrate how flawed this is by using a hypothetical scenario.
A friend of yours has an idea for a business. She goes to you and two other friends. She needs $300K to launch the business. All three of you are really bold and give her $100K each. In your case you sell your your home to come up with the money. You end-up bunking with one of the other investor/friends because, while you have some money left over, you don't have a place to live.
You are a shareholder.
Ten years later the business has gone nowhere. You don't have your money back and your investor friend just got married and you have to figure out where you are going to leave because he wants you out of the house.
And then you read a comment on HN about there being no basis for a corporation maximizing shareholder value.
There are more than two mutually exclusive options for how a company should prioritize its resources.
So, a business is there to solve a problem for it's customers while making money for shareholders. All ends of that equation derive the desired benefits. A company MUST focus on shareholder value. And the way to do that is to solve real problems and do so as well as possible and as efficiently as possible.
These things are interrelated. Based on the down-votes it is obvious some have missed the point of my prior comment's hypothetical about the three friends funding a business.
These three shareholders are jumping on the deal because they want to make money. Even our beloved YC jumps on deals to make money. That's what business is about. It isn't a bad word. And, yes, there's nothing wrong with shareholder value being a priority because the ONLY real and sustainable way to increase shareholder value is to ALSO increase CUSTOMER VALUE. One feeds the other.
Have a crappy product and there is no long terms sustainable way to increase shareholder value. Have an excellent product that solves a real problem as well as excellent customer support, marketing, pricing, etc. and shareholder value WILL increase.
You actually WANT a company you invest in to maximize shareholder value.
But in practice, "maximize shareholder value" means, whatever metrics are presented as part of quarterly or annual reports must always be larger than the metrics presented as part of the previous quarterly or annual report. That's where it turns into an antipattern, where it gets reduced to "the metrics from this report must have larger numbers than the metrics from the last report". That sort of reductivism is what I was referring to.
There reason, I propose, is the deviant behavior you describe isn't sustainable. If you do not produce real value for customers in the long run you are not going to produce value for shareholders. You can "cook the books" for a little while. Maybe. But not in the long term.
The title of the this thread names Apple and Google. Both of those companies have produced a huge amount of value for users and customers as well as shareholders.
Maybe I'm being repetitive. If someone invests their money in my business I am going to make it an absolute priority to do well by them. And the only way to do this is to do well by customers. One forces the other. And, BTW, I don't think this is a conscious decision. In other words, I don't think anyone says "Dammit, we need to make shareholder returns a priority...let's focus on customer value". A good company is aware of shareholder value being important yet their focus and driving force is and should be a passion to deliver best in class products and services (understanding that the one will take care of the other).
Are there companies out there who behave badly? Of course. Thankfully they are the exception rather than the rule.
More specific to Apple's case, the hoarding of cash overseas to avoid paying US taxes on it is one of many poisonous symptoms of our international capitalism. The amount of tax Apple would pay if those profits did come to the US would make a not-inconsequential dent in the federal deficit. The whole take-on-debt-to-pay-dividends strategy is so skeevy that while I don't doubt it's legal, it's very questionably ethical.
All that said, I think US tax policy contributes to the problem. During the Bush administration, an effort was made to argue that taxes on dividends amounted to double taxation because the corporation had already paid taxes on that money, so why should the investors also pay tax on it. And while dividend income was not made tax free, it is now (or at least was for a while, I haven't kept up) taxed at a significantly lower rate than "earned" income. But the fix that makes the most sense to me, and which would solve Apple's problem, is to exempt corporations from paying taxes on the money they then pay out as dividends, and tax the individuals earning the dividends their normal marginal tax rate. This would encourage corporations to pay more dividends, end the "double" taxation, solve some percentage of off-shore hoarding, increase US government revenue, and put more money into the economy and not in corporate bank accounts.
No, it does not. There is no correlation there at all.
Not one person I know who has ever run a business would make that connection. Why? Because they understand business reality vs. the fantasies floating around out there.
I'll give you just one easy-to-assimilate example:
Economic collapse Q4 of 2008. I was able to keep about 20 people employed because we were profitable enough prior to this event to, as many like to say, hoard cash. I hoarded cash like there was no tomorrow. Why? Because I had played that game and learned a few valuable lessons.
Without this war chest I would have been forced to lay off all twenty of them and probably even a few more people. Instead I made the decision to keep everyone employed and, yes, lose money for over a year (2009 and 2010 were horrible). We used that money to pay people's salaries and even more hoarded money to actually make the decisions to devote that time to develop new products. In fact, it got so bad that I actually paid a few salaries with credit card money for a few weeks. It was awful, but I was committed to keeping everyone working.
We came out of the recession drained of cash but with new products and a team that was as loyal to the company and the mission as I was to them.
Higher taxes or ridiculous wages (like $15/hr minimum wage) would have certainly put a bunch of people on the street despite my best intentions.
My standard recommendation to anyone who thinks they understand the economy is to write down their ideas/ideology today. Then mortgage the house, take out a loan or do whatever you need to do to self-fund a business (no playing with other people's money here). Work your ass off to grow it to a non-trivial business. Check what you wrote every year for ten years. Somewhere between five and ten years you are almost guaranteed to ask "What the fuck was I thinking?". And that's when you'll understand.
"A man holding a cat by the tail learns something he can learn in no other way" --Mark Twain
In general terms though, this view that business is bad, evil and greedy and that it (as an amorphous mass) conspires to abuse workers, drive down wages and hoard cash is a fantasy of unknown sources. Not reality.
Being in business is hard. Very hard. Nobody enjoys unlimited cash until you've achieved great success. Even then, one could argue there's never enough cash.
Most businesses operate at the ragged edge of failure for N years (variable based on the nature of the business and the industry). I don't know many businesses that could survive a 6 month to 1 year negative event. We were fortunate because we had a number of really good years and, yes, hoarded cash because I've always been of the idea that preparing for that moment was important.
Ask almost any business owner if they could survive if business fell by 50% to 75% overnight and most are likely to say "no".
And so, a business HAS TO seek lowest costs and maximize revenue in order to remain healthy, grow, develop new products and survive glitches (be they due to the economy or business issues).
Forcing randomly high minimum wage on businesses is locally destructive. A business, if it has the option and is forced to do so, will always find ways to control it's costs. In the case of skills and function that can be off-shored, well, a "we pulled it out of our collective asses" high minimum wage having no relationship whatsoever to local economic reality will result in those jobs being exported to the extent possible.
So I'll say, based on my experience, artificially manipulating minimum wage isn't in the best interest of the local economy. You force businesses to act against the interest of the local population as they could very well be facing a choice between remaining a viable concern and exporting jobs in order to stay alive. Bad idea.
Taxation is another interesting topic. We should all be for the absolute lowest taxes possible. Somehow we've migrated into this thinking that ever-higher taxes is a good thing. It isn't. And it isn't because of a number of reasons, both local and global.
At the global level it is easy to see that an environment where, to exaggerate, a government charges businesses 0% taxes will be far more competitive in the short and long term than a location where government, let's say, punishes businesses with 100% taxation. In other words, we take all of your profits at the end of the year. It should be enough for you to survive and make zero profits. The asymmetry of these two scenarios should be obvious. Identifying where destruction will occur in the long run is easy.
At the local level it should be equally easy to understand that we should pay just enough taxes to pay for what we need out of our society in order to have it function as desired. This has many convoluted facets. Health care is one of those. Can't get into all the details here.
At a fundamental level taxation is a necessary part of a society. We need to pay for stuff. We need people to administer and run various things. And we all need to pay for that. At the same time, we need to also demand that the people and organizations we effectively fund and hire to perform those functions do so efficiently and without waste. We don't do that. We are all too busy to force optimization of this very important metric. And so, somewhere between 25% to 50% of our money is wasted.
It's like giving your kids $1,000 a month for college and he proceeds to burn 80% of it. And, of course, the solution is to give them more money. No. Not at all. The solution is to use the available funds as efficiently as possible. More money makes the situation worst.
Taxing corporations is a weird thing to me. A company with 1,000 employees has a thousand people paying taxes. Now we take their work product and tax it one more time. The people we hire to run the town, city, state are taking a dip into this economic activity twice. And then our money is taxed again at the gas pump, the supermarket, the grocery store, our property is taxed, utilities are taxed, our investment income is taxed.
We have somehow created a system where nearly every single activity is taxed in some form. If this money were used effectively it'd be one thing. Yet, it isn't. Where I live (Los Angeles area) roads are in dire need of maintenance despite the fact that we've been pouring tax money into the very agencies that are supposed to be done this work. It's a mess.
And so, focusing on punishing companies through higher taxation levels seems completely counter intuitive, it will make things worst, not better. Our focus ought to be in forcing a change where it matters most: The effective utilization of tax revenues. We ought to demand that they do more with less taxes. The surplus we would have by paying less taxes for the same services would then go into the economy and have positive effects.
Got to stop there. Real work to be done.
So the reward inequality of the people who make wealth seems a larger concern here. But then, if everybody makes lots of money in capitalistic system -- nobody really does.
So, no, I'm pretty sure that system is corrupt in its essence, but is working just as intended too.
This phrase gets used from time to time to give some moral or net efficiency argument for avoiding taxes. I don't think it's useful. A corporation and government have completely different responsibilities and constituencies. Of course Apple can allocate resources better for Apple than the government would choose to, because Apple has no duty to care about most of the issues the government is tasked with.
> And rest assured: somebody always does.
We only have to consider the bizarrely inefficient US healthcare system compared to the rest of the developed world to see that 'always' is not true.
Unless by 'government' you mean only the US government. Many other governments are daily demonstrating their ability to deliver more affordable and cost-effective healthcare than the US.
One could argue that the medical system the us has right now is inefficient BECAUSE of the current legislation. It is a very regulated industry, it hasnt gotten to this point because of its unregulated capitalism.
It’s an apples and oranges comparison because The US effectively subsidizes the advances enjoyed by other countries.
"The problem with a simple tax code is that the left and the right dont trust each other, and they are both right".
The problem is that you can legally avoid taxes. Are we so used to this concept that we don't see its own hypocrisy?
Double-taxing exports (1x from the US government, 1x from the country they are sold in) is a really bizarre policy, especially in this era of global trade.
This idea that companies should have essentially zero cash is absurd. If that isn’t the argument you are making, then how much is enough? And, who gives you the right to decide that amount? The company isn’t yours. Nobody should tell you how much money you should keep in the bank, so what gives you the right to decide how much money someone else keeps in the bank?
You want Apple to repatriate foreign earnings? Lower corporate taxes.
Even in such a vague form, this is a touch sensationalist. The impact of 'the one that wins' may be negligible. There also may be no winner.
Effectively, these two companies embody fairly different points on the spectrum of shareholder control: Google being effectively a public closely-held company; Apple being a public widely-held company. True, Google has millions of shareholders, but the _control_ is closely held, hence why I am using that term.
The control that shareholders (and activists and raiders) can have on Apple is significantly different than on Google. And that is what the article is about.
Over time, the market could adjust from the Apple model (which is the status quo in public companies) to the Google model. The implications are tremendous, as the idea of a public company that is closely-held over the long term hasn't really been done before.
In the end the economist unwillingly reveals that the actual ramifications are highly theoretical (bordering on non-sense) and and leaves the reader only to conclude that this won't as stated "decide the future of capitalism". In discussing the future economy I would be much more inclined to ask: "How do we create a model where wealth and power is distributed broadly across society?", "What constitute infrastructure in a modern economy?", "How do know we aren't underperforming?" and so on.
A very silly article comparing two companies with similar money-management history and acting like some competition exists between the models because investors recently got an upper hand with Apple. They wouldn't have gotten their market position doing this. It strikes me like comparing two athletes when one recently acquired a disability and suggesting that the disability contributed to their historical success and suggests some new model for the sport going forward.
The title is a bit pompous, but the article does actually relate the policies of the two companies with a basic concept of capitalism (allocation of capital).
There's absolutely no reason to seek growth based returns which carry risk while this approach is available. Dividends and stock-buybacks represent a no-value-created system of incentives for the richest people in the world, directly extracting the surplus value of laborers at the expense of workers and long-term investors. Only when a company starts to topple does there seem to be any interest in moving into new markets or improving their existing lines of business.
Apple had $2.33 EPS for Q2 2015 and for Q2 2017 reported $1.90 EPS. So declined over the last 2 years.
Google other revenues (non ad) were over $10B for 2016 and growing at 50%. Apple total revenues in 2004 when it was 28 years old were less than just Google other. Just sayin.
Btw, Google holds the record of getting to $100B cap faster than any other. Even accounting for inflation.
I thought this would be about the way each interacted with customers, which is far more interesting.
- by building a payment service that's way cheaper and easier than e.g. Western Union or banks
- by using literally every last cent in his pockets to make SpaceX work (which benefits the whole world in terms of cheap, reliable, environmentally-friendly, russian-free § launches as well as the planned Mars colony)
- by launching the maybe most successful pure electric car, which soon goes into mass-market price range
This is what I as a socialist see as the one example of capitalism that actually WORKS.
§ not meant to be racist at all, but political - given the obvious tensions between Russia and the Western world, e.g. by Russian meddling in US elections, financing at least the German and French neonazi parties and invading Ukraine, it's simply unacceptable to depend on Russia honoring their rocket engine delivery contracts.
That's not the question that comes to my mind at all. Why limit it to just managers and investors? What about employees? Citizens of the countries that enabled these companies to make all that money in the first place?
That agglomeration of wealth is just absurd and frankly immoral.
Apple is way older than Google, maybe this has an influence in both diff. approaches...
but sure - it's somewhat legal or not illegal but don't pretend it's not sketchy.
Do you seriously expect them to pay more in taxes beyond what is legally required of them? Please avoid these "low effort" comments here on Hacker News, they do not work here.