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Comment by okanat | Hacker News Reader

EU didn't go into an uncontrolled spree investing every company that had .com in its name and ruined thousands of lives and wasted billions of dollars.

EU usually doesn't let companies to grow uncontrollable sizes that the government is completely controlled by them not the citizens.

The existence of Big Tech means that the government did a very poor job in protecting the consumers and the free and fair market

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The only difference is that US has lower cost of debt and that’s why they can buyout EU companies

> EU didn't go into an uncontrolled spree investing every company that had .com in its name and ruined thousands of lives and wasted billions of dollars.

This is the thing that so many Americans in tech don't seem to understand. VC Twitter is full of smugposting about how the US has "$5 trillion market-cap of startups" and the EU doesn't.

And what they miss is that the EU doesn't want Silicon Valley. It doesn't want the "trillions in startups". Because essentially none of them turn any profit. Why on earth would anyone want $5 trillion dollars in companies that do not make financial sense yet have awful externalities.

The five trillion market cap is from very profitable companies

Startups, not big tech companies.

Every company was started up

AAPL's profit is roughly equivalent to the GDP of Slovakia.

That's great for apple shareholders and citizens of Ireland indirectly benefitting from the miniscule amount of tax Apple pays here!

I understand you were rebutting OPs point that not every tech company is a capital furnace, but when framed in this manner, this sounds like something to be solved, not something to be proud of. That’s the difference between the EU and the US, and there is a strong case to be made that life is better in the EU when observing majorities.

Who is benefiting from Apple’s profits being the size of a small country’s GDP? Not most people, therefore, why would this be optimized for?

Apple makes a lot of profit because their products provide a lot of value.

Do you think that if you compare the profit that Apple makes to the value that that users get that Apple has the larger share of it? To a disturbing degree?

Certainly, if a company’s profits are the size of a small country’s GDP, I find that disturbing regardless of the value they’re delivering. Value is the experience and consumer excess, profits are fiat. Could that same value be delivered with compressed profits leading to greater consumer excess? I believe so. Not all profits are earned, some are inherent once an org achieves a certain maturity or industry position. Visa and Mastercard skimming a non insignificant amount off of US GDP, for example. Is that value?

https://www.ineteconomics.org/uploads/papers/LAZONICK_Willia... (“Profits Without Prosperity: How Stock Buybacks Manipulate the Market, and Leave Most Americans Worse Off”)

You didn't answer the first question about whether you think consumers or Apple have the larger share.

I thought my comment was clear, I will attempt to be more explicit: I am of the opinion that Apple’s profits are excessive, regardless of the consumer value delivered. I respect that others may have opposing views that profits should have no limits as long as value is delivered.

Well if EU politicians think Apple's profits are excessive what about introducing laws to foster some competition? You can complain about other countries running circles around you all you want but at the end of the day if you can't make a phone, piece of software or a CPU you will be at the mercy of those who can. The way to reduce "excessive profits" is to make it easier to start businesses which could provide the "overpriced" goods and services cheaper.

Easier to reduce their size with regulation versus believing a free market that isn’t truly free will suddenly whisk competition into the space. This is why China gives their domestic companies “unfair” advantages, because the free market is an illusion. It’s only unfair if you believe there is a “free market” or the market is fair, which it is not.

It is easy to forget that the economic system of fiat and capital is a shared delusion, agreed upon rules that can change when needed. The intent is to encourage outcomes, not to be the primary function.

Whatever your views on free market if you want goods cheaper someone needs to make them cheaper. Splitting up Apple won't result in that. You still need someone else to make phones.

> Apple makes a lot of profit because their products provide a lot of value.

That is a non-sequitur.

> Who is benefiting from Apple’s profits being the size of a small country’s GDP? Not most people, therefore, why would this be optimized for?

Off the top of my head, probably the millions of people who have a pension through one of Apple’s institutional investors like CalPERS. The effects of Apple’s profitability goes far and wide.

These numbers are always trotted out like these people have a material majority investment in the equities market (“won’t someone think of the teacher pension”), when per the Federal Reserve, the top 10% of Americans by wealth hold 93% of US equities.

This doesn’t entirely discount that CalPERS holds almost 40M shares (~$8.7B) of Apple (its top holding), just that them doing so is not reason enough to be more judicious about governing corporate profits. Still profits, but less. Those profits have to come from somewhere.

(CalPERS has $502.9B AUM ending June 2024, making APPL ~1.72% of their total assets)

https://www.calpers.ca.gov/docs/forms-publications/acfr-2023... (page 115)

https://calpers.ca.gov/page/newsroom/calpers-news/2024/calpe...

That seems all quite orthogonal. You asked who benefits and I’ve given you an example. Some benefit directly and some indirectly. But millions in the economy benefit and not just through institutions such as CalPERS.

Fair point, some people lose when policy is patched.

> Off the top of my head, probably the millions of people who have a pension through one of Apple’s institutional investors like CalPERS. The effects of Apple’s profitability goes far and wide.

That's like a member of the working poor who owns one share of stock, "benefiting" from company lobbying to keep the minimum wage down.

He's got two-hundredths of a cent more in dividends, and has lost many hundreds of dollars in potential wages.

Assuming that they know better than everyone else how they should be spending their money, and that reality is the one wrong because the numbers are too big when they are selling to the world? That sort of hubris is exactly why they don't have a world tech industry.

> That sort of hubris is exactly why they don't have a world tech industry.

You make this sound like a bad thing. There are diamonds to be found generating genuine value, but quite a bit of activity is simply low value under the guise of innovation.

I would caution against mistaking clarity and understanding for hubris. Europe doesn’t have line go up, but their citizens live better lives by most objective measures. From an optimization and first principles perspective, we should always be mindful of what we are optimizing for, so when I see people come out swinging with “Such profits! Much Tech! Innnnnnnovaaaaaation!” I approach it from a “simmer down now, lets decompose the system and observe” approach. What are the desired outcomes and what is value perspective we can compromise on as “good,” and then work backwards.

oh my God please stop inovating and making jobs think of the externalities!!!

American culture in a nutshell is to be in awe of large numbers without thinking very hard about whether you’re measuring the right things in the first place.

> The existence of Big Tech means that the government did a very poor job in protecting the consumers and the free and fair market

I'm sure they are quite proud of that achievement

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