by Source: Nitzan and Bichler, Capital as Power In 2005, Microsoft’s market value was 2,583% greater than that of General Motors. Mainstream economists would say that Microsoft therefore had more property than GM. But more of what? Nitzan and Bichler point out that when we look under the hood of market value, there’s nothing ‘real’ to back it up. Microsoft, for instance, has only 18% as many employees as GM. And it owns only 3% as much equipment (in dollar terms). So is this a distortion? Is it a sign that Microsoft’s wealth is fictitious? No, say Nitzan and Bichler. Wealth isn’t about material property. Instead, they argue that wealth is a commodification of property rights. So Microsoft’s greater market value stems from its greater ability to convert property rights into income.
Topics:
Editor considers the following as important: Uncategorized
This could be interesting, too:
Editor writes In search of radical alternatives
Stavros Mavroudeas writes «Οι καταστροφικές επιπτώσεις της ΕΕ στην Ελλάδα και τους εργαζόμενους» – Στ.Μαυρουδέας ΠΡΙΝ 20-21/4/2024
Stavros Mavroudeas writes «Κοινωνικές επιστήμες: είδος υπό εξαφάνιση;» – εκδήλωση Παντειέρα-Attac, 23/4/2024, 5.30μμ Πάντειο
Lars Pålsson Syll writes Cutting-edge macroeconomics …
Source: Nitzan and Bichler, Capital as Power
In 2005, Microsoft’s market value was 2,583% greater than that of General Motors. Mainstream economists would say that Microsoft therefore had more property than GM. But more of what? Nitzan and Bichler point out that when we look under the hood of market value, there’s nothing ‘real’ to back it up. Microsoft, for instance, has only 18% as many employees as GM. And it owns only 3% as much equipment (in dollar terms).
So is this a distortion? Is it a sign that Microsoft’s wealth is fictitious? No, say Nitzan and Bichler. Wealth isn’t about material property. Instead, they argue that wealth is a commodification of property rights. So Microsoft’s greater market value stems from its greater ability to convert property rights into income. That Microsoft can do this without owning bricks and mortar is interesting, but not surprising. As intellectual property teaches us, property rights need not be attached to anything physical.
