The Big Guys

Via GeekPress, here's a report of the 100 largest economic entities in the world. The market is starting to edge out governments: 49 of these entities are countries, 51 are corporations. Still, the first corporation doesn't show up until number 23.

Comments

[Eric II]

Given that (obviously) a large percentage of the GDPs of all of the countries on that list come from the revenues of corporations, perhaps a better list would define the governments merely by the sizes of their annual budgets, or perhaps their annual revenue intakes.

[Madog]

Shouldn't the EU be a single "economic entity"? I mean, it is an economic union first and foremost, right? And if not the whole EU, the definitly the Euro-zone.

[Neb Okla]

Interesting. Though I often hear Microsoft portrayed as "the big bad wolf" of corporations (and often written as Micro$oft or M$), I don't even see them on the list. Meanwhile, I find the neighborhood grocery store Kroger (based just down the road in Cincinnati).

[Madog]

It's just because Microsoft is so wealthy relative to other software companies that they get reviled for their $$. The real money is still in physical goods, for all the talk of the new economy.

[Eric II]

Neb Okla, that's because the true measure of Microsoft's strength isn't its revenue base, but its enormous profitability. Microsoft's net profit margin last quarter was about 41%. You don't see profit margins like that outside of royalty trusts and some state-owned oil firms.

[Tim Lambert]

The comparison is bogus. If IBM makes a computer and sells it to Wal-Mart for $400, and then Wal-Mart sells it for $600, it counts as $400 in sales for IBM and $600 for Wal-Mart, but not as $1000 of GDP. The contribution to GDP is $600, $400 from IBM and $200 from Wal-Mart. The chart greatly overstates the economic size of corporations.

[Stephen Fetchet]

I for one, am looking forward to serving our new giant corporate overlords...

[notJoe]

Stephen Fetchet,

Go back to slashdot.

[Neb Okla]

Eric II, MS may have good profit margins - but their products are no more expensive (based on my experience buying computer products locally for personal use, and from distributors for business).

If a company finds a way to deliver a comparable product at a huge profit then that is efficiency - which is a good thing in business.

[The Lonewacko Blog]

Corporations are just pikers on the world scene. The State still rocks! Tell me, which of those corporations on that list have their own death squads?

[matthew hogan]

"Of the world's 100 largest economic entities, 51 are now corporations and 49 are countries."

And they say that like it's a bad thing.

But I wonder how much of the companies' wealth is generated by a) government contracts, b) regulation-inflicted monopolies (by bankrupting competition), actual monopolies secured by government arrangements or mandates, etc. or some combination thereof.

Still, I notice most of the companies provide things we genuinely want and need -- food, power/energy, cars, insurance, etc.

[Neb Okla]

Maddog, I agree that the real money is in physical goods - but the US has only covered a lot of ground here as a result of improvements in efficiency.

MS's profitablitiy given that they sell comparable products at a comparable cost indicates that they have the efficiency game down.

I'm not sure why this would be a good thing for physical goods - but a bad thing for "the new economy".

Brink Lindsey touches on this in the July 2004 issue of reason.

[Eric II]

"MS may have good profit margins - but their products are no more expensive"

My experience is that this depends on whether or not Microsoft has a monopoly in a given market. Products like Money, Frontpage, SQL Server, etc. tend to be competitively priced. But that's not where Microsoft makes most of its billions.

The vast majority of that dough comes from Windows and Office, areas where Microsoft does possess monopolies, and where Microsoft's products are noticeably more expensive than the competition's. For example, compared the licensing rates for Windows with those for the desktop version of Red Hat Linux. Or the price of Office relative to Star Office. This doesn't necessarily mean that antitrust action should be taken agains Microsoft, but it does suggest that the company's influence can't be measured by its revenues alone.

[joe]

"Tell me, which of those corporations on that list have their own death squads?"

Some of the oil companies sort of share death squads with governments. Does that count?

[ABC]

"For example, compared the licensing rates for Windows with those for the desktop version of Red Hat Linux. Or the price of Office relative to Star Office"

How about comparing the price of a Porsche Turbo with the price of a small donkey?

Actually, the donkey might be more useful than Linux for the average user's computer needs...

[Eric II]

"Actually, the donkey might be more useful than Linux for the average user's computer needs"

Yes, and that's because so few PC apps, relatively speaking, are made for Linux. A very large number are made exclusively for Windows, a product that only Microsoft sells. Hence Microsoft's monopoly and pricing power. Which brings me back to my original point.

[Neb Okla]

Eric II - So now MS has a monopoly because developers write a lot of PC apps?

Why do you think they do that?

[Mo]

"Tell me, which of those corporations on that list have their own death squads?"

Does Philip Morris' marketing department count? And have you ever ridden in a Fiat?

[Eric II]

No offense, but you've heard of the chicken & egg dilemma, right? At this point, Microsoft's leadership in the PC OS market isn't because of the superiority of their product, but because the applications base already behind it guarantees enormous switching costs for the average PC user, myself included. The dynamics driving Microsoft's dominance of this market bear little difference to the ones driving eBay's dominance of the online auction market.

[The Lonewacko Blog]

Yes, and that's because so few PC apps, relatively speaking, are made for Linux

In some ways, I'd prefer to run Linux on my desktop. I certainly would never use a web host or a server that ran Windows, but that's beside the point.

About the only reason I'm running Windows is because I need to compile and test Windows-specific code, which is a bit difficult without Windows.

Other than that, there are Linux programs for just about every basic computer function from word processing to whatever. And, most of those programs are free.

At least three major problems preventing home users from being able to use Linux:

1. Momentum. Most computer users are familiar with Windows, plus they have Windows apps they've bought.

2. Linux is for nerds; if something goes wrong you might need to edit text files rather than using wizards. A lot of Linux users being assholes doesn't help: "RTFM, you luser! Look, all you need to do is type in 'grep fizbar $33sd -f -u -c -k -y -o -u -youluser' and it'll work, you simpleton!"

3. On those rare occasions when MS changes file formats, those changes are available immediately from MS. Linux programmers must then reverse engineer the new format and provide updates later or much later.

P.S. The bit about death squads was meant as a bit of sarcastic comment to expose - yet again - the fact that libertarians (or at least reasonites) are in many cases just corporate tools. If The State has death squads, what's to prevent megacorporations from doing the same? Should we welcome the concentration of power over us in either the form of The State or The Mini-State, Inc.?

[Jason Ligon]

"P.S. The bit about death squads was meant as a bit of sarcastic comment to expose - yet again - the fact that libertarians (or at least reasonites) are in many cases just corporate tools. If The State has death squads, what's to prevent megacorporations from doing the same? Should we welcome the concentration of power over us in either the form of The State or The Mini-State, Inc.?"

I think it more accurately exposes the tendency for anti-corporatists to perform simile gymnastics. Concentration of what power? Do you mean wealth, in which case we need to fear anyone who can afford a 'death squad'? Do you mean the power to legislate, which is only held by governments? Be specific. What is the nature of this power that we should fear?

A corporation is not a mini state. In the case of Nestle, who made the list, they try to sell you friggin chocolate bars! Do you have to buy them? Nope. Where do death squads come into the picture? "Chocolate bars and chocolate milk are not enough! Our new annual budget includes money for death squads, which is the best way to increase shareholder value!"

[Charles Taylor]

History teaches that the occasional Death Squad is necessary for a healthy economy.

[Stephen Fetchet]

Yer stealing my thunder. Go back to slashdot, y-o-u-l-u-s-e-r.

[joe]

Jason, oil companies (and fruit companies) have often found the use of force to be useful in maintaining and enhancing their profits. Surely you know that there is more to a corporation than the public face it works to hard to develop.

[JDM]

I'd like to see a good accounting of the good that comes from corporations vs. the bad. Do corporations really wreak any signifigant amount of Death Squad violence on people compared to the amount that non-corporate affiliated people wreak on each other?

Does corporatizing people make them more prone to commit violence?

[The Lonewacko Blog]

What was I thinking! Nestle makes milk, the purest, most natural substance known to man. When you think "Nestle," only a monster could not think "Warm & Fuzzy."

Now, of course, Krupp, AGFA, IT&T in Chile, etc. etc. etc. were just aberations. When millions or billions are at stake, corporations consistently play by the rules and only think of the greater good.

[JDM]

Also, you Linux people are nuts. I say this withe a SuSE Linux laptop sitting right next to the XP dextop I'm writing this on, which I use it to develop telecom code for Redhat Linux servers. If you think Linux is not YEARS away from Windows and the Mac in terms of average user usability on the desktop, you're just fooling yourself.

[Larry]

The biggest corporation in the world, General Motors, spends millions trying to get me to buy a car. And I live in Detroit. Yet I haven't bought one of theirs. That's how powerful they are to me.

But if I get a letter from some local county agent who's displease with, say, how I use my land, I better pay attention or someday someone will come and take away my property, and if I don't like it, they'll put me in jail.

Corporations in a free market (that aren't in cahoots with the government) thrive by giving me what I want. Government, which can't go out of business, even in a democracy, doesn't have to try to please everyone--in fact, it can be quite brutal to the minority. Non-democratic governments don't have to please anyone. (Note that the richest governments are those with a democratic system, which comes closest in mimicking, if imperfectly, a free market.)

[Jason Ligon]

"Surely you know that there is more to a corporation than the public face it works to hard to develop."

As JDM points out, I suspect there is approximately as much corporate fraud as any other kind. We have given a monopoly of force to the government, so it is the government who is applying all of the legal force. If we are talking about illegal force, we are talking about government incompetence at preventing it.

For the most part, corporations follow Friedman's concept of legal maximization of shareholder value. Interestingly, the political power of corporations comes in large part from the number of people they employ in a given district. The 'power' to move elsewhere is the biggest threat they can make to a politician.

[Paul Z]

That's really old news (circa 2000). The U.S. economy is now well north of $10 trillion, and the largest private corporation (by far) is Wal-Mart, at about $250 billion in sales; they passed GM two years ago. No doubt many of the relative rankings on this list would be affected using updated figures.

Also, since the rankings are based on USD, what exchange rate was used to convert the non-Dollar entities? With the major decline in the U.S. Dollar over the past year, the rankings are probably even more affected by that than by intrinsic factors.

[cm cole]

Refresh my memory. Why is China not a member of the 'G8'? Why is the Russian Federation included? (an unimpressive 16th place showing on this list).

Using the tabulation methods employed here would place the United Nations number one, no?

[Dan]

Now, of course, Krupp, AGFA, IT&T in Chile, etc. etc. etc. were just aberations. When millions or billions are at stake, corporations consistently play by the rules and only think of the greater good.

Do corporations occasionally do bad things? Sure. Why, people in the direct pay of corporations have killed thousands of people.

And people in the direct pay of governments have killed hundreds of millions.

And people in the direct pay of religions have killed tens of millions.

And you say I should be afraid of the corporations? Can you give me a sane reason why?

[Ruthless]

A list like this doesn't invite easy comparisons, but I wonder what it looked like a hundred years ago.

In other words, whose trust got busted? And what did it get us?

[42]

Perhaps here we have a list from which UN representation should derive.

[Fred Gillette]

Bangladesh? They're as poor as Kenny's parents.

[James Anderson Merritt]

Ahem. I think that California is still #5 or thereabouts. Or it would be, if States were still considered as something other than subordinate administrative regions of the US. Oh, how the Bear Republic has fallen...

Signed,
Born Here

[speedwell]

StarOffice is a wonderful thing (and I say that as someone who makes a living using Microsoft Office).

Even better is OpenOffice.org for Windows. It's basically StarOffice for the brave, sane and frugal. It converts very easily to and from MSOffice. And it's free for the downloading.

Did I say free? Oh, I did.

[jc]

I can't believe the Catholic Church isn't on the list.