Increasingly, businesses don’t generate profits. They generate capital gains. It’s fiendishly clever.
Source: How Amazon’s Accounting Makes Rich People’s Income Invisible – Evonomics
Half a trillion dollars in revenues.
Essentially zero profits. Ever.
Dollars delivered onto investors’ balance sheets? Somewhere north of 300 billion.
none of that shareholder income ever appears as household income in the national accounts
If the success of eBay or even the show “Pawn Stars” is any indication, people are excited to transact in physical things.
Source: StockX: A stock market for physical objects could change how capitalism works — Quartz
if I were to sell everything I owned on Craigslist or eBay, how much could I make to put towards the boat? The same question posed to my stock portfolio was easy to answer, but if I decided to liquidate all of my holdings, financial and physical, how would I value my vast collection of random stuff?
every marketplace must be built on trust and transparency. …
The way things are sold now on eBay or Craigslist is via a marketplace for individual items. Making stock markets means moving away from custom pricing for individual iterations of a thing (the pair of Air Jordan Retro Space Jams in my closet) and towards a universal price for all iterations of a thing (all pairs of Air Jordan Retro Space Jams in existence).
suppose for a moment it all works. If every household in America could have a living portfolio for their things, how would that change society?
Tyler Cowen writes about cost disease. … Cowen assumes his readers already understand that cost disease exists. I don’t know if this is true. My impression is that most people still don’t know about cost disease, or don’t realize the extent of it. So I thought I would make the case for the cost disease in the sectors Tyler mentions – health care and education – plus a couple more.
Source: Considerations On Cost Disease | Slate Star Codex, by Scott Alexander
RE: This Economic Phenomenon Is Making Government Sick, by Tyler Cowen
So, to summarize: in the past fifty years, education costs have doubled, college costs have dectupled, health insurance costs have dectupled, subway costs have at least dectupled, and housing costs have increased by about fifty percent. US health care costs about four times as much as equivalent health care in other First World countries; US subways cost about eight times as much as equivalent subways in other First World countries.
I worry that people don’t appreciate how weird this is.
…
It’s actually even worse than this, because we take so many opportunities to save money that were unavailable in past generations. … And it’s actually even worse than this. A lot of these services have decreased in quality, presumably as an attempt to cut costs even further.
The modern conflict between opponents and proponents of free college education is over how to distribute our losses. In the old days, we could combine low taxes with widely available education. Now we can’t, and we have to argue about which value to sacrifice.
If some government program found a way to give poor people good health insurance for a few hundred dollars a year, college tuition for about a thousand, and housing for only two-thirds what it costs now, that would be the greatest anti-poverty advance in history. That program is called “having things be as efficient as they were a few decades ago”.
I’m more worried about the part where the cost of basic human needs goes up faster than wages do. Even if you’re making twice as much money, if your health care and education and so on cost ten times as much, you’re going to start falling behind. Right now the standard of living isn’t just stagnant, it’s at risk of declining, and a lot of that is student loans and health insurance costs and so on.
What’s happening? I don’t know and I find it really scary.
What [Richard] Florida now sees is the double edge of the advice he gave and that so many followed.
A bigger, denser city, in general, increases the rate of innovation, increases the rate of startups, increases the rate of productivity; at the same time, the bigger, the denser, the more knowledge intensive, increases the rate of inequality, increases the rate of economic segregation, makes housing less affordable. So it’s a two-sided monster.
The underpinning tenet of chasing exponential growth is that anything less than “all of it” is never enough. … But it’s not the only paradigm available for rent.
Source: Enough – Signal v. Noise
Once you realize that the prevailing narrative of entrepreneurship is a paradigm, and not an immutable natural law, you open your eyes to alternatives. One of which is that of enough.
Big enough. Ambitious enough. Profitable enough.
But how much, exactly, is enough? Well, obviously that depends. What’s easier than trying to pin down a goal a priori is to accept when you’re past it.
The longest lived businesses in the world aren’t the ones that were biggest in their day. Many of them are family firms, or small to mid-sized enterprises content with steady evolvement of their niche. Content with enough.
Bigger isn’t automatically better, and may well simply be more brittle. Bigger risks, bigger dangers, harder falls from grace.
Taking profits every year, along the way, insulates owners from ending up as the last, biggest fool to buy a stake before the valuation stops growing.
Ultimately, what defines enough is up to you. The paradigm shift is to decide that there is such a point, and that the point is below “all of it”.