June 21, 2013
MORE WEALTH, LESS LABOR:
Profits Without Production (PAUL KRUGMAN, 6/20/13, NY Times)
[G.M.]'s value came largely from its productive capacity: it owned hundreds of factories and employed around 1 percent of the total nonfarm work force.Apple, by contrast, seems barely tethered to the material world. Depending on the vagaries of its stock price, it's either the highest-valued or the second-highest-valued company in America, but it employs less than 0.05 percent of our workers.
It ought to go without saying that GM would have been massively more valuable if it could have produced those vehicles with 0.05 percent of our workers. But, for folks like Mr. Krugman the point of 1950's GM was to employ workers, not to manufacture cars.
Posted by Orrin Judd at June 21, 2013 5:18 AM