How tech ghost corporations have changed the stock market and taken the capital out of capitalism. Other sectors, beyond tech, namely service industries, are set to benefit from a post COVID spending spree. In the post-pandemic era an enhanced appetite for risk and innovation could spur economic growth. Unbridled innovation in ‘the creator economy’ means everything is for sale. Variability, managed well, can be productive – ask a pastoralist.
QUOTE OF THE WEEK
“The two most valuable companies in the world today are Amazon and Apple. If this is capitalism, it is capitalism without capital” (John Kay)
ARTICLE OF THE WEEK
John Kay, RIP PLC: the rise of the ghost corporation
(Prospect, April 2021)
This is an erudite and insightful piece on the ascent and demise of the listed company, and where – for better or for worse – private equity will lead business next. Kay explains how and why the 21st century’s corporation has become so different. Amazon and Apple, the world’s two most valuable companies, are ghost corporations: they use little capital and the one they use is fungible—it does not need to be owned by the business that operates with it. This kind of company utilizes the stock market not as a means of raising capital, but to reward its investors. Read on (15 min).
Click here to read the full article
Michael Spence, The shape of Global Recovery
(Project Syndicate, 17 March 2021)
BULLISH! The Nobel laureate in economics asserts that the accelerating rollout of vaccines in many advanced economies has set the stage for a rapid recovery in H2 of this year and into 2022. In his opinion, the growth in digital and tech will subside while high-employment service industries will ride a wave of pent-up demand. This will trigger a partial but sharp reversal of the K-shaped growth patterns that have emerged in pandemic-hit economies (reads in 6-7 min).
Click here to read the full article
Bruno Macaes, After COVID, get ready for the Great Acceleration
(The Spectator, 13 March 2021)
This is a decidedly upbeat view of the post-COVID world. In Macaes’ opinion, “the pandemic has not only sped us up, but has made us more open to risk and disruption. We can expect many more scientific developments with profound benefits”. He argues that we are about to enter a new age of technological change, with breakthroughs happening at rapid speed, from transport and energy, to medicine and science, and even currencies. Much higher productivity and economic growth could follow (reads in 6-7 min).
Click here to read the full article
Taylor Lorenz, For Creators, Everything Is for Sale
(The New York Times, 11 March 2021)
Helped by new start-ups, digital creators are monetizing every aspect of their lives – down to what they eat, whom they meet and whom they respond to on TikTok. This is developing so fast that ‘the creator economy’ now represents the “fastest-growing type of small business.” Accordingly, the market is becoming more competitive, with creators devising hyper-specific revenue streams. One such example is NewNew, a start-up that describes its product as creating a “human stock market.” On its app, fans pay to vote in polls to control some of a creator’s day-to-day decisions (reads in 8-9 min).
Click here to read the full article
Ian Scoon, What pastoralists know
(AEON, 12 March 2021)
An academic elaborates on the connections between a trader in the financial markets and a pastoralist herding his animals, going on to explain why they can learn from each other. Both are experts in managing extreme variability – they exploit it as a productive resource and embrace uncertainty as part of life. Also, both need a sense of the big picture and local knowledge, understanding that attempts at total control will always fail (reads in about 10 min).
Click here to read the full article
