Here’s a silly, but widespread, idea.
Big corporations are as big as countries. For instance this report from The Guardian:
“The value of the top 10 corporations was $285tn (£215tn), beating the $280tn worth of the bottom 180 countries, which include Ireland, Indonesia, Israel, Colombia, Greece, South Africa, Iraq and Vietnam.”
Even, usually sensible, commentators like Scott Galloway use this comparison.
The problem is that it’s rubbish.
The value of a company is like the value of a house. It reflects future income you will get from the company if you own shares in it. Not just one year’s.
A country’s national income though, is a measure of how much it has in one year. More like rent, than buying a house.
This makes a huge difference.
Take Apple, the world’s biggest company.
Apple’s profit in 2015 though was around $50bn. Around 1.7% of the UK’s GDP in 2015.
On this measure Apple is about the same size as Tanzania. That’s big, but not overwhelming.
Does this matter?
Because when politicians see large corporations as overwhelmingly big, then it’s tempting to blame them for all of society’s problems. And to use them as an excuse for inaction. Instead politicians need to take responsibility.
In fact we can make corporations do what we want.
If we want Apple to pay more taxes, then it’s possible to do that. It needs smart co-operation between governments to be fully effective, but there are plenty of options that would bring in more money for any government who tries.
If we want to regulate big companies like Facebook, Google or Uber then it’s possible.
It just needs us to make the effort to work out how.