Venkatesh Rao

"Financialization" is about 50% evil shit done by people with operating under severe moral hazard, and 50% legit effects of where value actually lives in a complex globalized industry. It is NOT distributed in proportion to the atoms making up the physical "plant" of the thing

Like the bulk of the value of Apple right now is probably in the designs of M1/A13 chips and CAD files for say a half-dozen key physical devices that would fit on a small rack of servers at most. Not counting value in people's heads, which Apple can't claim. The rest is filler.

The diff between Apple and seemingly more physical businesses like McDonalds etc. is one of degree, not kind. The real estate and physical WIP stocks account for only a small value of the companies, and most of the financial bombing damage happens in the information structure.

Even heavy manufacturing... Tesla's Fremont factory was an old GM/Toyota joint venture factory. The new operator of the facility is financially worth way more than the old ones. It's all in the financial architecture and software now.

The "commodity atom" fraction value of all businesses is headed straight to zero. Almost all the value will be in a) software b) financial architecture. a) is vulnerable to viruses, malware, hacks etc. b) is vulnerable to financial disasters.

I've used private industry examples, but the same thing applies to public agencies (EPA, FBI, State Department...) that have been relentlessly bombed by Trump for 4 years. And now city/state orgs that are being thrown under the bus with new stimulus bill.

Socialists get mad because they *wish* valuation worked differently: start with uniquely high and fixed valuation of each human being, then value all the capital assets in proportion to proximity to the human element in the system, since that's what makes for stable human lives.

By this logic, McDonald's should be valued as follows: $X per employee, then $Y for the value of the equipment and furniture etc. in the branches the humans work in, etc. etc. Automated, distant things would be worth $0, as would any cloudy automated software.