Share-price-oriented firms grow without investments in physical assets or employment

Evidence

Blockbuster Video, which operated over 9,000 stores in 2004 and employed over 80,000 people, has been displaced by Netflix, which streams videos over the Internet, rents capacity on servers owned by Amazon, and employs a mere 2,000 people. Whereas the conglomerate firms of the 1960s and 1970s sought to straddle the Earth, the contemporary share-priced-oriented firm seeks to dance on the head of a pin. — Gerald F. Davis & Suntae Kim, Financialization of the Economy, 72

Categorization

• SHARE: The Blockbuster-to-Netflix contrast — 80,000 employees to 2,000 — is a vivid example worth sharing with anyone thinking about firm-scale trends.
• CANDY: “Straddle the Earth versus dance on the head of a pin” is a compact, memorable way to state the shift in corporate form.
• XREF: connects to: Tech firms dominate markets by capitalization despite modest revenue shares — Nick Couldry & Ulises A. Mejias, The Costs of Connection: How Data Is…, 205; Corporate ownership and profit concentrate in a tiny number of firms — Samuel Bowles and Herbert Gintis, Schooling in Capitalist America:…, 623