In 2016, the advocacy group Global Justice Now published a report showing that 69 of the world’s largest 100 economic entities are now corporations, not governments. With annual revenues of $485.9 billion, Walmart topped all but nine countries.GDP is a value-added concept – revenue is not. So what is the right metric? Walmart may have had this much revenue but its pretax income was only $20.5 billion and its operating income was $22.8 billion. Profits understate value-added and since Walmart has over $100 billion in operating expenses (think all those workers surviving on $9 an hour), Walmart’s gross profit is likely the right metric to compare to the GDP of nations and this figure in 2016 was $124.6 billion. So yea – it is a mega corporation but its value-added does not put it in the top 10 of governments.
Wednesday, July 12, 2017
Comparing Companies to Nations
Asher Schechter raises a good point in How Market Power Leads to Corporate Political Influence but this comparison is troublesome: