Daniel Drezner has a new post up that confuses me. For some reason I can never get the comments on his site to work, so I’m posting my puzzlement here.
One of the more invidious comparisons analysts like to make is to compare the size of something with a country’s gross domestic product. An old warhorse of political economy/anti-corporate types, for example, is to say that the sales of multinational corporations exceeds many countries GDP. This is true but irrelevant -- GDP measures the value-added that an economy generates per year, so the proper and correct comparison is between a firm’s profits and GDP. When using that metric, corporations suddenly don’t look so big.
If I’m reading the make-up of GDP right, profits aren’t really a valid comparison either. Wouldn’t that be comparable to the net domestic product? Or am I missing something here?
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