Thus there are two reasons why we have global corporations: creating market dominating virtual monopolies of incompetence that thus can compete with much more competent smaller businesses and creating buyers for smaller corporations that as such can convert illusionary shareholder value to less abstract cash. The shareprice of the buyer typically goes down as a result of the diluted value, next to the problem of making money with a merger.

The problem is now that the share ‘value’ of the largest corporations can not be realized as there is no larger buyer. Therefore the value of the largest businesses are purely illusionary. It is supported by pooling the stocks into pension funds that are then bought by small citizens who buy them in hope of participating in a business. When that story pops, we need to call in the government so that the Ponzi scheme does not crumble. Apart from the CDO counterfeit money produced by the real estate lenders, that is the reason governments have to secure the debts that can no longer be secured by the collateral of illusionary shares.

Large public businesses have stop to compete for buyers for their products but they compete for buyers of their shares as otherwise their value and ability of dominating the market by buying much better competitors would erode. That is the true nature of relationship between shareholder value and competition. Competition is not only stifled within an organization only but also externally. Which is why global businesses sell product illusions today as they do no longer have the ability to compete on a product level. They need to outsource everything to smaller businesses, ideally in low-wage countries and resell it at an illusionary perceived value in their home market.

The profits that these large businesses produce are not real. They are created by constantly buying and selling other businesses at abstract market values, wringing them dry of assets and writing off illusionary market values to reduce the taxes on the book profits they would have to pay otherwise. No, I am not a communist or socialist. I am an observer who sees that a truly free market economy his destroyed by large monopolies. An unregulated flow of capital in stock markets kill the competitve drive of a large business and it kills the smaller competitors that are either dominated by sheer marketing power or gobbled up by using illusionary share price.  Max J. Pucher