from the world's big
5 of the richest companies in history
Inconceivable wealth. And a few lessons in how not to get rich, too.
- You've definitely heard of Apple. But what about the Dutch East India Company?
- Did a 1911 Supreme Court decision result in more millionaires in America than any other court case?
- One example of how not to do it: the rise and fall of the Mississippi Company.
Dutch East India Company
The VOC flag. Photo credit: Michael Coghlan via Flickr.
Known under the initials VOC (Vereenigde Oostindische Compagnie), the Dutch East India Company would be worth about $7.8 trillion today. Founded in 1602, it accomplished globalist capitalism some 400 years before everyone else did. It began as a shipping company — with a 21 year monopoly on the Dutch spice market — before branching into almost every aspect of the spice trade, from production to consumer sales, while still keeping a massive footprint in the shipping industry at large for more than 100 years. But this success came at a massive moral cost: they exploited foreign workers, imprisoned many, and benefitted hugely from the slave trade. But for that 100 years, VOC was a gargantuan presence around the world. They controlled armadas of ships that were able to fight off navies and take territories, an impressive feat for a privately held company (imagine if Arby's began to take over entire city blocks).
You could probably say that the very idea of globalism stems from the VOC. Europeans wanted spices and textiles from Asia, but Asia didn't want very much in return except for precious metals — which Portugal and Spain had in abundance at the time. Paraphrasing here for the sake of brevity, the VOC created a hugely profitable trade corridor between Asia and Europe. And from around 1620 to 1630, the VOC used profits to reinvest in itself, becoming exponentially bigger in the process.
The Mississippi Company and the South Sea Company
Ooh, boy. This is a story. In you lived in France in the early 1700s you'd have likely heard of the Mississippi Company. Depending on which version of their history you read, you'll get two very different narratives about the company. They either controlled much of France's commercial interests in the New World for 20 years before fizzling out due to mismanagement... or they shipped convicts and prostitutes to Arkansas and Louisiana to ostensibly work for them in order to inflate their numbers and increase speculation on paper which nearly led to bankrupting France.
Both versions of the company history hold true. The central figure of the story was a Scottish economist named John Law who convinced the then-king of France, Louis XIV, to allow him to run the Banque Générale Privée ("General Private Bank") in 1716, taking on the national debt, which he then used to finance the Mississippi Company to organize trade with the New World. Law's company, in the space of two short years, bought several other shipping companies in order to create a near-monopoly of trade on the world's oceans. In order to fund such a massive operation, in 1720 the Mississippi Company became tied into the Banque Générale, which became the Banque Royale. Law kept pushing the valuation of his company and soon began shipping prisoners and prostitutes to America to work for his company as part of a marketing scheme which promised huge returns on stock.
The thing is: the scheme worked... but only for a very short while. Stocks soared, and then crashed. The whole cycle lasted just 4 years. Law fled to London and then to Venice, where he gambled away what he had left and died penniless in 1729 in Venice.
At roughly the same time, a joint-stock company was formed in England called the South Sea Company. John Law had been exiled from England after killing a man in a duel in 1694 (and was only free as he'd managed to escape prison and flee to Amsterdam), but after word of his successes with the Mississippi Company reached British shores they decided to set up their own similar joint-stock venture. The South Sea Company was given a monopoly to trade with South America. It, too, overvalued itself... mostly through speculation of a £70 million line of credit through the King of England himself, which never actually happened. A rush on stock by a who's-who of the who-was in England at the time (including Sir Isaac Newton, who had bought about £22,000 in South Sea stock) — followed by a slew of insider trading by South Sea employees who realized the bubble was about to burst — brought about a huge economic crash.
Both the South Sea Company and the Mississippi Company didn't actually do much trading with the Americas. It was mostly just a clever marketing ploy combined with public gullibility.
Businessmen in Saudi Arabia
Invited foreign and Saudi investors attend the Future Investment Initiative (FII) conference in Riyadh, on October 24, 2017.
The head of oil giant Saudi Aramco said that a lack of recent investments in the oil sector could lead to a shortage of supplies. / AFP PHOTO / FAYEZ NURELDINE
Still around today, Saudi Aramco is one of the world's biggest oil producers. Adjusted for inflation, at it's height, the company was worth $4.1 trillion.
When oil was discovered in Bahrain in 1932, the Saudi government accepted a bid from the newly-founded California-Arabian Standard Oil Company to search for oil in nearby Saudi Arabia. Soon after, Texas OilCo bought a 50 percent stake in California-Arabian. For the next five years, no oil was discovered and the company was hemorrhaging money. Finally, oil was discovered in Dhahran in 1938 and production quickly soared. Changing its name to Arabian American Oil Co (or, for short, Aramco) in 1944, it was then forced to share its profits with the Saudi government starting in 1950. This essentially nationalized the oil production, leading the huge amounts of money for the Saudi government. In 1980, the Saudi government assumed full control of Aramco.
While not quite as colorful a history as the Mississippi Company, Aramco is itself responsible for what economists now call the "golden gimmick" — wherein (and I'm definitely paraphrasing) a country's government takes shares from the company because it's just so darn profitable. Must be nice.
John D Rockefeller circa 1930: at work in his study. (Photo by Hulton Archive/Getty Images)
Ever heard the phrase "richer than a Rockefeller"? Well, that's because John D. Rockefeller founded Standard Oil in 1870 in Ohio. It became the largest oil refinery in the world for a number of years. Adjusted for inflation, in 1905, it was worth well over $1 trillion in today's money.
Rockefeller controlled 90 percent of the oil in America during the early 20th century; oil was used during that time primarily as a light source for lamps (this is before electricity became widely available) and then, with the invention of the car, became fuel for automobiles. Rockefeller was the cornerstone of two major industries until 1911, when Standard Oil was dissolved by none other than the U.S. Supreme Court for being an "illegal monopoly." When Standard Oil was broken up into 34 different companies — the shares of those companies became worth more than Standard Oil was, thus making Rockefeller obscenely wealthy instead of just extraordinarily wealthy.
How rich was John D. Rockefeller? Well, in 1913 he alone was worth about 2 percent of the entire U.S. GDP — about $400 billion, when adjusted for today's inflation. He attributed his success to a hard work ethic, his faith in God, and his abstinence from alcohol.
Oh, and those 34 companies? Two of them, Jersey Standard and Socony, became Exxon and Mobil, respectively. They eventually merged into a new company called Exxon-Mobil. That single company took over exactly where Standard Oil had left off and became a huge player in the gasoline industry. In 2007, it was worth $572 billion.
Apple CEO Steve Jobs speaks during an Apple special event April 8, 2010 in Cupertino, California. Jobs announced the new iPhone OS4 software. (Photo by Justin Sullivan/Getty Images)
Apple was founded back in 1976 by Steve Jobs, a canny marketer, and Steve Wozniak, an unparalleled programmer and computer genius. They had early successes in personal computers with the Apple I and the Macintosh, but by the mid-'90s they'd petered out, seemingly much more interested in appeasing shareholders than the public. Did you know Apple made CD players for a while? Digital cameras? A lot of people don't remember Apple's "weird" period.
But let's single out the the Apple Newton. This PDA (personal digital assistant) nearly bankrupted the company in 1993 after being rushed out before it was ready; it's handwriting recognition feature could barely read anything other than block letters and was widely mocked. Hold that thought for a paragraph.
Around 1997, Steve Jobs returned to the company and decided to concentrate on what the company did best: personal computing that catered to regular day-to-day users rather than avid tech professionals. He began to cater to different groups with singular products. The PowerMac for pro users. The iMac for classrooms. The MacBook and the MacBook Pro for people working out of coffeeshops.
But then Apple created the iPod, which could hold an entire library of music in your pocket. It was followed by the iPhone... a landmark device that put the internet, colors and all, in your pocket. The iPhone, funnily enough, has huge similarities to the much maligned Newton. Now consider the iPad and the Apple Pencil and how their handwriting recognition technology is considered the best in the industry. Sometimes you have the right idea but just 20 years too soon.
Then there was the iTunes store, which took over the music industry. Then the App Store, which transformed the tech ecosystem. In August of 2018, they became the most valuable company in the world with $1 trillion in value.
Which is still pennies compared to the Dutch East India Company. But hey. Who's counting?
Andy Samberg and Cristin Milioti get stuck in an infinite wedding time loop.
- Two wedding guests discover they're trapped in an infinite time loop, waking up in Palm Springs over and over and over.
- As the reality of their situation sets in, Nyles and Sarah decide to enjoy the repetitive awakenings.
- The film is perfectly timed for a world sheltering at home during a pandemic.
Richard Feynman once asked a silly question. Two MIT students just answered it.
Here's a fun experiment to try. Go to your pantry and see if you have a box of spaghetti. If you do, take out a noodle. Grab both ends of it and bend it until it breaks in half. How many pieces did it break into? If you got two large pieces and at least one small piece you're not alone.
But science loves a good challenge<p>The mystery remained unsolved until 2005, when French scientists <a href="http://www.lmm.jussieu.fr/~audoly/" target="_blank">Basile Audoly</a> and <a href="http://www.lmm.jussieu.fr/~neukirch/" target="_blank">Sebastien Neukirch </a>won an <a href="https://www.improbable.com/ig/" target="_blank">Ig Nobel Prize</a>, an award given to scientists for real work which is of a less serious nature than the discoveries that win Nobel prizes, for finally determining why this happens. <a href="http://www.lmm.jussieu.fr/spaghetti/audoly_neukirch_fragmentation.pdf" target="_blank">Their paper describing the effect is wonderfully funny to read</a>, as it takes such a banal issue so seriously. </p><p>They demonstrated that when a rod is bent past a certain point, such as when spaghetti is snapped in half by bending it at the ends, a "snapback effect" is created. This causes energy to reverberate from the initial break to other parts of the rod, often leading to a second break elsewhere.</p><p>While this settled the issue of <em>why </em>spaghetti noodles break into three or more pieces, it didn't establish if they always had to break this way. The question of if the snapback could be regulated remained unsettled.</p>
Physicists, being themselves, immediately wanted to try and break pasta into two pieces using this info<p><a href="https://roheiss.wordpress.com/fun/" target="_blank">Ronald Heisser</a> and <a href="https://math.mit.edu/directory/profile.php?pid=1787" target="_blank">Vishal Patil</a>, two graduate students currently at Cornell and MIT respectively, read about Feynman's night of noodle snapping in class and were inspired to try and find what could be done to make sure the pasta always broke in two.</p><p><a href="http://news.mit.edu/2018/mit-mathematicians-solve-age-old-spaghetti-mystery-0813" target="_blank">By placing the noodles in a special machine</a> built for the task and recording the bending with a high-powered camera, the young scientists were able to observe in extreme detail exactly what each change in their snapping method did to the pasta. After breaking more than 500 noodles, they found the solution.</p>
The apparatus the MIT researchers built specifically for the task of snapping hundreds of spaghetti sticks.
(Courtesy of the researchers)
What possible application could this have?<p>The snapback effect is not limited to uncooked pasta noodles and can be applied to rods of all sorts. The discovery of how to cleanly break them in two could be applied to future engineering projects.</p><p>Likewise, knowing how things fragment and fail is always handy to know when you're trying to build things. Carbon Nanotubes, <a href="https://bigthink.com/ideafeed/carbon-nanotube-space-elevator" target="_self">super strong cylinders often hailed as the building material of the future</a>, are also rods which can be better understood thanks to this odd experiment.</p><p>Sometimes big discoveries can be inspired by silly questions. If it hadn't been for Richard Feynman bending noodles seventy years ago, we wouldn't know what we know now about how energy is dispersed through rods and how to control their fracturing. While not all silly questions will lead to such a significant discovery, they can all help us learn.</p>
The multifaceted cerebellum is large — it's just tightly folded.
- A powerful MRI combined with modeling software results in a totally new view of the human cerebellum.
- The so-called 'little brain' is nearly 80% the size of the cerebral cortex when it's unfolded.
- This part of the brain is associated with a lot of things, and a new virtual map is suitably chaotic and complex.
Just under our brain's cortex and close to our brain stem sits the cerebellum, also known as the "little brain." It's an organ many animals have, and we're still learning what it does in humans. It's long been thought to be involved in sensory input and motor control, but recent studies suggests it also plays a role in a lot of other things, including emotion, thought, and pain. After all, about half of the brain's neurons reside there. But it's so small. Except it's not, according to a new study from San Diego State University (SDSU) published in PNAS (Proceedings of the National Academy of Sciences).
A neural crêpe
A new imaging study led by psychology professor and cognitive neuroscientist Martin Sereno of the SDSU MRI Imaging Center reveals that the cerebellum is actually an intricately folded organ that has a surface area equal in size to 78 percent of the cerebral cortex. Sereno, a pioneer in MRI brain imaging, collaborated with other experts from the U.K., Canada, and the Netherlands.
So what does it look like? Unfolded, the cerebellum is reminiscent of a crêpe, according to Sereno, about four inches wide and three feet long.
The team didn't physically unfold a cerebellum in their research. Instead, they worked with brain scans from a 9.4 Tesla MRI machine, and virtually unfolded and mapped the organ. Custom software was developed for the project, based on the open-source FreeSurfer app developed by Sereno and others. Their model allowed the scientists to unpack the virtual cerebellum down to each individual fold, or "folia."
Study's cross-sections of a folded cerebellum
Image source: Sereno, et al.
A complicated map
Sereno tells SDSU NewsCenter that "Until now we only had crude models of what it looked like. We now have a complete map or surface representation of the cerebellum, much like cities, counties, and states."
That map is a bit surprising, too, in that regions associated with different functions are scattered across the organ in peculiar ways, unlike the cortex where it's all pretty orderly. "You get a little chunk of the lip, next to a chunk of the shoulder or face, like jumbled puzzle pieces," says Sereno. This may have to do with the fact that when the cerebellum is folded, its elements line up differently than they do when the organ is unfolded.
It seems the folded structure of the cerebellum is a configuration that facilitates access to information coming from places all over the body. Sereno says, "Now that we have the first high resolution base map of the human cerebellum, there are many possibilities for researchers to start filling in what is certain to be a complex quilt of inputs, from many different parts of the cerebral cortex in more detail than ever before."
This makes sense if the cerebellum is involved in highly complex, advanced cognitive functions, such as handling language or performing abstract reasoning as scientists suspect. "When you think of the cognition required to write a scientific paper or explain a concept," says Sereno, "you have to pull in information from many different sources. And that's just how the cerebellum is set up."
Bigger and bigger
The study also suggests that the large size of their virtual human cerebellum is likely to be related to the sheer number of tasks with which the organ is involved in the complex human brain. The macaque cerebellum that the team analyzed, for example, amounts to just 30 percent the size of the animal's cortex.
"The fact that [the cerebellum] has such a large surface area speaks to the evolution of distinctively human behaviors and cognition," says Sereno. "It has expanded so much that the folding patterns are very complex."
As the study says, "Rather than coordinating sensory signals to execute expert physical movements, parts of the cerebellum may have been extended in humans to help coordinate fictive 'conceptual movements,' such as rapidly mentally rearranging a movement plan — or, in the fullness of time, perhaps even a mathematical equation."
Sereno concludes, "The 'little brain' is quite the jack of all trades. Mapping the cerebellum will be an interesting new frontier for the next decade."
What happens if we consider welfare programs as investments?
- A recently published study suggests that some welfare programs more than pay for themselves.
- It is one of the first major reviews of welfare programs to measure so many by a single metric.
- The findings will likely inform future welfare reform and encourage debate on how to grade success.
Welfare as an investment<p>The <a href="https://scholar.harvard.edu/files/hendren/files/welfare_vnber.pdf" target="_blank">study</a>, carried out by Nathaniel Hendren and Ben Sprung-Keyser of Harvard University, reviews 133 welfare programs through a single lens. The authors measured these programs' "Marginal Value of Public Funds" (MVPF), which is defined as the ratio of the recipients' willingness to pay for a program over its cost.</p><p>A program with an MVPF of one provides precisely as much in net benefits as it costs to deliver those benefits. For an illustration, imagine a program that hands someone a dollar. If getting that dollar doesn't alter their behavior, then the MVPF of that program is one. If it discourages them from working, then the program's cost goes up, as the program causes government tax revenues to fall in addition to costing money upfront. The MVPF goes below one in this case. <br> <br> Lastly, it is possible that getting the dollar causes the recipient to further their education and get a job that pays more taxes in the future, lowering the cost of the program in the long run and raising the MVPF. The value ratio can even hit infinity when a program fully "pays for itself."</p><p> While these are only a few examples, many others exist, and they do work to show you that a high MVPF means that a program "pays for itself," a value of one indicates a program "breaks even," and a value below one shows a program costs more money than the direct cost of the benefits would suggest.</p> After determining the programs' costs using existing literature and the willingness to pay through statistical analysis, 133 programs focusing on social insurance, education and job training, tax and cash transfers, and in-kind transfers were analyzed. The results show that some programs turn a "profit" for the government, mainly when they are focused on children:
This figure shows the MVPF for a variety of polices alongside the typical age of the beneficiaries. Clearly, programs targeted at children have a higher payoff.
Nathaniel Hendren and Ben Sprung-Keyser<p>Programs like child health services and K-12 education spending have infinite MVPF values. The authors argue this is because the programs allow children to live healthier, more productive lives and earn more money, which enables them to pay more taxes later. Programs like the preschool initiatives examined don't manage to do this as well and have a lower "profit" rate despite having decent MVPF ratios.</p><p>On the other hand, things like tuition deductions for older adults don't make back the money they cost. This is likely for several reasons, not the least of which is that there is less time for the benefactor to pay the government back in taxes. Disability insurance was likewise "unprofitable," as those collecting it have a reduced need to work and pay less back in taxes. </p>