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buybuydandavis comments on How much was creating Google worth? - Less Wrong
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Comments (48)
Don't mistake Google's market cap for the value people have gotten out of Google. Shareholders only get a fraction of the value delivered by their companies.
Sometimes, that "fraction" is greater than 1 (not that I'm saying that it is in the case of Google). Rent seeking, regulatory capture, arbitrage, and tournament theory are all cases where people make more money than their contribution to the economy.
Indeed, this was the premise of my post :-). I was using the ratio of the founders' earnings to market cap as a proxy for the ratio of social value produced by the founders to social value produced by Google.