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Half of Publicly Traded Companies Will Be Gone in 10 Years

Half of Publicly Traded Companies Will Be Gone in 10 Years
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Wednesday, 04 October 2017 01:07 PM Current | Bio | Archive

From 1950 to 2009, a total of 28,853 companies were listed on U.S. stock markets. Seventy-eight percent (78 percent) of them had disappeared by 2009. Of all publicly traded companies at any given time, half will be gone within 10 years.[1]

This data suggests a vibrant economy that forces companies to keep serving consumers in order to survive. Even the most powerful companies are unable to stay on top for long periods of time.

Still, many corporations seem to dominate the economy and the public imagination for a period of time. In today’s world, companies like Google and Facebook fill this role. Such companies are so dominant that many people believe they can never be stopped. But history suggests that they will maintain that exalted position for only a brief period of time.

Fifty years ago, General Motors was such a company. It sold 49 percent of all cars purchased in the United States.

John Kenneth Galbraith, a Harvard professor of economics, wrote that GM’s position was so dominant that it could no longer be constrained by either consumers or competitors. Galbraith, who served in four presidential administrations, made that claim in a book, The New Industrial State.[2] In his view, the auto firms would never compete with each other because they shared a common interest in soaking the consumer by raising prices.

Eleven years later, Galbraith updated the book and repeated his claim that no other auto company would be foolish enough to take on GM. Why? "Everyone knows that the survivor of such a contest would not be the aggressor but General Motors."

The auto giant’s market share was still a remarkable 46 percent at that point. It never again reached such lofty heights. In fact, GM’s share of the market declined for 29 of the next 36 years, eventually leading it into bankruptcy and a government bailout. It went from selling 46 percent of all cars in 1978 to 35 percent a decade later, 29 percent a decade after that, and just 17 percent in 2014.

In my book, "Politics Has Failed: America Will Not," I explain what happened. "Firms like Toyota, Honda, Nissan, and Hyundai didn’t read Galbraith’s warning of how they would surely lose by taking on General Motors. In 1978, those firms had a combined 8 percent of U.S. auto sales. Within a decade, that share had doubled to 17 percent and has since doubled again to 35 percent. In recent years, Toyota alone has sold more cars worldwide than GM."

GM’s story is not at all unusual. Of all the Fortune 500 firms in 1955, only 12 percent are still with us today.[3]


  1. West, G. (2017). Scale: The Universal Laws of Growth, Innovation, Sustainability, and the Pace of Life in Organisms, Cities, Economies, and Companies. New York, NY: Penguin Press.

      2. Galbraith, J.K. (1967). The New Industrial State. Princeton, NJ: Princeton                            University Press.

     3. A Wealth of Common Sense, "Why Cities Survive & Companies Die," September          28, 2017.

Each weekday, Scott Rasmussen’s Number of the Day explores interesting and newsworthy topics at the intersection of culture, politics, and technology. Columns published on Ballotpedia reflect the views of the author.

Scott Rasmussen is a Senior Fellow for the Study of Self-Governance at the King’s College in New York and an Editor-At-Large for Ballotpedia, the Encyclopedia of American Politics. His most recent book, "Politics Has Failed: America Will Not," was published by the Sutherland Institute in May.To read more of his reports — Click Here Now.

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From 1950 to 2009, a total of 28,853 companies were listed on U.S. stock markets. 78 percent of them had disappeared by 2009.
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Wednesday, 04 October 2017 01:07 PM
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