What does it mean that some of the decade’s big market winners were companies with no real net worth?
This should be of concern because it suggests that capitalism’s process of creative destruction isn’t working. Zombie companies tend to be less productive than others, so their survival may well be a part of the explanation for the low productivity that has bedeviled the West since the financial crisis.
All of these factors, I believe, are at work in the rise of negative-value companies. In all cases, a return to higher interest rates would bring this group great difficulties. Zombies and companies hollowed out by private equity would face an existential crisis, while we would see how well the new immaterial giants could cope once money had a higher price.
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