Hearing that Deutsche Borse will probably purchase the New York Stock Exchange, commentary focused on a German firm acquiring the symbol of U.S. capitalism. But who owns the German firm? According to the WSJ, Americans are major shareholders with 41% of Deutsche Borse while Germans have 18%.

Seemingly unrelated, the iPhone and a typical t-shirt are similar to Deutsche Borse. The iPhone supply chain winds up in China for assembly but the parts come from Germany and Korea and other countries where contract manufacturers are located. Comparably global, before a t-shirt lands in our drawer, it could have started as a cotton plant in Texas, become thread and a shirt in China, and then traveled to Florida for silk-screening.

So, the next time you see a “made in China” label, remember that other countries should probably have been listed. And, when you hear that a German firm is buying another business, do ask, “Who owns that German firm?”

The Economic Lesson

A process rather than a place, a market determines prices and quantities when it brings together buyers and sellers. For the original New York Stock Exchange, in 1791, brokers met under a buttonwood tree on Wall Street. People who wanted to buy or sell shares of the First Bank of the United States knew that they could get information under that buttonwood tree.

Now, with a global information infrastructure, markets for securities, iPhones and t-shirts can extend around the world.