The allocation of corporate profits to stock buybacks deserves much of the blame. Consider the 449 companies in the S&P 500 index that were publicly listed from 2003 through 2012. During that period those companies used 54% of their earnings—a total of $2.4 trillion—to buy back their own stock, almost all through purchases on the open market. Dividends absorbed an additional 37% of their earnings. That left very little for investments in productive capabilities or higher incomes for employees.
People who take 18th century values seriously are against concentration of power. After all the doctrines of the enlightenment held that individuals should be free from the coercion of concentrated power. The kind of concentrated power that they were thinking about was the church, and the state, and the feudal system, and so on, and you could kind of imagine a population of relatively equal people who would not be controlled by those private powers. But in the subsequent era, a new form of power developed — namely, corporations — with highly concentrated power over decision making in economic life, i.e., what’s produced, what’s distributed, what’s invested, and so forth, is narrowly concentrated.
The public mind might have funny ideas about democracy, which says that we should not be forced to simply rent ourselves to the people who own the country and own its institutions, rather that we should play a role in determining what those institutions do — that’s democracy. If we were to move towards democracy (and I think “democracy” even in the 18th century sense) we would say that there should be no maldistribution of power in determining what’s produced and distributed, etc. — rather that’s a problem for the entire community.
And in my own personal view, unless we move in that direction, human society probably isn’t going to survive.
I mean, the idea of care for others, and concern for other people’s needs, and concern for a fragile environment that must sustain future generations — all of these things are part of human nature. These are elements of human nature that are suppressed in a social and cultural system which is designed to maximize personal gain, and I think we must try to overcome that suppression, and that’s in fact what democracy could bring about — it could lead to the expression of other human needs and values that tend to be suppressed under the institutional structure of private power and private profit.
What happens to all the profit? Where does this money go? This should be the question for anyone working for a major corporation. — Xtrix
If most of the money is going to stock buybacks and dividends, my question is why do they do that? who decides, the CEO? You mentioned that it hasn't always been that way....how and why was it different? — John McMannis
Given this analysis, the only question left is: what exactly do we do about it? In other words, what about solutions? What goals are we working towards? — Xtrix
I think the only "solution" is to let the whole system collapse, probably better sooner than later... and see what can grow after that.
The "system" is predicated on the idea that "we" can secure a future for ourselves apart and above of the rest of the world. This has turned out to be a mistake... no matter the disavowment of this mistake, at some time we will have to recon with it. If we wait longer, it'll probably be that much harder. — ChatteringMonkey
Stock buybacks are happening because the ROI in them is higher than the ROI in non-financials. No need to look to ideological factors. Follow the money. It's as simple as that. — StreetlightX
And the resistance in the real economy is at record levels. The whole thing is being held together by the duct-tape of QE and PPP and record low interest rates. It's bleeding to death. Who in their right mind would park their money there? No sensible capitalist. — StreetlightX
I think the only "solution" is to let the whole system collapse, probably better sooner than later... and see what can grow after that. — ChatteringMonkey
Maybe...but that means enormous suffering that will be felt mostly -- as always -- by the poor and working classes. It means worldwide depression. They've gotten themselves into a game where they're now "too big to fail," and so the government serves as a backstop for them, preventing them from failing. On and on we go.
I'd much prefer massive legal and regulatory reforms, but that's not going to happen either. What's more is that we're really out of time. So if the entire system collapses, perhaps that's the last best hope we have?
There's always the people, of course. That's my real hope. Unfortunately millions of people are far too divided by our media bubbles, too tired from work, too sick from our lifestyles, too medicated, too drugged out, or too "amused" to know or care about the imminent catastrophe already unfolding. — Xtrix
Whatever goals we have, I’m thinking more and more there’s only one way to get there: through collective effort. That’s not to say we lose our individual identities— but that one person, isolated, simply can’t take on an entire system.
So then isn’t another way of looking at things to say: the “real” problem to overcome is our own unwillingness to get together? — Xtrix
Like it or not I guess it is the system which fits our necessities the most. I don't say we have to live in an economical jungle but in a world where the free market is respected as much as the public administration.
I guess that could be the perfect equilibrium — javi2541997
What organizations have you found to be working on these issues? — Xtrix
I was very disheartened when the vile Maggie Thatcher called Tony Blair her greatest achievement. That was a very bitter truth for me. — universeness
Whatever goals we have, I’m thinking more and more there’s only one way to get there: through collective effort. That’s not to say we lose our individual identities— but that one person, isolated, simply can’t take on an entire system. — Xtrix
I think that division is part of the whole divide and conquer strategy. Blaming the victims doesn’t seem like the right decision. — Average
Even if I can be insulting, that doesn't mean I can't respect what makes you human, and love that humanity. — Garrett Travers
Capitalism is just evolution, possibly gone wrong for the way it rewards (fierce) competition. — Agent Smith
I don't say we have to live in an economical jungle but in a world where the free market is respected as much as the public administration. — javi2541997
In the UK, there are two groups I know of called 'momentum' and 'compass,' who are trying to create a new progressive politics which tries to address many of the issues you raise. They both support Universal Basic Income (UBI) for example. — universeness
No, but the system has to be taken on an individual level. It's what "consumers" -- every individual person can do. — baker
Don't buy stuff at sales and at discount prices, don't buy fast fashion, buy less, buy relatively good quality, treat your things well so that they last. Don't buy junkfood. Don't buy pseudoluxuries (like storebrand versions of luxury items, like storebrand champagne). Buy as few imported goods as possible. — baker
True. But who's blaming the victims? — Xtrix
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