Almost every political fight, including the culture wars, can be traced back to this binary. States versus markets. Equality versus efficiency.
That is a false dichotomy. The tension is not between equality and efficiency. The tension is between coordination and defection in Hobbes’s war of all against all.
Popular government cannot survive unless a popularly acceptable level of equality is achieved under it. But it is not government’s job to command that equality; it is government’s job to enable it. Life presents plus-sum opportunities — massively multiplayer iterated Prisoners Dilemmas that cry out for coordination. In some cases, contracts, leagues, unions, and other voluntary associations can effect such coordination. But in some cases, the “voluntary” association is the government, which is voluntary in the sense that its managers are subject to being voted out of office. Just as all members of a union may not agree with every action its leaders take, not all members of a free society will agree with every action their leaders take. But membership is still voluntary: in a free country, one is free to stay or go. (I’m not saying that leaving is easy, but neither is leaving any other mutual benefit society over the occasional policy disagreement with leadership.)
If the public sector is crucial to major technological developments then taxpayers should get a larger share, through royalties or equity, or by including conditions that steer businesses towards value creation instead of value extraction. More research and worker training — less share buybacks and golfing.
Or, we could pay a UBI and be done with it. From Thomas Paine to Andrew Yang, proponents of UBI have seen it as a dividend, a payment to all citizens for being citizens of a place that has prospered so mightily. Conservatives are fond of saying that inflation is a tax. OK, then, let’s raise taxes by risking inflation, i.e., by printing some money to pay a dividend. My guess is that the low-marginal-cost society will soak up the UBI dollars like a sponge, creating more prosperity and no inflation. Point is, you don’t have to change how corporations behave to share the benefits of their organizational productivity with the citizenry.
IMO, antipathy to buy-backs is a pretty good indicator of unserious economic commentary. If you’re going full Bastiat looking at the unseen value of government support for enterprise, how about looking at what becomes of buyback money? Money returned through buy-backs does not disappear. Recipients reinvest it in growing enterprises. Thus, the money that allegedly could have created jobs at Buyback, Inc., is creating jobs at Startup, Inc. That’s a good thing, not a bad thing. Buybacks also match the capital structures of enterprises to the risk-appetites of the capital markets, which varies over time, especially as a demographic bulge moves through the financial boa constrictor.
Buybacks are part of the competitive landscape. They reduce the cost of capital, which reduces costs overall (as do tax cuts), which, in a competitive economy drives down prices. The failure of these tactics to lower prices is a failure of competition, and preserving competition is a coordination activity in which government can engage. Hobbling competitors by requiring they be inefficiently capitalized, however, is not how competition is achieved.
Because competition drives price to cost, consumers are ultimately responsible for wages. If we were willing to pay higher prices, we could impose higher wages on companies. We could boycott any company that refuses to pay a living wage, or we could even vote to compel companies to pay that wage. Such laws are just boycotts with a bit of coercion to prevent leakage. (It helps to understand labor laws as restrictions on whom consumers can buy from rather than as restrictions on what producers can do. The change in perspective puts the onus where it belongs.)
Ms. Raworth’s agenda can be implemented in the same way. Once we decide on the details of her doughnut, we can boycott enterprises that behave inconsistently therewith. And, of course, by “boycott” I mean forbid ourselves to deal with such companies by forbidding them to behave badly. That’s because shaping economy is precisely what the state is for. GDP, like all metrics, is subject to Goodhart’s law: when it becomes a target, it stops being a metric. So, yes, we should not worship growth for growth’s sake. But I don’t believe anything really radical needs to be done to the economy. All we need are some new tools for communicating why certain practices need to be curtailed.
What we need are better leaders, not some new form of economics. The old horse would work just fine if it had a better rider. We need to fix our politics. If we do that, a nip here and a tuck there — and a UBI — are pretty much all the economy will need.