[eru]

> Large firms have been sitting on enormous sums of cash; e.g., why is it that the most capitalized company on earth isn't investing aggressively. In lieu of investment, many of these firms have been focused on engineering stock buybacks.

Ie they have essentially been paying dividends. Working as intended.

[yorkedork]

What is it that's working as intended? The process of buying back shares of your own company?

If you read what I wrote carefully, you should notice something that I didn't say:

  AAPL has a bunch of cash and is using it to fund its stock buyback program. Thus, capitalism has failed.

In fact, I was attempting to elucidate the OP's topic. I believe a reasonable interpretation to be: why are so many startups with weak fundamentals and/or specious business models receiving so much funding via private equity?

My response to this question was to observe macro-level phenomena and speculate that the _emergence_ of this dynamic was due to a broad-based failure in matching capital with desired investment risk and return. I mentioned Apple to demonstrate what a capital hoarder has done (which is to reinvest in its own equity) in relief against private equity firms. In a global environment where demand for safe assets exceeds supply, less risk-averse firms are chasing further risk to maintain their desired level of return.

None of these points, I thought, required a race to defend attacks against capitalism; however, in the interest of demonstrating my sincerity, I'll share a couple of my own positions I believe are loosely-relevant to the broader discussion:

  * Capitalism maximizes human capital: no
  * Efficient markets hypothesis: wrong-headed, at best
  * Moralizing capital: one of the most socially and politically toxic behaviors

It is my view that capitalism is a set of prescriptions which seek to define and regulate economic behavior. Further, it seems misguided to say simply that capitalism has succeeded or that it failed. A better alternative might be to say: given a set of expectations, a capitalist environment produced correct or incorrect results. Or, a more politically-charged example: capitalism has succeeded (or failed) in maximizing, e.g., environmental capital, human capital, social welfare or aggregate happiness.

In any case, I now regret side-tracking myself and I don't find it particularly relevant to be debating the merits of capitalism in this context.

[eru]

OK, sure, no need to side track.

> Capitalism maximizes human capital: no

Actually, it economises on that kind of capital, too.