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Stock buybacks are good for the economy because they allocate money to where it can be used more efficiently, which is usually not in existing big corporations.
by konschubert 3y ago
Stock buybacks are good for the economy because they allocate money to where it can be used more efficiently, which is usually not in existing big corporations.
The alternative to stock buybacks is that the corporation make stupid acquisitions and try to integrate them into their processes, thereby killing them.
- jowea 3y agoThe closest alternative to buybacks is dividends. But to be honest I'm not sure if that's what the critics want the money going.
- konschubert 3y agoStock buybacks and dividends are the same thing economically, I mean both when I say “stock buybacks”. The difference is only in taxation.
- sumuyuda 3y agoShouldn’t the money be used more efficiently for society’s benefit or not concentrated by the share holders? Share holders will only further their own interests and not society’s interests.
- qwytw 3y agoHow do you accomplish that? Historically "shareholders" as a group have been quite effective (often but obviously not always) have been quite effective at using at their money for society’s benefit. In fact every society which tried to take all of their money away and eliminate them as a class (more or less violently) has failed economically. Turns out when it works properly free market competition is strongest force for economic and technological progress that has ever existed.