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Share Buybacks and the Contradictions of “Shareholder Capitalism”

In the jargon of finance, America is suffering from a capital allocation problem. The country seems incapable of making the necessary investments to fuel future productivity and growth, or to ensure widespread prosperity. At the government level, public spending on basic research and development as well as infrastructure investment has declined significantly over the past…

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“Getting Away with Murder”: Prescription Drug Coverage in America

Nine days before the presidential inauguration of Donald Trump, Vice President Elect Mike Pence strode to the press conference podium. He reviewed the transition team’s progress in nominating cabinet secretaries, but quickly turned his attention to the “concerted effort . . . to delegitimize this election and to demean our incoming administration.” Although pledging his…

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The Economics—and Politics—of Broadband

Today it is hardly possible to imagine an internet without its biggest players. Google’s market share in search is somewhere between 70 percent and 90 percent (depending on whether services like YouTube and Google Maps are included). Facebook has more than two billion active users. Netflix alone is responsible for more than a third of…

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Radical Markets versus Sensible Politics

Market-based reforms were used in the 1980s—really invented as a concept in the run-up to the 1980s—to counteract the excesses and failures of post–World War II social policy. At the time, marginal income tax rates in excess of 70 percent had shifteind income into unproductive tax-optimization vehicles instead of savings and investment. Excessive urban rent controls were a disincentive…

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Postal Banking’s Public Benefits

The financial crisis of 2008 made clear to the public, in a way that had not been apparent for some time, that banks depend for their existence and operation on a structural framework created by the federal government. But policymakers as well as the public at large do not have a clear view of the…

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Evaluating Increases in Think-Tank Executive Compensation

Shortly before announcing his plans to resign from the presidency of the American Enterprise Institute (AEI), Arthur Brooks outlined a framework for evaluating the “impact” of think tanks such as his own in the Harvard Business Review.1 In his article, Brooks identified several metrics for assessing impact, such as the number of op-eds placed in leading newspapers…

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Patent Reforms to Encourage Innovation and Competition

The original justification for patents and copyrights was to secure the moral right of holders to determine the use of their creations. For some time now, however, patents have been justified in terms of their economic utility. According to this view, market exclusivity is necessary for motivating inventors and investors to put time and money…

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Cryptocurrencies: Commodity Dynamics and Cartelization

Bitcoin and the other altcoins now have more “experts” than perhaps any other market. I am no such “expert”: I am neither a cryptographer nor a computer programmer. I am a currency and commodity trader of thirty-plus years, and I approach the cryptocurrency market from that perspective. The cryptocurrency market cannot easily be dismissed, despite…

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A Long-Term Perspective on the Gig Economy

In July 2017, Don Lane, a courier working in southern England for the German logistics firm DPD, attended a hospital medical appointment regarding his deteriorating diabetes condition. The firm fined him £150 because as a result he failed to deliver his allocation of parcels for the day. In the following months his diabetes worsened; he…

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Tech Platforms and the Knowledge Problem

Friedrich von Hayek, the preeminent theorist of laissez-faire, called the “knowledge problem” an insuperable barrier to central planning. Knowledge about the price of supplies and labor, and consumers’ ability and willingness to pay, is so scattered and protean that even the wisest authorities cannot access all of it. No person knows everything about how goods…

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