I have a working paper up at the Roosevelt Institute, as part of their new Financialization Project. Much of the content will be familiar to readers of this blog, but I think the argument is clearer and, I hope, more convincing in the paper.
The paper has gotten a nice writeup at the Washington Post, and at the Washington Center for Equitable Growth.
UPDATE. And in the International Business Times.
I just read it, and found it fascinating. It should be no surprise that it's getting good writeups.
For me, personally, it was the concept of rentier opportunity costs that had me spazzing, because I was thinking that this drives what sort of profits (nature, not amount) a corporation wanted, and that drives a corporation's decision making as to who should pay for the value generated~and not by testing any marketplace. For someone who provides content on the internet, aren't individual sales to people in the aggregate capable of generating a higher price (more total profits) for a corporation's services rather than selling data to some oligopsony with finicky consumption habits? Given the whole history and dynamics of paywalls, I have to wonder about whether rentier opportunity cost, normalized throughout business society, isn't a kind of implicit barrier to entry that gets enforced, whether you have a corporation, limited partnership, or sole proprietor. Customers expect whatever they are socialized to. Other companies in your niche are structured to accommodate large players that have rentier expectations, so forth and on.
Eeeh, might not be important thoughts, but I really did like the fizz in the head, so thanks again.
Any response to Ryan Decker's (fairly standard neoclassical) critique? Which boils down to: "What do the shareholders do with the money if not invest it elsewhere?"
http://updatedpriors.blogspot.com/2015/02/articulating-my-confusion-shareholders.html
Good question. I'm writing a response now, but it comes down to:
1. We know that it does not flow to investment elsewhere in the economy. (That's why include the aggregate data.)
2. Some of it does go to higher consumption by capital-income recipients — we know that there has been a disproportionate rise in consumption spending by higher income households.
3. Some of it ends up as incomes in the financial sector.
4. Some of it disappears, in the sense that lower investment leads to lower aggregate output. In the simple Minsky-Kalecki story, we can imagine that firm A's decision to reduce investment and raise shareholder payouts reduces profits at other firms, and if we trace this process throughout the economy we end up with a situation where the aggregate effect of increasing the share of profits paid out is to reduce total profits and leave total payouts unchanged.