Mark Perry's chart of the non-patriarchy; Ro Khanna on industrial policy; Dan Williams on social belief spirals; Tanner Greer on Silicon Valley intellectuals
"The most important part of markets is the feedback mechanism" True.... but to be fair to the proponents of an “intellectual framework” of industrial policy" they are picking up - however misguidedly - on other societal "feedback mechanisms".
The idea of Globalisation as a solvent destroyer of social fabrics – as laissez-faire-gone-too-far - has been gestating in various (mainly American) conservative think-tanks for some years now. I share the sense that the fraying of community bonds is perhaps the greatest threat to the continued thriving of Western societies. But I have my doubts about the ability of anti-globalist politics to do much about this. I am not a great believer in political solutions....more a believer in unintended political consequences. My instinct is that neither the national nor the global economy is really controllable in the age of the internet. Things will be what they will be. https://grahamcunningham.substack.com/p/globalism-vs-national-conservatism
Another thing worth asking is if globalization is really the effect of the harm that it is said to have caused. Containerization coincided with the Vietnam war, which coincided with the industrialization of Asia. But that also happened at the same time as the Great Society and other anti-meritocratic reforms began to take hold.
Containerization is a neutral bundle of technologies and techniques. The containerization that makes Asia so competitive could have just as easily made it so that it never industrialized. So why is it not that certain unwelcome aspects of globalization are an effect of a deteriorated domestic economy and not the other way around?
I mostly agree but while government action often has unintended consequences, so does government inaction. In both cases it is often because we don't do enough to understand the consequences. On top of that, Congress typically does very big things with consequences that can't be predicted well and are difficult to measure.
Nudge units were mostly spoken negatively of in this substack in the past but however limited their applicability, the basic component of measuring results is surely good.
The issue with weak industrial competitiveness is that there are many, many causes for it, and many of those causes are third rails of American politics. Observing this, politicians instead propose laws that in effect just say "The US must produce Widgets, and we will appropriate a small fraction of the money needed to produce Widgets for the duration of this appropriation law. This will bring Rock Candy Mountain down to the people."
Maybe it is overstating the case, but it makes you think of Russia under serfdom. The Russians understood that they were backwards, but they lacked more things that they needed to unscrew themselves than could be listed. They did not have adequate 19th century legal training, sufficient professional civil servants, skilled laborers, scientists, merchants, primary schooling, or anything like that. And Russia had friendly relations for most of the 18th and 19th century with Great Britain, the central European states, and even France, so all those developed countries were exporting industrial goods, culture, and other goods to Backwards-stan.
The US problem is obviously different in many ways, but it is reminiscent. Saying a tariff and a round of appropriations can even start to solve the problem is like saying a tariff could industrialize Russia without doing anything about serfdom. Welfare backwardness is different from serfdom-backwardness, but I think the country needs to think in those terms to start to address the issues. We need an American Deng: tweaking around the edges will not do anything.
A nit: "...stock buybacks...do nothing to encourage investment in Johnstown or Youngstown." is not a fair point (regardless of whether this is encouraged by tax cuts, profitable operation, or something else).
Stock buybacks are just another way to return profits to investors. They're not different in principle from paying a dividend. Investors making profit from their investments lets them invest in new opportunities which might be in Johnstown, Youngstown, San Jose.
We need to speak out against the demonization of stock buybacks.
I've heard that it benefits short-term investors to the detriment of long-term ones. In writing this I've come to doubt that claim. It seems more likely to benefit some short-term investors to the detriment of other short-term ones. IDK.
Since many executives are compensated based on share price, it creates a perverse incentive to buy back more than is best for the company.
Having too little cash on hand increases profits per share but it also adds risk of the company not having enough cash. On average, this might be better for shareholders but it is worse for workers and for society as a whole.
Buybacks and dividends both allow return of excess capital to shareholders but dividends tend do this more slowly. Fast may be good if there is a big influx of cash but that is rare. It is more likely the cash builds up over time. Buybacks can also be good if market conditions change a lot. But market conditions can change back quickly too. While not always better, incentives to use dividends instead of buybacks tends to promote a longer term view of goals and prospects.
Related to your comment, you might be interested in the following. There is more at the link.
“The second critique is that repurchases allow insiders to unfairly profit. If share repurchases as rent-seeking behavior by insiders were a common, systematic abuse, CEOs whose companies buy back shares would receive abnormally high pay, including salary, bonuses, and the value of equity awards. Using a model-generated measure of excess pay that has been vetted in earlier academic literature, we estimate that CEOs of companies that make large positive repurchases earn only $51,000 more than CEOs of companies that do not repurchase shares — a statistically and economically insignificant amount of excess pay. The difference is even smaller — $4,000 — when we compare CEOs of companies that repurchase frequently with those that do not repurchase. These differences are economically tiny in relation to the average CEO’s pay of several million dollars. Surprisingly, CEOs of companies that repurchase infrequently or repurchase small positive amounts earn the least excess pay, less than even the CEOs of non-repurchasing companies. None of this evidence suggests that companies use repurchases to boost CEO pay.”
That's actually not really surprising. The point was that buybacks are made in part for personal gain, not to benefit the company. So while the buy back might directly boost the CEO's income, secondary effects (harm to the company) would reduce his income, or maybe the next CEO's income.
I would no more want to be governed by a handful of Silicon Valley’s tech field than a handful of DC wonks.
The mountains they’ve mastered are no taller than the others and their field of view is just as biased and limited, albeit perhaps in different directions.
Rather than judge based on their entrepreneurial success, or whether they’ve read the right collection of books, I would evaluate based on how much of a public persona they’ve sought (hubris), and what sort of family life they’ve fostered and maintained (temperament).
I was confused by the reference to silicon valley. While I agree with what he said, I also believe there are many areas of society where it would be more difficult if not impossible to apply a similar approach.
The fact that there are more super high IQ men than women, & super rich men than women, in the top 0.001% ranges, allows feminists to continually claim discrimination when for most average measures of life's problems, men now have more problems.
The 5 min- J. Peterson note about 30 yr old women competing with 20-35 year old women for the same few high status men is so important. Those "smart" women who choose edu & career before marriage and motherhood are so much less likely to be happy at 40 or 50 if they're still childless. Whether they're cat or dog ladies -- rat race life without a family becomes a series of shallow hedonistic pleasures, and often a feeling of meaninglessness which seems justified by those struggling with the pains and joys of raising a family.
The need for single-sex male spaces is far more important for healthy relationships than most feminists understand. Letting girls, and gay leaders, into the Boy Scouts has been hugely damaging to that org but also so many boys who could have benefitted who do not do so.
Boys & men become better masculine men with some positive male only spaces to be "masculine". Sports does that some, but fails the non-sporty types.
I don't see how the belief that remnants of slavery continue into the present in ways that disadvantage descendants of slaves and people who look like them AND disadvantage others from optimal cooperation with said disadvantaged people raises the status of college-educated whites over non-colleges-educated whites or any other groups over any other group. Nor does is seem very difficult to test empirically.
Now what public policy can or should do about this cluster of facts IS a hard problem, but why would possible solutions/mitigation divide college-educated and non college-educated whites?.
I was also confused. Still am. One possibility is that the statement is made equating college educated with liberals wanting reparations or similar action and non-college being those who don't see the light, so to speak.
We could probably avoid many of the pitfalls of industrial policy if we had a czar in charge of overseeing the allocation of funds. Personally, I would nominate Lina Khan after she is done shutting down supermarket mergers and private label brands like Amazon Basics. Or maybe a COO/CAO approach might work in getting the policy right?
Are they reading the wrong book from Rand? To me, I always found *The Fountainhead* as deeper and more important than *Atlas Shrugged*. The former will be required reading for my daughter while the latter will be completely optional if there isn’t something better lying around. Maybe I’m just biased by my own iconoclasm?
I'd agree that tariffs are a suboptimal way to encourage manufacturing, and the US government isn't well set up to support industries in a way that isn't just a massive graft. But the current status quo isn't really a manifestation of comparative advantage. In comparative advantage you are paying for imports with exports that you are uniquely good at producing, and you don't have persistent trade imbalances. A developing country might have a trade imbalance if it has investment needs that can't be supplied domestically but that's clearly not the case in the anglophone countries.
If you wanted to unwind this and figure out what industries the US actually has comparative advantage in you would either need something like Buffet's proposed import certificate or capital controls.
Looking at laws that make physical production expensive is also important, but it's not practical to restore trade balances with countries that are already aggressively engaged in industrial protection simply by reducing regulations. The story of the US regulating its industries out of existence isn't false but it's definitely incomplete.
> How does a false or crazy belief survive? It has to get past the defenses of the social institutions that filter ideas.
Perhaps this is a means by which liberty plants the seeds of its own demise. I'm just thinking this out, but what I mean is
1. A central premise of liberty is that we can bind ourselves to contracts in way that the government cannot.
2. Let's take an example of this. When one signs up to go to college, one binds oneself to the college honor code and agrees to submit to the college's internal administrative discipline.
3. Now, suppose you are accused of sexual harassment. Instead of a legal or civil trial, you get some kind of college administrative procedure with no real guarantees of any sort of due process. They can't put you in jail, but if you lose you get thrown out of school and potentially tarred as a sex offender.
What I'm getting at is that the scope of society has enlarged so much that the new idea doesn't have to get through any defenses at all. If an institution is large enough, it can just offer it up the crazy new idea as an internal alternative to the traditional societal means of doing things. And of course, within a given institution, the crazy belief is entrepreneurial and useful for certain people.
"The “intellectual framework” of industrial policy is to eliminate this feedback mechanism. Politicians will determine which firms expand. They will give poorly-run firms the means (“procurement guarantees”) to keep wasting resources."
I agree this is a huge risk and it has been very common historically but does it have to be this way?
Maybe it's not a good example but would the early growth of railroads have happened without the land grants? Microchip production in Taiwan is surely a better example. Would that have happened without the subsidies that got it off the ground? Maybe it wouldn't matter to us in US because the chips would have come from SKorea and Japan instead but how did the subsidies help Taiwan dominate the market? Failures get a lot of attention but what other successes are there?
There is another reason to consider government subsidies in some cases. Do we really want to be dependent on China for rare earth minerals? How best is that addressed?
On the subject of how TSMC became the dominant fabricator of high-end chips, I found Chris Miller's Chip War to be a useful resource, as well as on the whole topic of outsourcing of chip fabrication. As I recall, it wasn't just the subsidies/industrial policy, but also the business model of specializing in chip fabrication for 'fabless' chip designers (like NVIDIA), as opposed to vertical integration of chip design and fabrication (the Intel model). And the Taiwanese government's decision to promote the development of chip fabrication in Taiwan was also influenced by geopolitical considerations, unfortunately.
That may also be true but I've listened to interviews with the lead person on both the government and private side. They both say it wouldn't have happened without the startup subsidies.
I'm not sure how general policy must be before it tips over into being "industrial policy" but Austin, to the extent that it has become associated with tech, owes *much* of that to spending by the state in conjunction with the city and especially UT. It wasn't totally novel - Motorola and IBM had already come to town - but I think it is generally regarded as something engineered by some "visionaries" who were more connected to government than to industry, or even tech.
Is the distinction between Central planning and Industrial policy just a matter of degree?
Despite the generally favorable view of socialism in learned circles, I think “Central Planning” is still a dirty word. We need to identify the equivalence with Industrial Policy at every opportunity.
Trade theorist "solved" the industrial policy issue ages ago. If there is a reason to desire more production of X, do not put a tariff on X, subsidize the production. And that does not mean subsidize investment in the production of X, but the production itself. a) Tariffs encourages only production for domestic sales, not exports. Why would that be desirable? b) Tariffs via the exchange rate discourage exports and imports of non-tariffed items. Why would that be desirable? c) Tariffs discourage domestic consumption of X. Why would that be desirable
Oddly neither "Left" nor "Right" remembers the solution.
The tariffs are a source of more revenue for govt, subsidies require higher taxes/ more inflation.
Once tariff protected domestic producers become profitable, they can begin exports (a); FX fixing is bad (b); discouraging consumption of imports reduces dependence on those imports.
The positive revenue from tariffs usually is a dominant consideration for the supporters.
Fair point? Stock buybacks are the best of American capitalism. In the large majority of the world capital is kidnapped in the firms that creates it. Look at firm rotation rates in equity index US vs. Europe, Korea or Japan.
In America, cash returns to the owners that can reallocate it to new firms.
As I mentioned elsewhere I don't agree with the stated point against stock buybacks but I think they have other negatives. You rightly point out a benefit except I think dividends do that with less negative consequences.
"The most important part of markets is the feedback mechanism" True.... but to be fair to the proponents of an “intellectual framework” of industrial policy" they are picking up - however misguidedly - on other societal "feedback mechanisms".
The idea of Globalisation as a solvent destroyer of social fabrics – as laissez-faire-gone-too-far - has been gestating in various (mainly American) conservative think-tanks for some years now. I share the sense that the fraying of community bonds is perhaps the greatest threat to the continued thriving of Western societies. But I have my doubts about the ability of anti-globalist politics to do much about this. I am not a great believer in political solutions....more a believer in unintended political consequences. My instinct is that neither the national nor the global economy is really controllable in the age of the internet. Things will be what they will be. https://grahamcunningham.substack.com/p/globalism-vs-national-conservatism
Another thing worth asking is if globalization is really the effect of the harm that it is said to have caused. Containerization coincided with the Vietnam war, which coincided with the industrialization of Asia. But that also happened at the same time as the Great Society and other anti-meritocratic reforms began to take hold.
Containerization is a neutral bundle of technologies and techniques. The containerization that makes Asia so competitive could have just as easily made it so that it never industrialized. So why is it not that certain unwelcome aspects of globalization are an effect of a deteriorated domestic economy and not the other way around?
I mostly agree but while government action often has unintended consequences, so does government inaction. In both cases it is often because we don't do enough to understand the consequences. On top of that, Congress typically does very big things with consequences that can't be predicted well and are difficult to measure.
Nudge units were mostly spoken negatively of in this substack in the past but however limited their applicability, the basic component of measuring results is surely good.
The issue with weak industrial competitiveness is that there are many, many causes for it, and many of those causes are third rails of American politics. Observing this, politicians instead propose laws that in effect just say "The US must produce Widgets, and we will appropriate a small fraction of the money needed to produce Widgets for the duration of this appropriation law. This will bring Rock Candy Mountain down to the people."
Maybe it is overstating the case, but it makes you think of Russia under serfdom. The Russians understood that they were backwards, but they lacked more things that they needed to unscrew themselves than could be listed. They did not have adequate 19th century legal training, sufficient professional civil servants, skilled laborers, scientists, merchants, primary schooling, or anything like that. And Russia had friendly relations for most of the 18th and 19th century with Great Britain, the central European states, and even France, so all those developed countries were exporting industrial goods, culture, and other goods to Backwards-stan.
The US problem is obviously different in many ways, but it is reminiscent. Saying a tariff and a round of appropriations can even start to solve the problem is like saying a tariff could industrialize Russia without doing anything about serfdom. Welfare backwardness is different from serfdom-backwardness, but I think the country needs to think in those terms to start to address the issues. We need an American Deng: tweaking around the edges will not do anything.
A nit: "...stock buybacks...do nothing to encourage investment in Johnstown or Youngstown." is not a fair point (regardless of whether this is encouraged by tax cuts, profitable operation, or something else).
Stock buybacks are just another way to return profits to investors. They're not different in principle from paying a dividend. Investors making profit from their investments lets them invest in new opportunities which might be in Johnstown, Youngstown, San Jose.
We need to speak out against the demonization of stock buybacks.
I agree with your point regarding the quoted text. That said, there are other reasons not to like stock buybacks.
Please don’t leave us hanging. What’s not to like about stock buybacks?
I've heard that it benefits short-term investors to the detriment of long-term ones. In writing this I've come to doubt that claim. It seems more likely to benefit some short-term investors to the detriment of other short-term ones. IDK.
Since many executives are compensated based on share price, it creates a perverse incentive to buy back more than is best for the company.
Having too little cash on hand increases profits per share but it also adds risk of the company not having enough cash. On average, this might be better for shareholders but it is worse for workers and for society as a whole.
Buybacks and dividends both allow return of excess capital to shareholders but dividends tend do this more slowly. Fast may be good if there is a big influx of cash but that is rare. It is more likely the cash builds up over time. Buybacks can also be good if market conditions change a lot. But market conditions can change back quickly too. While not always better, incentives to use dividends instead of buybacks tends to promote a longer term view of goals and prospects.
Related to your comment, you might be interested in the following. There is more at the link.
“The second critique is that repurchases allow insiders to unfairly profit. If share repurchases as rent-seeking behavior by insiders were a common, systematic abuse, CEOs whose companies buy back shares would receive abnormally high pay, including salary, bonuses, and the value of equity awards. Using a model-generated measure of excess pay that has been vetted in earlier academic literature, we estimate that CEOs of companies that make large positive repurchases earn only $51,000 more than CEOs of companies that do not repurchase shares — a statistically and economically insignificant amount of excess pay. The difference is even smaller — $4,000 — when we compare CEOs of companies that repurchase frequently with those that do not repurchase. These differences are economically tiny in relation to the average CEO’s pay of several million dollars. Surprisingly, CEOs of companies that repurchase infrequently or repurchase small positive amounts earn the least excess pay, less than even the CEOs of non-repurchasing companies. None of this evidence suggests that companies use repurchases to boost CEO pay.”
https://sloanreview.mit.edu/article/the-case-against-restricting-stock-buybacks/
That's actually not really surprising. The point was that buybacks are made in part for personal gain, not to benefit the company. So while the buy back might directly boost the CEO's income, secondary effects (harm to the company) would reduce his income, or maybe the next CEO's income.
I would no more want to be governed by a handful of Silicon Valley’s tech field than a handful of DC wonks.
The mountains they’ve mastered are no taller than the others and their field of view is just as biased and limited, albeit perhaps in different directions.
Rather than judge based on their entrepreneurial success, or whether they’ve read the right collection of books, I would evaluate based on how much of a public persona they’ve sought (hubris), and what sort of family life they’ve fostered and maintained (temperament).
I was confused by the reference to silicon valley. While I agree with what he said, I also believe there are many areas of society where it would be more difficult if not impossible to apply a similar approach.
The fact that there are more super high IQ men than women, & super rich men than women, in the top 0.001% ranges, allows feminists to continually claim discrimination when for most average measures of life's problems, men now have more problems.
The 5 min- J. Peterson note about 30 yr old women competing with 20-35 year old women for the same few high status men is so important. Those "smart" women who choose edu & career before marriage and motherhood are so much less likely to be happy at 40 or 50 if they're still childless. Whether they're cat or dog ladies -- rat race life without a family becomes a series of shallow hedonistic pleasures, and often a feeling of meaninglessness which seems justified by those struggling with the pains and joys of raising a family.
The need for single-sex male spaces is far more important for healthy relationships than most feminists understand. Letting girls, and gay leaders, into the Boy Scouts has been hugely damaging to that org but also so many boys who could have benefitted who do not do so.
Boys & men become better masculine men with some positive male only spaces to be "masculine". Sports does that some, but fails the non-sporty types.
I don't see how the belief that remnants of slavery continue into the present in ways that disadvantage descendants of slaves and people who look like them AND disadvantage others from optimal cooperation with said disadvantaged people raises the status of college-educated whites over non-colleges-educated whites or any other groups over any other group. Nor does is seem very difficult to test empirically.
Now what public policy can or should do about this cluster of facts IS a hard problem, but why would possible solutions/mitigation divide college-educated and non college-educated whites?.
I was also confused. Still am. One possibility is that the statement is made equating college educated with liberals wanting reparations or similar action and non-college being those who don't see the light, so to speak.
We could probably avoid many of the pitfalls of industrial policy if we had a czar in charge of overseeing the allocation of funds. Personally, I would nominate Lina Khan after she is done shutting down supermarket mergers and private label brands like Amazon Basics. Or maybe a COO/CAO approach might work in getting the policy right?
Are they reading the wrong book from Rand? To me, I always found *The Fountainhead* as deeper and more important than *Atlas Shrugged*. The former will be required reading for my daughter while the latter will be completely optional if there isn’t something better lying around. Maybe I’m just biased by my own iconoclasm?
“ God help us.” lol. Excellent post.
“The “intellectual framework” of industrial policy is to eliminate this feedback mechanism.”
Incredible that Europe and America have responded to the rise of China by becoming more like China.
I'd agree that tariffs are a suboptimal way to encourage manufacturing, and the US government isn't well set up to support industries in a way that isn't just a massive graft. But the current status quo isn't really a manifestation of comparative advantage. In comparative advantage you are paying for imports with exports that you are uniquely good at producing, and you don't have persistent trade imbalances. A developing country might have a trade imbalance if it has investment needs that can't be supplied domestically but that's clearly not the case in the anglophone countries.
If you wanted to unwind this and figure out what industries the US actually has comparative advantage in you would either need something like Buffet's proposed import certificate or capital controls.
Looking at laws that make physical production expensive is also important, but it's not practical to restore trade balances with countries that are already aggressively engaged in industrial protection simply by reducing regulations. The story of the US regulating its industries out of existence isn't false but it's definitely incomplete.
> How does a false or crazy belief survive? It has to get past the defenses of the social institutions that filter ideas.
Perhaps this is a means by which liberty plants the seeds of its own demise. I'm just thinking this out, but what I mean is
1. A central premise of liberty is that we can bind ourselves to contracts in way that the government cannot.
2. Let's take an example of this. When one signs up to go to college, one binds oneself to the college honor code and agrees to submit to the college's internal administrative discipline.
3. Now, suppose you are accused of sexual harassment. Instead of a legal or civil trial, you get some kind of college administrative procedure with no real guarantees of any sort of due process. They can't put you in jail, but if you lose you get thrown out of school and potentially tarred as a sex offender.
What I'm getting at is that the scope of society has enlarged so much that the new idea doesn't have to get through any defenses at all. If an institution is large enough, it can just offer it up the crazy new idea as an internal alternative to the traditional societal means of doing things. And of course, within a given institution, the crazy belief is entrepreneurial and useful for certain people.
"The “intellectual framework” of industrial policy is to eliminate this feedback mechanism. Politicians will determine which firms expand. They will give poorly-run firms the means (“procurement guarantees”) to keep wasting resources."
I agree this is a huge risk and it has been very common historically but does it have to be this way?
Maybe it's not a good example but would the early growth of railroads have happened without the land grants? Microchip production in Taiwan is surely a better example. Would that have happened without the subsidies that got it off the ground? Maybe it wouldn't matter to us in US because the chips would have come from SKorea and Japan instead but how did the subsidies help Taiwan dominate the market? Failures get a lot of attention but what other successes are there?
There is another reason to consider government subsidies in some cases. Do we really want to be dependent on China for rare earth minerals? How best is that addressed?
On the subject of how TSMC became the dominant fabricator of high-end chips, I found Chris Miller's Chip War to be a useful resource, as well as on the whole topic of outsourcing of chip fabrication. As I recall, it wasn't just the subsidies/industrial policy, but also the business model of specializing in chip fabrication for 'fabless' chip designers (like NVIDIA), as opposed to vertical integration of chip design and fabrication (the Intel model). And the Taiwanese government's decision to promote the development of chip fabrication in Taiwan was also influenced by geopolitical considerations, unfortunately.
That may also be true but I've listened to interviews with the lead person on both the government and private side. They both say it wouldn't have happened without the startup subsidies.
I'm not sure how general policy must be before it tips over into being "industrial policy" but Austin, to the extent that it has become associated with tech, owes *much* of that to spending by the state in conjunction with the city and especially UT. It wasn't totally novel - Motorola and IBM had already come to town - but I think it is generally regarded as something engineered by some "visionaries" who were more connected to government than to industry, or even tech.
Is the distinction between Central planning and Industrial policy just a matter of degree?
Despite the generally favorable view of socialism in learned circles, I think “Central Planning” is still a dirty word. We need to identify the equivalence with Industrial Policy at every opportunity.
Trade theorist "solved" the industrial policy issue ages ago. If there is a reason to desire more production of X, do not put a tariff on X, subsidize the production. And that does not mean subsidize investment in the production of X, but the production itself. a) Tariffs encourages only production for domestic sales, not exports. Why would that be desirable? b) Tariffs via the exchange rate discourage exports and imports of non-tariffed items. Why would that be desirable? c) Tariffs discourage domestic consumption of X. Why would that be desirable
Oddly neither "Left" nor "Right" remembers the solution.
The tariffs are a source of more revenue for govt, subsidies require higher taxes/ more inflation.
Once tariff protected domestic producers become profitable, they can begin exports (a); FX fixing is bad (b); discouraging consumption of imports reduces dependence on those imports.
The positive revenue from tariffs usually is a dominant consideration for the supporters.
Fair point? Stock buybacks are the best of American capitalism. In the large majority of the world capital is kidnapped in the firms that creates it. Look at firm rotation rates in equity index US vs. Europe, Korea or Japan.
In America, cash returns to the owners that can reallocate it to new firms.
American exceptionalism.
As I mentioned elsewhere I don't agree with the stated point against stock buybacks but I think they have other negatives. You rightly point out a benefit except I think dividends do that with less negative consequences.