Worth your time is this recent LSE lecture, "Why Growth Theory Requires a Theory of the State Beyond Market Failures," by the economist Mariana Mazzucato, whose book The Entrepreneurial State: Debunking Public vs. Private Myths in Risk and Innovation, is also worth your time. In my opinion, the ideas expressed in the lecture have expanded considerably from those in the book. Mazzucato's basic argument is that the state is the true source of technological and scientific innovation and not the private sector. In her picture of things, and a picture which is closer to the truth of things, the private sector only appears on the scene when all of the major risks, the major financial unknowns of a research project have been absorbed by the long and deep investment of the state.

And what is it that corporations do these days, if they are not really investing in new products? Share buybacks is where their money goes. Now Mazzucato's lecture provided a fact that much improved my image of Steve Jobs: Apparently Apple had to wait for his death to begin this sad business of reallocating money from projects that develop new things to a scheme that increases the value of shares...

Activist investor Carl Icahn is at it again, this time writing an open letter to Apple CEO Tim Cook and urging the company to buy back $150 billion of its own stock.
His idea: Apple (AAPL, Fortune 500) shares are extremely undervalued, so now's the time for the company to invest in itself — and increase the value of its investors' stock holdings.

The argument often used to justify buybacks is that the company has run out of exciting product ideas.