In Praise Of Carl Icahn's Apple Buyback Proposals — forbes.com

Carl Icahn’s idea that Apple Apple should buy back even more of its own stock is coming under fire from certain quarters. The insistence being that instead of just returning those profits to shareholders the company should instead be investing in expanding its current business. This point is then made more generally about businesses: instead of returning profits to shareholders the managers of those businesses should be employing that capital to expand production and perhaps the number of decent jobs around as well. Sadly, this sort of thinking is to miss what we actually want to be happening in the economy. What’s being missed is that we actually want, positively desire as a matter of public policy, capital to be cycled out of large and mature companies and off into investment in the new and untried. We should therefore be absolutely delighted when buybacks happen, or when dividend payments are high: because this is in accord with our desired public policy of moving that capital out of the slow growth sectors of the economy and into the newer and more dynamic.

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