The "efficient" balance-sheet can be a disorderly death sentence.
From the Economist, which explained:
The intellectual fashion has been for companies to have "efficient" balance-sheets. If cash is not immediately needed to reinvest in the business, it should be handed back to shareholders, who can use it more profitably elsewhere. Hoarding cash for a rainy day was seen as a failure of executive imagination.
And the title: companies make a fashionable mistake. But markets are always right, no? In the long run, we're all dead. John Maynard Keynes
Returns to rentiers are simply inefficient, because funding can in fact come from other productive stakeholders. This is the Cooperative Advantage of a Not for Loss "Social Business" model as Dr Yunus calls it.
I think current capitalism is about to be hoist by its own petard. The mechanism will be the pervasive spread of P2P Finance, and there will be a transition from banking as credit intermediation to banking as service provision. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
