Sublime

Companies with high CapEx business models were, on average, only 25 percent less capital efficient than low CapEx companies. High expenditures didn’t always lead to low efficiency, and some capital-intensive…

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coordination gap – a divide between what today’s coordination mechanisms manage well and what most economic activity actually requires.

Since the mid-1980s, Lazonick observes, “the resource-allocation regime at many, if not most, major U.S. business corporations has transitioned from ‘retain-and-reinvest’ to ‘downsize-and-distribute.’

These differing results tell an important capital allocation parable: the value of being in businesses with attractive returns on capital, and the related importance of getting out of low-return businesses.

Partly they killed themselves through replacing profit-and-loss responsibility pushed down to the lowest levels with a functional management structure, where you only had to report to your boss. There was a programming department, the sales department, the client services department (whatever it was), and there's the project management department,

Economies that combined all these institutional innovations – banks, bond markets, stock markets, insurance and property-owning democracy – performed better over the long run than those that did not, because financial intermediation generally permits a more efficient allocation of resources