Les Leopold is a guy who wrote a book called Runaway Inequality: An Activist’s Guide to Economic Justice. Here’s an excerpt from an interview about the book:

In the late ’70s, roughly, a new economic philosophy really caught hold in both political parties. It originally came from the right, from Milton Friedman and the free marketeers. Academics call it neoliberalism; in the book, we call it the “Better Business Climate.”

It basically was kind of a simple model. Cut taxes, cut regulations, cut back social spending so people will be more eager to find work and be less dependent on the government, and basically undermine the power of labor unions so the economy would run more on market principles and have less inefficiencies in it. There would be more investment and profits, and therefore, all boats would rise. It would lead to kind of a boom economy. That was the theory. I was in graduate school when that was going on, and it was pretty strong, even more liberal economists were sort of giving up on Keynesianism and going in this direction.

What they didn’t teach us and what they never discussed is that it’s one thing to deregulate trucking or airlines or telecommunications, but it’s quite another thing to deregulate the financial sector… In 1980, about two percent of a company’s profits were used for stock buybacks. By 2007, 75 percent of all corporate profits were used to buy back their own shares. Forget about R&D, forget about workers’ wages, forget about all that kind of stuff. All that matters to a CEO today is raising the prices of the shares through stock buybacks.

The mantra makes some logical sense – capitalism is about competition to create better products at better prices and operate efficiently in the short term, and a necessity to innovate if you want to compete in the long term. Consumers are supposed to win. Profit and stock price are supposed to be the score card that determines which companies are winning, and the possibility of winning is the incentive to play the game. This all makes some sense, unless and until people are gaming the system to such an extent it is not really competition any more.