In a comment here, Nuno Ornelas Martins says: "the central problem of economics is the distribution of the surplus rather than the allocation of scarce resources."

This, of course, flatly contradicts the standard view that scarcity is the problem of economics. However, in one context at least, he is right. J.W. Mason points out that, in the US, companies have (net) long ceased to raise money from financial markets. A similar thing is true in the UK; for years, companies' retained profits have exceeded capital spending - something which the OBR expects to continue.

It used to be the case that finance was scarce. The purpose of the joint-stock company was to overcome this problem, by allowing firms to raise small amounts of money from many dispersed investors.

But this is no longer so. From the point of view of existing companies, finance is abundant. Their problem is no longer one of the scarcity of finance, but instead of the distribution of surplus.

Sure, shareholder-owned firms raise cash. But they do so either through borrowing to buy back shares, or as a way for owners to cash out through IPOs. Such cash raisings aren't a means of raising investment funds.

This brings into question the nature of the firm. If external shareholders aren't necessary for raising investment funds, what use are they?

They don't provide effective oversight of managers; we know this from the theory of collective action and from the bitter experience of the banking crisis.

Nor is it that share prices signal which firms should invest and which shouldn't. Charles Lee and Salman Arif point out that, around the world, high investment leads to falling share prices, more earnings disappointments and weaker macroeconomic growth. This suggests that capitalism does a bad job of investment appraisal, with investment being driven by sentiment rather than by an accurate assessment of genuine profit opportunities. (Though this might tell us more about humans' bounded rationality than about the failure of capitalism.)

All this raises the question: if the problem is now the distribution of surplus, are capitalist institutions the best solution? It's tempting to think not. A natural alternative would be a more equal distribution of ownership, perhaps through a form of Roemerian market socialism, such that dividends would, in effect, be part of a citizens' basic income.

The obvious objection to this is simply that such a reallocation of property rights would be unjust; why should someone who owns lots of shares be expropriated more than one who is (say) long of housing?

And this raises a possibility which is counter-intuitive but I think at least reasonable - that the case for capitalism (in the narrow sense I intend here) lies more in justice than efficiency.

A clarification. You might object that the fact that corporate spending fell sharply after the banking crisis shows that finance matters hugely for businesses - that it isn't scarce at all. I'm not sure. The fact that businesses in aggregate are/were self-financing suggests that what happened in the crisis was a loss of intermediation services, not of finance per se; finance could not be transferred so easily from cash-rich to credit-constrained firms. To tweak Larry Summers' metaphor, it was as if electricty transmission failed, rather than electricity generation.

Note for the hard of thinking: I am not saying here that the central problem of economics is always distribution rather than scarcity. I'm just saying that, in this context and now, it is. Most interesting facts in the social sciences are local and particular.