RECOMMENDED READING
A perplexingly common mistake among market evangelists is the assumption that wealth amassed represents value created. “There is one sort of labour,” wrote Adam Smith in The Wealth of Nations, “which adds to the value of the subject upon which it is bestowed: there is another which has no such effect. The former, as it produces a value, may be called productive; the latter, unproductive labour.”
Wealth can be a sign that tremendous value has been created for investors, customers and society more broadly. But wealth can also be captured rather than created. And while that works well for the capturer, the game is zero-sum, or even value-destroying, in aggregate. The private equity industry offers a fascinating case study in the importance of distinguishing between these scenarios.
Recommended Reading
Oren Cass Joins Bannon’s War Room to Discuss Financialization
The real Wall Street problem isn’t just the edge-case fraudsters or looters; it’s the entire exercise. Private equity, hedge funds, private credit: all these layers atop legitimate markets that create Read more…
Critics Corner with Steven Kaplan
Oren Cass is joined by private equity expert Steven Kaplan to discuss leveraged buyouts, bankruptcy, and the effects on workers.
Coin-Flip Capitalism
Coin-Flip Capitalism aims to help policymakers and the public better understand how the hedge fund, private equity, and venture capital industries function, what social and economic value they create or destroy, and how policy should respond.
