In general, you can make that sort of broad argument about anything. For example, you could say slavers were trying to reallocate labor from where it was less productive (African subsistence farming) to where it was more productive (building the American economy).
The point being made here is whether Private Equity CEOs are contributing anything substantial apart from concentrating capital. The answer to that has to be no. Private equity firms (the refashioned lbo firms, not vc) have a history of preying on medium-sized solid businesses where they strip the company of assets, load it with debt, and eventually pocket gains at the expense of employees and other stakeholders.
That said, I agree with you in that a PE CEO is a bad example to use in this case. A PE firm is not neutral-useless, it is deleterious to society.
>For example, you could say slavers were trying to reallocate labor from where it was less productive (African subsistence farming) to where it was more productive (building the American economy).
I think that's a different discourse. Slave labour was not a "bullshit job", it was productive. However, it was unethical. You can have productive jobs which are unethical, but that's a separate discussion from bullshit jobs.
>I think that's a different discourse. Slave labour was not a "bullshit job", it was productive.
That depends on how you do the accounting. If you account for slave labor as the cost of minimal food and housing, then it's not only productive, it's cheaper than almost anything else, especially because the slaves are property, so you can breed them and get a return-on-investment while also extracting labor.
Of course, if you account for slave labor in terms of some equivalent to wages, then all of a sudden society has reason to stop using slave labor and innovate instead. Ditto for today's low-wage labor in which sub-living wages end up subsidized by state antipoverty benefits.
Society has always faced a choice between exploitation and innovation, a zero-sum arrangement and a positive-sum arrangement. Unfortunately, rarely has it been wise enough to choose the latter.
Private equity is one of the most valuable functions of a market based economy, and that's understating its importance. To say the head of a private equity firm serves no purpose, is to claim allocating private capital in a market economy needs nobody in charge of that process at the company doing it.
Nearly all venture capital is private equity. Sam Altman is the President of a private equity company.
Private equity is not about concentrating capital, it's about allocating capital to productive use. It's no more vile than the stock market, which allocates capital from investors during the IPO process and afterward through the common purchase of shares.
Further, your comparison about slavery is obviously entirely false. An angel investor - aka private equity investor - like say Mark Cuban, who owns his own investment company and is the head of it, is not performing a function similar to slavery. Mark's capital is his own, and it was not stolen from people held in slavery by force. There is no similarity, and one cannot simply say they're similar because slavers were re-allocating capital too, that would be an intentionally nonsensical comparison.
This is why I wrote in paranthesis that I am talking about refashioned lbo firms, not vc firms. I am talking about KKR, Bain Capital (not Bain Ventures), Blackstone and the like. I am NOT talking about firms like Kleiner Perkins and Sequoia.
Then why not say leveraged buyout firms, since your issue is with an exceptionally small segment of private equity, instead of referring in general terms to private equity (and PE CEOs) across your entire post?
Having a good understanding of what KKR does, I fail to see how they're so bad. Most of KKR's deals have involved voluntary buyouts, which were then spun back off and voluntarily purchased by other investors. Almost all of the deals that made them famous in the 1980s were friendly deals.
Can you give me a better understanding, in a short summary, of why KKR is so terrible?
The point being made here is whether Private Equity CEOs are contributing anything substantial apart from concentrating capital. The answer to that has to be no. Private equity firms (the refashioned lbo firms, not vc) have a history of preying on medium-sized solid businesses where they strip the company of assets, load it with debt, and eventually pocket gains at the expense of employees and other stakeholders.
That said, I agree with you in that a PE CEO is a bad example to use in this case. A PE firm is not neutral-useless, it is deleterious to society.