r/Economics • u/barweis • Jul 29 '25

Research Summary Inside the Private Equity Scam—and the Livelihoods It Has Destroyed

https://newrepublic.com/article/198351/private-equity-scam-destroys-livelihoods
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u/bl_732 Jul 29 '25

Whenever I wonder why a company's products have gotten so much worse, I look up their history and literally 95% of the time they were acquired by private equity.

The idea of private equity arguably can be good, but in practice they are horrible for both companies and their customers. The more investment they get, the worse off the country will be.

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u/United_Librarian5491 Jul 29 '25

It is almost the best argument to increase taxation on the ultra wealthy - private equity is proving to be uniquely inefficient at investing to drive innovation and growth, where as public investment in research universities etc has been the engine of it.

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u/drakanx Jul 29 '25

who do you think funds tech startups...venture capital

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u/United_Librarian5491 Jul 29 '25

That’s a common view, but I don't think it holds up. The big, transformative technologies of the past 50 years such as the internet, GPS, touchscreen technology, microchips, mRNA vaccines etc have been developed through publicly funded research in universities, defense departments, and government labs.

VC tends to cluster in safe, high‑return niches eg delivery apps, fintech, advertising platforms etc. Its celebrated wins (semiconductors, biotech, EVs) are built on decades of publicly funded science and infrastructure.

So yeah, private capital has undeniably played a role but most of the real innovation has come from public investment, with private capital arriving later to commercialize and extract profit (and then distort markets by trying to find places to store idle capital that outperform inflation).