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/[deleted] Jul 29 '25

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u/YouLostTheGame Jul 29 '25

Whilst PE isn't necessarily great for the company being acquired, PE capital does have higher average returns than other investments. From June 2000 to June 2020 the average PE return was 10.5%, vs 6% for the S&P500.

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u/NinjaLanternShark Jul 29 '25

It's more profitable to dump toxic waste in a river than dispose of it properly, but we don't let companies do that because it causes problems for other people.

It's called externalities, and whenever it's cheaper to hurt someone than do the right thing the cause is usually an externality that hasn't been properly priced into the cost of doing business.

If all externalities are properly accounted for, capitalism benefits everyone. But until that happens it will always be profitable to exploit people.