Thread

1. NegativeK · 1789944184 · focus · HN ↗

   Can someone steelman private equity, please? I'm honestly looking for the upsides (for non-investors) of when PE moves into an industry like medicine and begins buying up businesses that traditionally aren't already large chains.

   I already hear the downsides frequently from someone whose work is directly affected.

   1. tbrownaw · 1789950347 · focus · HN ↗

      > Can someone steelman private equity, please?

      Step back and look at what it fundamentally is.

      Person A has a business they want to sell.

      Person B has a pile of money and thinks that that business is (or can be) a good investment.

      That's it.

      So, what happens if person A is prohibited from selling their business? Are they forced to keep working because they don't have enough other savings to retire on? Do they shut the business down in order to retire? Something else?

      .

      Calls to ban private equity are attempts to play "shoot the messenger".

      1. Xirdus · 1789954947 · focus · HN ↗

         > So, what happens if person A is prohibited from selling their business?

         I actually made that thought experiment. Disallow selling businesses. Disallow selling shares. Disallow stock market. Disallow mergers. The only way to acquire a business is to found it or to inherit it. The only way to quit a business is to shut it all down, with all assets liquidated, all liabilities settled, and all contracts terminated.

         The main downside is that it's harder for to make money. Otherwise... I only see positives. And no, it wouldn't kill innovation. The investors would just have to invest the old fashioned way - by founding companies or expanding their existing businesses. As for job security, we already don't have it in the current system.

         1. cyberax · 1789957303 · focus · HN ↗

            OK. Your job is from now is dung transport. Because you inherited it, whether you like it or not.

            Sure, you are allowed to start a new business. But where would you get money? You can't sell your dung transport business, and you don't have enough money of your own to just start a new business from scratch.

            1. Xirdus · 1789988743 · focus · HN ↗

               It's crazy what some people will come up with just to have something to criticize instead of the actual contents of the thing they're replying to. Nobody said continuing an inherited business is mandatory, least of all me.

               I am all for serious discussion about shortcomings of my idea. But this isn't it.

               1. cyberax · 1790023703 · focus · HN ↗

                  No, I'm just describing the dystopia that will be the result of your idea.

                  You basically want to reinvent the feudalism with its nobility and peasants.

                  1. Xirdus · 1790026112 · focus · HN ↗

                     The dystopia you're describing has nothing in common whatsoever with my idea. Now please stop misrepresenting my words.

                     1. cyberax · 1790026482 · focus · HN ↗

                        Yes. It absolutely does, because your system heavily favors inherited capital that HAS to stay within the family. It also heavily discourages capital mobility, risk-taking, and entrepreneurship.

                        Say "hello" to dynastic marriages, noble lineages, etc. The _best_ case is the system of medieval guilds.

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