Private Equity and Creative Destruction

The private-equity controversy raging around Mitt Romney is complicated in part because of corporatist interventions. But it misses the point to say, as some have, that Bain Capital wasn't trying to create jobs; rather it was trying to make money for its investors. For that just raises the question: How does one make money for investors? Theoretically the answer is: ultimately by creating value for consumers. That could require reducing the use of labor and resources in one line of production in order to free them for another line in which consumers have a more intense demand. We live in a world of scarcity.

Of course, I’ve only scratched the surface.