The Asset Class: How Private Equity Turned Capitalism Against Itself

O’Brien, a financial journalist and assistant opinion editor at the Guardian, debuts with a smart examination of private equity. This secretive industry, she explains, claims to unlock the full earning potential of mismanaged companies for the benefit of investors but in reality weakens governments and widens the chasm between rich and poor. She traces private equity’s origins to the 1970s, as an attempt to revive stagnant Western economies. Its early adopters included economic policy advisers to U.S. president Ronald Reagan and U.K. prime minister Margaret Thatcher. Case studies reveal how private equity hobbles essential sectors—including British nursing homes, Danish housing, and Kenyan hospitals—while laundering money for billionaires, pension funds, and autocrats thanks to regulatory loopholes. Elsewhere, O’Brien examines the resulting backlash as well as the futility of individual opposition—whether from outraged customers of privatized water companies in Northern England or short sellers on Wall Street who dared to take on Blackstone, the world’s largest private-equity firm. Much has been written about private equity’s harms to American consumers, workers, and taxpayers; O’Brien’s investigation widens the scope to the entire Western economic system, exposing a global conspiracy in a narrative that has all the stakes and most of the accessibility of spy fiction. Readers will be entertained and enlightened. (June)