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March 13, 2007



Deep breaths, Chris. This is no more and no less than a stock British columnist at work.

To put in dodgy python: -

def_init_Columnist(grotesque, issue, idiot, synonym)
tuple(grotesque, issue, idiot, synonym),(silly old bat, private equity, Tony Benn, obviously)

print "Oh, I'm just a [%grotesque] and I don't understand [%supposedly complicated issue], but surely [%idiot] must be right because their opinion [%synonym for "suits my prejudices"]" trick."


The parameters of Columnist could also take the values "silly girl", "stereotype ineffectual middle class twerp", "global warming", "Islam", "terrorism", "Britney Spears", "Sir Ian Blair", "Lord Goldsmith", "David Cameron", "common sense" etc.

Yeah, I know I need a template engine to do this properly, but it is actually true that we could replace her with a simple script.


Note that somewhere during the Golden Age of smartarsedness and chippiness briefly achieved in the last comment, I edited it drastically and accidentally left the word "trick" at the end of a sentence.

I'd be obliged if you were to let it stand in order to maximise my public humiliation.

Phil Hunt

Alex, I suggest you sell than program to the G|uardian. They could save a lot of money in columnists' fees.


She doesn't sound much like Lord Hanson. Are they related?


Phil, consider it open source.

Will, somehow I doubt it, as essentially all her output that isn't defined by the code above concerns worrying about money.


Not that there's anything wrong with that, but I'd gladly pay more for the paper if they guaranteed less of her.


...What Hanson is doing here is blurting out the sheer crassness of the lame-brained soft left. She gets her opinions from her addle-headed friends, rather than research and thinking...

By this, I presume you've finally made the break from the left, Chris or what can be concluded?

Larry Teabag

Obscurity, do you know anything about anything?


Um, James? Did you miss the concluding bits about worker ownership completely? I mean, you even quote the bit about lame brained.

Guess the recent articles about most conservatives being stupid also went over your head as well?

Alex? You're nuts. I think I knew that already, but you're still nuts.

Mark Wadsworth

If worker-ownership were somehow better or more efficient that other forms of ownership, then most businesses would be worker-owned.

Most businesses clearly aren't woker-owned, so it clearly isn't the best form of ownership (not for most types of business, anyway).

Igor Belanov

Thank you Mr Wadsworth, aka. Dr Pangloss, I presume?

john b

Shorter Mark Wadsworth: "if genocide were wrong, nobody would commit genocide. Since people commit genocide, it clearly isn't wrong."


Nuts? You don't understand my method. In fact, I'm going to *do* that.

Mark Wadsworth

John B, genocide is wrong, which is why it is not committed nearly as often as it could be. And whether it is right or wrong depends on whether you are perpetrator, victim or taking purely a moral standpoint.


Nice and objective Chris, BUT...

"Private equity firms succeed largely because publicly-quoted firms are inefficient"

We impede free-markets with 'inefficiencies' because we deem them to be in the public good.

Capital is in great supply at the moment, therefore the need for greater transparency in public companies is not quite as important as it has been in the past.

Several private equity deals I have worked on have been no more than the laundering of mafia-run operations. It stank. Especially where public money (via the EBRD) was used to make the buy outs possible.

Private equity often looks prima facie like efficient markets at work, but quite frequently are crony run deals to fuck over legit shareholders, with complicit fund managers to boot.

Chris - the rather dim Guardian columnist does not at least take the evidence of a business school as conclusive. Is it not well accepted that business schools never publish anything controversial for fear of losing those big consultancy fees they rely on to subsidise their academic pay?

Your most uncritical article ever.



"Several private equity deals I have worked on have been no more than the laundering of mafia-run operations"

So you have gone to the authorities (as you are legally obliged to do) informing them about money laundering? No, of course you haven't. Why? Are you afraid of the "mafia's" reprisals? Or are you contemptuous of the legal authorities? Or is your connection with the financial world just a figment of an overactive imagination?


Jonny does have a point about the source; it is a bit like the Centre for Hamburger Research carrying out an in-depth study and finding out that "all evidence suggests that hamburgers are delicious!"


Mr Eugenides is right - this is the best fisking of the year.



Out of interest, how does private equity launder mafia operations? Does the private equity fund buy-out the mafia business? Is the private equity fund itself backed by mafia money? Or something else?

If the fund buys out a mafia business, that sort of going on is rather tangential to the Guardian article, and must surely be a fringe activity (I wonder what multiple illegitimate businesses sell on, and whether we should see the process of legitimization as benign). If the fund itself is backed by mafia money, well that's bad but is it any different from dodgy money being invested via shares, bonds or fine art or whatever? Or are you suggesting that anti-laundering controls are weaker in private equity than on other investment vehicles.

(btw. I am not questioning you as in doubting you, just questioning as in interested in the answers)

Kevin Carson

Mark Wadsworth,

Guess what? Slavery is a very inefficient form of production. But there's one thing even less efficient, from a slave-owner's standpoint: having to go to work for yourself.

You seem to be assuming that this is a free market in which the most efficient forms of organization win out. In fact, there's a giant organization known as government, allied with a lot of big organizations called corporations, whose main purpose is to prevent competition that might weed out less efficient forms of organization. The entire economy is rigged with entry barriers and toll-gates (many of the latter consisting of so-called "intellectual property" sic) whose sole purpose is to restrict competition and derive rents from doing things inefficiently.

Mark Wadsworth

Kevin. Let's take Tesco for example. Market capitalisation £34,000m and it has 370,000 employees. So if each employee spent £92,000 on Tesco shares, it would be employee-owned and managed.

I realise that this is probably a lot of money for Tesco employees, but if they all chipped in £100 a month, after ten or twenty years they would own such a large stake as to be able to control it.

Would you recommend this course of action to Tesco employees, or would you advise them to spread their investments more widely?

Richard Beddard

Nothing wrong with private equity in principle but as the size of the buy-outs increases the managers' interests are decoupled from the investors'. That's because the 1 or 2% management fee is rewarding enough and they don't have to worry so much about their share of the profits when they return the company to the market or sell it on - hence the managers can run the companies they acquire for cash, or asset strip if you like, while investors keep pouring in money - assuming the returns of the past. It may not be sustainable, but that's what seems to be happening at the moment. I wrote about it in more detail here: http://blog.iii.co.uk/?p=129


There are successful employee-owned businesses, such as John Lewis. But they function as largely conventional private sector enterprises - directing their capital where the best returns can be had, aggressively seeking profit and growth opportunity, and issuing annual dividends to their shareholders.

I suspect that the author of the otherwise quite excellent fisking, has more of an 'up the workers' image in mind, where the miners run the pit. Which is sort of how British Leyland was run (into the ground).

Employee ownership is a fine model; if the business continues to act like a business.

Otherwise, privately-held businesses seem to do rather well, particularly banks.

Publicly traded companies usually end up as bureaucracies, but are significantly more efficient than public sector entities. These are typified by the NHS, which has more 'managers' than nurses, waiting lists for routine procedures, and the highest staph infection rate in the developed world.

In other words, anything is better than the public sector.

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