This is the final published book chapter version of an earlier working paper on the impact of private equity in modern capitalism. The book is The Embedded Firm: Corporate Governance, Labor and Finance Capitalism, Cambridge, 2011. The editors are Peer Zumbansen and Cynthia Williams

The rise of private equity funds represents a new stage in capitalism. These funds combine financial resources and capital markets expertise with detailed operational knowledge of the operations of takeover targets to maximize the creation and expropriation of value on behalf of investors. Their...

This paper examines major forces that have decoupled economic and business prosperity from social prosperity and explores how recoupling can be promoted. Economists have specified well-known conditions under which free market enterprise with shareholder value maximization is efficient. These...