Global business models and labor challenges
Maria Alejandra Caporale Madi
Chair WEA Conferences, Professor and researcher at Instituto de Economia UNICAMP (retired)
Please cite the paper as:
Maria Alejandra Caporale Madi, (2016), Global business models and labor challenges, World Economics Association (WEA) Conferences, No. 1 2016, Capital Accumulation, Production and Employment:, 15th May to 15th July 2016
Today, private equity funds express the power of centralized money to define not only investment flows but also working conditions. Indeed, private equity funds have been responsible for the employment standards of tens of millions of workers worldwide and the impacts of private equity investments on working conditions is raising growing concerns. The social impacts of the private equity business model based on “rationalization” have been less explored by academic researchers, while extensive studies have been developed by private sector companies and industry bodies that tend to report only stories of success. Taking into account that financialization enhances the redistribution and reallocation of power and wealth, this paper assesses, from a Keynesian approach, that the private equity funds’ business model foster social vulnerabilities. After presenting a brief overview of global business environment and the post-crisis evolution of private equity funds, this paper discuss the factors that shape the microeconomic and macroeconomic effects of their typical investment strategies. Rather than treating private equity funds as a financial phenomenon, the analysis rethinks the relations between private equity funds and labour as involving forms of production at the current frontier of capital.