How to get beyond the parasite economy

Such discussions always remind me of the short-sightedness of man. Anyone with a cursory understanding of history knows that if left to their own devices, the rich continuously consolidate wealth until there is a single Monarch, apparently chosen by God, who rules above everyone with impunity.<p>That this is not obvious shows how far we&#x27;ve fallen off the path of simple rational thought.

I tend to dislike pieces like this. Advice like this: <i>... but in the meantime, you can help as an individual. I recommend that you refuse to buy as much as a guitar pick from any company currently owned by a private equity firm, or any financial entity that does not come from the music industry itself.</i> tends to not be very practical or helpful. It means that for many people their choice is do this evil immoral thing that the author is decrying as the downfall of civilization or go without entirely. Given that choice, most people will do this presumably immoral, evil thing. Because people have needs.<p>Stuff I would prefer to see: A list of websites helping to support alternative business models that the author thinks is not all evil and immoral. A list of businesses that try to source their products from approved, moral places as much as they can. Other pro-active things that one can actually do (other than &quot;just don&#x27;t buy from Bad Guys&quot; -- I mean more in the vein of &quot;here are the Good Guys you can and should buy from&quot;).<p>Last, &quot;parasite&quot; economies tend to kill themselves. Historically, Greece, India and Persia all placed extremely high value on bees as a naturally occurring mental model for business, basically: Bees neither kill flowers nor get killed by them. They exchange their service (pollination) for product (pollen, with which to make honey) and both sides gain something of benefit without being harmed. This is a brilliant thing to value culturally when most of your examples from nature fall into the category of &quot;kill or be killed&quot;.<p>It is brilliant because it is the only paradigm that is sustainable. If you are enough of an asshole, you can and will be taken out eventually. Even Roman emperors sometimes got offed by their own Praetorian Guard for being too assholish to put up with. No one is beyond reach. You learn to engage in a symbiotic exchange where both sides gain something or you eventually get a Darwin Award. That&#x27;s just how it is.

There is something funny when you have an entire post about supposed &quot;parasites&quot;, that then try to sell you $800 dollars conference seats (&quot;Transition Economics&quot;, &quot;Book Now!&quot;).

&quot;...but in the meantime, you can help as an individual. I recommend that you refuse to buy as much as a guitar pick from any company currently owned by a private equity firm, or any financial entity that does not come from the music industry itself.&quot;<p>Well, ok, but how many people really pay attention to the ownership structure of companies they purchase products from?<p>I know that &#x27;vote with your dollars&#x27; is a typical answer to problems like this. On average, I suppose I purchase ~5 individual items each day. I don&#x27;t really have the time to make sure that each of these companies that make these products conduct themselves in a manner that I consider ethically sound.

This piece is entirely incomplete. It purports to examine the entire ecosystem from the angle of a single company, and writes an article not unlike painting eagles (or vultures as the case may be) as the villain conspiring against the innocent rabbits.<p>Let&#x27;s go through this logic again. So a hedge fund comes in, buys a company, levers it up with a partner&#x27;s money, leaving a pile of toxic debt on their neighbor&#x27;s lawn.<p>With you so far.<p>The company issues more junk bonds in order to pay it&#x27;s existing creditors, and that gets snapped up by other PE firms &#x2F; Hedgefunds, who need it in order to fulfill a never-ending quest for returns.<p>Yup got it.<p>GC then goes bankrupt and the banks are evil.<p>Whoa, wait a minute. Where is this whole process did anyone get hurt? The author seems to think Guitar Center, and YOU, the average consumers. But in order to really understand that, let&#x27;s look back in time.<p>Guitar center, if were any other company, were started by a few enterprising individuals with a passion for what they do. In turn, they were able to build a great business, and grow it to serve the entire country. After a while, wanting to cash in their success, they sell the company to a buyer, knowing very well what they planned to do with the company. The rest is history.<p>Not as clear anymore is it? Now lets look at what happens in the future.<p>GC goes bankrupt. Or it doesn&#x27;t but becomes irrelevant. The 800-pound gorilla in the space dies, and there&#x27;s room in the space now for another innovator, a new group of passionate individuals who can now bring their vision to life.<p>And the cycle starts anew.

A great article.<p>But now maybe Eric Garland should look into the capital structure of Fender Musical Instrument Company. Then we can all get really depressed.

So, if there is a large amount of money that is searching for risky investments to the extent that investors are willing to finance an obviously failing business, how come more of it doesn&#x27;t end up in risky ventures that might actually go somewhere?<p>Is the problem a lack of information, the lack of better investments, or that investors don&#x27;t care about their money?

Despite the title, the article lacks any exploration of &quot;how to&quot;. This is disappointing.

Who exactly are the parasites, who is the host, and how did the parasite benefit at the expense of the host?<p>If the parasites are investment bankers, and the hosts are the investors with 401(k)s, then fine. But that has nothing to do with music.<p>If GC is the host and the investment bankers are the parasites, that doesn&#x27;t quite make sense. GC apparently sought out the &quot;parasites&quot; at every turn, and that doesn&#x27;t sound like a normal parasite&#x2F;host relationship.<p>It sounds to me more like a business that just used too much leverage&#x2F;debt, presumably to grow quickly. That works sometimes, and sometimes collapses. This time it collapsed. The times it works it doesn&#x27;t make the news.<p>So what&#x27;s special about GC?

...so what wrongdoing did the banks do, exactly? Told another way, a failing company was headed towards bankruptcy, until the banks stepped in and saved the day by recapitalizing the company, saving thousands of jobs and a good brand in the process.