What Kills More Jobs, Private Equity or Venture Capital?

Illustration by Michael George Haddad for Fortune

💥A Boom with a View💥 is a column about startups and the technology industry, written by Erin Griffith. Find them all here: fortune.com/boom.

In February venture capitalist Michael Moritz penned a scathing New York Times op-ed about the evils of private equity that, in theory, hit all the right notes. He bemoaned the PE industry’s risky use of debt to acquire companies, its tendency to lay off workers at those companies, and its exploitation of the carried-interest tax loophole to enrich its fund managers. He tied Blackstone Group CEO Stephen Schwarzman’s wealth to the populist rhetoric of the 2016 presidential election and criticized Schwarzman’s cozy role on President Trump’s business council. Moritz even mocked the term “private equity” as whitewashed public relations spin, arguing that the old name, “leveraged buyouts,” is more accurate.

One week later, Schwarzman threw himself a 70th birthday party as glamorous and over-the-top as his notorious 60th, a black-tie fete so extravagant (a performance by Rod Stewart, a dinner of lobster and filet mignon, a life-size painting of himself) that it became a symbol of Wall Street excess during the 2008 financial crisis. Another tone-deaf Bonfire of the Vanities bash should have been the perfect moment for America’s economically challenged citizens to raise their pitchforks and demand an end to the country’s growing wealth disparity. But it didn’t happen. Mockery of the camels, trapeze artists, and Gwen Stefani performance at Schwarzman’s 2017 blowout barely escaped the insider-iest corners of finance Twitter. The country reacted with a shrug.

Instead, an article about Silicon Valley elites investing in doomsday bunkers garnered much more attention, confirming a sneaking suspicion among Moritz’s technology-industry peers: Wall Street fat cats are no longer the country’s cartoon villains of choice. There is a new enemy, and he or she is in a power center on the opposite side of the country.

The tech industry has plenty of its own billionaire playboys who don’t always consider the impact of their “disruption” or show empathy to the victims of it. They’re just as guilty of killing jobs—not by shipping them overseas so much as making them obsolete (or at least better suited to robots). That bankers act cynical, power hungry, or greedy doesn’t surprise us. But Silicon Valley’s mantra to “make the world a better place” in the process only adds insult to injury.

Critics swiftly objected to Moritz’s essay. The Times’ own M&A columnist called it “misguided.” A private equity lobbying group noted that startups employ debt too. And finance professionals pushed back on Moritz’s job-killer argument, noting that Google (GOOGL), a blockbuster investment for Moritz at his firm Sequoia Capital, has upended the advertising and media industries (and may someday do the same for taxi and truck drivers).

It would be silly to halt technological progress, including potentially lifesaving breakthroughs like self-driving cars, to preserve redundant jobs. But the new Masters of the Universe ought to be concerned about what will happen if the people whose livelihoods they are displacing rise up in protest. Acknowledging the negative effects of their disruptive technologies would be a start.

A version of this article appears in the March 15, 2017 issue of Fortune with the headline “Of Vice and Men.”

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