Theoretically, yes; in practice most private equity is no better at management than the people they are replacing. Often times they miss the fat and cut the bon

Theoretically, yes; in practice most private equity is no better at management than the people they are replacing. Often times they miss the fat and cut the bone instead. It's hard to actually see what provides company value and what is actually expendable. Remember that the whole idea behind free markets is that you can't perfectly know and precalculate every input and output of an economy; you want a distributed set of economic actors making decisions for themselves. And large businesses are not immune to this - they operate not like tribes, but like little mini-economies unto themselves. If we actually could "cut the fat", command economies would have worked and America would have collapsed instead of the Soviet Union.