In preparation for this weekend’s big LSB Investments Summit, it might be useful to ask the question:  Is venture capital a big waste?

Well, that might be overstating it a bit, but the potential profitability of venture capital is the topic of James Surowiecki’s new piece in MIT’s Technology Review.   He diagnoses the problem of there being too much VC money out there, and the glut is putting a big crimp in the side of an industry that once produced monster profits.   On the other hand, shouldn’t we expect that a profitable industry would attract entry, driving (economic) profits to zero? (Hint: yes).    Is that a bad thing or a good thing?

Those interested in diving deep into this subject should consult Josh Lerner’s new book, Boulevard of Broken Dreams:  Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed — and What to Do About It.

Of course, I strongly endorse you reading up and peppering this weekend’s panel with questions, prefaced with things like, “I read in the recent Technology Review that…” and “Do you agree with Josh Lerner that…”

UPDATE: Here’s Lerner interviewed at Vox.