#2 Asset Managers and the Rise of Rentier Capitalism — with Brett Christophers

Transcription

What are rent and profit?

(00:07:25) Rodrigo: We would like to start with sort of more of the basics because we are at a crash course. And that is about what the difference is between economic rents and profits. (…)  Could you walk us through and why is it important, these different opinions and positions on rents? And what is your own position? How should we deal with this?

Brett Christophers (BC): (..) I think there's at least two reasons. So one is that it's pretty impossible to navigate debates about capitalism and about the economy, whether historically or today, without having a grasp of what people mean when they talk about rent and when they talk about profit.

That's one reason. And I guess the other one is that rent, at least as I understand it, is a very important and arguably increasing part of contemporary capitalism. And so if you want to come to terms with what capitalism is, then you need to understand what rent is. (..) I think it's broadly fair to say that there are two main understandings of economic rent. (..) So the first one, and the one that is common to what you might call mainstream economists or kind of orthodox economics, is an understanding where rent is kind of a surplus. And it's specifically a form of surplus profit. So if firms generate profits through their activities, what mainstream economists understand by rent is essentially a surplus profit. (...) So in that tradition, rent and profit are not sort of different things. (…)

The second understanding, and the understanding which I kind of cleave to in what I've written about this stuff, is an understanding that is circulating stead amongst what you might call kind of heterodox economists. And their rent is something different. And essentially what rent is there is income that is generated by virtue of control, ownership or control of other means of some kind of scarce asset of some kind. And that asset can be kind of naturally scarce in the form of, say, I don't know, natural resources of some kind, oil or gas. Or it could be an asset that is essentially kind of artificially rendered scarce by virtue of, say, legal devices of some kind or another.

And those assets can be of varying different kinds. Now, historically, if you go back to the early years of economic theory, then the classic rent generating asset was land and landed property of various forms. And then increasingly, I guess over time, people have added different kinds of assets into that understanding of things that generate this particular form of income called rent. So financial assets have increasingly been understood as assets where you can earn this income in the form of rent by virtue of controlling those assets. But it also now includes things like natural resources, so minerals of various kinds, and includes things like intellectual property, so patents, trademarks, copyright and so on, which are classic forms where the scarcity I mentioned earlier is a scarcity that's not natural. It's created through law and through the enforcement of those laws, but also all sorts of other assets.

And going back to what you were talking about with the previous crash course that you did with Corey, so lots of people now would understand things like digital platforms as rent generating assets, because control of those platforms and control of the commerce that takes place on those platforms essentially allows the owner of that platform to generate incomes purely by the fact that they control those platforms, whether it's Airbnb or whatever else it might be. And then also things like infrastructures, so networked infrastructures, infrastructures for the delivery of important utility services like water services, electricity and other energy forms, would also be thought of as rent generating assets of one kind or another. So that's the understanding I subscribe to in the book, which is, as I say, is very, very different from the mainstream economic understanding.

Calculating Rent

00:15:32 Q: As far as I know, there are no clear-cut methods to calculate rents empirically from existing financial accounts. Do you think that that is a problem when we discuss rents and its problematic nature, when we try to discuss it with policymakers or if we try to problematize it?

BC: No, it's a good observation and a good question as well. I mean, I think the observation is true. So if you go to, say, the national accounts for a particular country, whether that's the Netherlands or the UK or wherever else it might be, you cannot simply go to those accounts and look for a line called rent that will tell you the amount of income that different economic entities within that nation are generating, if you understand rent in the kind of capacious way that I've just described it here. So no, you can't do that. If you want to, quote unquote, measure rent, you have to be quite creative about the way you go about doing that, and you have to be quite kind of entrepreneurial in terms of finding the relevant data and interpreting the relevant data. And yes, of course, that's a problem in the sense both that's time consuming and painstaking work, and b) it means it's inherently contested, because if you have to be creative and entrepreneurial in terms of how you put together those, those measures, then it becomes very easy for people to say, well, we don't agree with your definitions. We don't agree with the way you've kind of passed this data. And then c), of course, policymakers don't have very long attention spans, so they don't want to be presented with data that you then have to spend half an hour elaborating how you've actually put that data together. That's not what they're interested in.

So, yes, it's problematic. (…) Rent is ultimately not something you can put a specific number on. It's just you can't really do that. And there are lots of reasons for that. But the main one, and I think the most important one, is the following, which is that if you understand rent in that way, ultimately all forms of income have rent elements of some degree or another, by which I mean that the boundary between what is rent and what is not rent is not a kind of a hard and fast line. It's blurry. And I'll give you an example of that, say a pharmaceutical company. I like to link to your other webinar. So this is a link not to the one before, but to the next one. If you're a pharmaceutical company that is generating income through selling medicines that are protected by patent, by intellectual property patents of some kind or another, and if you understand the income that is generated by virtue of those patents as rents, which I think we should, then how do you distinguish between the income that you are earning that is earned by virtue of your employees developing these medicines, going out on the road and selling these medicines, on the one hand, and the income that you are earning by virtue of the fact that you have these patents in place that protect you from competition, ultimately, you can make various attempts to do that through various different. But there's no hard and fast line between the two. It's a judgment at the end of the day as where one ends and the other one begins. And I would argue that's true of essentially all forms of capitalist income of one kind or another. They all have some rentier rent elements, and in some cases, they're tiny, and in some cases, they are essentially almost all rent.

Rent on housing, for example, is essentially all rent as I've understood it. But then someone is always doing the work involved, defining tenants and making sure the tenants make their payments and so on. So there's always a combination of the two. And that makes measuring it very, very important. Last point before you come back in, having said that, I still think that it's possible to make arguments about kind of directional trends in an economy. I think we can say, look, this economy is becoming more and more oriented towards rent type incomes than it was historically, but putting hard and fast numbers on it is very, very difficult. And yes, that's a problem.

Asset Managers Society

00:21:00 Q So, yeah, reflecting on the kinds of societies we live in, I think another important distinction in your work is the distinction between asset manager capitalism and asset manager societies. Right. So could you explain that difference, also reflecting on the understanding of rent you just gave?

BC: (…) So the argument I made in the first of the two books that Rodrigo held up, the Rentier Capitalism book; (…) Capitalism in recent decades has become more and more about rent, and more and more about the actors who are typically corporations, but not only corporations, whose income consists primarily of earning rent of various forms, from intellectual property, from land, from financial assets, whatever else it might be, from intellectual property, from natural resources, and so on. So rent has become more important to contemporary capitalism.

And rentiers, which are economic actors whose income consists primarily of rent, have in turn also become more important. And the book talks about some of the reasons why that might be. What kinds of policies have precipitated the rise of rent and rents and rentiers. So that's what the first book does. Now, what the second book, the book about asset managers does is very closely linked to the first book. And what I mean by that is that when I was doing the research into the first book, one thing that became increasingly apparent to me while I did that research, but which I didn't explicitly address in the rentier capitalism book, was that I kept coming across this particular set of actors, a particular type or category of rentier corporation, which was asset managers.

So when I was looking at the UK, and when I was looking at the question of who owns the land and property and earns the rents from it, who owns the financial assets, who owns the infrastructures that English and Welsh households depend upon for the delivery of their water, for the delivery of their energy, who owns the transportation networks and so on, I kept coming back to these actors that I was not particularly familiar with, which were asset management institutions. And I kept coming back to a particular group of them, not least the Australian asset management firm Macquarie, again, who I was not particularly familiar with before. And so they kind of put this seed in my head and that's how the second book came about, which was, look, I want to actually spend some time now focusing not on rentier capitalism in its totality, but focusing on this particular group of what seemed to be very influential and very powerful rentier institutions, asset managers.

So what that second book focuses on is a very important phenomenon. And that phenomenon is essentially the growing control by asset managers like Macquarie, but also the likes of Blackstone that many people will have heard of, and a Canadian firm called Brookfield Asset Management, another big asset management firm, the growing control by these types of asset managers of essentially the physical things, the physical systems in which our daily lives are basically embedded. And I focus in particular on two types. The first of those is housing of various different forms. So that can be apartments, it can be detached houses, it can be student housing, it can be care homes, it can even in the US case, be mobile home communities. So housing on the one hand, and then various forms of essential infrastructure on the other hand. So energy infrastructures, transportation infrastructures, telecommunication infrastructures, water and wastewater infrastructures, and then also social infrastructures like hospitals and schools.

So that's what the book looks at is the fact that these infrastructures and these different forms of residential property have increasingly, in recent decades, but particularly since the financial crisis, come under the ownership and control of asset managers. And that really wasn't happening to a significant degree before.

So that is what I mean by the concept of asset management. Asset manager society is a society, ours essentially, in which social life is embedded in these infrastructures, physical infrastructures that are owned by asset managers. And what I do in the book, and this kind of gets back to where your question began, is I distinguish that from what other people have increasingly referred to as asset manager capitalism, because what they refer to there is essentially not the control of these very socially influential and socially important physical infrastructures, physical assets by asset managers, but rather the control of financial assets by asset managers. So, what they're talking about there is when asset managers control ownership of growing amounts of financial assets like stocks and bonds.

And there the focus is actually typically on a different set of asset managers because they have different specializations. So there the focus tends to be on the likes of Blackrock and Vanguard and State Street, the so called big three, who between them own and control on average, about 20% of the shares of every single company listed on the stock market. But they tend to control them in a very passive way. So, they control them through these so called index funds, which just hold them, because these funds, they essentially replicate the ownership of the big stock market indices in the US. And they own thousands and thousands of shares in these thousands and thousands of companies through these index funds.

But they do it very passively. They don't get involved typically, in what's going on with those companies, whereas what I'm talking about in these books is they don't own five or 6% each of these companies. They own the assets in their totality. They control the assets. They decide the amount that you pay to rent, the housing that you own, they control the amount that you pay in terms of a toll to go on the roads that they own. So, they control these assets in their totality, and therefore they control a significant aspect of our lives because our lives are dependent upon these assets. And just. I'll finish that question by giving you kind of an indication of some of the numbers involved. So, Macquarie, the first of those asset managers that I mentioned, it estimates that it controls, owns and controls infrastructures on which around 100 million people around the world rely every day to go about their lives, whether it's telecommunications infrastructures or transport infrastructures or whatever else it might be. So, they have a huge effect on our lives without almost all of us even knowing it. So, I would guess that 99.9% of those 100 million people have no idea that the infrastructures that they rely upon every day and to whom they make payments are controlled by Macquarie.

Managing Assets

00:29:58: Q So basically, it is a very clear distinction between the large numbers we find with Blackrock and State Street and Vanguard owning shares on stock markets and bonds. Massive trillions of dollars are managed by them and then a seemingly much smaller amount in the hands of these other asset managers. But they have a very direct control and they do very different things with their assets. They actually try to extract something from them. They need to manage these assets, they need to sell them, keep on buying them, et cetera. So, there's a whole world out there that you try to describe.

BC: It's a completely different business model. So, while some of them, and Blackrock is a good example, while some of them do operate in both those worlds, and many people might have heard that Blackrock recently signed this deal to buy one of the world's biggest actors in the infrastructure control world. Historically, Blackrock has been a tiny part of Blackrock's business. Until now, it's been predominantly in that other world. And so they're very, very different business models. And the people at Blackrock that work on those two different things, they're completely different groups of people running completely different funds and doing completely different things with completely different incentive mechanisms in place. So it's very important to understand that.

States and the investment space for asset managers

00: 31:41: But if we then look at the assets that are trading hands, shares and bonds, these are markets that have been out there for a long time, for centuries. These other markets are very recent. Childcare, housing, very intimate parts of society have been bought by these private equity funds. Can we understand this without understanding the role of the state in enabling these private equity funds to enter into these domains of our society?

BC: No. I mean, a simple answer is no. And I guess there are two parts, I suppose, to answering that question that I would highlight. And the first of those is simply that essentially the likes of Blackstone and Macquarie and Brookfield can and do buy up housing, mobile home communities, wind farms, toll roads, parking meter systems, because they can. And obviously they can, as you hinted, because the state says they can. So there's nothing, in theory at least, to stop governments saying no, we don't think this is an appropriate investment space for asset managers. We are going to stop them buying things. Of course, governments could do that if they chose to do so. We can maybe come back later to why they don't do so, but they could. So, yes, in general, the state plays a role.

Second part of the answer is that, and many, many people listening might already have figured this out for themselves, but they've played a more direct role in many ways because obviously a lot of these assets were actually conventionally owned by the state, whether in the form of central government or for example, municipal government. So, for example, in Germany, to take that as an example, a lot of the major housing portfolios that traditionally were owned by municipalities, both in the former West Germany and in the former East Germany in the 1990s and 2000s, were sold off precisely to asset management companies like Blackstone, like Fortress, like Cerberus and various others.

So the government played a very, very direct role there. And again, look at the UK. Asset managers like Macquarie have become major owners of the water and wastewater networks in the UK in recent times. Well, they could only buy those things because the government decided to privatize those assets in the first place back at the end of the 1980s. So that's the second government role, is not just enabling them to buy them, but actually selling them. These were things that were publicly owned, but that are now, in many cases publicly owned that are now privately owned. And then the third role, which again, some listeners might be aware of, is another important one, which is that a lot of these assets that asset managers have bought, asset managers, when buying them, have considered those to be relatively risky purchases. They've thought, we would like to buy these. We would like to buy, for example, this line on a subway system. But we're worried that over the next ten years, the number of passengers using this subway system might decline, and therefore we don't want to buy this subway system because of that. So what governments have often done in those circumstances to encourage asset managers to invest is they said, okay, we will come in and we will essentially remove and shoulder some of the risk that you don't want to take on. So in the case of a subway line, for example, they'll come in and say, okay, if passenger numbers fall and revenues fall below a certain level, we will guarantee a certain level of income to you, the investor, as a way to encourage you to make that investment.

Derisking State

00:36:17 Q: What Daniela Gabor calls the derisking state

BC: (…) That's right. The government will come in and remove that risk to encourage the investment to take place. And my view on all of that is that in some cases what they're doing is necessary, by which I mean necessary to precipitate the investment. So private sector investors would not invest unless the government shouldered some of that risk. I think in other cases, it's less clear that that's the case. I think in some cases the private sector would probably invest anyway, but the government just comes along and sweetens the deal. So, yes, the government plays a central role in all of this for precisely those three sets of reasons that I mentioned.

Marketization under neo liberalism

00:37:18 Q: It's more about the historical embedding of the role of the state and the refraining role of the state. So how does asset manager society, as you explain it, relate to the rise of new liberalism right. Where you had this huge wave of privatization, an institutional and legal reordering to markets where there were no markets before. The marketization of so many things, of society. At the same time, also austerity, where states retreat from certain parts of society, stop spending there. I mean, there's also a lot of talk about fiscal consolidation and austerity again these days, although we did experience, I guess, a revival of the importance of the role of the state during the pandemic. So, yeah. In what way does asset manager society relate to neoliberalism? And what does that say about neoliberalism?

Sure. Yeah. I mean, I think you've already, in asking the question you've already sort of hinted at, which is always the sign of a good question, I guess. Why, I would say is that it's pretty clear that what I refer to as asset manager society. So the expansion of the ownership and control of these types of physical assets by asset managers could not have happened to anything like the degree it has without the emergence of what we call neoliberalism, and indeed is arguably a creature of neoliberalism. And I suppose there are two connected or linked aspects of that.

One is the fact that a central component of neoliberal political economy in most parts of the world, at any rate, has been, an attempt to introduce competition where previously it didn't exist. So let's take as an example, one that I'm quite familiar with myself is electricity, which historically, in most parts of the world, electricity systems were controlled by single government owned actors that controlled everything from generation through transmission and distribution. And in the 1980s, and increasingly in the 1990s, policymakers and their economic advisors said, well, okay, we think that consumers will get a better deal if instead of everything being controlled by one actor, if we can introduce competition, at least to parts of the value chain of electricity generation and distribution, where it's possible to have competition principally in generation and in retail. So the two ends. And so that was very much a kind of part of neoliberal orthodoxy and still is part of neoliberal orthodoxy.

And selling off government assets, unbundling things like electricity systems into generation assets, transmission assets, distribution assets, retail assets, and then selling them off to the private sector, including increasingly to asset managers, was absolutely part of that. So competition was part of it.

But the other one, of course, was what I would personally consider to be almost kind of the central ideology of neoliberalism is the ideology that the government and the public sector more broadly should own as little as possible of anything. For me that's always been the central tenet of what I understand to be neoliberalism and still is the central tenet of neoliberalism, which is, as an aside, almost.

This is precisely why I don't understand it when people say these, you know, we're at the end of neoliberalism. Well, no, because nothing has changed at all in that orthodoxy. There's no sense of a return in places like the UK and the US at any rate to widespread public ownership of these sorts of assets. So if you take that as the orthodoxy, then for sure, asset manager society is a creature of neoliberalism, because neoliberalism said the state should own as little as possible, but of anything.

So the types of things that the governments used to own, like housing, like utility infrastructures, should instead be owned and controlled by the private sector. And that's what happened. And as you said today, that orthodoxy remains. So the best example of that would be something like renewable energy, where the orthodoxy across most of the world, and there are exceptions, China is a partial exception, but where the orthodoxy is, look, we need vast amounts of new climate infrastructures, particularly for mitigation purposes, but also for adaptation. And the orthodoxy is that that infrastructure should be developed and owned and operated by the private sector. And that to the extent that the public sector has a role, it is purely about kind of providing nudges, providing incentives in the form principally of various forms of derisking, whether that be tariffs or tax credits or whatever else it might be. Absolutely, yes.

Q: 00:43:24 I suppose your next book will be covering that terrain.

BC: That's exactly what it's about.

The geography of this, defensive strategies

Q: Another question is about the geography of this and what we can learn from it. So when we talk about these more intimate parts of society, housing, childcare, they are all very part of the national type of capitalism. National institutions, historically grown, they are very separate in one country from the other. Not always, but in many case they are. Do you think you can say that there are certain countries that are more closed off to these investment strategies? And what could we learn from those countries that are more closed off, that have more of defensive strategies in place?

BC: Yeah, absolutely. You won't be surprised to hear this, because, like you, I'm a geographer. One of the things I emphasize, particularly in the “Our lives, in their portfolios” book, is that all of this, the kind of emergence and materialization of asset manager society is highly geographically variegated, both across and within countries. I think it's worth saying that there are big differences across Europe, for example, in the extent to which this has occurred, and there's huge differences between the global north and the global south, I think particularly in terms of kind of the historical trajectory of this. And I'm happy to get into that in more detail if we have some questions. I think that at one end of the spectrum, you have a country like the UK, that in terms of infrastructure, at any rate, the housing story is a bit different. But in terms of utility infrastructures, the UK has essentially sold off pretty much everything that can be sold off.

But there are definitely other countries. I think France would possibly be a good example of this, where there's been much less enthusiasm for privatizing key infrastructures. Energy would be a good example of that. Almost all of the electricity system in France, for example, across the value chain, is still controlled by EDF, which is a publicly owned entity. Those are countries that have not gone as far down the road as the UK in the first place.

But there are also countries that have sort of tried to almost kind of row back, where asset managers have made significant inroads, or at least have attempted to make inroads into buying up the types of assets that we've been talking about. And it's elicited negative reactions across society. And governments have kind of responded to that and have said, yeah, actually, maybe we need to rethink this. And just one very local, and I guess a limited example would be in terms of housing in Denmark. So in Copenhagen in the late 2010s, private equity firms like Blackstone in particular, became very aggressive buyers of housing in Copenhagen and subsequently were putting up rents very, very aggressively. And the government, a new left wing government, took power, I think it was in 2019, and actually introduced a new clause to the main housing law in Denmark, which actually became known colloquially as the Blackstone paragraph, or the Blackstone clause, which was designed essentially to limit the ability of the likes of Blackstone to buy up this housing and then to put through those aggressive rent increases in the way that they had been doing.

So there are things that can be done. However, I would say the very few governments around the world are doing that. And I would also say that very few are likely to do it going forward. And there's a simple reason for that. And it's this. And it goes back to what we were just talking about just now, about neoliberalism, which is that not only do most governments not see asset managers as a problem or as the problem, they actually see them as the solution. And what I mean by that is that everywhere you look in the world today, essentially there is a broad consensus that there needs to be massive future investment in housing.

There are housing shortages in most major urban regions of the world. So there needs to be massive future investment in housing, and there needs to be massive future investment in infrastructure, particularly climate infrastructure. Again, mitigation and adaptation. Now, if there's an acceptance that you need massive investment, but you have governments that have been convinced or have convinced themselves that governments themselves shouldn't be doing that investment because of fiscal conservatism, because of not wanting to take on government debts, especially now that interest rates have gone up from the low levels they were at in the previous decade, then essentially governments are in a place where there is no other answer than the private sector. If governments are not going to carry out that investment themselves. And once you begin to say that the private sector is the answer, pretty soon you arrive directly at asset managers, because asset managers control the vast bulk of surplus capital around the world today. So governments essentially see asset managers as the answer to these investment problems because they've decided that governments themselves aren't the answer. So if you listen to what politicians around the world are saying today about who's going to answer the housing investment challenge, who's going to answer the infrastructure and climate infrastructure investment challenge, they see Blackrock as the answer. They see Blackstone as the answer. They don't see them as part of the problem. And to me, at any rate, that's a massive problem.

International Trade and investment Treaties

Q: 00:50:36 Yeah, you could almost call it ironic if it wasn't so sad. But yeah, let's try to get to some very cheerful questions then. The most uploaded question now is by Miriam Vander Stichene. And it's about international trade and trade treaties. The question is specifically about which authorities and regulations. I know that you just gave a wonderful speech on the lack of good policy of these same authorities, but maybe you can sketch some concrete steps, vision or examples where things are being perhaps put back in public hands or where you see actually regulation that does put asset managers back into their place.

BC: I suppose that the question points towards two things, which is that the reason that major asset managers, the bulk of which, let's be clear about this, the bulk of which are headquartered in North America, particularly the US, the reason that they can and do buy up these sorts of assets increasingly around the whole world is essentially twofold. So one is that their money can flow relatively easily around the world because the types of capital controls that the world had in the post war era don't exist anymore. So capital can flow essentially freely around the world without the types of restrictions there were historically.

And then secondly, once that capital lands in a particular country, it is able to buy up the types of assets we've been talking about, whether that's in Spain or whether that's in Nigeria or whether that's in or South America somewhere.

So there are two sorts of things there and obviously significant restrictions on either of those things would, I guess, potentially have a chilling effect on the phenomenon. It would potentially limit or even stop the phenomenon. But also, as I said, I don't see many signs of that mean it's interesting go back to Denmark because I think it's an interesting case. One other thing that happened there was that Macquarie, for a long time, the Australian asset manager I talked about earlier, was for several years the majority owner of the Copenhagen airport. And when it bought into the airport it kind of said, oh, we're a long term investor, we're in it for the long haul, we're going to invest in the asset, we're going to create an asset that is flourishing in the long term and so on. And as is typically the case, it sold out relatively few years later. And that really pissed off many politicians in Denmark, particularly on the left. And I think there were calls at that point, as I recall, to actually put in place measures to prevent foreign ownership of nationally valuable or nationally key assets. I can't remember the particular language that was used now that didn't happen in the end, but I believe that Denmark did introduce new measures that required a screening process for the screening of possible overseas investors in nationally sensitive assets, or whatever they were called. So things like that can be done.

But again, that's generally not what's happening, generally just wonders. One other thing I want to say, because I think it's very important, generally the opposite is happening. The world is opening up in various ways. What you find is when governments even make the slightest noise about potentially clamping down on regulation around the investment in these types of assets, immediately asset managers say, okay, if you're going to make things more difficult for us, we're just going to withdraw investment. If you in the UK, for example, are going to clamp down on regulation of investment in the water sector, which the regulator of what has repeatedly said it will do over the years, but has never done the immediate day, it says that you have press releases from the big asset managers saying, okay, if the UK is going to start playing hard, we're just not going to invest. And as soon as that happens, the government thinks, shit, we can't do this because then we're not going to get the investment we need. And so the asset managers just play this game where they kind of threaten to do things. And then governments that have begun to make even very soft noises about increased regulation get cold feet and don't do anything after all.

Competition and privatisation

Q: 00:56:03  It's by Jessica Parish, her question is on the point of competition and privatization of public assets and utilities. So my understanding is that in the UK, this has absolutely not lowered costs for consumers or improved services. I think it's a known story. I'm thinking of the energy strike against massive escalation in costs. The wastewater scandal is another example. How do we account for the continued power of this when these logics or problems don't hold up?

BC: My understanding is absolutely, and I talk about this in the rentier capitalism book is in the UK across all of the sectors that have been fundamentally privatized. I think the evidence is very compelling that it has not been a good deal for consumers, it's been a good deal for investors, and that investors have done well, partly because consumers have gone down prices have gone up at very high rates over the last couple of decades. I think the one exception to that is probably telecoms. But there I think consumers have done well, not because of privatization, but because mobile came along and actually provided strong competition to fixed line telephony. And that's the main reason for telecoms consumers doing well.

So despite the fact that this has been bad for consumers, and despite the fact that even outlets like the Financial Times, all of their writers, I think if you read them carefully, essentially admit that privatization in the UK has been a disaster for consumers, nothing changes. Why? I don't have a good answer to that, other than the fact that, and again, this goes back to the point earlier about the grip of neoliberal orthodoxy. The grip of neoliberal orthodoxy on policymakers in places like the UK, on both the right and the nominal left in the Labour party, is so strong that the idea of doing anything differently, substantially differently, like public ownership, is just beyond the political pale.

And so there's just this poverty of the political imagination. And to me that is the main answer. And a lot of that comes back to the hold of the media, the hold of the press, the fact that as soon as you get politicians coming along like Corbyn and Labor under Corbin that even hint at a different way of doing things, they get slaughtered by the media and politicians run scared. So I think that to me is the answer, is the poverty of the political imagination in a landscape where right wing media have an enormous degree of power.