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Asset Managers and the Rise of Rentier Capitalism — with Brett Christophers
Episode 25th February 2024 • Crash Course Economics • Crash Course
00:00:00 01:01:44

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Embark on a journey encompassing Brett Christophers' latest three books in this Crash Course Episode. He provides a comprehensive overview of the ascent of rentier capitalism, observed in diverse forms across political economies, and hones in on the pivotal role of asset managers in value extraction and shaping a rentier economy.

Key questions we will explore with Brett:

  • What exactly are rents, and what sets them apart from profits within the capitalist framework? Why is this distinction crucial?
  • How has the landscape of asset management evolved, and where does it fit into the broader narrative of the rise of rentier capitalism?
  • In the pursuit of decarbonisation, what obstacles arise due to the dominance of monopolists in various sectors of our economies?

Brett Christophers is professor of human geography at Uppsala University’s Institute for Housing and Urban Research. He published over six books covering various aspects of Western capitalism. For our talk we focus on his three latest books published by Verso, ‘Rentier Capitalism: Who Owns the Economy, and Who Pays for It?’,’ Our Lives in Their Portfolios: Why Asset Managers Own the World’, The Price is Wrong: Why Capitalism Won't Save the Planet

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About Crash Course Economics


Crash Course is a platform designed to open up debate on how we can move

out of the current crisis and make the necessary steps towards

achieving social, economic, ecological and regenerative justice.


Crash Course is inviting global experts to break down complex issues in

lay terms and make them accessible to all so that we can understand how

to shape our economic system for a just recovery and future.


Website: https://crashcourseeconomics.org/

Newsletter:

https://dashboard.mailerlite.com/forms/366770/110811319736730927/share

YouTube: https://www.youtube.com/channel/UCu3cbKwed48Bu7dkQDVjRQA

Twitter: https://twitter.com/CrashEconomics


Music credit: "Capital G" by Nine Inch Nails, "Tribal Remix" by

Imnotlouis (CC BY-NC-SA 3.0 US)

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About Crash Course Economics

Crash Course is a platform designed to open up debate on how we can move out of the current crisis and make the necessary steps towards achieving social, economic, ecological and regenerative justice.

Crash Course is inviting global experts to break down complex issues in lay terms and make them accessible to all so that we can understand how to shape our economic system for a just recovery and future.

Website: https://crashcourseeconomics.org/

Newsletter: https://dashboard.mailerlite.com/forms/366770/110811319736730927/share

YouTube: https://www.youtube.com/channel/UCu3cbKwed48Bu7dkQDVjRQA

Twitter: https://twitter.com/CrashEconomics


Music credit: "Capital G" by Nine Inch Nails, "Tribal Remix" by Imnotlouis (CC BY-NC-SA 3.0 US) 

Transcripts

Sara Murawski

Good afternoon, everyone. A very warm welcome to crash course economics, or welcome back. Nice to see you all here. So today we'll feature the second webinar of our fourth crash course series on ranche and monopoly capitalism. I'd like to ask you to introduce yourself in the chat, so just put your name there, perhaps where you're based and which institute you work at. My name is Sarah. I'm a project manager at Sustainable Finance Lab and at the Transnational Institute TNI, and I'll be your host today. Together with Rodrigo Fernandez, who is a researcher at SOMO. And behind the scenes, we have Jeremy Krollsmith, our web developer, and Jenny Ponnebecker, who's absent today, our communications officer at SOMO, who are working very hard to make this webinar a success. So, before we kick off, let me introduce questions to you really briefly. So we're a collective of engaged activists and experts from a number of organizations, and we united at the start of the COVID crisis in order to understand how Covid changes the world and reflect on the challenges we face today and possible solutions. Of course, today we have a municipal cris. So reflecting on that as well, a crash course is a platform designed to open up a debate, interactive debate, on how we can move out of this multiple crisis towards achieving social, economic, and ecological justice across the globe. In order to do that, we're inviting global experts to break down complex issues and make them accessible to you all so that we can shape our economic system in a just and democratic way. And our goal is to democratize knowledge and give you the necessary tools to change the world, because we first need to understand the world, of course, before we can change it. And in this series this time, we will be discussing how a few giant corporations gain significant control over market access, technology and resources, which allows them to extract increasingly substantial rents to the admin of smaller competitors, while also undermining more stringent regulation and our democracies. There will be four webinars in this series every two weeks. And in each webinar, we will provide you with a 1 hour crash course on a specific subject that makes you understand our contemporary economy and society a bit better. If you miss out on any episode, you can watch all our former webinars on our website, crashcourseeconomics.org. And of course, of this session, there will also be a recording, a podcast, and a summary. Rodrigo, up to you.

Rodrigo Fernandez

Yes, thank you, Sarah. So, for those who do not know us, we started a few years ago during the pandemic. We started out with a series on monetary policies on why central banks had to save capitalism again. The second series, still during the pandemic, was on the debt crisis in the global south, which continues looming and evolving. Third series was on big tech and techno feudalism and democracy. And this fourth series is dedicated on rentier capitalism and monopoly capitalism. Last time, two weeks ago, we had Corey doctoral, so we discussed digital monopolies and what to do about it. So today we have Brad Christophers, and we will be focusing on rents and asset managers. In two weeks time, we will have Nick Dearden and we will be talking about Pharma, big pharma, and the types of rentier capitalism forms, shapes you find in this sector. And the last episode will be with Angela Wigger. With her, we will be discussing how competition policy has become part of the problem, how to fix it, and the deeper political economic issues surrounding monopoly capitalism. So, Sarah, it's up to you.

Sara Murawski

at. We will finish exactly at:

Rodrigo Fernandez

So, yeah, just to briefly introduce Brad Christophers. He is a professor of geography at university. He is an extremely productive academic. He has written a large number of academic papers, but to the wider audience, he may be known for his books. He's written six or perhaps already seven books. And we will be discussing two of those books today, a new book coming out also just, I believe, one of these weeks on green capitalism and why it won't save us. We would like to perhaps discuss in our next series when we will be discussing the problems of green capitalism and climate change. But for today, yeah, so we will be discussing two books he wrote for verso. So one, rentier capitalism, who owns the economy and who pays for it? And the other book is our lives in their portfolios, why asset managers own the world. So, Bret, could you join us, please? So we have enormous ground to cover today, and I'm sure we will not be able to discuss all our questions, but let's see how far we get.

Brett Christophers

Sure. Thank you for having me.

Rodrigo Fernandez

First of all, just great for you to be here. Also, just before we start, I think just the last two weeks we have seen a number of book reviews coming out and symposia discussing your. So just this week I saw the assistant professor from Leide University, Natasha van der Zwan, who wrote an article for the Journal of Cultural Economy. I'm sure you've seen it. Sidrik Durand has written something. So there's a lot of discussion and a lot of praises for your book. But 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 on the one hand, basically. So where do we find these rents? And secondly, so go back to this book. Here you show some intellectual history, debates surrounding rents, different schools of thoughts about rent. 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

Okay, nice big question to start with. I'll do my best to try and sort of introduce the topic as clearly and straightforwardly, but also without kind of dumbing it down as I possibly can. I think that to take the very last part of your question, first, the question of why this is important, 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. So these are some of the most commonly invoked and employed terms in economic description and analysis. So if you want to come to terms with what's going on in the economy, you pretty much have to have a grasp of what people mean when they use these terms. That's one reason. And I guess the other one is, and I would argue 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, at least by my understanding what rent is and why it's such an increasingly important thing. Okay, so first of all, kind of what do we mean by rent at least, what do people understand by the term rent, and how might that differ from profit? I think, without wanting to oversimplify an incredibly complex and kind of contested set of debates and intellectual traditions, I think it's broadly fair to say that there are two main understandings of economic rent. And they kind of originate in the same place historically in terms of economic theory. But they kind of headed in very different directions from those shared beginnings. 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 a profit that is incremental to a kind of normal or average level of profitability. And that surplus, that excess profit or rent, is typically generated by virtue of an absence of competition. So if normal profit is the level of profit that can be obtained by firms in the presence of competition, if you begin to take that competition away, which is to say, if you begin to have conditions of monopoly or oligopoly power in the economy, then the excess profit that is available by virtue of the absence of competition is what is typically understood as rent. So in that tradition, rent and profit are not sort of different things. Rent is a form of surplus profit rather than an app, rather than something different from profit. So that's the first one, and that's kind of the mainstream understanding. 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. So it's people that are interested in the economy, but to try to understand it in ways differently from mainstream economic understandings. And there 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.

Rodrigo Fernandez

As far as I know, there are no clear cut methods to calculate to present 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?

Brett Christophers

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 a that's time consuming and painstaking work 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. And I think the other thing I would say is that as I and other people kind of broadly on the left, working within economic theory understand it, 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.

Sara Murawski

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?

Brett Christophers

Yeah, okay. Again, another very big question. I think the best way I can start to answer that question is the following. So the argument I made in the first of the two books that Rodrigo held up, the Rentier capitalism book, is that capitalism in recent decades, and I focus specifically on the UK, because I think it's kind of a classic case of this. But it's not the only case. 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 our lives in their portfolios book 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 book 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 Mapori. Most people would have no idea that that's the.

Rodrigo Fernandez

Yeah, so. I'm sorry. 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.

Brett Christophers

Yeah, and I think that's very well put, Rodriguez. It's a completely different business model. So while some of them, and Blackrocket 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.

Rodrigo Fernandez

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, yeah, they are very recent. Childcare, housing, very intimate parts of society.

Brett Christophers

Correct.

Rodrigo Fernandez

Have been bought by these private equity funds. And so the question I had in mind is, 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?

Brett Christophers

he former East Germany in the:

Rodrigo Fernandez

What Daniel Lagabor calls the derisking.

Brett Christophers

I mean, it's not her term. That term existed for a long time, but she's sort of popularized it. That's exactly right. So governments come in. I mean, the term has been used for a long time by governments and private sector investors. Precisely. 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.

Sara Murawski

And, Bret, this is the question I have to ask. It corresponds so much to what you've already said. 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.

Brett Christophers

Right.

Sara Murawski

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? Sorry, one more thing before you answer. If anyone has any questions to Brad, please put them in the Q A tab. So I already see there are some questions in the chat. It's easiest if you put them in the Q A tab because then other people might also upload them back to you. Brad?

Brett Christophers

and distribution. And in the:

Rodrigo Fernandez

I suppose your next book will be covering that terrain.

Brett Christophers

That's exactly what it's about.

Rodrigo Fernandez

Yeah, it is almost time to go to the Q A from participants. But yeah, if I may, just 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?

Brett Christophers

So in Copenhagen in the late:

Sara Murawski

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 von Derstichene. And it's about international trade and trade treaties. So I think another neoliberal regime. And Miriam asks, international trade and investment treaties and national and EU laws with a neoliberal competition objective have allowed asset managers to freely buy and get rent all across the world, which authorities and regulations would stop the increasing role of private equity, traditional asset managers and freely flowing capital rents around the world and tax havens. So 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.

Brett Christophers

Yeah, that's a good question to which I don't have a very good answer. 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 money can, 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, and this is very important, is 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 you. 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.

Sara Murawski

Yeah, inclusion will be problematic indeed. We have time for one more question, so I'm going to ask it to be brief, Bret, but it's a relevant question, so we're going to ask it. It's by Jessica Parish, who says, a great presentation and conversation. Thank you so much. 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. Anyhow, how do we account for the continued power of this when these logics or problems don't hold up? Relevant question. And you have 2 minutes, Bret.

Brett Christophers

That's how we're back to mean. I think you're. And 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.

Sara Murawski

Thanks a lot, Brad. So, I mean, that's perhaps not the most positive note to end on. I do think maybe we one day can organize some kind of brainstorm with all the crescourse participants and speakers on how to fill this intellectual and imaginary gap.

Rodrigo Fernandez

I have one thing we forgot to mention, and that Brad is also visiting the Netherlands for those who are here. So the 6 march he will be visiting the dip and dance in Rotterdam and the 7th spy 25 with abled angler. And we will be discussing all of these things probably, and we will have more time.

Brett Christophers

And that's right. And that's to talk about energy and energy transition and the climate change.

Sara Murawski

th at:

Brett Christophers

Yes. Shall I ask the question now?

Sara Murawski

Yes, if you can.

Brett Christophers

vaccines in:

Sara Murawski

Great. We'll make sure to come back to that. So thanks a lot, Brett, again, thanks for having me. Yes. See you in Amsterdam, hopefully. Thanks all for participating. If you want to keep updated, you can sign up for our newsletter, visit our website, it's in the chat crashcourseeconomics.org. Hope to see you again in two weeks time. Bye, everyone.

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