In this episode of Built to Divide, we pick up where the post-2008 housing machine left off—and show how the subscription economy (SaaS, streaming, “pay forever”) migrated into the built environment.

Dimitrius Lynch traces the privatization movement from Milton Friedman’s voucher logic and post–Brown v. Board backlash to modern power brokers like ALEC, corporate bill-writing, and the quiet reframing of citizens into customers.

Then we explore build-to-rent communities engineered for “predictable cash flow,” housing-as-a-dashboard, and the rise of rentier capitalism—profits from controlling gates, not creating value. The episode connects BlackRock’s infrastructure thesis and Aladdin risk platform, the 2008 recovery pipeline, and the long continuity from Bretton Woods → financialization → asset management dominance.

Finally, we widen the lens to the next frontier: farmland financialization, where ownership detaches from stewardship and the right to live—and farm—becomes something you lease back.

Episode Extras - Photos, videos, sources and links to additional content found during research.

Episode Credits:

Production in collaboration with Gābl Media

Written & Executive Produced by Dimitrius Lynch

Audio Engineering and Sound Design by Jeff Alvarez

you

2

Imagine living in a town where nothing is truly yours.

3

The school your child attends has a monthly tuition.

4

Miss a payment and your child loses their spot.

5

The road to drop them off charges a toll too.

6

The water in your tap is metered by a private gatekeeper.

7

The hospital wing is branded, sponsored, and optimized for revenue over care.

8

Even the park bench beneath the oak tree carries an ad and a maintenance fee.

9

You don't own a book.

10

you rent the right to turn a page.

11

If you don't own the farm, you lease space to grow and pay a toll to harvest.

12

The refrigerator you store the food in has a monthly fee too.

13

And your home, the place that once anchored identity, family, and wealth, feels less like

a stake in a community than a monthly invoice for the privilege of sleeping inside its

14

walls.

15

That is the promise and peril of the privatization movement.

16

the belief that everything can be run like a business because businesses are efficient.

17

Sometimes they are.

18

A private operator can patch the roof while a committee debates who's allowed to buy the

latter.

19

Contracts enforce deadlines, metrics expose waste, competition, when it's real, can lower

costs, at least for a while.

20

The idea sells because it offers speed, simplicity, and control.

21

But business is not a synonym for society.

22

Businesses answer to balance sheets.

23

Communities answer to one another.

24

Firms optimize for predictable cash flow.

25

Public goods exist precisely to absorb the unpredictable.

26

The child who needs extra help.

27

The patient who can't pay.

28

The bus route that runs empty at 10.30 p.m.

29

because a night shift nurse still has to get home.

30

Those inefficiencies aren't flaws.

31

They're the point.

32

The truth is, privatization, despite its tidy language of efficiency, has always been

political.

33

It isn't just a management tool.

34

It's a strategy for power.

35

Who decides, who benefits, and who bears the costs?

36

In the 1950s, Milton Friedman argued that democratic governments naturally expand, pulled

by interest groups, sustained by bureaucracies.

37

protected by politicians reluctant to shrink their own authority.

38

To Friedman, the state was a monopoly, and monopolies breed inefficiency.

39

Privatization wasn't just reform, it was a counterweight.

40

While there's merit in that idea, the privatization movement effectively shrinks

government, the power of the collective, without admitting you were shrinking the public's

41

rights.

42

In 1955, Friedman presented the idea of school vouchers.

43

Public money, private delivery.

44

Bureaucracy stays small, the market sorts the rest.

45

He called it choice, but Freeman was clear about the trade-off.

46

Businesses, he argued, owe no duty to society beyond the contract.

47

Even when funded with public money, they are accountable only to owners, not to the

public, not to democracy.

48

History tested that idea quickly.

49

The real fallacy in Mr.

50

Faulkner's reasoning is that this is something new.

51

Desegregation has been coming about over period of 20 or more years.

52

When Mr.

53

Faulkner or anyone else says wait, you must bear in mind that Negroes in this country have

54

We've been waiting since the 14th Amendment was adopted.

55

As a matter of fact, I would say that the NACP's more reasonable criticism is that we're

moving too slow.

56

This is Thurgood Marshall on Night Beat with Mike Wallace, broadcasted in 1954 by the

Dumont Network.

57

After Brown vs.

58

the Board of Education, a 1954 landmark Supreme Court decision that declared racial

segregation in public schools unconstitutional, choice became a weapon.

59

White families sought to evade integration through private schools that offered what

customers demanded.

60

Separation, subsidized with public funds.

61

other newspaper in Richmond, I think they're all under the same outfit.

62

The Richmond news leader.

63

I think that's the name of it.

64

the day or so after the decision came down in a long editorial called on the people of

Virginia to fight against integration.

65

with all of their power to litigate for over a hundred years if necessary.

66

That was said long before the NACP even opened its mouth.

67

In Prince Edward County, officials defunded public schools, issued tuition grants, and

watched white families form segregation academies.

68

They then closed the public schools entirely and locked the doors.

69

The lesson was unmistakable.

70

Put a public good in private hands and the rules change.

71

Discrimination becomes preference.

72

Exclusion becomes choice.

73

Reedman sought escape from government's iron fist.

74

In practice, his model forged another, one fueled and funded by division.

75

Contrast that with Wake County, North Carolina, about 45 years later.

76

There, Superintendent Dr.

77

William McNeil pursued integration by design.

78

Beginning in the late 1990s, the district used socioeconomic indicators to prevent

concentrated poverty

79

balancing income levels, academic performance, and resources across schools.

80

And because decades of race-based policy often mapped onto wealth and opportunity,

class-based assignment frequently reduced racial isolation too.

81

The principle was simple.

82

A child's zip code should not decide their future.

83

It worked.

84

By 2003, student achievement exceeded 91%.

85

In 2004,

86

Forbes ranked Wake County among the nation's best large districts, and McNeil was named

National Superintendent of the Year.

87

Equity and excellence reinforce one another, an outcome that should be desired as it would

likely lead to more productive members of society.

88

But that success triggered backlash.

89

Enter the American Legislative Exchange Council, or ALEC.

90

Amid conservative resistance to desegregation and regulation,

91

It was founded in 1973 by activists like Paul Weirich, a co-founder of the Heritage

Foundation.

92

Alec paired corporate representatives with state legislators to draft model bills behind

closed doors, then sent them home to be introduced as law, often word for word.

93

Alec has forged a unique partnership between state legislators and leaders from the

corporate and business community.

94

This partnership

95

offers businessmen the extraordinary opportunity to apply their talents to solve our

nation's problems and build on our opportunities.

96

Working together as a team, you serve our nation well.

97

Alec brands itself as nonpartisan, but its mission is explicit.

98

Limitate government, free markets, and federalism.

99

Corporate members pay to sit alongside lawmakers and vote equally on legislation.

100

Once approved,

101

Those bills spread quietly across the country, rarely disclosed as ALEC

102

I didn't know how incredibly extensive and deep and far reaching this effort to rework our

laws was.

103

This is Lisa Graves, a former Justice Department attorney who is the executive director of

True North Research and president of the board of the Center for Media and Democracy, a

104

nonprofit investigative reporting group in Madison, Wisconsin.

105

In 2011, an Alec insider turned whistleblower

106

provided graves with a trove of ALEC documents, including actual ALEC model bills.

107

Of the many areas of interest, education was central.

108

Early opposition to busing evolved into a polished push for vouchers, charters, and online

schooling, marketed as freedom, structured to fracture public systems, and aligned with

109

for-profit firms like Connections Academy and K-12.

110

What you see is corporations that have

111

a direct benefit whose bottom line directly benefits from these bills voting on these

bills in the ALEC task force.

112

so corporations like Connections Academy, corporations like K-12, they have a direct

financial interest in advancing this agenda.

113

It's worth noting that ALEC's corporate membership also includes major players in the

criminal justice ecosystem, private prison operators, security contractors,

114

and surveillance and communications technology firms.

115

Consider that a destabilized market-driven education system can serve these interests on

two fronts, financial gain on pathways to opportunity, while simultaneously expanding the

116

market for incarceration, monitoring, and ultimately a pool of coerced or low-cost labor

for those who fall through the cracks.

117

Wake County became a flashpoint because it exposed the lie at the heart of school choice.

118

If integrated public schools could succeed at scale, the case for marketizing education

collapsed.

119

Integration was reframed as forced busing.

120

Planning became social engineering.

121

Parents were reframed as consumers.

122

By 2009, the backlash prevailed.

123

The school board flipped.

124

The diversity plan was dismantled.

125

Wake County wasn't undone because it failed, but because it worked.

126

The same logic resurfaced during the urban fiscal crisis of the 1970s.

127

As cities bled revenue, conservatives blamed pensions and social programs.

128

Privatization became the compromise.

129

Don't call it austerity, call it efficiency.

130

Thinkers like Emmanuel Savas reframed citizens as customers and government as a monopoly.

131

Crisis, he argued, was a golden opportunity.

132

Not to rebuild the public, but to replace it.

133

The strategy was incremental.

134

Privatize one service at a time, never announce the full destination.

135

Because people like libraries, they like clean water, they like teachers who show up.

136

Over time, the argument turned openly financial.

137

Trillions in public budgets became a marketplace for contracts, tolls, and fees.

138

Governments became customers and corporations became sellers.

139

But sellers write the fine print.

140

That's how we arrive here.

141

A world where access itself is the product.

142

We saw it plainly in media.

143

Subscriptions instead of one-time purchase.

144

Then software.

145

Then mobility.

146

Now shelter.

147

But not everything that matters should be gated.

148

A playground's value is an ROI.

149

It's belonging.

150

A library is an inventory, it's autonomy.

151

A half empty bus isn't waste if it's the only way to get home.

152

Through privatization, if you own the gate, you can charge for passage forever.

153

And once that logic reaches housing, it doesn't just change markets, it changes what it

means to belong.

154

I'm Demetrius Lynch, and this is Built to Divide.

155

And then if you look at the private sector and you look at where is their surplus capital

sitting available to be invested in that type of infrastructure?

156

Well, the answer these days is pretty much asset management companies like BlackRock.

157

We believe that there's a need for trillions of dollars investing in infrastructure

related to our power grids, AI, the whole digitization of an economy, all these different

158

investments.

159

Well, they go together, don't They all go together.

160

Last time we explored how decades of financial experimentation and political complacency

collided and how the government's rescue of the financial elite deepened inequality,

161

reshaped cities, and set the stage for a new kind of housing crisis, one defined by

corporate landlords, stagnant wages, and policy capture.

162

If you haven't listened to that episode, I encourage you to go back and listen to all the

episodes of this series in order.

163

Today, we chart the pivot from selling homes to selling access, how the subscription

mindset of the tech economy leapt into housing, how the bill to rent model matured into a

164

permanent feature of American life, why investors prefer yields to sales, and what it

means when rent becomes a platform.

165

We'll also look at a historic transfer of ownership in farmlands.

166

And we'll get into all of that after this break.

167

Episode 8, From Ownership to Access.

168

the industrial economy, scarcity created value.

169

A manufacturer built one more refrigerator and earned one more dollar.

170

The business made something, the consumer owned it, and the transaction ended.

171

Credit extended that relationship.

172

Media, then digital technology introduced a whole new equation.

173

Copying a file costs almost nothing.

174

Updating an app is constant.

175

Serving a movie to 10 million screens isn't 10 million times as expensive as serving it

once.

176

The product no longer ended at the sale.

177

It began there.

178

So the philosophy flipped.

179

If you can't profit by selling the same thing over and over, you profit by selling the

time inside it.

180

Continuous access.

181

Around 2000, software moved towards SaaS, software as a surface.

182

The DVD by mail became the endless scroll.

183

The CD became the stream.

184

We didn't stop paying, we just started paying forever.

185

And investors fell in love for a simple reason.

186

One-time sales are lumpy.

187

Subscriptions are smooth.

188

Analysts call it visibility.

189

Forecastable revenue quarter after quarter.

190

Capital prefers rivers to rainstorms.

191

Monthly recurring revenue looks like a river.

192

When Wall Street finds a model that lowers risk without sacrificing return, it hunts for

new places to apply it.

193

Predictable cash flows can be securitized, leveraged, hedged, and scaled.

194

If you can turn human necessities into subscription lines on a spreadsheet, the multiples

go up.

195

And there is no necessity like shelter.

196

By the mid 2010s, the ground shifted under the traditional development model.

197

Land prices climbed fastest where jobs were.

198

Material costs rose.

199

Skilled construction labor, thinned out by the Great Recession, didn't return at the scale

we needed.

200

Permit cycles extended.

201

Every fee pushed the pro forma towards red.

202

The math that once justified bill to sell started to fray.

203

So large scale public builders face two choices, push sell prices further beyond what

buyers could afford or change the business model entirely.

204

The market's answer had been hiding in the ruins of the last crisis.

205

For closure auctions in Phoenix, Atlanta, Charlotte, Dallas, investors realized that they

didn't need a buyer at the end of every project.

206

They could be the buyer, permanently.

207

Buy in bulk, stabilize occupancy.

208

operate at scale.

209

Package rents into securities, harvest predictable cash flow quarter after quarter while

assets appreciate on their own.

210

That's not a one-time hit.

211

That's a pipeline.

212

It turns a cyclical transaction industry into a yield machine.

213

Once that logic clicked, a pivot followed.

214

What tech had proven with SaaS, convert ownership into service, real estate redeployed

into bill to rent.

215

This is Todd Wood, founder and CEO of Christopher Todd Communities on CNBC's Power Lunch,

discussing the concept after partnering with Taylor Morrison to expand it across the

216

country.

217

know, owning a home has always been the American dream and probably always will be.

218

65 % that are renting are under the age of 35.

219

And so we have this huge group of individuals that are renters by choice.

220

If you look at really what our product delivers to them, it's a totally different concept

that anybody's ever seen before.

221

What we did was if you look at the traditional multifamily, which is kind of a vertical

environment where people can live in either a two to three story garden style apartment,

222

or even an urban high rise.

223

And then you look at kind of the standard traditional single family rental, which is a

home in a four cell community, but it's for rent.

224

So what this product that we've done is it's kind of a hybrid.

225

It's right in between.

226

It's in the best of both worlds that we bring to uh the environment.

227

And if you really look at it, we've always said, you know, sometimes you used to drive a

truck, sometimes you used to drive a car, but somebody came out and said, you know, let's

228

create something that's in between.

229

An SUV has really done well.

230

So we really look at this product as people want to live in these communities for all

kinds of various reasons.

231

depending upon their demographic.

232

But the concept isn't new.

233

Long before bill to rent became a line item in an investor deck, entire workforces lived

in homes they did not own.

234

Company towns, where the employer owned not just the factory, but the houses, the stores,

the schools, even the rules.

235

These towns appeared across the world, from the US to Belgium, Germany, Japan, Mexico,

Chile, and beyond.

236

Because capital discovered a simple truth.

237

Controlling shelter is a powerful way to control labor.

238

One early example was Grand Hormou in Belgium.

239

After acquiring a mining concession in 1810, industrialist Henry de George commissioned a

neoclassical town to house workers.

240

Orderly, efficient, and dependent.

241

When the mine closed in 1954, the town emptied.

242

Today it's a museum.

243

A beautiful artifact of a system where work, housing, and power were fused.

244

In the United States, the most famous company town was Pullman, built outside Chicago in

245

The Pullman Company was a manufacturer of railroad cars.

246

The founder, George Pullman, offered housing, markets, libraries, churches, and an entire

planned world for employees.

247

Workers weren't required to live there, but those who did

248

often received better treatment, including higher wages.

249

The system worked until the panic of 1893 when Pullman cut wages but refused to lower

rents or prices.

250

Workers revolted.

251

The Pullman strike of 1894 paralyzed rail traffic nationwide.

252

A federal commission condemned Pullman's control as un-American, noting that aesthetic

beauty mattered little, quote, when they lacked bread.

253

The strike ended in violence with 34 strikers dead at the hands of federal troops and in

254

But the idea didn't die, it evolved.

255

industrialists tried again with softer edges.

256

Model towns like Port Sunlight and Bournville in England offered green space, decent

housing, schools, and cultural life.

257

The Cadbury brothers' Bournville became a showcase of welfare capitalism, healthier, more

humane, and still deeply controlled.

258

These experiments influenced the Garden City movement and professional planning itself, a

future where design could soothe conflict

259

without surrendering authority.

260

Eventually, public investment made company towns less necessary.

261

Schools, libraries, parks, labor protections, minimum wages, union power, especially under

the New Deal, reduced employer influence.

262

Workers were encouraged to own homes, not rent them from their bosses.

263

The company town faded.

264

Until now.

265

In 2021, Nevada Governor Steve Sisolak

266

bloated innovation zones, corporate districts with powers usually reserved for counties,

taxes, courts, school systems.

267

Around the same time, Elon Musk pushed to incorporate Starbase, Texas, built around

SpaceX, which in itself is yet another example of privatizing civil programs.

268

In 2025, Starbase officially became a municipality with a SpaceX executive as mayor.

269

There's a new city in Texas and it's home to the South Texas home of Elon Musk's SpaceX

company as they are now formally finally being named as Starbase.

270

Starbase, Texas becoming a city will help us continue to build the best community possible

for the men and women building the future of humanity's space uh place in space.

271

So we're following this very closely as a vote on Saturday to formally organize Starbase

as a city.

272

was approved by a lopsided margin among the small group of voters who live there and are

mostly Musk's employees at SpaceX with all votes coming to a tally of 212 to 6.

273

Elon Musk posting on social media saying now a real city.

274

Starbase is the facility of launch site of the SpaceX rocket program that is under

contract with the Department of Defense and NASA that hopes to send astronauts back to the

275

moon and someday

276

Mars.

277

first floated the idea of starbase in 2021.

278

Approval of the new city was all but certain of the 283 eligible voters in the area.

279

Most are believed to be starbase workers.

280

The lesson is familiar.

281

When housing, work, and governance consolidate into the same hands, efficiency, maybe even

wages, may rise, but freedom shrinks.

282

Modern build to rent, though, is different in scale and mechanics.

283

It isn't just building rentals.

284

It's building a balance sheet.

285

The UK popularized the term after 2008 when government, eager to spur supply, invited

institutional capital into large scale rental projects.

286

Planning flexed.

287

Financial supports were discussed.

288

Firms like Essential Living, Grey Star, and Quintane formalized the category.

289

In the U.S., the path was less official and more opportunistic.

290

The foreclosure wave created a sea of bank-owned homes.

291

Blackstone's invitation homes, as we've discussed, bought distressed properties by the

thousands.

292

American Homes for Rent, Tricon Residential, and Progress Residential joined the suite.

293

Management platforms standardized leasing and maintenance.

294

Financing vehicles securitized rental streams.

295

At first, it was buy to rent.

296

Then came the next move, build from scratch.

297

Why inherit quirks of scattered houses when you can design whole neighborhoods for

operational efficiency?

298

Clustered layouts to reduce drive times, standardized plans for bulk purchasing, amenity

centers to justify premiums, pets, parking, and packages engineered the management model.

299

The language shifted to home without hassle.

300

not at least a membership.

301

Then the pandemic hit.

302

Families fled tight apartments for space, yards, and privacy.

303

Capital poured in.

304

JPMorgan, Goldman Sachs, Brookfield, Greystar.

305

Builders pivoted.

306

Lennar partnered with CenterBridge and Alliance to build a multi-billion dollar rental

platform.

307

Toll Brothers leaned harder into rental and multi-family.

308

The message was blunt.

309

If your buyer can't or won't buy, don't sell.

310

Subscribe them.

311

This wasn't just preference, it was economics.

312

Wages stayed flat in real terms.

313

Asset prices increased behind the upward force of those with leverage.

314

Rungs were being completely removed from the ladder of wealth and opportunity.

315

So, builders stopped aiming for a one-time exit and started aiming for consistent, ongoing

revenue.

316

Once you manage 10,000 homes, you're not a builder, you're infrastructure.

317

And once you're infrastructure,

318

You don't need a boom.

319

You need tenants not to move.

320

A technical shift made that more feasible.

321

Cloud infrastructure and frictionless payments and operations.

322

AWS, Azure, and Google Cloud rewired how services are delivered.

323

Updates became invincible.

324

Billing became automatic.

325

APIs stitched platforms together like Legos.

326

Housing followed.

327

Leasing portals, instant background checks,

328

dynamic pricing, smart locks, resident experience apps that route maintenance, manage

amenities, track package lockers, and quietly harvest data, occupancy patterns, renewal

329

probabilities, rent sensitivity.

330

SAS had taught the playbook.

331

Instrument everything, learn constantly, reduce churn.

332

Rent now lives in a dashboard.

333

The model shift had cultural wins at its back too.

334

Supply constraints tightened like a vice.

335

Trades retired and apprenticeships lagged as a generation was steered toward the

credential economy after manufacturing and labor were shipped overseas.

336

At the same time, millennials and Gen Z came of age under student debt, another prey of

financialization.

337

Obligation aggressively sold as opportunity that became an anchor.

338

I recall private loan and

339

credit card companies camped out on my campus, trading freebies for applications.

340

The debt, non-negotiable and unforgivable followed people across state lines, limiting

where they could live, what jobs they could take, and how far they could move.

341

Mobility slowed, risk became unaffordable, starter homes appreciated out of reach, and the

gig economy and side hustles fractured salaries into hours

342

that never add up.

343

In that world, flexibility isn't always a perk.

344

It can be wreckage, the last thing you grab to breathe in a turbulent sea just before you

go under.

345

Marketing reframed it as aspiration, curated life without the quote, burden of ownership.

346

The dog park that used to be a city's job is now an amenity.

347

The pool that used to require a public vote is now bundled into rent.

348

The dream pivoted from roots to mobility, from equity to access.

349

And access is billable.

350

Meanwhile, zoning locked vast neighborhoods into single-family sprawl, permitting queues

stretched.

351

Land near jobs became scarce, then prohibitively expensive.

352

When interest rates rose in 2022, they hit like a final blow, sending mortgages and

construction loans soaring.

353

and freezing what little new housing could still be built.

354

In a world where adding supply is hard, scarcity becomes valuable.

355

If you can't build enough for everyone to own, you can profit by owning what everyone must

rent.

356

Predictable returns, tax benefits, inflation pass-through, fees stacked atop base rent,

parking, pet rent, trash valet, smart home packages.

357

Scarcity is no longer the problem to solve.

358

It's the moat to defend.

359

That's the inversion.

360

The obstacle became the opportunity.

361

Pre-2008, institutional ownership of single-family rentals was negligible.

362

By 2020, it had climbed into the hundreds of thousands.

363

By 2023, roadmaps projected doubling again.

364

Read the filings.

365

Pensions rebalanced toward core income.

366

REITs sold housing as a service.

367

Builder earnings calls highlighted rental divisions.

368

Housing isn't unique.

369

When new sales flatten, industries rewrite how they get paid.

370

Automakers push leases and subscriptions.

371

Telecom shifted to monthly plans.

372

Software became SaaS.

373

Media swapped own this for access everything.

374

The logic is identical.

375

If customers can't or won't swallow ownership costs,

376

offer controlled access priced just below pain.

377

The outcome is identical too.

378

Lower volatility, higher valuations, deeper dependence.

379

As we discussed, Airbnb contributed technology to the shift as well.

380

Recurring users generate recurring data.

381

In tech, that improves the product.

382

In housing, it improves the portfolio.

383

What units rent fastest?

384

What amenities justify premiums?

385

what layouts reduce repairs, what policies lower churn.

386

Data refines underwriting.

387

Underwriting sets valuation.

388

Valuation draws capital.

389

And capital buys more homes.

390

That's the flywheel.

391

Economist Brett Christopher's highlights a broader pattern, rentier capitalism.

392

Profits made not by making things, but by controlling gateways.

393

Governments around the world, not just in New Zealand, have identified a whole series of

investment demands relating particularly to infrastructure.

394

And I know you were just talking about infrastructure just now, not least relating to

climate.

395

infrastructure, infrastructure of climate mitigation and adaptation.

396

And as well as recognizing a huge demand for investment, I think the second important part

is that governments have increasingly accepted or taken the view that governments

397

themselves shouldn't be undertaking that investment.

398

shouldn't be principally or even at all public money.

399

So they're looking to the private sector to undertake most of that investment.

400

And then if you look at the private sector and you look at where is their surplus capital

sitting available to be invested in that type of infrastructure, well, the answer these

401

days is pretty much asset management companies like BlackRock.

402

BlackRock, not to be confused with the previously discussed Blackstone, is one of the most

prominent examples of this transition to owning everything.

403

BlackRock is not a bank.

404

It doesn't take deposits.

405

It doesn't make loans.

406

It doesn't sell mortgages to families or credit cards to consumers.

407

And yet it has become one of the most powerful financial institutions in human history,

quietly shaping markets, governments, and everyday life through ownership without

408

responsibility and control without accountability.

409

Founded in 1988, BlackRock began as a niche firm focused on fixed income investing and

risk management.

410

Its founders, led by Larry Fink, believed the future of finance would belong to those who

could measure risk across increasingly complex portfolios.

411

That belief turned out to be prophetic.

412

By 2025, BlackRock managed roughly $12.5 trillion in assets, more than the GDP of every

country on earth, except the United States and China.

413

When you include the assets it doesn't own, but it vises on,

414

The figure swells closer to 15 trillion, roughly the size of the entire US economy.

415

BlackRock's reach is not abstract.

416

It is a top shareholder in nearly every major US bank and a major owner of America's most

recognizable corporations.

417

Apple, Microsoft, Google, Amazon, Walmart, ExxonMobil, Chevron, Coca-Cola, Boeing,

Lockheed Martin.

418

Visa, MasterCard, and thousands more.

419

It doesn't run these companies.

420

It votes within them, quietly, permanently.

421

This is a new model.

422

Own everything, manage nothing, and collect influence everywhere.

423

Unlike banks, BlackRock is lightly regulated.

424

It invests other people's money, pensions, insurance pools, sovereign wealth funds,

central banks.

425

So it avoids the capital requirements and scrutiny applied to institutions deemed too big

to fail.

426

It is a firm few people can describe, but as Larry Fink signals here, one that touches

almost every corner of the global economy.

427

I think it's enormous.

428

We made a strategic study in 2023, and this is why we did these three acquisitions.

429

did GIP.

430

We believe infrastructure is just at the beginning of a golden age.

431

I'll get into that.

432

We believe private credit will continue to grow and evolve.

433

did HBS.

434

That's HBS.

435

But also, believe that if you believe there's going be a melding between public and

private markets, which we believe that's going to happen.

436

What does that mean?

437

meaning portfolios are going to have both private markets and public markets.

438

There's a possibility that the government, the US government is going to allow in their

fine contributions more private markets into DC.

439

But the foundation of that is to be, is data and analytics.

440

So we bought prequin, which is the smallest of the three deals, but it could be as

impactful that any of them in terms, because I think more and more people are going to

441

need analytics and data to justify the blending of public and private together in a

portfolio.

442

We look at all three as a major component of our long-term strategy.

443

Related to uh infrastructure, we believe that there's a need for trillions of dollars

investing in infrastructure related to our power grids, AI, the whole digitization of an

444

economy.

445

We are still going to be investing in decarbonization.

446

So all these different investments.

447

Well, they go together, don't they?

448

They all go together, plus making sure that we have adequate uh

449

dispatchable energy.

450

all of this is all part of a plan.

451

BlackRock's power isn't just in what it owns.

452

It's what it knows.

453

At the center of the firm is Aladdin, a risk management platform that functions like an

x-ray machine for the global finance system.

454

Aladdin runs thousands of stress tests every day, modeling how wars, rate hikes, housing

crashes,

455

and liquidity shocks ripple through portfolios.

456

Today, it monitors more than $18 trillion in assets used not just by BlackRock, but by

pension funds, insurers, central banks, and even BlackRock's competitors.

457

When you use Aladdin, you see the world through BlackRock's lens.

458

That lens became indispensable in 2008.

459

When the global finance system seized up

460

the US Treasury and Federal Reserve turned not to regulators, but to BlackRock.

461

The firm was hired to manage toxic assets from Bear Stearns, AIG, Fannie Mae, Freddie Mac,

and Citigroup.

462

Throughout the crisis, Larry Fink was in constant contact with Timothy Geithner, Hank

Paulson, and Ben Bernanke.

463

According to public records, Fink spoke privately with Geithner more than 100 times during

his tenure.

464

The message to markets was unmistakable.

465

BlackRock wasn't just surviving the crisis.

466

It was helping design the recovery.

467

BlackRock's advisory work during the crisis may have indirectly strengthened its market

credibility and investor confidence, which could have helped in raising capital or

468

negotiating deals.

469

That credibility paid off.

470

In 2009, while the public was still absorbing foreclosures and layoffs,

471

BlackRock acquired Barclays Global Investors and its iShares ETF platform for $13.5

billion.

472

Capital Barclays needed to fend off anxious regulators after the bank resisted a

government bailout during the financial crisis.

473

The cash would also help Barclays fund its acquisition of Lehman Brothers assets, a deal

474

Overnight,

475

BlackRock became the world's largest asset manager and the dominant force in passive

investing.

476

As money flooded into index funds, BlackRock became a permanent shareholder everywhere

capital flowed.

477

But from the bird's eye view, there's much more to understand about this story.

478

Back in 1988, Fink initially sought funding from Peter Peterson, who you may recall as a

co-founder of Blackstone.

479

He believed in Fink's vision and Blackstone provided a $5 million credit line and seed

capital to BlackRock.

480

The fledgling firm was originally called Blackstone Financial Management before it spun

off as BlackRock.

481

Again, Peterson supplied political gravitas to the establishment of Blackstone, but we

haven't yet discussed who Peterson was and where that influence came from.

482

Peter G.

483

Peterson,

484

The eldest of three children to immigrant parents from Southern Greece was an investment

banker.

485

But prior to founding Blackstone, he was the chairman and CEO of Lehman Brothers from 1973

486

Now, before his transition to investment banking, Peterson began at MarketFacts, a

Chicago-based market research firm.

487

served as director of an advertising agency, McCann Erickson, in 1953.

488

and later joined movie equipment maker Bell and Howell Corporation in 1958 as executive

489

His background was business.

490

Peterson wasn't an economist.

491

He was a translator, someone who could spin economic turbulence into a story elites could

accept.

492

And in 1971,

493

He took a sabbatical from his business career to serve in the Nixon administration, first

as assistant to the president for international economic affairs.

494

In April that year, Peterson produced a secret report for Nixon on the volatile world

economy.

495

The United States was facing inflation, trade competition, and declining industrial

dominance.

496

President Nixon didn't want a technical diagnosis.

497

He wasn't searching for economic truth.

498

He wanted a narrative that preserved confidence.

499

Peterson delivered on July 26, 1971.

500

President Nixon and Peterson met in the Oval Office of the White House from 4.32 PM to

5.19 PM.

501

With this big election year of labor unions, our vote has been unimplied with over 60%.

502

This becomes one of our operations for photo bill.

503

Sometimes we talk a little bit about the photo bill, but the big concern I have about

504

quotas versus other approaches is that they'll tend to freeze our industry into industries

of the past, and while Japan and the others are putting their dough into the future of

505

industry, we're saving them with the past.

506

Secondly, I don't think we've heard the lines of Mr.

507

Manziel and friends, even if we have the worstest balance of payments problem in years, I

could expect.

508

defense cuts with German troops, aid, you know the whole foreign policy thing.

509

Getting away, I don't understand why we should be making foreign policy decisions for

balance and payments.

510

This doesn't seem to be appropriate, but that, and it leaves you weak politically, both at

home and

511

Over and over, the problem is framed as structural inevitability rather than political

choice.

512

Quotas are rejected not because they fail workers, but because they would freeze industry

in the past.

513

Labor protections are treated as electoral liabilities.

514

Trade imbalances are discussed as abstract pressures, not as the result of policy

decisions.

515

What matters is competitiveness, confidence, and survival.

516

language that shifts blame outward and forward in time.

517

use that as you know is a very value added system.

518

Now the economist told me that as far as trade is concerned it has many of the effects of

de-manuation.

519

In the sense that you're cousin, you're just raising your

520

politically in this room.

521

certain amount of protection for our industry.

522

It's a certain amount of export, you know, picking up.

523

And instead of giving it a devaluation, we're putting it healthy.

524

I think we could package this if you follow me in a way that...

525

we are going to increase exports.

526

And it's a temporary thing, which we think under the balance of payments rules of gap we

could do.

527

And Lord knows people have been telling us we have a balance of payments problem.

528

Britain has done this once.

529

France has done it.

530

So it's nothing.

531

So it's not all that good.

532

So that's an approach that...

533

uh Here's what's missing.

534

Wages, corporate pricing power, financial speculation, or the decision to dismantle

post-war controls.

535

Instead, Peterson emphasizes global competition and the need for flexibility.

536

This is the soft launch of a new doctrine.

537

Discipline at home,

538

to reassure capital abroad.

539

One part of this, that's my discussion, but frankly, this part, you know, we're in a crazy

world.

540

It's just not what I think about it.

541

We're really only country that can be better.

542

And, you know, you like to take the long view here, but the way the rest of this works...

543

Singapore and so forth.

544

This isn't the last time the storm is going to come up.

545

And I've been trying to figure

546

Paul tells me that he's absolutely right.

547

checked that under the bread and woods thing.

548

that is part of the package at some point.

549

We would want that authority.

550

But some presidents say she can't be a third because long-term spread...

551

here.

552

you

553

asking for his authority to do a top secret thing on a bold approach to this problem.

554

Looking toward an August announcement, get that bit over at Sunwell.

555

We'll count these jokes and I'll add in the cranking and then just keep everybody.

556

Yeah.

557

There, Peterson proposes the idea of ending Bretton Woods.

558

He acknowledges that the president doesn't have the authority but as a part of some

package they would want that authority.

559

He then requests approval for a top secret plan, a bold approach with the target of an

August announcement.

560

Nixon pauses for a moment and then says, I think this is a good idea.

561

asking for its authority to do a top secret thing on a bold approach to this problem.

562

Looking toward an August announcement, if it all works out well, we'll count on these

jokes and I'll add in a crank and then just keep everybody.

563

Yeah.

564

On August 15th, 1971, with Peterson's logic and justification, Nixon announces a series of

economic measures implementing wage and price controls, imposing import surcharges, and

565

ending the gold standard, unleashing an era of financialization.

566

The through line is remarkable.

567

Peterson helps in Bretton Woods, opening the door to financialization.

568

He transitions to investment banking two years later, entering Lehman Brothers as chairman

and CEO.

569

After being ousted from Lehman, he co-founds Blackstone and with the benefit of

connections and influence, the company perfects private equities extraction model.

570

Blackstone seeds BlackRock, who scales that logic globally, advising governments,

571

They rocket to become the world's largest asset manager, owning everything and monetizing

access to capital itself.

572

Now, BlackRock doesn't need to run companies or pass laws.

573

It sits above them, allocating capital, modeling risk and shaping outcomes.

574

It is the system born of the Bretton Woods collapse, one where capital governs

575

and ownership is separated from responsibility.

576

This is not conspiracy, it is continuity.

577

And it explains why in a world where housing becomes an asset class, pensions chase yield,

and governments outsource judgment to algorithms, BlackRock doesn't feel like an

578

aberration.

579

It feels like the endpoint of a clear path from 1971 directly to today.

580

A century ago, the center point was the factory.

581

Today, it's the platform, the network, the patent, the franchise, the landlord's ledger.

582

In that world, a company prospers by owning the right choke points.

583

Own the bottlenecks, lease the flow.

584

Your risk declines as everyone else's dependence grows, the same thing that was warned of

governments.

585

There are other choices.

586

We can build more, faster, denser, smarter, where people actually need to live.

587

We can re-legalize small apartments and missing middle homes.

588

We can make public and cooperative housing dignified, abundant, and permanent.

589

We can shape rules for platforms so that homes don't disappear into tourist inventories

and corporate enclaves.

590

We can tax what is extracted rather than what is earned.

591

We can tilt the balance back towards belonging, but first we have to understand the

machine we're inside, the image itself.

592

Drive through the entry of a prototypical build to rent community.

593

A tasteful sign, gently curved street, a leasing office that looks like a boutique hotel.

594

The homes are detached or paired townhomes.

595

Clean lines, repeating elevations with just enough variation to feel personal.

596

Every kitchen is a photograph.

597

White shaker cabinets, quartz counters, laminated vinyl plastic flooring.

598

Every garage has a sensor.

599

every door a smart lock.

600

The lawn care is included because uniformity is part of the brand.

601

At the center, amenities.

602

A pool with cabanas.

603

A gym that would shame the old apartment complex you knew in your 20s.

604

A dog park with turf engineered for drainage and easy cleaning.

605

A co-working lounge where ring lights glow through the afternoon.

606

Package lockers that ping your phone.

607

A calendar of community events.

608

Yoga, food trucks, trivia.

609

The lease is digital and payments are automatic.

610

Fees are layered.

611

Pet rent, smart home package, trash valet.

612

Repairs route through an app and renewal notices reflect an algorithm's appraisal of your

alternatives.

613

You are both tenant and telemetry.

614

To the investor, this is a symphony of predictability.

615

Turnover is lower with a dog park.

616

Repairs are faster with standardized parts.

617

m

618

contracts on landscaping fixed costs.

619

A 97 % occupancy rate across 5,000 units reads like a barn coupon.

620

If markets wobble, rent grows slow, but the checks don't vanish.

621

The asset doesn't sit empty waiting for a buyer, it hums.

622

Scale the model up and you see the outline of a new city.

623

Residents who rent from homes from one company drive on roads maintained by another.

624

work in spaces built by the hour, stream entertainment from a platform, store their files

in someone else's server barn, and sometimes get their healthcare and schooling in systems

625

that partner with the public purse but answer to private boards.

626

Every layer in an account.

627

For many, this may sound nice, and it may work.

628

Until it doesn't.

629

Until the rent spikes, until the job stutters,

630

until the subscription stack consumes the raise you thought would change your life, until

the app logs you out of your own front door, until you bristle against the company's

631

interests.

632

Return to the short-term rental shadow.

633

In markets without thoughtful rules, the conversion of long-term units to short-term stays

can hollow a community out.

634

It's not just fewer apartments.

635

It's fewer students stabilizing a school's enrollment.

636

fewer year-round patrons for small businesses, less predictability for transit planners.

637

The access economy is nimble, yes, but it can be predatory when its incentives collide

with public needs.

638

Where policy is weak, place becomes a product on someone else's calendar.

639

And here, Brett Christopher highlights other outcomes when everything runs like a

business.

640

If your incentive is to own a

641

infrastructures and housing with a view to selling them and making a profit.

642

You have two or three specific incentives that I think make them inappropriate.

643

Firstly, your main goal is to increase the income you extract from those assets as quickly

as possible to make them more attractive to other potential buyers, which means putting up

644

rents, putting up water rates and so on.

645

But the other thing is, if you know that you're not going to be owning that infrastructure

in 10 years time, let alone in 20 or 30 years time,

646

You are by your very nature disincentivized to carry out long-term capital expenditure,

long-term capital investment that will, for example, keep that infrastructure in good

647

shape for 20 or 30 years time.

648

You're much more likely to be inclined to carry out kind of like band-aid, sticking

plaster type solutions, which keep those infrastructures in okay, Nick, for the next few

649

years, but then basically lumber the next owner with those problems.

650

And if you look at the many of...

651

Many viewers will have heard about the lamentable state of UK water and wastewater

infrastructures, which have been significantly owned by asset management institutions in

652

recent times, including Macquarie from Australia, owned Thames Water for a long period of

time.

653

And that's just a case study in underinvestment in the infrastructure alongside massive

extraction through dividends and so on and so forth of income.

654

Even after the asset finds its long-term operator, the market is extraordinarily good at

delivering convenience to those who can pay and extraordinarily bad at guaranteeing

655

dignity to those on the fringe or that can't pay altogether.

656

The ledger balances for shareholders, not for neighbors.

657

While the invisible hand does its work, the invisible heart withers.

658

Public goods exist to hold the line against that drift.

659

to ensure the water flows, the bus arrives, the park remains free, the home is not only a

product but a platform for our life.

660

Privatization can rescue broken systems, yes.

661

Unfettered, it can also make dependence permanent.

662

The difference is not ideology, it's design.

663

Some defenders argue that modern finance has evolved, that natural market discipline, the

democratization of investing,

664

and a flood of tradable products now keep power in check.

665

Asset-backed securities, dividend flows, and index funds, they say spread ownership widely

and tie institutions to the public interests.

666

Ordinary workers through retirement accounts and pensions become beneficiaries of the same

systems that dominate markets.

667

Responsibility in this telling is no longer imposed from the outside.

668

it's baked into the portfolio.

669

While it's a powerful story, reality doesn't quite work out that way.

670

The first of those is like, well, yes, but if those funds are making profits for ordinary

retirement savers by investing money in a fund that is itself making money by ratcheting

671

up rents on other workers or even potentially the same workers, then I'm not particularly

sure that's a good thing.

672

I'm not sure I would want my pension to be boosted uh by essentially kind of rent gouging

other people.

673

So that's one thing.

674

Second thing is, increasingly the money that the funds like BlackRock and Blackstone

establish is not the money of ordinary retirement savers.

675

Increasingly, it is the money of institutions like huge sovereign wealth funds from the

Middle East.

676

So for example, Blackstone's biggest infrastructure fund, which has about, I think, just

over $20 billion US dollars invested in it.

677

Half of the capital in that fund is the fund of one sovereign wealth fund, is the uh PIF,

the Public Investment Fund of Saudi Arabia, where there's all sorts of questions about

678

human rights and so on.

679

So if that fund makes money, well, they're doing it, they're making the money mainly for

Saudi Arabian government.

680

So that's the second thing.

681

Third thing is, yes, some of the rest of the money is retirement savings, but like all

forms of wealth, retirement savings wealth, so pension wealth,

682

unbelievably unequally distributed in society.

683

think if you look at the US, something like 50 % of all retirement savings are held by, I

don't know, the top 2 % of income Yeah, highest income is.

684

Yeah.

685

So yes, if Blackstone or BlackRock funds perform well, some of the money that is the

profit that is generated by that fund goes to ordinary workers, but it's a tiny, tiny

686

sliver.

687

And the logic of access didn't stop at the city limits.

688

It moved outward.

689

mile by mile until it reached the fields.

690

Early in the shift, the relationship to land changed and history should have rung alarm

bells.

691

More and more farmers stopped owning the land they worked.

692

They leased it.

693

The risk stayed with the farmer, however.

694

The upside drifted elsewhere.

695

Strip away the apps and LLCs and the arrangement starts to resemble an older system

Americans like to believe we left behind.

696

sharecropping.

697

The laborer works the land, shoulders uncertainty, and pays a cut to the corporation whose

connection to the soil is purely financial.

698

For generations the bargain was different.

699

Farmers absorbed volatility, weather, pests, market swings, and governments softened the

edges through subsidies and insurance to preserve continuity.

700

Affordable food, productive land, stable rural communities.

701

Ownership mattered because stewardship mattered.

702

That balance is breaking.

703

Today, farmland is increasingly treated as an asset class.

704

Pension funds, private equity, REITs, family offices and platforms acquire land not to

farm it, but to hold it.

705

An inflation hedge, a predictable lease stream, a securitized yield.

706

If you own the ground, you don't gamble on crops.

707

you rent the right to farm and collect the check.

708

The product isn't food.

709

It's access to the soil that makes food possible.

710

A demographic cliff also accelerates it.

711

The average US farmer is over 60 and many have no successor.

712

Over the next two decades, an estimated $24 trillion in farmland and agricultural assets

is expected to change hands.

713

one of the largest land and wealth transfers in American history.

714

Step onto a country road and the new order is visible.

715

Fields leased by the acre.

716

The farmer works the land and owns none.

717

When a storm wipes out a season, the farmer takes on the debt.

718

The landlord's income remains.

719

Risk is localized while profit is extracted.

720

Platforms grease the transfer.

721

farmland reits and marketplaces turn acreage into a product.

722

Acre Trader, for example, sells shares in entities that own farmland.

723

Farmers may still work the fields, but as tenants or minority stakeholders, while

ownership migrates upward.

724

And this system is politically connected.

725

JD Vance, backed by Peter Thiel, invested in Acre Trader via Nara Capital before entering

the Senate.

726

He may not run the company, but the investment is emblematic.

727

Populous language paired with platforms that financialize land and convert farmers into

renters.

728

Billionaires like Bill Gates owning hundreds of thousands of acres draw attention.

729

But Gates is the headline, not the engine.

730

The deeper transformation is structural.

731

Ownership detaches from stewardship.

732

Decisions move from kitchen tables to dashboards.

733

Profits.

734

flow out of rural counties long before national statistics catch up.

735

Meanwhile, small diverse regenerative farms continue to prove that they work.

736

These practices aren't new.

737

They're older than industrial agriculture.

738

What they require isn't novelty.

739

It's access to land and time.

740

Because the great farmland transfer isn't just about acreage.

741

It's about whether land remains something people belong to or something they rent back

from distant owners.

742

We can let the logic of access continue without friction, or we can bend it back toward

the public good, build more housing where people need it, regulate where platforms

743

undermine communities, revive cooperative and public options, and tax extraction built on

scarcity while investing in reducing that scarcity.

744

Mostly, we have to see the machine we're inside.

745

If millions cannot buy, you can either make buying possible

746

or make not buying profitable.

747

In the short run, the latter path pacifies a problem.

748

In the longer run, it cements a greater one.

749

Economic and social pressures will continue to mount through the 2010s and 2020s.

750

Local anti-housing campaigns, the development pipeline that produces luxury by default,

gentrification and displacement, empty towers as safety deposit boxes,

751

creative class and the way global capital treats homes as slots in a portfolio.

752

Next time on Built to Divide.

753

government is filled with moochers and lopers right up to their ears and they have a great

idea.

754

The object of a lot of them is to get the job and sit there until they get a pension.

755

Thanks for listening.

756

Built to Divide is presented by Lines, my architecture and creative studio.

757

This podcast is produced in collaboration with Gable Media.

758

If you enjoyed the show, please tell a friend and rate and review it on Apple podcasts and

Spotify.

759

It really helps others find it.

760

And if you're looking for similar content, Built to Divide is part of the Gable Media

network where you can find even more like this.

761

Visit gablemedia.com.

762

That's G-A-B-L media.com.

763

And before I go, if you want to see additional photos, video clips, and content that went

into this episode, you can visit me at lines.studio slash podcasts.

764

Talk soon.

765

This is the White House as seen from the south lawn.

766

We're in the state dining room on the left of the screen hidden behind the trees.

767

There are three rooms which serve as reception rooms for the smaller official functions of

the White House.

768

The red room, behind these walls after the death of Willie Lincoln, Mrs.

769

Lincoln consulted mediums and prevailed upon her husband to attend one seance.

770

The blue room, until recent times,

771

This was the room where presidents received the credentials of foreign ambassadors to the

United States.

772

The green room.

773

This used to be the dining room.

774

And here Jefferson gave his famous dinners and introduced such exotic foods as macaroni,

waffles, and ice cream to the United States.