Foundational Economy (Manchester Capitalism) by Foundational Economy Collective

Author:Foundational Economy Collective
Language: eng
Format: epub
Publisher: amazon

First, there is a disconnection from production, as firms tend to abandon the path of productive capitalism where the gain comes from developing product or service markets. The operating business is necessary to reassure investors they are not investing in a Ponzi-type scheme. But, as shown in this chapter, operations will then be run for cash and the maximisation of income and capital gains through financial channels. The interests of shareholders and fund investors are now front and centre in business strategies, management calculation and firm organisation. This reframing has (at least) two serious implications for foundational infrastructure: it leads to capital rationing and, when the returns expectations are not satisfactory for the holders of capital, the result is ‘capital strike’ or industrial divestment. Hence the contrast between state-led and cross-subsidised national electrification programmes in the mid-twentieth century and the current slow roll-out of fast broadband by a multiplicity of investment-averse providers. The resulting contrast is striking. The mid-twentieth century national electricity grids were created by state investment. Fast broadband, the ‘successor’ to energy distribution in the foundational economy, is often not available outside major cities: a 2017 digital progress report in the EU found that 76% of homes in cities have access to fast broadband (of 30 mmpbs or better) but in rural areas only 40% of homes have access.5

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