FlyTheNest

But those vested interests should themselves be put under the spotlight. The CEOs of big tech and of globe-spanning asset management companies such as BlackRock, Blackstone and Vanguard, with trillions of dollars of assets under management, are far more powerful than our most senior civil servants, even those atop the Treasury. Witness the way British government seems unable or unwilling to stop huge foreign companies buying up swathes of our homegrown businesses, even our critical infrastructure.

This settlement is the result of a transformation in political orthodoxy over several decades, which was driven by a compelling story about power. At its core is the idea that the overbearing, inefficient state should get out of business’s way, and that the job of a business is simply to maximise key metrics: profit, share price. Everything else—the impact on employees, customers, suppliers, the environment—is an “externality”. Even competition policy designed to protect the free market is often cast as a state-enforced barrier.

This “shareholder value” ideology stemmed from the relative powerlessness of individual small investors in the 1960s and 1970s. In 1963, the majority of the UK stock market was in the hands of individual domestic shareholders whose holdings were too insignificant to give them any leverage over powerful company bosses. In response, economists such as Milton Friedman argued that executives should make generating returns for their shareholders their overriding priority.

But in the decades since, share ownership has been revolutionised twice over: by the rise first of the fund manager and then those global asset management companies. By the early 1990s, British insurance firms and pension funds dominated share ownership; today, it’s international investors. In concert with privatisation, this has transferred power from both the British public sector and from British-owned companies to a globalised, but often American, private sector. The story of power that licensed this change is decades out of date, yet it still pervades British politics. If Burnham is to overturn 40 years of neoliberalism, as he has said, dismantling the narrative that underpins all this will be a large part of the task.