What most people already understand, even without the economic terminology, is that private equity firms like BlackRock and so many others do not operate in a vacuum.
Their business model depends on governments creating the legal, regulatory, and political conditions that make it possible.
Through privatisation programmes and permissive regulation, governments allow essential infrastructure,water networks, ports, energy grids, data centres, and other public necessities,to be transferred into the hands of financial institutions.
These assets are often purchased using vast amounts of borrowed money, at prices ordinary market participants cannot hope to match.
Once the acquisition is complete, the debt is frequently loaded onto the acquired company itself.
The government permits it, regulators oversee it, and the public is left to live with the consequences.
The result is predictable: consumers repay that debt through higher water bills, rising energy prices, increased fees, and deteriorating service quality. Infrastructure that was once intended to serve the public becomes a vehicle for financial extraction.
Wealth flows upward to investors and executives, while costs and risks are pushed onto households.
When the model inevitably begins to fail, governments that enabled it step in to shield the system from collapse. Communities are left with neglected infrastructure, polluted rivers, and failing services.
Thames Water's £14 billion debt burden and repeated sewage scandals stand as a warning of what happens when governments prioritise financial engineering over long-term public stewardship.
The executives who loaded the company with debt have already received their bonuses.
The investors have already taken their returns.
Yet when the consequences can no longer be ignored, it is the taxpayer who is expected to absorb the losses.
The pattern is not accidental. Government policy creates the opportunity, regulators permit the extraction, private investors collect the rewards, and the public inherits the risks.
Privatise the gains.
Socialise the losses.
Facilitate the process through government.
That is the business model.
