What is ‘the economy’? If you listened to any Chancellor since the late 70s, you would be forgiven for gaining the impression that it is all about ‘debt’ and ‘deficit’ and how the country has to ‘live within its means’ and ‘pay down its credit card’. But under these conditions inequality has soared, public services have been de-funded, the UK failed to recover its living standards post-2008-crash, and it has suffered the biggest drop in average real wages of any OECD country except Greece.
Whilst accepting that living within your means may be a good rule for households, the reality is that a government like ours, with its own currency and its own central bank, is not at all like a household. The economy is a far broader subject, covering not just what the government spends but what we spend too, as private individuals and the wider non-governmental sector, including how much debt we get into. After all, it was private debt, not public, that caused the 2008 crash.
It is time for the public to have a better understanding to replace the clichés about the government ‘having no money of its own’. In a sovereign currency nation like the UK with its own central bank it is, in fact, the sole currency issuer. Its spending is not limited by its ability to tax.
MMT is not a political theory, but a description of how money creation works and why missing it out of the economic equation leaves classical economic thinking disconnected from the real world; while the real world suffers from that disconnect in terms of unemployment, loss of key services and environmental degradation.
The conventional view is that public spending must be paid for through taxation, government sales of assets, and issuing government bonds – in other words, through taxes now, ‘selling off the family silver’ now, or borrowing money now at interest which will have to be repaid in the future, which is presumed to create a burden of additional taxation for future generations.
A right-wing response to this conventional position might be an austerity programme to keep government spending down, and privatisation, in order to keep taxes low; or a left-wing one, which is to say tax the rich and the multinationals much more highly, because the Government needs more money from the rich so it can pay for our public services.
Both the right and left-wing reactions are wrong, or at least misleading. They are based on the conventional view of public sector finance which is accepted as being valid by many people on all shades of the political spectrum. It is a view which a majority of highly credentialed economists, including Nobel Prize winners, knows to be incorrect, but which many of them justify as a mechanism for imposing some restraint on politicians. They believe that if politicians knew the financial options which are actually available to them, they would abuse these freedoms, spend like drunken sailors’, and wreck the economy.
The sets of conventions and rules which have been applied down the last few decades, particularly since 1979, have, to a greater or lesser extent, obscured the truth which can be summarised in two ‘laws’ of public finance.
1) A government with its own currency (e.g., sterling), its own central bank (e.g., the Bank of England), floating exchange rate, and no foreign currency debt, faces no financial budget constraint at all.
2) Such a government faces real and ecological constraints. As a society, we cannot run out of pounds, but we can run out of – or misuse – people, skills, technology, infrastructure, natural and ecological resources. There are limits, but the limits are ‘real’ and not financial. Governments should therefore focus their policies on human and ecological resources, not the deficit.
We have to be clear that nothing in the above restricts any policy choices that any government may make. A party intent on low state intervention, allowing private sector providers to compete for public service contracts and a low tax regime has as much right to their political stance as a statist one or one which promotes subsidiarity or full public ownership. However, all should be obliged to argue their case on grounds other than ‘affordability’, ‘sustainability’ and ‘how are you going to pay for it’.
In the video below, Professor Stephanie Kelton speaks on why a government budget should not be looked at in the same way as a household budget. Professor Kelton gave this talk as part of the lecture series between UCL Institute for Innovation and Public Purpose (IIPP) and the British Library in 2018.
A country with its own currency never runs out of money. What it runs out of is something much more interesting: people who will accept its money.
The only difference between gilts as government finance and MMT’s “money from thin air and tax if there’s an inflation problem” is that in the first case the government is making a guess – usually quite a good guess – as to how much taxation will be needed given the planned government spending. Yours is a distinction without a difference. We’ve had positive interest rates, gilt yields and inflation since the year dot. Gilt interest is just an informed guess as to the future “tax” needed. The MMT theorist doubts the inflation would ever arrive, and would only tax if it did. But the inflation has always arrived like sunrise, and gilt issuance and interest is a perennial part of the anti-inflationary landscape. It’s hard to see what real difference the adoption of MMT would make.
Craig, gilt issuance and interest is a part of the anti-inflationary landscape the way stomach stapling is part of the anti-obesity landscape. Thankfully our medicos and dietitians are smarter than our economists and politicians.
Remember all government spend works via crediting bank accounts (put numbers up and down in the accounts) so all government spend is ‘printed money.’ The allegedly hyperinflationary printing money is debunked by this paper that says loans create deposits (also read this Bill Mitchell blog) that debunks money multiplier/high powered money:
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy
“Whenever a bank makes a loan, itsimultaneously creates a matching deposit in theborrower’s bank account, thereby creating new money.The reality of how money is created today differs from thedescription found in some economics textbooks:• Rather than banks receiving deposits when householdssave and then lending them out, bank lending createsdeposits.• In normal times, the central bank does not fix the amountof money in circulation, nor is central bank money‘multiplied up’ into more loans and deposits”
http://bilbo.economicoutlook.net/blog/?p=1623
“Policies such as Quantitative Easing which has been in the news lately are predicated on a mistaken belief about the way the banking system operates and how the non-government and government sectors interact. One of the hard-core parts of mainstream macroeconomic theory that gets rammed into students early on in their studies, often to their eternal disadvantage, is the concept of the money multiplier. It is a highly damaging concept because it lingers on in the students’ memories forever, or so it seems. It is also not even a slightly accurate depiction of the way banks operate in a modern monetary economy characterised by a fiat currency and a flexible exchange rate. So lets see why!”
“The conception of the money multiplier is really as simple as that. But while simple it is also wrong to the core! What it implies is that banks first of all take deposits to get funds which they can then on-lend. But prudential regulations require they keep a little in reserve. So we get this credit creation process ballooning out due to the fractional reserve requirements.
Well that is not at all like the real world. It is a stylised text-book model which isn’t even close to how things actually operate. The way banks actually operate is to seek to attract credit-worthy customers to which they can loan funds to and thereby make profit. What constitutes credit-worthiness varies over the business cycle and so lending standards become more lax at boom times as banks chase market share.
These loans are made independent of their reserve positions. Depending on the way the central bank accounts for commercial bank reserves, the latter will then seek funds to ensure they have the required reserves in the relevant accounting period. They can borrow from each other in the interbank market but if the system overall is short of reserves these “horizontal” transactions will not add the required reserves. In these cases, the bank will sell bonds back to the central bank or borrow outright through the device called the “discount window”. There is typically a penalty for using this source of funds.
At the individual bank level, certainly the “price of reserves” will play some role in the credit department’s decision to loan funds. But the reserve position per se will not matter. So as long as the margin between the return on the loan and the rate they would have to borrow from the central bank through the discount window is sufficient, the bank will lend.
So the idea that reserve balances are required initially to “finance” bank balance sheet expansion via rising excess reserves is inapplicable. A bank’s ability to expand its balance sheet is not constrained by the quantity of reserves it holds or any fractional reserve requirements. The bank expands its balance sheet by lending. Loans create deposits which are then backed by reserves after the fact. The process of extending loans (credit) which creates new bank liabilities is unrelated to the reserve position of the bank.
The major insight is that any balance sheet expansion which leaves a bank short of the required reserves may affect the return it can expect on the loan as a consequence of the “penalty” rate the central bank might exact through the discount window. But it will never impede the bank’s capacity to effect the loan in the first place.”
The gilt market is liquid.
“The process of extending loans (credit) which creates new bank liabilities is unrelated to the reserve position of the bank.”
Not so. I’m afraid that statement fundamentally misunderstands how banks and payments operate.
If it is true that banks have an unrestricted ability to create money, why did the Royal Bank of Scotland come within hours of running out of money in October 2008, and require a government bail-out? Because money created by banks is commercial bank money that does not circulate outside their balance sheets. Money that supports payments in the wider economy is central bank money created by the Bank of England.
Yes, banks can create deposits on their books through the lending process. This is known as commercial bank money. But the bank’s customers will want to make payments to spend those deposits. At that point the customer will send a payment instruction to her bank (via a cheque, or an online payment instruction, or an instruction to make a CHAPS payment). Assuming the beneficiary banks with another bank, the payer’s bank will settle that payment using its own central bank money in its Settlement Reserve Account at the Bank of England. The bank will simultaneously debit the customer’s account, thereby destroying the money previously created. This applies to all payment channels in the UK. There is no other mechanism available.
Thus the bank’s reserves are directly linked to the amount of lending they perform. Excessive lending will mean the bank is unable to settle the payment volumes that will inevitably follow.
Just a couple points Al.
Banks make loans regardless of their reserve position. That is what Bill is saying. If the newly created deposits are then used to make payments to payees at another bank, that is no different if payers used existing deposits rather than the newly created ones Reserves get shuffled round the system like chips at the casino. That’s what banking is all about.
Your statement that money created by banks is commercial bank money that does not circulate outside their balance sheets is not correct. Bank deposits whether created by a new loan or not circulate round the economy all the time. Every time it happens a bank reduces the payer’s account (a liability to the bank) whilst simultaneously reducing its reserve a/c (an asset of the bank). The reverse happens with the payee. Both the payee’s bank a/c (a liability) and the payee bank‘s reserve a/c (an asset) increase by the amount of payment.
It is not true to say money is destroyed at the point the payer makes a payment. It is transferred to another bank.
Hi Al,
Kester knows a lot more about this than you.
Bank reserves are irrelevant – that’s why in COVID the FED could reduce the SLR to zero for a year…and no bank runs.
Deposits are transferred into the offshore, unregulated, almost entirely unobserved Eurodollar System where a single deposit can be lent and relent (with no fraction reserved) until the same deposit can circle all the way back to the first bank who originated the first loan, and can then re-loan it!
Such ridiculously long and circular chains of interbank liability allow the proliferation of money in this ultra complicated offshore ledger system.
All the while credit is being created greasing the wheels of commerce (and unfortunately finance) and the Fed and any other central banks know nothing about this.
Despite this it all works well until counterparty risk tears its ugly head and intermediaries (money lenders) stop wanting to lend; then the complex dance grinds to a halt, and we recognise all the hallmarks of a Eurodollar crisis – the first being the misnamed GFC, actually the GMonetaryC.
We see USD (the reserve currency ) value shoot up and all others down and we see a rush for safe and liquid collateral and the failure of junk collateral which had been transformed as it was swapped for good collateral with a haircut.
Problem is even the safe US bonds were rehypothocated and very few (relatively) treasuries were backing unfathomable amounts of debt (thanks to the long and circular chains of interbank liabilities)
Money forward markets become increasingly negative, interest rate swaps spreads go negative, bond prices rocket as people scramble for safe and liquid and Repo fails increase.
@Kester That paper’s statement that “Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.” is surely false.
When I accept a loan, I not only have to pay it back, I also have to pay back interest, resulting in a net loss.
No because the money you used the loan for bought something of value (the cost of the loan) which remains in the economy even after you have paid it back. Unless you just sat on the money and then gave it back.
Why is it “surely false” ? It appears to be simply a description of a process.
What is the relevance of your point about paying interest in this context ?
Gilts are money from thin air (actually keystrokes) too. They are just numbers in accounts with a rate of interest and a maturity date. They are bought with money created by keystrokes and exchanged for money created by keystrokes. The whole process simply involves changing numbers in one account up and those in another account down.
It’s keystrokes all the way.
The myth part of your story is that MMT doesn’t recognise inflation, of course inflation is the eternal risk, but its what government spends its money on that matters. As an example if government nationalises transport and only pays to run and administer it, it reduces inflation as they don’t have to pay for share holders and profits to the company. Even better it could make all transport free just like free bus fares for pensioners, think how that would help ordinary families with children. That’s just one example, the opportunities for a forward thinking government is endless. Real economists recognise that it’s the responsibility of government to ensure that real human and material resources are availvable at the time it spends into the economy to guarantee inflation is kept under control. Instead of today letting private profiteers rip and standing back whilst the so-called markets do their work.
You can’t adopt MMT. MMT is an explanation of what is.
Craig,
You seem to be missing the point. As Steven says, MMT isn’t a set of policies that you can choose to adopt, it is a description of how the real economy actually works. The consequences of recognising MMT is that you think about what the Govt is able to do based on real resources that are available and not on the amount of ‘money’ the Govt can ‘raise’ by taxation and/or borrowing. As a concrete example, the number of nurses and teachers leaving those professions is extremely high. That is both a highly inefficient loss of skilled, experienced professionals and has a highly deleterious effect on the quality of the services provided. Those people are leaving because the workload is crushing and the pay inadequate. We are told that this cannot be rectified because there is no money to put into those services because we need to reduce the deficit and pay down the debt. MMT recognises that those are false objectives; there is no actual economic rationale for doing so. The teachers and nurses (the real resources) are there and the demand for their services is there. What is needed is the Govt to create the funds to employ/re-employ the requisite numbers of staff and pay them appropriately. In MMT you merely create the funds to match the available resources rather than conventional policy which artificially restricts funds and then matches the resources to fit the small budget (austerity). There would be an inflation risk if the Govt created the funds to buy resources that could not be produced (i.e. if the economy or the relevant sector was already running at full capacity), so that ‘excess demand’ causes the price of scarce resources to increase. But the cause of inflation is lack of real resources, not too much spending. Create the funds to fit the resources, not the other way round.
Excellent summary!
Hi Craig,
I like that explanation of MMT.
Do you think that once the resources (teachers and nurses) get the money from the government and then SPEND it into the economy this will lead to price rises?
If so how does this play out, in terms of inflation?
What is “money”? A means of exchange? We read of rich men/women who have so many millions or billions, what does this mean? Lots of noughts on computers scattered across the globe which they can “put to use” at any time they wish, i.e. spend. It’s like a government’s “money”, intangible, only acceptable as a means of exchange for goods and services in a society which has the means to provide those goods and services, useless on a desert island or the moon! Only acceptable if that money can be further used as a means of exchange by the receiver. If course it is subject to demandpull/cost push inflation. This might not make sense, just exercising the mind.
Precisely. Saying that we should not adopt or implement MMT is like saying we should not adopt the theory of gravity because it might make us all heavier.
All the public’s money comes from the central issuing bank. It is not ALL owed back to the bank because it is an investment in assets (e.g. infrastructure and housing), and services (e.g. labour, health care and education). Of course the bank can take back its money at any time by increasing taxes and gain a surplus!
If the population increases by 10%, then the public’s money must also increase by 10%, derived from the bank. No deficit is created because the entire population now has the same standard of living due to the bank’s investment in society.
A bank that does not invest in a person’s labour to fix a dilapidated bridge is failing society.
The only people who matter are the citizens of the country and they HAVE to accept the currency as they are obliged to pay their taxes in it.
So the real undue is
HOW DO WE REVERSE THIS LIE IN THE PUBLIC’S MIND?
We couldctake the example of the creation of the NHS in 145-8 by a govt when the country was bankrupt apparrently, by war! Yet MMT still worked!! And a union investigation I the 1990s( I believe) showed that the NHS CONTRIBUTED 3% PA to our GDP.
Likewise council housing.
Likewise the publicly funded Education system.
So this brings us back to the WILL of those making the govt choices re spending.
And that brings us back to the age old Marxist choice. Do you want things organised by private companies which withdraw much of the public’s access to money by taking profits, or do you want things organised by not for profit organisation that leaves a lot more money floating around the system for people to use, instead of it ending up hidden away in off shore tax havens!!!
Hi Craig,
I like that explanation of MMT.
Do you think that once the resources (teachers and nurses) get the money from the government and then SPEND it into the economy this will lead to price rises?
If so how does this play out, in terms of inflation?
Hi, could you tell me why you haven’t published the comment I made 3 days ago, it was waiting to be moderated, but seems to have disappeared.
Many thanks.
Lewis
Hi Lewis,
I hadn’t had chance to check the site for a few days. All your comments have been published now.
Claire
Hi, could you tell me when you will publish the comments I made a few days ago, They were waiting to be moderated, but seem to have disappeared.
Many thanks.
Lewis
No replies.
Why do MMT people fear honest discussion?
Here’s a couple of replies to your comments Lewis.
Your spending is someone else’s income and vice versa.
If you give somebody £100, they spend it which is taxed at 20%, leaving the next person with £80 as income. They then spend that £80 which is taxed at 20%, leaving the next person with £64 as income. And so on until the entire £100 disappears and creates £100 of extra tax. All without changing the tax rate one single percent
The result is lots of extra sales and income for people down the spending chain they wouldn’t otherwise have received. It’s a straightforward geometric progression.
Eventually £100 has been put into the economy and £100 has been taken out of the economy.
So why would the price level rise ?
If they all used their £100 to buy a puppy then the price of puppies might rise if there is not enough of them. But they don’t they buy many different goods and services. So you have to keep an eye on where the shortages are and the bottlenecks on the supply side.
Bank lending and tax cuts can also be inflationary for all the same reasons. If everyone who took out a loan bought a puppy or everyone who got a tax cut bought a puppy then the price of puppies ” could ” rise.
With the government the sole supplier of that which it demands for payment of taxes, the economy needs the state’s currency and therefore state spending sets the terms of exchange; the price level is a function of prices paid by the state when it spends.
There are two primary dynamics involved in the determination of the price level. The first is the introduction of absolute value of the state’s numeraire, which takes place by the prices the state pays when it spends. Moreover, the only information with regard to absolute value as measured in units of the state’s currency is the information transmitted by state spending. Therefore, all nominal prices can necessarily be traced back to prices the state pays when spending its currency.
The second dynamic is the transmission of this information by markets allocating by price as they express indifference levels between buyers and sellers, and all in the context of the state’s institutional structure.
The price level, therefore, consists of prices dictated by government spending policy along with all other prices subsequently derived by market forces operating within government institutional structure.
The state sets the terms of exchange for its currency with the prices it pays when it spends, and not per se by the quantity of currency that it spends. For example, if the state has an open-ended offer to hire doctors at £50,000 per year, the price level as thereby defined will remain constant regardless of how many Doctors are hired and regardless of the state’s total spending. The state has set the value of its numeraire exogenously, providing that information of absolute value that market forces then utilise to allocate by price with exchange values of other goods and services determined in the marketplace. Without the state supplied information, however, there would be no expression of relative value in terms of that currency.
Should the state decide, for example, to increase the price it pays for its Doctors to £55,000 per year, it would be redefining the value of its currency downward and increasing the general price level by 10%, as market forces reflect that increase in the normal course of allocating by price and determining relative value. And for as long as the state continues to pay Soctors £55,000 per year, assuming constant relative values, the price level will remain unchanged. And, for example, the state would have to continually increase the rate of pay by 10% annually to support a continuous annual increase of the price level of 10%.
Lewis that is known as The paradox of productivity.
The issue the monetarists suffer from is an aggregation issue. If you hold £100, nobody knows if you are saving that or intending to spend it. What we really need is the amount of bank liabilities that have materially changed their ownership tag over a period of time. Then we would know what ‘Vt’ is. But we don’t have that, so monetarists try to guess – assuming all M is in motion if it fits in a particular classification. Hence all the M1, M2 nonsense. Those categorisations are wrong. Plain and simple. As we can never know what ‘ Vt’ is.
I don’t have to spend a demand deposit. It can sit there for months. I don’t even need to ‘optimise’ it, because unlike economists my life doesn’t revolve around a belief in interest rates ruling everything. I just keep it there because I like the size of it, or I’m scared of the future. Or a bit of both.
The neoliberals and conservatives say nothing very much – other than lamenting that they can’t work out what money is locked in place and which is in circulation because we now have interest payments on demand deposits and time deposits that can be cashed on demand.
The monetarists are stuck in the 1960s. Finance has evolved so that nothing is locked in place – which means you can’t manipulate it to speed up and slow down the economy.
The neoclassical Keynsian, monetarist and Austrian view still believes that the economy tends to fix itself. If we just sit back economic growth will go back to its maximum.
Unemployment will drop to 2% what we consider full employment but it might need some help now and then. The Paul Krugman mainstream view. That There are no business cycles. Remember that when the globalist neoliberal UK Parliament claimed the business cycle is dead.
However, the truth is you could have the purist free market economy in the world but still have big unemployment numbers because the system tends to move towards breakdown.
Why ? Why does the system tend to move towards breakdown ?
Why can’t it be that higher wages force firms to invest in better management techniques and the most advanced technologies in order to get the most out of their higher cost labour?
That’s known as the paradox of productivity. Productivity improvements just lead to falling prices, so firms try to avoid doing productivity improvements and prefer to try and obtain monopoly power instead. That’s what a ‘market niche’ is.
Oh boy have we seen this monopoly power as the public sector was transformed into rent seeking monopolies. Energy companies for one during the supply side constraints. I will go into that in more detail later.
Higher wages will lead to some firms failing, which releases people onto the labour market, driving down wages. If you try to hold those jobs up, and force losses onto the other side you end up with an investment strike and the whole house of cards collapses into stagflation. Remember when privatised companies tried to hold the government to ransom by refusing to invest during the pandemic.
Failing to match higher wages with higher product must result in both investment capital and the demanding wage earners taking a cold bath. The economic system is a referee. It must not favour either side in the football match.
And why would firms in a competitive capitalistic system ever try to avoid productivity improvements?
Simple-
Compare the cost of a concert violinist to a loaf of bread in the 19th century vs today. That’s what productivity increases do over time – because it takes less human time to produce an item, and time is really what everything ends up being priced in.
That’s the paradox of productivity. Productivity improvements ultimately leads to cheaper prices not increased profits. Because that’s what competition is there to do. The profits can go further – in that they can buy more stuff. But capitalists like to accumulate units of account.
In essence the dynamics of pure competition leads to an oversupply in the market which brings prices down until firms start to go bust to eliminate the oversupply. Therefore market players try to stop competition happening by constantly seeking a monopoly perch on which to extract rent.
Oh boy, we have we seen this happening time and time again. With a big 2 or 3 in each sector rigging prices between themselves.
The myths of free market beliefs say it all sorts itself out. It clearly doesn’t. The system has to force competition onto essentially reluctant players, and eliminating the clarion call of “what about the jobs” is one way of doing that – let bad firms go bust.
A company that can produce more with the same inputs (costs) is going to do that if there is a market for their product.
That’s the HUGE problem. Because the costs is the income that is used to buy the products ( in aggregate).
If you expand output then you are selling to the same income which implies that the price must go down to shift the increased amount of stuff. Theoretically their competition will eventually learn to do the same and the excess profit will disappear.
Not theoretically. This is exactly what happens. The dynamics of market share maintenance kicks in and prices go down. You get a short uplift and then a nose dive. When you have been in business long enough you know it is better to find a niche than run up and down this escalator. Because items are ultimately priced in a person’s time used to make them. When it boils down to it actual demand must match actual supply at the point of EFFECTIVE demand.
THE job guarentee fixes that and ratches competition up to mach 10. By flattening the Phillips curve.
https://m.youtube.com/watch?v=M-8RXC_vY2g&embeds_referring_euri=https%3A%2F%2Fyoursforscotlandcom.wordpress.com%2F&source_ve_path=OTY3MTQ
So no Lewis MMT’rs don’t fear honest discussion. If you studied the MMT body of work over the last 30 years. Most questions you have has already been answered.
Lewis what else has happened over the last 50 years.
Back in the 1920’s a guy called Hotelling started to look at Monopolistic competition in terms of location and used the example of where would 2 ice cream sellers on a beach locate themselves. From a social point of view you would think they should locate themselves about one quarter way in on one side of the beach. The other seller would do the same at the other end of the beach. So that they divided the market in two and the consumers could access the ice cream. You would end up with a long beach with a seller at each end a quarter way in on the beach.
Hotelling then says let’s assume the ice cream sellers are mobile and one ice cream sellers moved a bit closer to the centre. In terms of distance starts to steal some of the consumption of the other seller. Which then forces this seller to move a bit closer to the middle of the beach to try and get it back. Hotelling noticed that what happens is eventually you end up with both sellers right in the centre of the beach beside each other. This is not optimal from the stand point of those in the long beach that would like to buy ice cream. The social optimum for the consumers and that is have the seller’s spread out across the beach has been destroyed by the competition between the 2 sellers. The 2 sellers will eventually come to a monopolistic agreement regarding their prices.
Then Hotelling says what happens if a 3rd seller sets up on the beach. Everything becomes unstable as the 3 sellers set up in different places on the beach every day and prices become unstable. Until eventually all 3 end up in the same place in the beach and work together.
Why in cities you have districts that sell the same product. You would expect them to be all over the city but you end up with Jewellers all in one area. Pubs and nightclubs, shopping centres, DIY stores, Bookies, Restaurants etc, etc, etc.
So when you get a big 2 or 3 in any sector what do they do. What do the energy companies do ? What do the water companies do ? What do the rail companies do ?
They head to the centre of the beach and form a MONOPOLY and work it between themselves how to extract the most rent as possible and take turns at hiking prices for their services. They turned the public sector into a rent extracting MONOPOLIES.
These out of town shopping centres are deliberate. It allows them to all move to the centre of the beach like the ice cream sellers. The high street are just a number of consortiums that own everything.
When you buy from the privatised public sector you are faced with a big two in each sector. When you buy on the high street or Amazon they have all moved to the centre of the beach.
They don’t want to compete they want to be able to take your tax cut or your minimum pay rise for themselves.