In a recent interview Ann Pettifor, global financial analyst, spoke about the corrupted crony capitalism that led to the collapse of Carillion, a major Government contractor.
Ann Pettifor: “For me this is a story of how hypocritical the whole free market theory is. These are guys who really don’t want to play the free market game which involves risk.
“What is exciting about entrepreneurship is that someone has a bright idea, they go out, they take a risk they use their house to mortgage this, and if the idea is a good idea they make loads of money. If it’s a bad idea they lose money. Now most of the participants in the current game actually don’t want to play that. They want to have tax payers guaranteeing their income. So big construction companies decide “why do I want to go and build houses, flats or factories for the private sector when I can do it for tax payers and I can tie them down into contracts and I know I will get paid every day” – taxpayers don’t go away and governments don’t fail and can’t be liquidated.”
James Butler, host: “… back in the Blair years the argument was made that Private Finance Initiatives (PFI) were supposed to take the risk out of the public sector and put it in private hands when actually quite the reverse has happened”
Ann Pettifor: “So this has become a grand Ponzi scheme where they piled on new contracts that they knew were not viable and carried on borrowing big monies on the grounds that the taxpayer was going to bail them out and the taxpayer did – the government came along with some new contracts. This must have felt really good – knowing that they were not at risk because the government was behind them.”
James Butler spoke to Pettifor and Grace Blakeley on Novara Media. 19 Jan 2018.
Listen to the interview: