Canadian PM Mark Carney just announced the creation of the “Canada Strong” sovereign wealth fund (SWF). These SWFs are pools of capital managed by states. These funds can invest in a wide range of projects, though they are typically large-scale industrial or infrastructure projects and targeted toward fostering national development. Increasingly, both developed and developing capitalist-states are using SWFs, along with public pension funds, in order to foster domestic capital accumulation.

I’m not going to explain here the importance of these massive pools of capital to contemporary capitalism, as I’ve written about this elsewhere. However, I want to make some immediate comments about what we can expect out of this announcement. Much of the dynamics we will likely see with this fund were discussed in my recent infrastructure series, but in particular Parts 6, 7, and 8 are about the Canadian context.

First, this fund will likely be used as the vehicle to build the massive infrastructure projects that Carney has been promising. Last year’s Bill C-5, which essentially allows the federal government to fast-track “nation-building” projects, is slowly being supported by more concrete financial and bureaucratic mechanisms.

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For example, early this April, the government announced a $51 billion “Build Communities Strong Fund,” and I assume this SWF will work in tandem with it. Odds are this SWF will be run by professionals from the financial sector, particularly the asset management world. People often bring up that Carney was employed at Brookfield, but they forget the firm is also the world’s largest (private-sector) infrastructure investor.

Second, the fund will likely “de-risk” massive infrastructure projects for private investors through the use of public-private partnerships. In practice, this money will be used to guarantee revenues for whatever private partners (the builders or operators) are involved in producing these projects. This state capital will be used to guarantee private sector profits, socializing the risk and privatizing benefits.

Third, Carney will probably use this as a way to have off-balance-sheet spending so he can look like he’s saving money while also investing in big projects. I assume it will be a Crown Corporation like the Canada Infrastructure Bank, and that it will be filled with corporate actors running it.

Finally, I want to discuss the wording Carney uses to describe the fund as a “people’s” institution. Carney commented:

“This will be a Government of Canada fund, but more importantly, this will be a people’s fund. It will be your fund.”

Is this Commandante Carney coming out? What do we make of this? In the future, I will write a piece about how we can understand the socialization of economic activities, but for now, it’s important to go beyond the idea that “state = social.” In theory, all state property is social property of the people. However, in practice, this is a very weak form of socialized property. While it is the product of pooled social resources such as labor—a feature of all massive forms of both money and real capital—it is not run collectively in any meaningful sense of the word.

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To call this a “people’s” funds ignores that socialized property is more than just pooled resources produced and managed socially. A people’s institutions has real political content, meaning its an organization that works towards the empowerment, development, and liberalization of the masses. There is nothing inherently good about a public fund. A public institution can be used to foster education, provide healthcare, and develop human capacities. But in this case, it will more likely be used to support corporate power, maximize profits, and build infrastructure for Canada to help the U.S. and its allies pillage across the globe. We must not be naive but rather more critical about the nature of these institutions.

When judging the potential effects of a fund, you have to ask the right questions. What matters is: 1) the kinds of projects that are invested in, 2) the governance structure (is it democratic?), and 3) what its purpose is (social reproduction of people or of capital). There are examples of financial institutions being tools of human development and working-class power, such as Costa Rica’s Banco Popular, an institution 100% owned and run by social groups within the state (not without contradictions).

However, if we are frank, this institution will be nothing but an extension of finance capital’s power. It will work to dispossess and exploit the working class, make Carney and his colleagues richer, and build the means to support global imperialism. Only the creation of institutions that foster popular power can lead us to a better future.

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1. Series Announcement

2. Introduction: what’s the deal with capitalism and infrastructure?

State Theory

3. How Does the Capitalist State Support the Economy?

4. What is the Relationship Between the Capitalist Class and the Capitalist State?

Contemporary Asset Management: the New Finance Capital and the Wall Street Consensus

5. The New Finance Capital and the Rise of Asset Managers

6. Public Private Partnerships and Global Development: The Wall Street Consensus

7. (BONUS) Method: Marx’s Critique of Political Economy and Capitalist Relations

Case Study: Canadian Experience

8. What even are Public Private Partnerships (P3s)?

9. How the Capitalist Class Organizes Itself: The Canadian Council for Public Private Partnerships and ‘Enabling’ Fields

10. New Finance Capital and the “Long-Term” Plan: The Canada Infrastructure Bank and Institutionalizing P3s

If you want to support my writing, please consider becoming a paid subscriber or you could buy me a coffee.

While the Canada Infrastructure Bank (CIB), established in 2017, is a relatively new Crown Corporation, it has already become a vital arm of the Canadian integral state and has further institutionalized the use of P3s in the development of public infrastructure. For those who do not know, in Canada a Crown Corporation is an organization 100% owned by the federal or provincial government but is run like a private company. They are used to advance policy objectives like other state owned enterprises, typically working in sectors where it’s deemed too difficulty for a private company to successfully operate.

The origins of the CIB go back to the 2015 election, when federal parties were proposing plans to deal with Canada’s ongoing infrastructure gap. While the Conservative Stephen Harper government campaigned on creating a central role for P3 projects to close Canada’s infrastructure gap, the Liberals ran on a platform of deficit spending, gains for the middle class, and an infrastructure led economic stimulus. The Liberals claimed the CIB would “provide low-cost financing for new infrastructure projects” as “the federal government can use its strong credit rating and lending authority to make it easier and more affordable for municipalities to build the projects their communities need” (Whiteside, 2017, p. 224). While Canada’s government debt to GDP was at around 50 percent in 2015 (”Canada Government Debt: % of GDP,” n.d.). At an interest rate of even one percent lower than those available from private lenders, municipalities could save $100 million on a $500 million dollar 35-year loan as calculated by the Resident and Civil Construction Alliance of Ontario (Whiteside, 2017, p. 225).

Unsurprisingly however, the Liberals did none of what they promised during the campaign. Instead, the CIB would become a focal point of integral state power within the Canadian context. The specific goal of the CIB was in line with the usual focus of P3s during the WSC era, simply on a larger scale. The CIB was created and given 35 billion dollars with an 11-year mandate as a part of the Trudeau Liberal government’s “Investing in Canada Plan”, to spend on “large, revenue generating projects in priority areas” (Nahornick, 2021, p. 3). These include public transit, green infrastructure, clean power, broadband, trade and transportation, and Indigenous communities. The “About Us” section on the CIB’s webpage, most aptly summarizes their government mandate: “Our purpose is to invest $35 billion in revenue-generating infrastructure which benefits Canadians and attracts private capital” (The Canada Infrastructure Bank, n.d.). However, from the early formation of the CIB, it was clear that the Trudeau government was courting the expertise of global financial capital to structure it precisely for their benefit. This did not simply involve consultations, but extensive cooperation to design the bank and pitch it as an investment source to international investors. This was an active project of the Canadian state in cooperation with industrial and money-capital to push national industrial policy ambitions. Going over a timeline of the interactions between BlackRock and the federal government leading up to the bank’s creation reveals this clearly.

In January 2016 two months after taking office Trudeau met with Larry Fink the CEO of BlackRock and the World Economic Forum at a meeting set up by Dominic Barton, then partner and McKinsey and Company and close friend to Fink. Fink unsurprisingly pushed the securitization of infrastructure as a part of BlackRock’s initiatives. In February of 2016, the Liberal government hired investment bankers from Bank of America Merrill Lynch, Morgan Stanley, and Credit Suisse to advise the infrastructure minister and investigate the early privatization of various assets such as ports and airports. As then Minister of Finance Bill Morneau stated, the government’s goal was to “leverage the expertise and capital of the private sector” and touted the new role of the CIB as “identifying a pipeline of potential projects and investment opportunities that provide the biggest economic, social and environmental returns.” (Whiteside, 2017, p. 226). It was evident at this point that the ‘pipeline’ would be one built to transform more public infrastructure into places for accumulation to take place.

Not long after in March 2016 Trudeau would meet with Fink in NYC. Only two days later, Finance Minster Morneau unveiled the Advisory Council on Economic Growth (ACEG), which was Chaired by Barton and made up of representatives from institutional investors and pension funds across Canada (”New Evidence Shows BlackRock’s Role,” n.d.). Crucially, this included another close friend to Fink, Mark Wiseman, who was then Canadian Pension Plan Investment board CEO. During his tenure he outsourced a significant amount of pension asset management to BlackRock. Wiseman would leave after the first meeting of the ACEG to take a position at BlackRock, where he would remain until being fired in 2019 (”BlackRock Exec Mark Wiseman Ousted,” n.d.). He is still a deeply connected, as was the chairman of the Alberta Investment Management Corporation until late 2023.

Fink, Barton and Wiseman are more than just good friends. In fact, they started a Non-Profit called “Focusing on Long-Term Capital” which critics the perceived ‘short-termism’ of finance, advocating instead for money holders to take long term debt and equity stakes in projects. As Qamheia uttered in his speech at the CCP3 conference several times, ‘long-term’ is increasingly the focus of institutional money-managers. As Barton and Wiseman state in a Harvard Business Review article, they believe a “strong desire exists in many business circles to move beyond quarterly capitalism” (Barton & Wiseman, 2014). In their vision asset-managers who provide the ‘fuel’ of capitalism must be the ones to spearhead this approach. This is because only asset managers who hold large pools of capital can reap the benefit of capital-intensive infrastructure investments. Much like the move towards passive management, the securitization of infrastructure also seeks to create a low-risk form in which asset managers can park their capital. Thus, WSC policies fit perfectly into the dynamics of the New Finance Capital.

By October 2016 the ACEG released a report which endorsed the creation of the CIB, emphasizing of course its use of P3s as a method of courting in private capital. This culminated in the now infamous set of meetings in November, when Trudeau, Morneau, and several other cabinet members met with financial actors from across the globe at the Ritz-Carlton and Shangri-La hotels in Toronto. Paul Wells reported that at the Monday Ritz-Carlton meeting, Trudeau along with three ministers met with “the presidents of two banks, senior executives at a half-dozen others and CEOs from every one of [Canada’s] largest pension funds” (Wells, 2016). At the Ritz meeting alone, the investors held a combined total of $21 trillion in assets (Wells, 2016). That was just the start. In the afternoon, Trudeau and nine of his cabinet ministers met with Fink. In fact, many of those present at the event were BlackRock’s clients (Curry, 2017a). Major representatives of the global financial capitalist class were present, including the “Hong Kong Monetary Authority, with $360 billion (U.S.) in assets… Norway’s Norges Bank, which may be the world’s largest sovereign wealth fun… The Olayan Group from Saudi Arabia, with assets somewhere north of $100 billion… Singapore’s Temasek Holdings, closer to $200 billion…Qatar Investment Authority…[and] the [Swedish] Lansforsakringar.” (Wells, 2016).

The degree to which the Liberals worked in cooperation with international finance capital is greater than just these November meetings. In the year following the hotel meetings, federal documents revealed that the Liberals had extensive month-long interactions with BlackRock. Government records show BlackRock officials were included in high-level government working groups and helped prepare the pitch to international investors and even to write the slide deck that Federal Infrastructure Minister Amarjeet Sohi presented to Blackrock’s clients to make sure the message resonated (Curry, 2017b; Curry, 2017a). The cooperation between the state and capital could not be more apparent. The Liberals wanted to show that they were serious about producing and maintaining an attractive investing space for international capital. Not only that, but they sought to find a way to harness private finance for their own industrial policy ambitions.

The deep connections between BlackRock and the Federal government were of course apparent in the early makeup of the CIBs board members. It seems that BlackRock had influence in not only what the CIB would become but its early personnel. In February 2017 Jim Leech a BlackRock Executive who was advising the federal government on the CIB became a special advisor to the Bank. Janice Fukakusa, then an executive at RBC was named the Chair of the new Infrastructure Bank. She was herself the former boss of Marcia Moffat who was at RBC before joined BlackRock in 2015 to be the head of Canadian investing. At the time Moffat was married to Wiseman. Finally, Pierre Lavallee previously worked with both Wiseman and another BlackRock executive André Bourbonnais at the CPPIB before finally being named the CEO of the CIB in May 2018 (”New Evidence Shows BlackRock’s Role,” n.d., p. 2). In short, the point is to show how personnel connects play a role in the transference of practices and their consolidation in public institutions. This makes pointing out these connections important to understanding how the economic power of these actors becomes political power, not only externally but within state institutions themselves in their function.

The slow pace of projects led both the Conservatives and NDP to be vocally critical and state they would shut down the CIB if in power (The Globe and Mail, 2019). After repeated criticism, a shift in executives occurred seemingly to take off heat. In April of 2020 both Fukakusa and Lavallee resigned from their positions, of course not with Lavallee getting a $720,000 bonus (120% of his annual salary) (Toronto Sun 2019). To replace him former McKinsey & Company partner Ehren Cory was appointed CEO and remains in that position today. Did this personnel change mean a shift away from WSC narratives such as de-risking? Quite the opposite, they in fact became more overt under Cory. Almost immediately Cory in an early interview emphasized that the CIB should be “de-risking” projects by taking on risk to attract private actors (Daily Commercial News, 2020). Furthermore, in a January 2023 interview, Cory basically outlines how the CIB fundamentally functions as a de-risker which takes taxpayer money with the express purpose of facilitating private accumulation, stating:

[The CIB is] meant to provide a way for us to create aligned incentives for us to partner with people to get infrastructure built. We do that through both loans and equity investments on behalf of governments. We’re using taxpayers money to make loans and equity investments. And the thesis there is we can partner with people to get infrastructure built. [italics added] (CIBC Capital Markets, 2023).

This outlines quite explicitly the aforementioned roles of the CIB and how, despite personal changes, the tenants of the WSC de-risking are alive and well in Canada. The CIB is aligned with the global movement towards infrastructure de-risking, as was expressly outlined in an interview for the CIBs’ internal magazine between Cory and the Secretary General of the OECD Mathia Cormann (”In Conversation with Mathias Cormann,” n.d.).

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Despite the ambitions of courting international capital, the results of the CIB have been an absolute failure. The federal government originally claimed that $1 in tax money would turn into $4 in investments from private capital (Wells, 2020). However, the 35 billion has been disbursed much slower than the federal government projected. In March 2022, the CIB had only disbursed $3.374 billion, very far from the $10 billion they themselves projected by this time as shown by a Parliamentary Budget Office report (Nahornick, 2021). Things have picked up slightly since as of November 2022 they have disbursed $6.8 billion, better than the POB predicted but still under the CIB’s prediction of around $11-12 billion. While in 2023 it seems the goal of $10 billion is almost in reach, few see this as an overall success (The Globe and Mail, 2023). This is not to mention again, the questionable quality of these projects in the first place.

The PBO links the funding delays in part to policy choices as “nearly half of the project submissions fall outside the mandate the Government has assigned the CIB”. In practice, the CIB has been having trouble achieving its mandate to identify a “pipeline of large, transformative potential projects” that are both in the public interests and delivered in partnership with public, private, and institutional investors (Nahornick, 2021, pp. 1–3). As commentators have pointed out, the large lucrative projects that many large asset managers and institutional investors wanted such as ports and airports have not been the ones offered up (Whiteside, 2017, p. 230; Skerrett, 2018, p. 22). Simply put, asset managers and pension funds in Canada are not seeing the huge long-term investments which they would like to lock their capital in. Ultimately, nothing epitomizes these feelings of failure better than the conclusion of the 2021 parliamentary committee on the CIB which made only one recommendation; “That the Government of Canada abolish the Canada Infrastructure Bank.” (”Committee Report No. 3,” n.d.).

References

Barton, Dominic, and Mark Wiseman. “Focusing Capital on the Long Term.” Harvard Business Review, January 1, 2014. https://hbr.org/2014/01/focusing-capital-on-the-long-term.

“BlackRock Exec Mark Wiseman Ousted over Affair with Employee.” Accessed July 1, 2023. https://nypost.com/2019/12/05/blackrock-exec-mark-wiseman-ousted-over-affair-with-employee/.

“Canada Government Debt: % of GDP, 1962 – 2022 | CEIC Data.” Accessed November 28, 2022. https://www.ceicdata.com/en/indicator/canada/government-debt--of-nominal-gdp.

CIBC Capital Markets. “The Infrastructure Deficit - the Role of the Canada Infrastructure Bank - CIBC Capital Markets,” January 30, 2023. https://cibccm.com/en/insights/podcasts/the-infrastructure-deficit-the-role-of-the-canada-infrastructure-bank/.

Committee Report No. 3 - TRAN (44-1) - House of Commons of Canada. Accessed April 16, 2023. https://www.ourcommons.ca/DocumentViewer/en/44-1/TRAN/report-3/.

Curry, Bill. “Liberals Gave Investors ‘Extraordinary Control’ over Infrastructure Bank: Opposition.” The Globe and Mail, May 5, 2017. https://www.theglobeandmail.com/news/politics/liberals-gave-investors-extraordinary-control-over-infrastructure-bank-opposition/article34910106/.

———. “Private-Sector Role in Canada Infrastructure Bank Raises Conflict-of-Interest Questions.” The Globe and Mail, May 5, 2017. https://www.theglobeandmail.com/news/politics/ottawas-dealings-to-secure-infrastructure-funds-raise-questions/article34904963/.

Daily Commercial News. “P3 2020: Cory Defines New Role for Canada Infrastructure Bank - Constructconnect.Com,” November 23, 2020. https://canada.constructconnect.com/dcn/news/government/2020/11/p3-2020-cory-defines-new-role-for-canada-infrastructure-bank.

“In Conversation with Mathias Cormann, Secretary-General, OECD | Canada Infrastructure Bank.” Accessed July 19, 2023. https://cib-bic.ca/en/media/the-frame/article/in-conversation-with-mathias-cormann/.

Nahornick, Nora. “Canada Infrastructure Bank Spending Outlook.” Office of The Parliamentary Budget Officer, April 28, 2021. https://www.pbo-dpb.gc.ca/en/blog/news/RP-2122-003-S--canada-infrastructure-bank-spending-outlook--banque-infrastructure-canada-perspectives-depenses.

“New Evidence Shows BlackRock’s Role in Canada Infrastructure Bank May Have Also Included Advising on Key Personnel.” Campaign for Accountability. Accessed March 1, 2023. https://campaignforaccountability.org/work/new-evidence-shows-blackrocks-role-in-canada-infrastructure-bank-may-have-also-included-advising-on-key-personnel/.

The Canada Infrastructure Bank. “About Us.” Accessed March 23, 2022. https://cib-bic.ca/en/about-us/our-purpose/.

Toronto Sun. “Canada Infrastructure Bank Approved Bonuses to CEO Who Resigned.” 2019, Accessed July 19, 2023. https://torontosun.com/news/national/canada-infrastructure-bank-approved-bonuses-to-ceo-who-resigned.

Wells, Paul. “Risks Abound as Trudeau Makes Big Pitch to Giant Investors: Paul Wells.” The Toronto Star, November 13, 2016. https://www.thestar.com/news/canada/2016/11/13/trudeau-aims-to-attract-billions-in-private-sector-capital-for-infrastructure-projects.html.

———. “Trudeau and Cabinet Woo International Money: Paul Wells.” The Toronto Star, November 15, 2016. https://www.thestar.com/news/canada/2016/11/15/trudeau-and-cabinet-woo-international-money-paul-wells.html.

———. “Farewell, Then, Canada Infrastructure Bank.” Macleans.Ca (blog), October 2, 2020. https://www.macleans.ca/politics/ottawa/farewell-then-canada-infrastructure-bank/.

Whiteside, Heather. “The Canada Infrastructure Bank: Private Finance as Poor Alternative.” Studies in Political Economy 98, no. 2 (May 4, 2017): 223–33. https://doi.org/10.1080/07078552.2017.1343008.

Skerrett, Kevin. “Pension Funds, Privatization, and the Limits to ‘Workers Capital.’” Studies in Political Economy 99, no. 1 (January 2, 2018): 16–39. https://doi.org/10.1080/07078552.2018.1440986.

1. Series Announcement

2. Introduction: what’s the deal with capitalism and infrastructure?

State Theory

3. How Does the Capitalist State Support the Economy?

4. What is the Relationship Between the Capitalist Class and the Capitalist State?

Contemporary Asset Management: the New Finance Capital and the Wall Street Consensus

5. The New Finance Capital and the Rise of Asset Managers

6. Public Private Partnerships and Global Development: The Wall Street Consensus

7. (BONUS) Method: Marx’s Critique of Political Economy and Capitalist Relations

Case Study: Canadian Experience

8. What even are Public Private Partnerships (P3s)?

9. How the Capitalist Class Organizes Itself: The Canadian Council for Public Private Partnerships and ‘Enabling’ Fields

10. The Canada Infrastructure Bank and Institutionalizing P3s

If you want to support my writing, please consider becoming a paid subscriber or you could buy me a coffee.

If public policy cannot be understood in a vacuum devoid of the historical context of accumulation, that applies even more so to P3s. P3s are not just singular contractual agreements between private and public actors. As Hurl et al highlight, for P3 development to take place within nations requires a network of public and private ‘enabling’ organizations, institutions, governance structures, legal regulations, financial, and contractual arrangements. These networks are required to provide the political and economic environment for P3s to become a reality. Furthermore, what research in the U.K, U.S, and Canada has shown is these networks are dominated by a “financial engineering sector – made up of investment banks, law firms and management consultants - playing a leading role in spearheading the formation of PPP advocacy groups, as well as building networks through supranational organizations, such as the World Bank” (Hurl, L’Heureux, & Kraemer, 2022, p. 38). Enabling fields thus “create shared meanings and controls, thereby providing order to social action”, i.e., develop capitalist subjectivities and foster inter-class consensus around policy.

The focus on these enabling components is a central focus of the P3 literature. In essence, the theorization of enabling fields points to the various functions of the integral state of fostering cooperation between public and private actors to articulate class power. No organization epitomizes this better than the Canadian Council for P3s (CCP3), a national ‘nonpartisan’ member-based organization that represents various public and private sector actors. Its stated main functions include conducting research, publishing findings, facilitating forums, and seeks to promoting “evidence-based decision making” about the use of P3s model. It hosts events, conferences, and various pro-P3 websites such as P3 Spectrum, which tracks all projects in the country. The different paid membership categories include corporate ($1,000), public/non-profit ($350), individual ($380) and a sponsorship member ($3,650). The sponsorship member includes privileges such as setting organizations agenda and priorities, lead advisory groups, and of course acts as “a resource to CCPPP on issues and government interface” (Dyson & Preston, 2006). A globally leading organization in P3 policies, their mission statement is to:

…shape the future of Canada’s infrastructure and services by delivering value to Canadians through public-private partnerships…promote [an] innovative approach to infrastructure development and service delivery through public-private partnerships with all levels of government [through] convening both public and private market participants to discuss leading practices and harness lessons learned and adapting the model as needed (”About Us (PPP Council),” n.d.).

The CCP3 is no small deal. As of 2021, it has more than 300 membership organizations that reads like a “Bay Street Who’s Who”. According to Hurl et al., the list includes “extensive representation across the public and private sector” and this has made it “a natural space for leaders to share ideas, address key topics, and grow networks” (Hurl, L’Heureux, & Kraemer, 2022, p. 41). It is not only a powerful actor in the Canadian national context but according to some it is arguably “the world’s leading organization that focuses solely on the promotion of PPPs” (Jooste & Scott, 2012, p. 163). In other words, it is a natural place for class wide consensus to be articulated.

Nothing captures the function of the CCP3 expressing and sharing ideas that their Annual CCP3 Conference. Held annually in November the event is according to them “internationally recognized as the premier forum on public-private partnerships, bringing together 1,200 senior government and business leaders from across Canada and around the world” (”Annual Conference,” n.d.). The recent 2022 keynote titled “Why Canada’s Infrastructure Needs Private Finance Now More than Ever”, given by BMO Capital Markets managing director Laith Qamheia is quite revealing. The event opens with an introductory remarks by a Robert Perata an employer of the events sponsor Colas Canada, one of the countries largest road construction companies.

What is immediately shocking is the almost hostile narrative which starts when Peraita asks, “after three decades of helping delivery successful projects in Canada are governments increasingly reluctant to use private finance help shovels in the ground and make their infrastructure projects a reality?” (P3 2022 — Keynote Address, 2022, 2:39). Qamheai goes onto say that while there have certainly been “some” efforts to harness private capital he claims the

…general trend has been for governments to implement procurement programs that crowd out private capital from participation and projects that would otherwise be very attractive to investors, and which could benefit from the innovation, discipline, efficiency and long-term value enhancement the private capital brings. (P3 2022 — Keynote Address, 2022, 5:55).

He claims too many projects are Design and Build or Design Build and Finance with not enough adding operations, maintenance, or long-term equity stakes in their design. Models which create little debt or limit it to the construction phase are the manners in which private capital is supposedly sidelined. Allegedly “too few” projects which present attractive forms of debt and equity have come to market in recent years. Comments which allude to potential capital flight, the impossibility of building green infrastructure without private capital, and Canada loosing its status as a world leader in infrastructure, all evoke an almost threatening manner in which private capital was speaking to governments, warning them not to make the wrong move.

Even more interesting is the defence Qamheia gives as to why “long-term private capital” should be a bigger part of P3s. Qamheia outright states most governments reduce their reliance on private capital due to the increased costs that are associated with long-term private capital. However, looking at simply upfront costs or the transfer of risk (both of which he reaffirms are vital) present long-term private capital in a “narrow lens” (P3 2022 — Keynote Address, 2022, 6:48). Looking at the accounting shows that private capital adds costs and may not reduce risk, but Qamheia argues this ignores the “value added” by the expertise, efficiency, and innovation of private capital.

Assessing the potential value private capital brings to a project is difficult says Qamheia, but if we look at a portfolio wide basis, we apparently see fewer overrun costs, faster procurement, less delays, and higher service quality (P3 2022 — Keynote Address, 2022, 17:15). Needles to say, these have already been shown to be questionable claims. The focus on ‘long-term capital’ is itself evocative of the new investment strategies of the N.F.C and passive management. Long term equity stakes are a hallmark of post-2008 investment and a pillar of WSC strategies pushed by the likes of BlackRock, as will become more apparent in the discussion of the CIB.

The CCP3 is not just a space for financiers, as it effectively brings together various actors from across the public and private sectors to foster cooperation and consolidate ideals around various aspects of P3 policies. The integral state function of the CCP3 can therefore be shown by looking at the various conferences and meetings, the makeup of the board of directors, and the ‘revolving’ door of personnel between the public and private sector which it facilitates.

Conferences and meetings are an obvious place for capitalist and public officials from various sectors to discuss policy directly. For example, the 2019 conference was attended by more than 800 people including public officials, financial specialists, construction, and engineering firms not just in Canada but across the world. This included various corporate sponsors such as SNC-Lavalin, Aecon, PwC, P1 Consulting, Bruce Power, and McCarthy Tetrault LLP. The guest list included high profile figures such as Doug Ford, provincial infrastructure ministers, as well as P3 officials from other parts of the Anglo-world including the U.S, U.K, and Australia (Hurl, L’Heureux, & Kraemer, 2022, p. 41).

There is also quite clearly a “revolving door” of personnel among those working in the P3 industry, and Hurl et al. show this with an analysis of CCP3 and IO. Through a comprehensive analysis of resources, they argue that only 187 individuals make up the “inner circle” of the enabling field in Canada. Due to the business model of P3s is inherently about forging public and private cooperation, the movement of personnel is quite pronounced. They identify organizations with more than 10 employment ties as being the most connected. Out of the 2,531 employment ties, they detected a 42% of total career changes of actors from the public to private sector or vice versa.

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Many individuals working in civil society P3 organizations have ties to IO (113), the Government of Ontario (67), or the federal government (37). More interesting is the private sector, which shows many connections especially with professional service firms such as KPMG (26), EY (22), and PwC (21). Large engineering firms such as SNC-Lavalin (32) and Bombardier (14) also saw various connections. A few examples of high-profile cases included Michael Jordan who served as Deputy Minister for Ontario in several ministries before becoming a partner at PwC. There is also Ed Clark, former president and CEO of TD Bank Group turned CEO of IO from 2012 to 2016, and David Livingston who was an executive at TD Bank for 29 years before becoming head of the IO. Livingston eventually went to jail for four months after deleting incriminating evidence from provincial hard drives. These are only a handful of examples (Hurl, L’Heureux, & Kraemer, 2022, p. 47).

Another component which shows the integral state nature of the CCP3 is the composition of the board of directors for which Hurl et al. collected data for over a 20-year period. From 2000-2020, 89 individuals from 91 different organizations sat on the board, 66% from private firms (e.g., Canadian Imperial Bank) and 34% public agencies (e.g., Government of Ontario). The most common members are capitalists from the service sector or “private transaction providers” including many from the ‘Big Four’ service firms, which make up 24% of the total seats and include corporations such as PwC, which has been on the board since its inception. Law firms are also heavily present, with on average 4-5 members out of 23 at anytime. Construction and engineering firms such as SNC Lavalin, Bombardier (both gone now due to their respective scandals), and Aecon are also present. The financial sector including banks such as CIBC and the Bank of Montreal as well as leading assets managers such as Macquarie UBS and Fengate were present less at about 10% of the seats. Public sector representatives were divided about 9% municipal and 8% federal/provincial. Typically, this includes city managers, formerly elected officials, or senior civil servants, which comprised the largest category at about 5.6% of board positions. IO, a provincial crown corporation, has had its CEO on the board since its creation in 2005 (Hurl, L’Heureux, & Kraemer, 2022, pp. 40-41). I have compiled a table of the most recent members of the board of directors, and it mirrors many of the conclusions made by the authors below (see Table 4).

Thus, the CCP3 is more than just a non-partisan civil society interest group promoting infrastructure policy. Hurl et al. underline the integral state function of the CCPP clearly, state that it allows public officials to “sustain ties” and “keep up lines of communication with industry and finance and consolidate support for PPPs in civil society while at the same time entrenching it as the new normal in government.” (Hurl, L’Heureux, & Kraemer, 2022, p. 42). Rather than simply an instance of capture by ‘finance’, industrial, money and commercial capitalists work together with state actors to attempt and create an optimal outcome. Whether everyone wins is another story entirely. What this shows is that securing accumulation, especially in the highly internationalized context of twenty first century capitalism, involves the articulation of many organizations and institutions that are comprised of actors in various sectors of the capitalist class. The extensive network of which the CCP3 is at the center, fosters cooperation and consensus between public and private officials across provincial, national, and international borders. These actors work together to identify problems and attempt to foster solutions for growing problems in capitalist accumulation surrounding infrastructure policy. In the final section, I will show how this analysis extends to the newest institution in the Canadian P3 enabling field the Canada Infrastructure Bank.

References

Dyson, Stephen Benedict, and Thomas Preston. “Individual Characteristics of Political Leaders and the Use of Analogy in Foreign Policy Decision Making.” Political Psychology 27, no. 2 (2006): 265–88. https://doi.org/10.1111/j.1467-9221.2006.00006.x.

Hurl, Chris, Valérie L’Heureux, and Susanne A. Kraemer. “Elite Networks in Public Private Partnerships: Mapping the Enabling Field in Ontario.” Studies in Political Economy 103, no. 1 (January 2, 2022): 34–52. https://doi.org/10.1080/07078552.2022.2047478.

Jooste, Stephan F., and W. Richard Scott. “The Public–Private Partnership Enabling Field: Evidence From Three Cases.” Administration & Society 44, no. 2 (March 2012): 149–82. https://doi.org/10.1177/0095399711413868.

“About Us (PPP Council).” PPP Council. Accessed April 14, 2022. https://www.pppcouncil.ca/web/About_Us/web/About_Us/About_Us.aspx?hkey=98be3d80-2b17-4dab-800c-63bcffe76aa7.

“Annual Conference.” Accessed November 28, 2022. https://www.pppcouncil.ca/web/Events/Annual_Conference.aspx.

P3 2022 — Keynote Address: Why Canada’s Infrastructure Needs Private Finance Now More than Ever. YouTube video, 2022.

Happy Holidays to everyone. I hope people are able to have some peace this time of year, even if it’s in knowing there is a calm before the struggle continues. This will be my last piece of the year and nearing the end of this series. 2025 was a big year for my writing. I now have around 20 paid subscribers, over 3,000 general subs, and I could not be more grateful for each and everyone of you. I have bigger plans for 2026, and I hope the next few years will allow me to pursue more and more independent research. However, I also know the mission is to change the world, not merely understand it. For now i’ll be eating some turdiddri and relaxing with family. Till then, if you celebrate, Merry Christmas. Also I’m trying to gain more and more paid subscribers so I can . Till the end of the month of December you can get 25% off a 1 year subscription.

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1. Series Announcement

2. Introduction: what’s the deal with capitalism and infrastructure?

State Theory

3. How Does the Capitalist State Support the Economy?

4. What is the Relationship Between the Capitalist Class and the Capitalist State?

Contemporary Asset Management: the New Finance Capital and the Wall Street Consensus

5. The New Finance Capital and the Rise of Asset Managers

6. Public Private Partnerships and Global Development: The Wall Street Consensus

7. (BONUS) Method: Marx’s Critique of Political Economy and Capitalist Relations

Case Study: Canadian Experience

8. What even are Public Private Partnerships (P3s)? A Case Study of Canada

9. The Canada Infrastructure Bank and Institutionalizing P3s

If you want to support my writing, please consider becoming a paid subscriber or you could buy me a coffee.

The rise of P3s as a staple policy of neoliberal states was deeply contradictory and complex, and its implementation in practice before and during the rise of the WSC has been no different. In 2022, P3s remain the cross-partisan policy for infrastructure provision in Canada among all levels of government. In fact, federal and provincial governments have so far as to adopt pro P3 legislation which encourage or requires considering P3s for projects above certain monetary sizes ($40 million Quebec, $100 million in Ontario, BC and Saskatchewan) (Loxley & Loxley, 2020, p. 8). From the 1990s to 2019, the federal, provincial, and municipal governments have overseen at least 291 active P3 projects totalling approximately $139 billion in market value. This includes in several sectors 102 in health, 83 in transportation, 21 in waste and water management 15 in education and 11 in energy among others (P3 SPECTRUM, n.d.). In short, they are a crucial policy in the Canadian context.

P3s act as sources of profit through either facilitating productive or money-circuits of capital. Thus, there is a blend of private operation and financing of projects in various configurations. The first occurs through building, operating or providing the goods or service in question given the specific project. P3s come in various models but the most used in Canada are Operation and Maintenance Contracts (O&M) where private actors operate publicly owned assets under contract, and the Design-Build-Finance-Maintain/Operate (DBFM or DBFMO) in which private sector actors design, build, finance, and perform maintenance and operation activities of infrastructure over a long period of time (See Table 1 for more) (”Definition & Models,” n.d.). This includes long multi-decade lease-based bundle contracts as well as risk sharing agreement with private property rights and profit-making mechanism central to the service and infrastructure delivery process (Whiteside, 2019, p. 4). Firms gain a stable revenue source since they monopolize the provider and delivery role of services in specific locations (Ashton, Doussard, & Weber, 2012). States are also often required to buy the infrastructure after the agreement expires at a higher than market rate. In this manner, the privatization of the productive process, whether it be in building infrastructure or running the service once its complete, turns public infrastructure into a circuit of industrial capital.

The second is through the ownership of assets derived from the projects themselves. Project financing is split between debt and equity holders with varying rights to revenue and responsibilities to deliver services. Equity assets gives fundamental ownership rights over the P3s and entitles asset holders to revenue minus cost and debt obligations. However, debt in the form of securities entitles owners to payments and are typically secured by private commercial banks. During the construction phase this is typically in the form of debt with bonds dominating during operational phases. These are often low-risk high-return assets. The equity holders are often big companies involved in engineering, construction, and maintenance, while project investors tend to be pension funds, sovereign wealth funds, infrastructure funds, and banks. Typically, the projects are split between 30% equity and 70% debt (Whiteside, 2019, p. 4). As a result, P3s have turned infrastructure into a particularly lucrative asset class. Holders of debts or equities in these projects benefit similarly from low risk and high return on investments. In general, equity holders can expect a real rate of return of at least 15-25%. Equity sales are said to be ever more lucrative, as in the UK they are estimated to give a return of 51% on investment (Whiteside, 2019, p. 5). It has been quite a successful set of policies from the view of capitalist accumulation. Altogether, through P3s the state has further subsumed productive and financial processes to circuits of private capital by embedding infrastructure provision into market relations.

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The justifications of states in using P3s as a model of provision has been that they lead to overall lower costs due to market incentives and reduce project risk for governments in the construction and operation of infrastructure (Vining & Boardman, 2008, p. 12). This is epitomized by the definition of P3s given by the CCP3, a national nonpartisan member-based organization that represents various public and private sector actors. They define a P3 as a “cooperative venture between the public and private sectors, built on the expertise of each partner, that best meets clearly defined public needs through the appropriate allocation of resources, risks and rewards.” [emphasize added] (”About Us (PPP Council),” n.d.). P3s are presented as models which not only tap into private sector expertise (as state capacities have been greatly diminished) but also reduce the overall fiscal burden on the state. Competition and incentives among private actors are said to improve overall infrastructure quality (Loxley & Loxley, 2020, p. 29). The centrality of all these elements together, is typically what are the selling points of P3s.

Since P3s require the involvement of several different concrete capitalist, from financiers to construction and service providers, it has become a natural space for different actors to meet and organize themselves. This highlights that in general, P3s play an integral state role as capitalist class power is articulated between public and private actors with the goal of sustaining capitalist social relations through nurturing accumulation. Proponents of P3s view little to no contradiction between private accumulation and public needs for infrastructure, the natural result of neoliberal ‘public management’ logic, which sees the market as the best and most efficient providers of goods (Whiteside, 2019, p. 7). The question is, are the proponents of P3s correct? Is the model successful at providing quality public infrastructure, lowering costs, and transferring risk for the state? Is what is good for capital good for everyone? The historical evidence on the success of P3s tells a completely different story from mainstream narratives. Of course, all national contexts are different, but the Canadian case is relatively well studied.

First, there is the question of risk. In the case of P3s, risk typically refers to one form or another of financial risk from say construction costs, maintenance costs, usage levels (revenue) and more (Vining & Boardman, 2008, p. 13). Project risk is also associated with the site (access, suitability, quality) design and construction (potential delays, cost over run, weather) overspending on operation and maintenance and finance (interest rate changes or inflation) (See Table 2 for more) (Whiteside, 2019, p. 8). However, as has been shown above, in practice P3s often the exact opposite of transferring risk away from the public sector and often requires it takes more formally (or informally) onto their balance sheets. This has always been the case with P3s, in Canada and abroad. For example, Vining and Boardman analysed several P3 projects to judge their performance and whether they transferred risk and cost to private sector actors. Their analysis of 18 different P3s projects showed that they varied in their level of revenue uncertainty, a key indicator of risk. Of the 10 they looked at extensively, projects associated with high levels of revenue uncertainty were unattractive to private actors and therefore made it nearly impossible to find interested investors (Vining & Boardman, 2008, p. 37). In practice, the evidence that P3s transfer risk to private actors is essentially non-existent.

When it comes to the development of high-risk projects, private investors will only get involved when the government is a major lender and therefore assumes a high amount loss-risk if the project goes bankrupt. For example, the P3 projects of the Evergreen Park School in New Brunswick and the Waterloo Landfill Gas Power Plant in Ontario both saw private actors take on all the risk of the project, however this is because the revenue uncertainty was very low or virtually non-existent. With the Confederation Bridge in PEI, the high level of revenue uncertainty meant the government needed to guarantee investment bonds in the project so private actors would be willing to finance and take on some risk in the project (Vining & Boardman, 2008, p. 42). These, and various more examples, show that while many projects end up getting built and function (ignoring questionable levels of quality), risk is only transferred to private sector actors when there was low risk of revenue loss in the first place. It is no surprise then that investors also seldom desire providing new and cutting-edge infrastructure, but generally prefer “brown fielding” (buying/investing in existing infrastructure) rather than “green fielding” (building new ones) because they do not need to bare the costs of construction and gain guaranteed revenue for decades to come (Whiteside, 2019; Whiteside, 2011).

Second, there is also little evidence the model reduces cost. Various facets of private sector provisions immediately make things more costly than an alternative public model. The initial cost of projects often starts higher because of the higher interest rates associated with private sector financing. For example, Whiteside calculated that using P3s and private financing could add up to $150 billion to the Liberal’s infrastructure spending plan (Whiteside, 2017, p. 224). This is an increasing issue given the recent run of inflation and targeting by central banks across the world. Another example of is the réseau express métropolitain (REM) light rail train being built in Montreal. Despite the federal government giving a loan of $1.2 for CDPQ to build and operate the service, they will be running it on a for profit basis. With the general expectation of seven to nine percent profit rates, the project will already be more expensive than an inhouse non-profit alternative (Loxley & Loxley, 2020, p. 99). Another crucial component is all the extra costs associated with organizing P3 contracts between public and private sector actors such as transaction and negotiation costs, which lead to the total social costs outweighing any initial savings. To make matters worse, P3 contracts are often renegotiated before they even start, which posses even more costs for the public sector. For example, the transaction costs involved in negotiating contracts to build the Abbotsford hospital in B.C cost the government over $7 million in administrative fees and $24.7 million in legal and consultant costs. The case was similar with the hospital project in Brampton Ontario, which cost the government $33.9 million to hire advisors to aid with simply choosing a contract (Whiteside, 2011, p. 261).

Finally, there is the question of whether the ‘expertise’ of the private sector translate to improved project quality. This has been notoriously difficult to answer definitively. The IMF itself states it cannot be assumed the private sector is always more efficient, and there seems to be no systemic advantage to private sector involvement (Loxley & Loxley, 2020, p. 29; Hall & Lobina, 2005). The results in Canada thus have ranged from perfectly fine to dismal. For example, the North Bay Regional Hospital ended up seeing over 50 beds close during its operation, similarly the Royal Ottawa ended up smaller than planned with fewer beds (CUPE, n.d.). The REM project, which is considered the CIBs most successful project, has been a focal point for controversy, as many feel it was rushed, has questionable public benefit, and created a whole new transit system rather than adding to existing ones (Hackett, 2021). Although the project is still being completed, many have already complained about the noise levels being higher than expected (Global News, n.d.). Some projects have led to literal environmental disasters, such as the Hamilton-Wentworth water treatment plan, which in 1996 led to a sewage spill with 180 million liters ending up in the Hamilton harbour, a disaster for which the provider tried to avoid liability (Loxley & Loxley, 2020, p. 29). The quality of maintenance services is often poor due to unclear contracts, which often lead providers to telling their workers to perform subpar duties in the defence that they interpret duties differently. One worker when interviewed was told the P3 operator instructed them to “clean the inside of the doors, but not the outside.” (Loxley & Loxley, 2020, p. 10). In short, there are dozens of cases that could be mentioned which show the varying ways in which P3s have failed to fulfil their stated purpose in full (see Table 3 for more examples). The purported benefits are thus far from readily apparent.

Fundamentally, P3s are not a method of funding projects but financing, meaning money is ultimately still coming from citizens and not the private sector. The private sector financing must be repaid, and that ultimately means these P3s entail new debt for governments using them or costs for users. P3s are not a magic solution that solves a lack of funding that municipalities might have. As former chair of Partnership BC (the provincial P3 agency) Larry Blain stated, “Clearly all the money is coming from the government…It’s debt of the province whether you borrow it as bonds, or contract over a 35-year period.” (Loxley & Loxley, 2020, p. 10). Furthermore, municipalities do not raise more capital as the access to funding will be outweighed by the interest rate cost. For example, the Moncton’s water treatment plant could have had an effective interest rate of 5.85% when with P3s if paid about 10%. This increased its overall debt costs over 10 years by about $14.4 million (Loxley & Loxley, 2020, pp. 10–11).

It is not only the state, but projects are still heavily paid for by taxpayers through maintenance and operation fees that governments pay out to the private actors for providing the infrastructure through the contract period. Citizens also pay directly through individual user fees, for example with things like parking at a hospital or bridges charging tolls (Whiteside, 2019, p. 13). The heavy reliance on out-of-pocket funding from users is evident in speeches given by high level P3 officials. Former board of director chair for the CIB Janice Fukakusa herself stated the CIB would be financed outside the public balance sheet and that projects could generate revenue in many ways including “fees, tolls, fares, tariffs, and mechanisms based on appreciating land value.” (P3 2017: Keynote Speech: Janice Fukakusa of the Canada Infrastructure Bank, 2017). In a 2018 interview with IPE Real Assets magazine, former CIB CEO Lavallee said “when it is operational, users will fund the bulk of the operations.” (Krancseptember/October 2018, 2018). What the above evidence shows is that while P3s are certainly a profitable model for private capital, it is highly doubtful that it provides the best option for the state and citizens from a risk and cost perspective.

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In short, the purported benefits of using P3s to provide public infrastructure is questionable at best. Rather than transferring risky and or costly ventures onto the private sector, the government is giving private actors extremely lucrative projects and financial assets that act as stable and predictable streams of revenue. The state acts as a guarantee of these projects, effectively de-risking P3s as sources of revenue. It promotes the creation of various circuits of both industrial and money-capital through opening projects, issuing debt and equity and allowing user fees and tax dollars to become sources of revenue. Looking more directly at the politics surrounding P3s, it becomes even clearer the political role they play for the capitalist class. Going forward I will now look at the integral state institutions and organizations through which the state and capitalist class organize class hegemony.

References

“About Us (PPP Council).” PPP Council. Accessed April 14, 2022. https://www.pppcouncil.ca/web/About_Us/web/About_Us/About_Us.aspx?hkey=98be3d80-2b17-4dab-800c-63bcffe76aa7.

Ashton, Philip, Marc Doussard, and Rachel Weber. “The Financial Engineering of Infrastructure Privatization.” Journal of the American Planning Association 78, no. 3 (Summer 2012): 300–312. https://doi.org/10.1080/01944363.2012.715540.

CUPE. “Five Times Provincial Governments Failed with P3 Hospitals: A Warning for Taxpayers in Newfoundland and Labrador.” Canadian Union of Public Employees. Accessed October 11, 2021. https://cupe.ca/five-times-provincial-governments-failed-p3-hospitals-warning-taxpayers-newfoundland-and-labrador.

“Definition & Models.” Accessed April 22, 2020. https://www.pppcouncil.ca/web/P3_Knowledge_Centre/About_P3s/Definitions_Models.aspx.

“Global News.” Montreal Residents Complaining about Noise from REM Trains as Testing Continues | Globalnews.Ca. Accessed July 21, 2023. https://globalnews.ca/news/9700584/montreal-residents-complaining-noise-rem-trains-testing/.

Hackett, Alexander Contributor. “Montreal’s Controversial REM Train East Is a Product of Quebec’s Top-down Political Culture.” Toronto Star, October 12, 2021. https://www.thestar.com/opinion/contributors/montreal-s-controversial-rem-train-east-is-a-product-of-quebec-s-top-down-political/article_c32f31de-8f2a-57f8-a282-3d8771379853.html.

Hall, David, and Emanuele Lobina. “The Relative Efficiency of Public and Private Sector Water,” October 1, 2005, 5.

Krancseptember/October 2018, Joel. “Q&A: Pierre Lavalle, Canada Infrastructure Bank.” Real Assets. Accessed April 16, 2023. https://realassets.ipe.com/analysis/qanda-pierre-lavalle-canada-infrastructure-bank/10026738.article.

Loxley, Salim, and John Loxley. “Asking the Right Questions: A Guide for Municipalities Considering P3s.” Canadian Union of Public Employees, October 15, 2020. https://cupe.ca/guide-municipalities-p3s.

P3 2017: Keynote Speech: Janice Fukakusa of the Canada Infrastructure Bank - YouTube. Accessed April 16, 2023.

Vining, Aidan R., and Anthony E. Boardman. “Public-Private Partnerships in Canada: Theory and Evidence.” Canadian Public Administration/Administration Publique Du Canada 51, no. 1 (March 2008): 9–44. https://doi.org/10.1111/j.1754-7121.2008.00003.x.

Whiteside, Heather. “Public-Private Partnerships: Market Development through Management Reform.” Review of International Political Economy, July 3, 2019, 1–22. https://doi.org/10.1080/09692290.2019.1635514.

———. “Unhealthy Policy: The Political Economy of Canadian Public-Private Partnership Hospitals.” Health Sociology Review 20, no. 3 (September 2011): 258–68. https://doi.org/10.5172/hesr.2011.20.3.258.

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1. Series Announcement

2. Introduction: what’s the deal with capitalism and infrastructure?

State Theory

3. How Does the Capitalist State Support the Economy?

4. What is the Relationship Between the Capitalist Class and the Capitalist State?

Contemporary Asset Management: the New Finance Capital and the Wall Street Consensus

5. The New Finance Capital and the Rise of Asset Managers

6. Public Private Partnerships and Global Development: The Wall Street Consensus

7. (BONUS) Method: Marx’s Critique of Political Economy and Capitalist Relations

Case Study: Canadian Experience

8. What even are Public Private Partnerships (P3s)? A Case Study of Canada

9. The Canada Infrastructure Bank and Institutionalizing P3s

If you want to support my writing, please consider becoming a paid subscriber or you could buy me a coffee.

The method that guides this work is Marx’s critique of political economy. Marx’s method involves not only a critical analysis but deconstruction of the fundamental categories of capitalist society. Rather than taking the ‘concepts’ of everyday social practice (such as money, value, or labor) as so self-evident that they need no further explanation, Marx challenges the deeper presuppositions made about human social relations (Heinrich 2012, 34). He shows the ‘economic-categories’ (Marx 1975; Kosík 1976) of human consciousness to be reified reflections of socio-historic relations of production (Kuruma 1969). Marx analyses them insofar as they are social-forms part of a large totality. That is, they are forms of appearance which in their totality express the essential relations of capitalist society, that is, its essence or content (Kuruma 1969). Thus, since these phenomena are expressions of this process, the goal of researcher is thus to understand the internal relations between them, that is, understand them in their unity as part of a social totality (Kuruma 1969). This means understanding how all social relations, that is for example how nominally (and formally) separate ‘political’ and ‘economic’ relations, immanently relate to one another in the reproduction of capitalist social relations. Rather, this study understands them as forms which work to produce capitalist relations (Clarke 1980).

What is then the essential ‘logic’ of capital that dominates our social relations including our politics? It is important to note clearly first that capital not a thing but a materialized social relation (Marx 1981, 953). Capitalist relations are a historically specific form of social reproduction in which products of social labor take on the form of commodities (Marx 1981, 125), through which capital autonomously regulates our social metabolism. Capital’s essential purpose is the valorization of value, the endless process to accumulate value through the exploitation of things and human labor (Fitzsimons and Starosta 2021, 11). Capital thus subsumes our lives through various social forms which turn the essential purpose our social reproduction into the production of surplus-value (Marx 1981, 251). Capitalism is ultimately driven by the global quest for (relative) surplus value by capitals in competition (Fitzsimons and Starosta 2021, 12). Thus the ‘logic’ of capital speaks to organized way social functions are set up to achieve this ultimate goal.

That is, I attempt to show that ‘political’, ‘economic’ and ‘civil society’ processes are all social ones which act as moments in the total social reproduction of capitalism. Formally separate economic processes of the movement of commodities and political processes of class struggle and states policies are understood immanently related. Through the historical subsumption of human reproduction to capitalist relations, capitalism is reproduced materially and can be identified in political, ideological, economic, legal, and institutional forms and practice. These are the concrete forms in which the domination takes place both by and through things and human subjects (Clarke 1980, 20). This is the central theme of this paper.

Capitalism is thus not a static ‘structure’ imposed on human agents from above. Rather, the social-forms and the processes they compose in their unity are products of human practice, that is, the practical everyday activity of living material subjects (Kosík 1976). Categories thus represent the forms taken on by social subjects under capitalism which determine their social existence (Starosta 2015). These roles related to the form in which the surplus-value is appropriated by economic subjects that is for example wages, profit, rent and in the case of the modern state taxes. This can be represented by building on the expanded circuit of industrial capital that Marx outlines as a circuit of total social reproduction:

M – C (LP + MP) … P … C’- M’ (Profits + Interest + Wages + Rent + Taxes)

In receiving specific forms of revenue outlined in the circuit, social subjects act as “personifications of economic categories” through performing certain social functions necessary for capital to reproduce itself through us (Marx 1981, 92). The industrial capitalist, the money-capitalist, the landowner, workers, and the state, all appropriate different forms of social labor which determine their relations to others in society. This is the lens through which the actions of state, capitalist, and other social actors will be analyzed in this research.

It is important to not confuse the term ‘determinations’ with referring to some form of economic determinism. Social form-determinations are not causal structures devoid of historical context or human subjectivity. They are not formal-logically categories which remain static but are dynamic dialectical ones which attempt to capture social relations in thought (McNally 2017). You cannot separate the most abstract social forms from the concrete historical content because they develop through one another (Panitch 1977, 6). The contradictions of capitalist are historical as much as they are social (Clarke 1980, 78). Therefore, understanding the action of state and capitalist actors requires understanding them as form-determined subjects within more concretely determined historical conjunctures. The historical development of capitalism and its politics is understood through the dialectical interaction of these social forms of their historical content, which is the only way to fully capture these social processes.

References

Clarke, Simon. 1980. One-Dimensional Marxism: Althusser and the Politics of Culture. Allison & Busby.

Fitzsimons, Alejandro, and Guido Starosta. 2021. “Global Capital, Uneven Development and National Difference.” Historical Materialism 29 (1): 3–30.

Heinrich, Michael. 2012. An Introduction to the Three Volumes of Karl Marx’s Capital. Monthly Review Press.

Kosík, Karel. 1976. Dialectics of the Concrete. D. Reidel Publishing Company.

Kuruma, Samezo. 1969. An Introduction to the Study of Marx’s Theory of Value. Iwanami Shoten.

Marx, Karl. 1975. “Marginal Notes on Wagner.” In Marx-Engels Collected Works, Vol. 24. International Publishers.

———. 1981. Capital: A Critique of Political Economy. Vol. 3. Penguin.

McNally, David. 2017. “Intersections and Dialectics: Critical Reconstructions in Social Reproduction Theory.” In Social Reproduction Theory, edited by Tithi Bhattacharya, 94–111. Pluto Press.

Panitch, Leo. 1977. “The Role and Nature of the Canadian State.” In The Canadian State, edited by Leo Panitch, 3–27. University of Toronto Press.

Starosta, Guido. 2015. Marx’s Capital, Method and Revolutionary Subjectivity. Brill.

1. Series Announcement

2. Introduction: what’s the deal with capitalism and infrastructure?

State Theory

3. How Does the Capitalist State Support the Economy?

4. What is the Relationship Between the Capitalist Class and the Capitalist State?

Contemporary Asset Management: the New Finance Capital and the Wall Street Consensus

5. The New Finance Capital and the Rise of Asset Managers

6. Public Private Partnerships and Global Development: The Wall Street Consensus

Case Study: Canadian Experience

8. What even are Public Private Partnerships (P3s)? A Case Study of Canada

9. The Canada Infrastructure Bank and Institutionalizing P3s

If you want to support my writing, please consider becoming a paid subscriber or you could buy me a coffee.

Public Private Partnerships Today: The Turbulent Wall Street Consensus

The use of P3s as a policy model for facilitating the provision of infrastructure has been a staple policy of capitalist countries across the globe. P3s are used in the United States, Canada, the United Kingdom, Europe, all the way to China, Africa, India, and South America, becoming the standard in various national contexts. While P3s continue to be a policy staple of global capitalism, there have been important changes in the context of their implementation which speaks to the rising power of asset managers. In the late 1980s early 1990s was the era of the Washington Consensus (WC), spearheaded by the global north and institutions such as the International Monetary Fund, OECD, World Bank and so on. The WC focused on the “holy Trinity” of market policies, including “macroeconomic stabilization through lower inflation and fiscal discipline; liberalization of trade and capital flows, of domestic product and factor markets; and privatization of state companies” (Gabor 2021, 430). However, after the repeated crises of the 1990s, including especially the 1997 East Asian crisis, the model began to fall into repute. The 2008 financial crisis was the final nail in the coffin. Out of a context of crisis, rising power of asset managers, a simultaneous savings glut and infrastructure gap, the stage was set for a shift in global infrastructure provision that bore a clear socio-historic character.

As mentioned in the introduction, the WSC is also heavily focused on the transformation of P3 loans into securities. This supports dynamics of market-based finance that are a key pillar of contemporary capitalism. Both market-based finance and asset-based accumulation requires the constant creation of new assets, something that the WSC could potential provide on a global scale. Securitization transforms non-tradable loans from MDBs, other private banks, or state institutions involved in the financing of P3 projects into a range of tradeable securities with distinct risk/return profiles that can be sold to institutional investors as development assets (Gabor 2019a, 1). The G20 Infrastructure as Asset Class report explicitly calls for policies to engineer new financial markets in securities to attract global investors into P3 projects (Gabor 2019a, 6–7). Furthermore, a G20/OECD 2020 report explicitly states the benefits of securitization as being the “creation of a more liquid secondary market” for infrastructure securities, which lowers the need for detailed review of assets and greater ability to benchmark (risk asses) different assets (G20 and OECD 2020, 26). The goal is thus to develop a model of P3 contracts which engenders the development of “securities, derivatives and wholesale money markets that can support liquid infrastructure/SDG asset classes” and as a means to also funnel private capital into projects (Gabor 2019a, 8). In short, the potential of resolving infrastructure investment shortfalls while bolstering market-finance is central to WSC.

For P3 projects to get off the ground, state institutions and/or multilateral development banks (MDB) must set up frameworks to guarantee payment flows to project operators and investors by taking responsibility for potential project risk. The traditional underlying risk profile of infrastructure projects is not one preferred by institutional investors. The de-risking of these projects is increasingly a necessity. For example, states/MDBs have been necessary actors in facilitating P3s at least 60% of projects in emerging economies. Therefore, states or MBDs must construct “both highly rated, low return tranches suitable for conservative pension funds/asset managers and lower-rated, higher return tranches suitable for investors with higher risk appetite such as hedge funds” (Gabor 2019a, 6). For these projects to be ‘investable’ the state must guarantee the revenue streams from these projects by assuming both demand and political risks which could dry up cash flows. If demand falls for P3 services the cash flows to operators and bond holders is threatened, and the development of strong secondary markets for assets stunted.

While asset-managers came out of the crisis more powerful than every, policies everywhere did not immediately just adapt to this new reality. Rather, the successful implementation of P3s is a political process as much as an economic one. That is why so much time, effort and resources are spent by states, capitalists, and other multilateral institutions in assuring the economic and political foundation is set for the WSC policies to be successful. Its readily apparent the WSC functions to articulate global class power through integral state spaces. Identifying this articulation of a hegemonic apparatus of institutions and practices makes this quite clear. For example, this is encapsulated in recent reports by global institutions, such as the United Nations Billions to Trillions (2015), the World Banks’ Maximizing Finance for Development (2018), the G20’s Infrastructure as an Asset Class (2018) and Principles for Quality Infrastructure Investment (2019) and G20/OECD’s report in collaboration with institutional investors and asset managers (Gabor 2021, 430). A more concrete example of this is the mission statement outlined in a OECD/G20 infrastructure investment report as to “convey the perspectives of asset owners and managers on ways to overcome the infrastructure investment gap, by identifying selected key issues and challenges, and providing proposals for G20 Finance Ministers and Central Bank Governors” (G20 and OECD 2020, 1). The report is the result of several meetings that took place in 2019 with over 100 investors representing over $20 trillion USD in assets and 28 countries. It allowed for the discussion of “detailed policy actions” supported by investors. Participating institutions include key players such as BlackRock, Fidelity, Goldman Sachs, J.P Morgan, and several national pension funds (G20 and OECD 2020, 46–49). The broad policy suggestions include (in no particular order): 1) to harness private sector expertise and capital, 2) use collaboration, engagement and partnership with the private sector to manage risk and attract investment, 3) focus on building local infrastructure investment markets (asset classes) 4) promote government leadership in sustainable finance (G20 and OECD 2020, 1–2). Of course, BlackRock was ahead of the curve, releasing a report as early as 2015 titled “Infrastructure Rising: an asset class takes shape”, pushing many of the policies that would become central to the WSC (Whiteside 2016).

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Despite all the enthusiasm for the WSC it has achieved little success. At COP26 expectations were high. US Special Envoy for Climate representative John Kerry argued states must “de-risk the investment and create the capacity to have bankable deals. That’s doable for water, it’s doable for electricity, it’s doable for transportation” (Gabor 2021b). In the push for blended finance, Head of the Glasgow Financial Alliance for Net Zero (GFANZ) Mark Carney announced their intention to work with governments and multilateral institutions to mobilize their $130 trillion for green investments. However, by COP27 excitement seems to have dwindled. GFANZ had to drop partnerships with UN Race to Zero, an initiative to get green pledges and reduce greenwashing. CEO of BlackRock Larry Fink stayed away from GFANZ and its mobilizing drive after several reports denounced it as a systemic failure, and due to increasing Republican backlash to green finance policies. Despite this, the answer has been that states simply need to get even better de-risking practices, reinforcing its political appeal. In the end, the policy question of COP27 remained:

“how do we scale up de-risking to make decarbonization investable for BlackRock?” (Gabor 2022)

The continued support for these policies despite their difficult getting off the ground alludes to the larger role they play in cementing class power. With systemic crises such as climate change, growing calls have been made to re-nationalize industries and introduce forms of intervention which take investment decisions away from private finance. Despite actual content of the WSC, advocates praise the model and argue private finance can save the planet and capitalism without the need for extensive public intervention (Dafermos, Gabor, and Michell 2021). This is seen as consistent with and an extension of neoliberal free-market principles. However, given the actual proposals of the model this seems absurd and contradictory. The entire framework is centered around the argument that private finance cannot do it alone and the state does need to intervene, intensively and extensively. This has been particularly evident in the post-crisis financial system. Where capitalist once said laissez-faire, they now proclaim faire!

Regardless, WSC supporters argue that private finance can and should be harnessed to push for a green transition and decarbonization. This green framing is a core component of WSC politics and its potential mass appeal. The WSC is pushed explicitly as the private-sector alternative to public initiatives such as the Green New Deal which seek to take power away from private finance and towards state actors (Dafermos, Gabor, and Michell 2021, 99). As a result of this battle the WSC consensus has been pushed as part of many global climate initiatives. These initiatives all have the goal “to create investible development projects that can attract global investors and orient their trillions into Sustainable Development Goals ambitions” (Gabor 2021, 100). This involves ‘unlocking’ the value trapped in publicly run and owned infrastructure projects, from transportation, infrastructure, health, welfare, education and so on. A prime example of this intersection between securitized accumulation and climate change politics has been the proliferation of Environment, Social and Governance (ESG) models of investing. This popular form of investment marketing focuses on ‘rating’ assets based on a variety of social factors. The argument made by financiers is essentially that they can do well fiscally by doing good ethically with their investments (Ventrone 2023). ESG is a core pillar of the WSC and its pro-finance politics.

In short, contemporary P3s play an intimate role in contemporary industrial policy which seeks to harness private finance for general and climate-change specific projects. It is a collective political process which involves not simply the dominance of state or capitalist actors, but the messy and porous competing interest between them. The state simultaneously seeks to support accumulation while ‘harnessing’ private capital to achieving national industrial goals, an important reason there is variations in WSC policies.

Bibliography

Dafermos, Yannis, Daniela Gabor, and Jo Michell. 2021. “The Wall Street Consensus in Pandemic Times: What Does It Mean for Climate-Aligned Development?” Canadian Journal of Development Studies / Revue Canadienne d’études Du Développement 42 (1–2): 238–51. https://doi.org/10.1080/02255189.2020.1865137.

G20, and OECD. 2020. “Report on the Collaboration with Institutional Investors and Asset Managers on Infrastructure.” https://www.oecd.org/finance/g20-collaboration-with-institutional-investors-and-asset-managers-on-infrastructure.htm.

Gabor, Daniela. 2019a. “Securitization for Sustainability: Does It Help Achieve the Sustainable Development Goals?” Heinrich Böll Stiftung. https://us.boell.org/sites/default/files/2019-11/DGabor.pdf.

———. 2019b. “The (Impossible) Repo Trinity: The Political Economy of Repo Markets.” Review of International Political Economy 23 (6): 967–1000. https://doi.org/10.1080/09692290.2016.1207699.

———. 2021. “The Wall Street Consensus.” Development and Change 52 (3): 429–59. https://doi.org/10.1111/dech.12645.

———. 2021b. “The Wall Street Consensus at COP26 | Daniela Gabor.” Phenomenal World (blog). November 18, 2021. https://www.phenomenalworld.org/analysis/cop26/.

———. 2022. “The Wall Street Consensus at COP27 | Daniela Gabor.” Phenomenal World (blog). November 19, 2022. https://www.phenomenalworld.org/analysis/the-wall-street-consensus-at-cop27/.

Ventrone, Davide. 2023. “ESG : Financial Greenwashing or Why ‘Market Solutions’ to Green Investments Don’t Work.” Canadian Union of Public Employees. July 10, 2023. https://cupe.ca/esg-financial-greenwashing-or-why-market-solutions-green-investments-dont-work.

Whiteside, Heather. 2016. “Austerity Infrastructure Financialization, Offshoring, and Tax Sheltering Public- Private Partnership Funds.” Austerity and Its Alternatives. University of Waterloo. https://altausterity.mcmaster.ca/documents/w25-dec-19-2017-heather-whiteside-austerity-infrastructure.pdf.

This post is part of my series on the political economy of infrastructure financing. It discusses the politics and economics of providing infrastructure in contemporary capitalism. To find out what this series is about check out the Series Announcement. To view other posts in this series check out the table of contents below. Finally, check out the infrastructure tab on my homepage for more on this topic:

1. Series Announcement

2. Introduction: what’s the deal with capitalism and infrastructure?

State Theory

3. How Does the Capitalist State Support the Economy?

4. What is the Relationship Between the Capitalist Class and the Capitalist State?

Contemporary Asset Management: the New Finance Capital

5. The New Finance Capital and the Rise of Asset Managers

Public Private Partnerships

6. What even are Public Private Partnerships (P3s)

7. Public Private Partnerships and Global Development: The Wall Street Consensus

Case Study: Canadian Experience

8. The Canadian Council for Public Private Partnerships and ‘Enabling’ Fields

9. The Canada Infrastructure Bank and Institutionalizing P3s

If you want to support my writing, please consider becoming a paid subscriber or you could buy me a coffee.

In the past few posts, we discussed the capitalist state and its general role in supporting 1) the dominant practice in the economy that comprises a given regime of accumulation and 2) its role in formulating class power. Now we are going to change gears, so to say, and start talking about capitalist finance in order to better understand the relationship between asset managers and policies of infrastructure provision.

Post-war transformations in capitalist finance

The changes in capitalist finance starting in the post-war period culminated in the contemporary rise of the asset manager regime of corporate governance, led by BlackRock, Vanguard and State Street, referred to as the 'Big Three' (B3). The B3 came to amass an unprecedented amount of assets, causing a massive concentration and centralization of money-capital as they came to hold large stakes in companies across the economy (Braun 2020, p. 270).1 This phenomenon has been dubbed different names. Critical finance economists such as Benjamin Braun and Daniela Gabor have referred to this as "asset manager capitalism". Marxists such as Stephen Maher and Scott Aquanno refer to this as the New Finance Capital (NFC). The term "finance capital" is used by Marxists in a very loose manner, typically to refer to money or financial assets of any kind. But for Hilferding, the originator of the term, it had a very specific meaning.

Finance capital, as defined by Hilferding, speaks to the 'fusion' (that is, a close relation) between money-capitalists (owning capitalists) and industrial capitalists (functioning capitalists) in the regime of corporate governance. As Hilferding argued in his time, the financiers "become industrialists" through their deep and intimate connection with the dynamics of industrial production. However, today this exists in a new historical form, one which developed primarily out of two central changes to capitalist accumulation in the post-war period: the rise of asset-based accumulation and market-based finance (Maher and Aquanno 2023, p. 144-47).2

First, asset-based accumulation is defined by the growing significance of "non-cash financial assets as forms of money-capital" (Maher and Aquanno 2022, p.90). Financial assets (also known as securities) are forms of interest-bearing capital which are legal claims to future revenue streams. Broadly, this includes equity (stocks or shares), debt (bonds, mortgage bank deposits) or derivatives (most commonly forwards, futures, options, swaps) (for more on derivatives see Bryan and Rafferty 2006).3

Thus, the simultaneous prerequisite and outcome of assetization/securitization is that a wide range of tangible and intangible objects and concrete processes from which revenue is derived becomes subsumed by the value-form. They are commodified and objectified into abstract financial assets. That is, a sum of money transforms into capital in the form of a sui generis commodity, which seems to have the ability to produce a profit all on its own (Marx Volume 3, p.489).

What adds another layer of complexity to these developments is that interest-bearing assets act as forms of near-money by performing monetary functions. This is clear in the intricate role they play in the system of market-based finance and modern credit creation, the second important transformation. Market-based finance is a complicated process (one that I won't pretend to yet fully understand). However, it's central to understanding modern infrastructure financing.

Market-based finance refers to how the credit-creation functions of financial systems were reorganized around the production, ownership and exchanging of highly liquid assets. With the rise of institutional investors such as insurance companies, pension funds, and mutual funds came large pools of money-capital. As profit-driven institutions, they sought means to invest their idle money-capital. Furthermore, since firms want to hedge against inflation, the use of interest-bearing assets becomes an important means to protect the 'moneyness' of one's money-capital.

However, since institutional investors must often pay out cash to customers on demand (investors, pensioners, insured parties), this led them to search for liquid/short-term assets which could easily be converted into cash (Maher and Aquanno 2023, p.94). Highly liquid assets (e.g., government bonds) can be converted into the general equivalent-form (cash, deposits) on demand. These conditions led to the development of money markets for exchanging short-term highly liquid debt instruments such as bonds. In essence, this meant the creation of credit between asset and cash holders. This led to the proliferation of various forms of short-term credit (Maher and Aquanno 2023, p.87, 96).

The most important form of market-based finance is known as repurchase agreements or repos which function as a means of producing short-term and low-cost credit. Repos involve the sale of an asset by actor A for cash from B with the condition that A will repurchase the asset at a specified price and date back from B. The repo is effectively a loan in which the asset will be bought back with interest. The asset acting as collateral will be of slightly higher value than the cash offered to protect from market volatility. This difference between the cash value and market value of the asset is referred to as a 'haircut' (Gabor and Vestergaard 2016).

For this to work, the assets used for repo agreements need to be highly liquid to function as collateral that people will accept. If the underlying collateral is easily exchangeable, the risk of default and loss is low for the lender, as they can just sell the asset and reclaim any losses. Ultimately, this allowed for widespread and relatively cheap credit to be created through the monetization of non-cash assets and the 'duplicating' or even 'triplicating' of money (Gabor 2016).

The rise of the ‘big three’ asset managers

Asset-based accumulation and market-based finance make up the essential economic practices from which asset managers derive their systemic dominance. They are tasked with profitably allocating large swathes of capital across a plethora of possible investment outlets. The Big Three asset managers from largest to smallest are BlackRock, Vanguard, and State Street. In early 2024, BlackRock managed $10.5 trillion, Vanguard $9.3 trillion and State Street $4.3 trillion (Kakabadse and Knyght 2025). The B3 have become the most relevant 'general money-managers' of the entire economy and powerful representatives of total social capital, a role Marx identified in the past with banks (Marx 1981, p.567).

It's always difficult to get perfect data on the scale of the B3's asset holdings. Nonetheless, what is clear is that the concentration and centralization of assets in the hands of the B3 is immense and historically unprecedented. For example, the total number of publicly listed firms on the U.S. stock exchange as of 2022 was around 4,923 and the B3 are the single largest shareholders in at least 40% (Maher and Aquanno 2023). They are the largest in 438 of the S&P 500 companies or around 88% of firms (a figure which remains relatively stable in 2025) (Fichtner et al. 2017). However, if we look by market capitalization, the B3 are collectively the largest or second largest shareholders in firms that represent almost 90 percent of market capitalization in the entire U.S. economy (Maher and Aquanno 2023, p.144). These numbers seem to be generally the same today (see Kakabadse and Knyght 2025).

To make profits, asset managers engage in two circuits of interest-bearing capital in which they take large, concentrated swaths of money-capital and advance them to collect interest for their clients and fees for themselves. The first circuit invests money in productive circuits, starting with households and corporations lending to institutional investors then hiring asset manager services and finally them investing the money in stocks, bonds and other assets (Maher and Aquanno 2023, p.137). Asset managers' clients are mostly other institutional investors, as for example BlackRock with those comprising 56% of AUM in 2020 (Maher and Aquanno 2023, p.133).

The second circuit invests money in credit-circuits through cash management and securities lending operations. Typically, this is done through Money Market Mutual Funds, where corporations and financial institutions give cash to asset managers who then give it to an intermediary known as a 'custodian' who organizes repos with borrowers. Once the repo is done, the custodian takes its own fee, then the asset manager its fee before returning the remaining interest to the original investors (Maher and Aquanno 2023, p.140). They also work on the opposite side by lending out securities to be used as collateral in repos. This allows them to use assets they already hold, profiting from their total capital even further and remaining more competitive. This is how asset managers play a crucial role in contemporary credit-creation which efficiently valorizes idle money capital.

This unprecedented concentration and diversification are reflected in the shift of institutional investors towards strategies of passive management, which involves holding assets based on pre-determined indexes. Thus, profits are acquired by attempting to 'match' general market trends. This contrasts with active management which seeks to 'beat' the market, something increasingly difficult in an environment of general equity inflation. Despite engaging in practices of passive management, it is critical to note they are in no way passive investors. The overall shift has been one towards "constructive activism" in which fund managers engage directly in conversation with companies in relation to "business oversight and strategy". This is facilitated through corporate governance and stewardship divisions that are solely devoted to monitoring and policing their portfolio companies. As Vanguard CEO Bill McNabb has said, the move to passive management has been a "journey towards increased engagement" which seeks to provide more oversight and input on boards of directors. Passive management "doesn't mean [being] passive as an investor" but changes the nature of engagement by giving more desire to engage actively (Maher and Aquanno 2022, p.66).

These divisions have tremendously expanded in the last 10 years along with complex screening processes for portfolio companies. This has led to increased cases of monitoring of portfolios and a rise in activism. Vanguard, for example, sent 923 letters in 2014 alone in which it "requested specific governance structure changes," yet still this is less than the over 1000 "meetings or calls" it made in 2019. State Street's current strategy is to meet with around 600 to 700 companies per year, around 45% of its assets under management (AuM). Since these investors have massive stakes and can exercise their substantial voting rights positions, it's easy to see why they have so much influence. This is precisely how the relationship of the New Finance Capital exists concretely, how money and industrial capital have developed an intimate contemporary relation (Maher and Aquanno 2023, 2022).

How did this change state policies?

Now, building on our topic of the relation between changing practices of accumulation and changing state policies, we need to see how the rise of asset managers is related to changes during the Great Financial Crisis. As the evolutionary dynamics of capitalism necessitate, the growing importance of asset-manager money-circuits is reflected in changing forms of state policies and institutions that are arising to support these practices of accumulation. In the wake of the 2008 crisis, the U.S. state made historic moves to support the financial sector with the Federal Reserve greatly extending its traditional role as the "lender of last resort" to become the dealer of last resort in the shadow-banking system (aka market-finance), a process that was emulated across the world (Gabor 2021). The crisis was itself due to MBS no longer being seen as risk-free assets. Thus, the Fed took on new forms of intervention to protect the entire global financial system by becoming the market-maker of repos (Aquanno 2021).

Eventually, the most important policy practice established came to be known as Quantitative Easing. With QE policies, the Fed would purchase toxic assets crucial to the functioning of repo markets such as MBS and Treasury bonds (Maher and Aquanno 2023, p.125). The state was pushed to purchase not only 'safe' state/quasi-state assets, but also corporate stocks and bonds. The central role played by asset managers in this process of asset reclassification is crucial. Not only did BlackRock aid state/quasi-state actors such as the Fed, Treasury, Fannie and Freddie in repricing toxic assets during the crisis, but they also helped fellow financial institutions AIG and Lehman Brothers. Following the 2008 crisis, it was clear asset managers came to displace banks as the most important financial institutions in the economy and the most influential on the state.

While the state had already been supporting MBS for decades, QE cemented and led to the institutionalization of support for these assets' market values. This led to the de facto establishment of a money-circuit that effectively monetized state debt and redistributed liquidity in the system. The Treasury Department would issue bonds which were purchased by banks before these same bonds would be purchased by the Fed itself. This would in effect provide banks with liquidity in the form of central bank deposits. Using QE allowed the Fed to redistribute cash and provide liquidity to financial institutions (banks, institutional investors, and asset managers) and corporations in purchasing these assets. Systemically this had the effect of raising liquidity through flushing the economy with 'free money' due to the monetization of state-debt instruments. This caused a general environment of asset-price inflation along with low-interest rates and low asset yields. This has effectively remained until today, and despite the highest inflation seen in decades, the supposed movement towards quantitative tightening is seemingly already coming to an end (Howell 2023). Thus, these practices culminated in the rise of a 'de-risking state', built around policies and institutions which seek to minimize the risk of holding financial assets. This is a crucial development for understanding infrastructure policies (Gabor 2019)

Share critic of political economy

The ascension of the B3 and the proliferation of asset-based accumulation was the result of not only the de-risking of MBS and Treasury bonds, but the chain effect these had on corporate debt and equity as well. The increase in the money-supply effectively lowered interest rates and thus the cost of corporate and government borrowing. This meant rates of return for simply lending out money-capital were now extremely low. Asset managers, institutional investors and NFCs now held massive pools of money-capital but needed a place to invest. Thus, investors flush with cash started picking up shares in NFCs which led to a general appreciation in the price of equity. This had the effect of supporting liquidity in stock markets and de-risking them, supporting its general appreciation in the past decade. This led to the conditions in the structure of accumulation which incentivized asset-managers to acquire large stakes in the entire U.S. economy.

In short, the era of the ‘New Finance Capital’ is defined by the proliferation of asset-based accumulation, market-based finance, large economically and politically influential asset managers and, crucially, a de-risking state that supports all these practices through many policies and institutions. In short, the New Finance Capital is more than just influential in contemporary capitalism, but is central to it. If it isn’t already obvious, this has major implications for contemporary development policy, especially in infrastructure. In order to show this, the next post will go further in depth into the form this takes in the elusive Wall Street Consensus.

References

Aquanno, Scott M. The Crisis of Risk: Subprime Debt and US Financial Power from 1944 to Present. Cheltenham, UK; Northampton, MA: Edward Elgar Publishing, 2021.

Braun, Benjamin. “Asset Manager Capitalism as a Corporate Governance Regime.” Preprint. SocArXiv, June 18, 2020. https://doi.org/10.31235/osf.io/v6gue.

Buller, Adrienne. “‘Doing Well by Doing Good’? Examining the Rise of Environmental, Social, Governance (ESG) Investing.” August 2020.

Fichtner, Jan, Eelke M. Heemskerk, and Javier Garcia-Bernardo. “Hidden Power of the Big Three? Passive Index Funds, Re-Concentration of Corporate Ownership, and New Financial Risk.” Business and Politics 19, no. 2 (June 2017): 298–326. https://doi.org/10.1017/bap.2017.6.

Gabor, Daniela. “The (Impossible) Repo Trinity: The Political Economy of Repo Markets.” Review of International Political Economy 23, no. 6 (November 1, 2016): 967–1000.

———. “Revolution Without Revolutionaries: Interrogating the Return of Monetary Financing.” SocArXiv, March 11, 2021. https://ideas.repec.org//p/osf/socarx/ja9bk.html.

———. “Securitization for Sustainability: Does It Help Achieve the Sustainable Development Goals?” Heinrich Böll Stiftung, October 2019. https://us.boell.org/sites/default/files/2019-11/DGabor.pdf.

Gabor, Daniela, and Jakob Vestergaard. “Towards a Theory of Shadow Money.” Institute for New Economic Thinking, 2016. https://www.ineteconomics.org/research/research-papers/towards-a-theory-of-shadow-money.

Howell, Michael. “The Return of Quantitative Easing.” Financial Times. Accessed July 5, 2023. https://www.ft.com/content/6d14cad1-00f2-4d39-969f-c01ae1860d34.

Kakabadse, Andrew, and Reeves Knyght. “The Quiet Power of the Big Three: A New Era of Corporate Governance.” IR Impact, July 2025. https://www.ir-impact.com/2025/07/the-quiet-power-of-the-big-three-a-new-era-of-corporate-governance/.

Maher, Stephen, and Scott M. Aquanno. The Fall and Rise of American Finance: From JP Morgan to BlackRock. London: Verso, 2023.

Marx, Karl. Capital Volume 3: A Critique of Political Economy. Translated by Ben Fowkes and David Fernbach. Vol. 1. London; New York: Penguin Books in association with New Left Review, 1981.

Footnotes

1. Series Announcement

2. Introduction: what’s the deal with capitalism and infrastructure?

State Theory

3. How Does the Capitalist State Support the Economy?

4. What is the Relationship Between the Capitalist Class and the Capitalist State?

Contemporary Asset Management: the New Finance Capital

5. The New Finance Capital and the Rise of Asset Managers

Public Private Partnerships

6. What even are Public Private Partnerships (P3s)

7. Public Private Partnerships and Global Development: The Wall Street Consensus

Case Study: Canadian Experience

8. The Canadian Council for Public Private Partnerships and ‘Enabling’ Fields

9. The Canada Infrastructure Bank and Institutionalizing P3s

If you want to support my writing, please consider becoming a paid subscriber or you could buy me a coffee.

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In the previous post of this series, I gave an outline of the ways the capitalist-state supports the capitalist class in their economic pursuits. But one of the things I pointed to was the fact that economic policies are products of a given historical period and relate directly to the ongoing practices of accumulation. While its true capitalist politics work to mediate the process of accumulation, we are still required to outline concrete processes in which this political mediation takes place.

In other words, who decides on the correct policies? How are decisions on which policy to implement made? How are policies designed? How does the state understand the necessary changes that must be made to match the evolving dynamics of accumulation? How is support built for these policies?1 Identifying the determination of state policy as a political-form mediating capitalist relations is crucial. But not outlining the process through which this symmetry between public policy and private accumulation takes place leaves out a lot of important details.
(Panitch 1994, p. 73-74). To fill this gap a little I'm going to outline a political function of the state I refer to as articulation.

Unfortunately, Marxists have often been the forebears of dogmatic abstract understandings of capitalist states. It is common for crude economistic readings of Marx to claim that the political actors merely act as the direct tool of the capitalist class, implementing their preferred policies without question as if they were handed a list of demands (Panitch 1974, p.4). This reading often comes from a particular passage in the Communist Manifesto which states:

the executive of the modern State is but a committee for managing the common affairs of the whole bourgeoisie

The passage is not completely erroneous but has led to less than nuanced depictions of capitalist politics. The late Canadian Marxist Leo Panitch in the late 1970s gave an over-the-top example of how we stereotypically think about the way policy decisions are made:

It's assumed that what one really means, in the modern Canadian context, is that E.P. Taylor [20th century Canadian business tycoon] , after having eaten two or three babies for breakfast, calls Pierre Trudeau every morning and, amidst satisfied belches, gives the prime minister instructions on what the government should accomplish that day. (Panitch 1977, p. 3)

This could basically be said today about Elon Musk, Peter Thiel or whoever (although in those cases it's more believable and I completely wouldn't be surprised if they did). Sidenote, I do also love the cover of Clyde W. Barrows Critical Theories of the State just because it's probably the best artistic representation of instrumentalist theories of the capitalist state.

Needless to say the relationship between state actors and capitalists is not as straightforward as typically stated. This extremely crude reading comes from a fundamental misunderstanding of the nature of the state and class itself. There's a differentiation but not complete separation between political functionaries and the capitalist class itself (Panitch and Gindin 2012, p. 4).

The ruling class comprises political actors and the capitalist class. This division is analytically necessary, but they are not mutually exclusive concrete roles. In fact, it's rarely the case in practice that these two worlds aren't mixed. Given the nature of capitalism, political actors and the capitalist class must have a close relationship, while at the same time being formally separated by relations of private property. However, policy implementation is not the result of a unidirectional influence by the capitalist class. This is because in the first place, there is not an easily identifiable and politically unified capitalist class with a pre-existing set of self-evident interests. Rather, as Stephen Maher argues, the crucial role of the capitalist state is precisely the process of “forming the class-wide interests of capital and mobilizing a constituency that is not already self-mobilizing” (Maher 2022, p.17)

In the abstract, all classes under capitalism have general interests, but in concrete practice, things are infinitely more complicated. By their nature, individual capitals engage in a wide variety of concrete accumulation processes and as a result have various concrete particular interests. However, beyond the most obvious foundational policies (protection of private property etc.), the abstract general interest of the capitalist class does not immediately exist.
This means the state must find ways to enable the mediation between the concrete particular interests of a widely varying capitalist class and implementing abstract general policies to support the system as a whole.

In other words, the general interest of a particular capitalist class is not something pre-existing but rather built-in cooperation with political actors, further emphasizing the porous demarcation of the political and economic spheres. States do not merely organize pre-existing objective relations but help to educate capitalist and form class interests. In other words, the state must find ways to build consensus and foster cooperation among capitalists to help formulate and articulate the general interest of the ruling class (Maher 2022, p.14).

This will never lead to complete consensus and there will always be winners and losers, content, and discontent among the class itself. This is the nature of the state’s role in articulating class power and precisely a deep contradiction of the often-zero-sum nature of policies. There will always be ruling-blocs which keep out certain class fractions, and this will lead to intra-class tensions.

Since this is a materially and historically driven process, the question becomes not only how the economic power of individual capitals is mediated and translated to political power, but what are the specific policies, organizations, practices and institutions used to achieve this. A theoretical framework of this process is provided by Maher’s theorization of the integral state.

Maher’s theorization of the integral state builds on Gramsci’s conceptualization of state power, which broadens its scope to include the often-externalized spheres of political and civil society. State power is quite diffuse, and the boundaries between nominally political and non-political (i.e., civil society which includes the ‘economy’) is often blurred and porous (Maher 2022, p.15). Political power is regularly expressed in more than just formal state institutions such as the legislature, the executive, the courts, and security forces. In fact, seemingly ‘non-political’ institutions within ‘civil society’ often act as informal yet vital conduits of state power.

As Gramsci argues, capitalist states construct political hegemony through “complexes of associations in civil society (as cited in Maher 2022. p. 15). This shows how nominally “apolitical” and generally autonomous institutions outside the formal state can still act as “vectors for the operation of state power in securing political order” (Ibid). This allows for the understanding of capitalists as actors that holds not only ‘economic’ but also direct and indirect political power. They do not hold political power formally but often essentially.
Corporations are not just economic institutions, but political ones. Through specific linkages, corporations work with the state to “mediate relations within the state complex itself, while participating in the organization of class power” (Maher 2022, p.20).

Maher’s theorization adds the crucial element missing from Gramsci’s original exposition, the institutional ramifications of the integral state. Maher’s developed theorization therefore defines the integral state as “comprised of the institutional networks and relays that mediate and integrate state and corporate power,” including “all the mechanisms through which corporate power is organized into class power and articulated to a hegemonic apparatus, including those on the terrain of civil society.” (Maher 2022, p.18). Different historical periods of capitalist development align with different articulations of this institutional matrix of class power and connect to different “organizational forms of state and corporate power" (Maher 2022, p.19). The linkages that can form the integral state include the bureaucracy, executive, legislature, industrial policy apparatus, civil society business associations, corporate governance structures, and so on.

In short, the integral state allows for an understanding of the broader reaches of capitalist class power that are often clearly readily apparent but not operationalized into a coherent theoretical framework. This allows us to outline the precise way ‘political’, ‘economic’ and ‘civil’ actors, who formally are separate in their function, together constitute a holistic unity of capitalist social relations and together expresses its power. That is, it allows us to show the political process through which economic relations are concretely established, how politics articulates the consensus that facilitates capital's subsumption of our relations of production. Before looking more directly into this process considering the role of P3s, I will outline the features of the contemporary period of accumulation.

Bibliography

Clyde W. Barrow, Critical Theories of the State: Marxist, Neo-Marxist, Post-Marxist (Madison, Wis: University of Wisconsin Press, 1993), 146

Leo Panitch, “Globalisation and the State,” Socialist Register 30 (March 18, 1994): 73–74, https://socialistregister.com/index.php/srv/article/view/5637.

Leo Panitch, “The Role and Nature of the Canadian State,” in The Canadian State, ed. Leo Panitch, Political Economy and Political Power (University of Toronto Press, 1977), 4, http://www.jstor.org/stable/10.3138/j.ctvcb5d84.4.

Stephen Maher, The Making of the Integral State, Marx, Engels, and Marxisms (Cham: Springer International Publishing, 2022), 17, https://doi.org/10.1007/978-3-030-83772-3_1.

1. Series Announcement

2. Introduction: what’s the deal with capitalism and infrastructure?

State Theory

3. The capitalist state and its support for accumulation

4. The integral state and making class hegemony

Contemporary Asset Management: the New Finance Capital

5. The New Finance Capital and the Rise of Asset Managers

Public Private Partnerships

6. What even are Public Private Partnerships (P3s)

7. Public Private Partnerships and Global Development: The Wall Street Consensus

Case Study: Canadian Experience

8. The Canadian Council for Public Private Partnerships and ‘Enabling’ Fields

9. The Canada Infrastructure Bank and Institutionalizing P3s

If you want to support my writing, please consider becoming a paid subscriber or you could buy me a coffee.

Subscribe now

The problem of the big bad capitalist state

A comprehensive historical and theoretical discussion of the capitalist state is far beyond the scope of this series. Needless to say, there's been a rich history of debates within the Marxian literature.1 This post, however, will focus on one aspect of the capitalist state, which is specifically how it supports accumulation and how this changes over time.

Before doing so we can briefly ask, what is the capitalist state? If political power is understood as the institutionalized capacity of a certain set of social actors to make decisions regarding what is to be done, how and by whom, then the capitalist state is the specific form this takes under capitalism. Capitalism is a class society, and these are defined by asymmetrical relations of power upheld through control over the allocation, distribution and appropriation of social product. Furthermore, the state is not merely one unified actor but comprises a set of apparatuses which themselves are in contestation with one another.

Finally, the capitalist state is not merely an empty neutral vessel through which anyone's interests can be represented. There are in fact relational presuppositions that constitute the capitalist state as such, and to change them is to make the state not a capitalist one. Nonetheless, institutions within the capitalist state and their actions are products of class struggle.

How state capacities pport capitalist economies

The main focus of this post is the question of how the capitalist state supports capitalist accumulation. In other words, what are the general policies and practices of the capitalist state which are necessary to support modern day economic relations? In outlining this, it's helpful to think of two functions played by the state, one as a regulative authority and the second as a market-actor.

As a regulative authority, the capitalist state sets out the basic relational and institutional practices necessary for a capitalist economy to function. Most important is the establishment of private laws giving rights to commodity owners and public laws which establish the relationship between individuals and 'society' (i.e. the state). To protect these relations, the institutionalization of systematic violence is established through the creation of police to protect property and certain peoples while terrorizing others. Furthermore, the military is established for both domestic and international protection of the ruling classes.

Of course, states are also responsible for the provision of necessary infrastructure, but that will be discussed more extensively as we go forward. The state also ensures that a system of schooling is established in order to ensures the base level of competence for individuals to enter the economy. These are some general examples that are by no means exhausted and of course entail endless variations in concrete configurations (Panitch 1977, p. 3-4).

However, there are more directly economic regulatory practices. The state must establish a national form of value, a specific monetary unit of account. The necessary form this is organized is through the establishment of national payment systems. Payment systems refer to the financial infrastructure and set of payment instruments, procedures and rules that enable the transfer of funds (monetary value) in a given economy. It allows for the linking of bank accounts and the settlement of payments with bank deposits, the most common form of money.

States are responsible for managing these national currencies. Ensuring they act as a stable form of value is essential to secure relations of production. Specifically, central banks are responsible for assuring stability of exchange relations through minimizing inflation, unemployment, and other disturbances. Whether they do this well is another story.

Finally, markets do not merely appear in capitalist. Despite the fantastical notion of the autonomous establishment of "free markets", markets are social constructions that need to be supported by state power. Not only in the obvious sense that in the last instance the baton, tear gas and guns must be used to support them. Rather, a system of laws, norms and regulations must be established. That is, states are active in the construction of markets.

Nonetheless, states are not merely ‘regulative’ actors (Burnham 1991; Clarke 1992).2 They do not simply set the stage for accumulation to take place or remove barriers through policy but uphold markets through engaging directly in commodity exchange. The idea that states are the 'last resort' when markets fail has been around pretty much since capitalism's birth. With returning forms of debt monetarization since the 2008 crisis, central-banks are increasingly becoming the ‘market-makers’ of last resort (Gabor 2021, 6).

The deep connection between states and the liquidity of bond markets connects the regulation of capitalist relations to the direct engagement of states in markets themselves (Gabor and Bran 2016, 617). Thus, highlighting these processes gives a fuller scope of the state’s tools used to perform its functions. States are thus 'market-makers' in the broad sense that they engage directly in commodity exchange in order to make sure markets are functioning well. Why this is important will become obvious in following posts.

Fiscal powers of the capitalist state

The roles of regulation and market-making would be impossible to fulfil if it were not for the particular fiscal powers of the state. Typically when discussing actors in a given social class, we make reference to the form of revenue they earn. In Volume 3 of Capital Marx discusses the 'Trinity Formula' in which capitalist earn profit-interest, the worker earns wages, the landowner earns rent.

What then would be the forms of revenue earned by the state? This would be its capacity to tax. It would seem then that the state is bound to the same limits as any actor, whether they are financiers, businesses, landowners, or workers, in that they are limited in their fiscal capacity.3 However, this common mistake comes from a misunderstand of the nature of money and its relation to the state.

I don't have the space to fully flesh out my answer to what is money, but I will briefly outline its relationship to the state. Money is the universal equivalent unit of value, it acts as the medium through which the value of commodities is represented.^[4-1] Value is the quality of commodities as products of a certain portion of (abstract) social labor.^[6] The character of value speaks to the fact that all human productive activity is mediated by the human labor, and this metabolic relationship between humans and nature is itself mediated by the given social relations of a historical period in question.

Money is not the the particular physical form taken - it's not metal, paper, plastic, nor the digital/analog accounting entries themselves- it's the unit of value (Wray 1999). The nominal form of value- a pound, a dollar, remumbi etc.- this is what 'money' is. It's the essential element that makes money what it is, the form it takes does not need to be a physical object (Reuten 1988 ; Matthews 2000). Money is thus the abstract symbol of value, of social labor as an autonomous power.

Money, rather than being something external to the concrete form of political power, is rather inherently constituted by it. States issue the national form of money which is the basis for private accumulation. Specifically, the state establishes in law and practice what is the money-form of a given country. Private accumulation is reliant on publicly legitimized money.

However, what's particularly important about this is that this money is itself a liability of the state. This idea of money being the liability of the state is often confusing to a lot of people at first, including myself. How are say, coins a liability, if they aren't a debt to the state in the form of a loan?

What helps to explain this is when we connect this to taxation. The state agrees to accept this money as payment for taxes. This means that any form in which the recognized nominal unit of value takes, (coins, paper, bank-deposits) because something that the state is required to accept as payment for fines and taxes (Davis 2010, p. 414)

Now we can return to the question of revenue. In technical terms, there is no limit to the amount of money the state can create for itself. There are real practical and political limitations, but since the state issues its own money it can simply issue more money and thus cannot default on debt in its own money. This does not mean it should spend whatever it wants, but the idea that it functional can is important, because we can later investigate why it does or does not use its full monetary power to backstop the economy.

While taxation is critical, the fiscal powers of the capitalist state would be incomplete without understanding the role of state debt. Governments can issue debt in the form of bonds (a liability) backed by its taxation capacity, and political hegemony (an asset) (Davis 2013, 48) (see table above). In general, government bonds are thus considered a highly secure asset, providing a center of gravity for the entire financial system. The confidence of market-actors in the currency itself also follows to government debt, as states can run massive deficits if borrowers believe they will ultimately pay it off (Davis 2013, 54). This gives some states the option to attract funds through the issuance of debt without necessarily increasing the tax burden.

In general bonds can function as a financialized form of surplus redistribution in which the state can help actors by choosing to who they are issued, effectively redirecting surplus to them. Since debt management and payment is a priority for capitalist states, debt holders are effectively the recipients of state tax resources. The words of this illustration titled The Janus Faces of the Modern State capture exactly how the fiscal powers of the state are used as a weapon of class power:

What it grants the working class (taxes) | What it grants the upper ten thousand

Taxes are much less about ‘funding’ the government than a tool of class management. It’s clear it allows for the upper redistribution of wealth, but it’s also a direct means of class compulsion. The use of taxation to establish colonial systems by Western states is a well documented example of its use as a tool of class power (Forstater 2005).

Capitalist states are constantly evolving

As we delve more concretely into the history, it will be clear why understanding state fiscal powers will be relevant for the politics of infrastructure finance. However, it's important to note that these capacities developed over time. These functions and the policies are products of the dialectical interaction between capitalist social forms and their historical development over time (Maher 2022, 3). The subsumption of our social relations to capitalism, a process fundamentally realized and mediated by state policies, always takes on changing historical forms.

As new contradictions and needs grow out of ever-changing relations of accumulation, so too do the roles of the state as a result. The articulation of new modalities through which the social relations of capital are realized materially is the process through which states develop new institutions, policies, and capacities to deal with ever present contradictions of capital.

This means precisely that periods of accumulation evolve not simply because of changing dynamics within the private sector but state actions as well. Rather than being a passive actor the capitalist state is “an active force with its own internal dynamism” (Maher 2022, 13). Marxian analyses have referred to this as the ‘relative autonomy’ (Poulantzas 1978, 161) of the state, the fact that it maintains “autonomous capacities to act on behalf of the system as a whole” (Panitch and Gindin 2012, 4). State actors both deal with the fallout of social crises and are pro-active, meaning they are forward-looking in their support for capitalist social relations. Historical change and the co-dependent evolution of the political and economic will be a central theme going forward in my analysis of infrastructure provision.

Before delving into the real substance of this series, there's one central question that needs to be addressed. That is, how do states know what policies are required for a given period of accumulation? What is the relationship between the political class and ruling class? How do state actors know what needs to be done? This will be the subject of the next piece in the series.

References

Burnham, Peter. 1991. “Neo-Gramscian Hegemony and the International Order.” Capital & Class 15 (3): 73–92. https://doi.org/10.1177/030981689104500105.

Clarke, Simon. 1992. The State Debate. 3rd ed. London: Palgrave Macmillan Limited.

Davis, Ann. 2010. “Marx and the Mixed Economy: Money, Accumulation, and the Role of the State.” Science and Society 74 (3): 409-428. 10.1521/siso.2010.74.3.409

Davis, Ann E. 2013. “The New ‘Voodoo Economics’: Fetishism and the Public/Private Divide.” Review of Radical Political Economics 45 (1): 47–65. https://doi.org/10.1177/0486613412447057.

Gabor, Daniela. 2021. “Revolution Without Revolutionaries: Interrogating the Return of Monetary Financing.” SocArXiv. https://ideas.repec.org//p/osf/socarx/ja9bk.html.

Gabor, Daniela, and Cornel Ban. 2016. “Banking on Bonds: The New Links Between States and Markets.” JCMS: Journal of Common Market Studies 54 (3): 617–35. https://doi.org/10.1111/jcms.12309.

Forstater, Mathew. 2005. “Taxation and Primitive Accumulation: The Case of Colonial Africa.” In The Capitalist State and Its Economy: Democracy in Socialism, edited by Paul Zarembka, vol. 22. Research in Political Economy. Emerald Group Publishing Limited. https://doi.org/10.1016/S0161-7230(04)22002-8.

Matthews, Peter Hans. 1996. “The Modern Foundations of Marx’s Monetary Economics.” The European Journal of the History of Economic Thought 3 (1): 61–83. https://doi.org/10.1080/10427719600000004.

Maher, Stephen. 2022. The Making of the Integral State. Marx, Engels, and Marxisms. Cham: Springer International Publishing. https://doi.org/10.1007/978-3-030-83772-3_1.

Panitch, Leo. 1977. “The Role and Nature of the Canadian State.” In The Canadian State, edited by Leo Panitch, 3–27. Toronto: University of Toronto Press. http://www.jstor.org/stable/10.3138/j.ctvcb5d84.4.

Panitch, Leo, and Sam Gindin. 2012. The Making of Global Capitalism: The Political Economy of American Empire. Brooklyn, NY: Verso.

Payments Canada. 2022. The Role of the Canadian Payments System. Ottawa: Payments Canada.

Poulantzas, Nicos A. 1978. Classes in Contemporary Capitalism. London: Verso.

Reuten, Geert. 1988. “The Money Expression of Value and the Credit System: A Value-Form Theoretic Outline.” Capital & Class 12 (2): 121–41. https://doi.org/10.1177/030981688803500108.

Williams, Michael. 2000. “Why Marx Neither Has Nor Needs a Commodity Theory of Money.” Review of Political Economy 12 (4): 435–51. https://doi.org/10.1080/09538250050175127.

Wray, L. Randall. 1999. “Theories of Value and the Monetary Theory of Production.” SSRN Electronic Journal, ahead of print. https://doi.org/10.2139/ssrn.150497.

1. Series Announcement

2. Introduction: what’s the deal with capitalism and infrastructure?

State Theory

3. The capitalist state and it’s support for accumulation

4. The integral state and making class hegemony

Contemporary Asset Management the New Finance Capital

5. The New Finance Capital and the Rise of Asset Managers

Public Private Parnerships

6. What even are Public Private Partnerships (P3s?)

7. Public Private Partnerships and Global Development: The Wall Street Consensus

Case Study: Canadian Experience

8. The Canadian Council for Public Private Partnerships and ‘Enabling’ Fields

9. The Canada Infrastructure Bank and Institutionalizing P3s

If you want to support my writing, please consider becoming a paid subscriber or you could buy me a coffee.

Subscribe now

What’s infrastructure got to do with capitalism?

A defining feature of modern capitalism has been the growing necessity of cooperation between the state and capitalist actors to meet the needs of the economy, in other words the needs of capitalist accumulation. While the public and private sectors have always been 'in cahoots', forms of public and private cooperation differ insofar as they each bear the mark of specific socio-historical period of capitalist accumulation. That is, the way in which capitalists and state actors organize the capitalist system always takes on a specific set of practices based on the given historical moment in question. Public policy is a product of the period in which it's implemented, it cannot be simply abstracted from it.

A critical element of the contemporary period of capitalism has been the rise of a New Finance Capital (N.F.C) as argued by Stephen Maher and Scott Aquanno, in which market-based finance, asset-based accumulation, and asset management are central to relations of industrial accumulation.1 These practices will all be discussed as the series goes on, but for now it's important to understand that different practices of profiteering in the private sector must be matched by policies coming from the public sector.2 The dominance of these phenomena has necessitated changing state policies to match the changing modes of accumulation.

Am example of a policy space in which the trends in accumulation are matched by a specific set of policies are those surrounding the financing, producing and operating of *infrastructure*. Policy surrounding infrastructure provision has consolidated into a model supporting the contemporary power of asset-managers, contemporary finance capitalists. Before going forward it's important to briefly define what I mean by 'infrastructure'.

Infrastructure in political economy refers to the foundational material structures of a society. The word "infra" from Latin literally means "below". Infrastructure is the skeleton of the 'real' economy under capitalism, the foundation which acts as the basis for commodity circulation and profit making to take place.3 In this sense, infrastructure typically includes roads, bridges, damns, water and sewage systems, canals, railways, subways, harbors, airports, power plant, grids, communications, wind turbines, solar panels, oil and gas and so on.4

Now why should we care about infrastructure policy anyways? Why does it matter today? Let me paint a picture for you. It's the mid-2000s, neoliberal hegemony has been around for at least 20 years and just came out of the 1990s where it colonized the entire globe.

Decades of shock therapy, structural adjustment programs, austerity and gutting of state capacity has led to less infrastructure being built. Since in the past the state largely spearheaded these projects, it's lack of initiative in this field led to the growth of an infrastructure gap.5 This is term you’re going to be hearing a lot in this series.

By the mid 2000s, global development experts began warning of a growing “infrastructure gap”, a disparity between the financing put forward to build critical infrastructure versus the amount needed.6 There’s a lot of different estimations as to the actual monetary value of this ‘gap’.

Widely accepted estimates come from the Global Infrastruture Outlook, a non-profit organization funded by G20 states, which provides the statistic used by the OECD and other major development institutions. The total calculated investment needed globally stands at 97 trillion USD by 2040. This is calculated by looking at sectoral needs in energy, air travel, rail, water, road, ports, and telecommunications.

However, the the amount being currently invested in allegedly 79 trillion. It is estimated that by 2040 the global gap in spending will be $15 trillion dollars, with spending as a proportion of GDP being off by about 3.5% a year. By the 2010s and today, fixed this gap has become a central global issue, discussed by states, financiers and multilateral institutions alike.

The project was done in 2017 however, which at this point is nearly a decade ago. Now in 2025 the figures are larger, with the World Bank stating we need closer to 4.5% of GDP a year or around 1.5 trillion annually. This is not only a matter of fixing existing infrastructure, but building neccesary infrastructure that people still don’t have access to. According to the World Bank:

nearly 700 million people have no access to electricity, 2.2 billion lack drinking water, 3.5 billion lack safe sanitation, 1 billion live more than 2 kilometers from an all-season road, and a third of the global population--2.6 billion people--remain digitally unconnected.

Therefore, providing infrastructure is also a matter of dealing with under-development faced by the periphery that has been charateristic of the capitalist system since it’s inception.

Share critic of political economy

Now we have to discuss the process of actually getting infrastructure made. So to get something built in capitalism, you need money and access to the means of production. Regarding the first part, someone needs to fund these projects. This in theory, shouldn't be a problem, because for over a decade there's been billions of dollars in excess capital globally, reffered to as dry powder. Dry powder is cash or near-cash assets that businesses (financial and non-financial) are holding rather than investing.

In terms of having access to the means of production, I'm referring to the fact that you need not only the physical materials but expertise to actually building things like roads, buildings and so on. Because in Western capitalist systems the state has little to no capacity to do these things, this means the private sector must instead.

This brings us to the important question. What then are the policies, practice and institutions, the forms of public and private cooperation, surrounding modern day infrastructure provision? They are captured by the Wall Street Consensus (WSC), a term coined by critical finance economists Daniela Gabor.7 At it's core, the WSC framework is based on the premise that if you want to get infrastructure projects done, states need to 'court' private sector expertise and capital. The mix of using public and private funds also goes by the name “blended” finance.

That sounds nice, but what does it practically mean to make these investments attractive? Why aren't they attractive now? In short, the argument is that as it currently stands, investment in infrastructure projects do not meet the 'risk-profile' of most investors.8 It's too risky, and the reasons for this can be complex.In order to transform infrastructure projects into 'bankable projects' it's suggested to use a "tried and true" practice of public-private partnerships (P3s). P3s are agreements between government and private sector entities to deliver a public good or service. There's an important catch however. The OCED defines P3s as:

“an agreement between the government and one or more private partners according to which the private partners deliver the service in such a manner that the service delivery objectives of the government are aligned with the profit objectives of the private partners and where the effectiveness of the alignment depends on a sufficient transfer of risk to the private partner”9

Here's the key points to know about P3s. The public policy goal must align with the profit objectives of the private sector while at the same time transfer risk to private actors. That risk is transferred from public to private hands is a key benefit touted of P3s.

But wait a minute. How can it be that the private sector is supposed to be taking on more risk when they are saying that these projects don't meet their risk profiles in the first place? As will become clear in the following posts, the theory and practice of P3s couldn't be further apart.

In practice, the relation of P3s to risk is the opposite of what is argued to happen: the state has to absorb risk for the private sector so that investors will be willing to finance projects. They must de-risk these projects. What does ‘de-risk’ mean? Basically that investors must be certain they will receive revenue and returns on their investments. The many ways in which this is achieved will be discussed in a following post.

The goal however, is to make 'investable' projects that can be financed, and in particular involves transforming the loans to finance infrastructure into securities of varying risk profiles.6 This will be crucial for understanding the connection of infrastructure financing to asset-based accumulation and market-based finance.10

This is part of the wider project by asset managers such as BlackRock to promote infrastructure as an asset class. As briefly discussed in a previous post, the push is to make infrastruture a pillar of investors portfolios, moving from the 60/40 model (60% equities 40% bonds) to a model where ‘alternative assets’ account for a quater of investments.

P3s and infrastructure assetization is also seen as the solution to funding the 'green transition' and decarbonization, being presented as the liberal alternative to the "Green New Deal".11

In short, asset-managers and institutional investors have made it clear: if states want private capital to flood into infrastructure projects, these projects need to be de-risked.12 This is achieved through policies which in one way or another transfer financial risk and responsibility onto the balance sheet of state institutions, often informally.13

What I bring to the table is somewhat of a fusion of the Post-Keynsian and Marxian approaches to infrastructure development. Gabor and Braun identify the financial dominance of asset managers and it's growing connection to state policy. However, unlike Maher and Aquanno (who do not discus infrastructure assetization), they lack a more comprehensive theorization of the state and class politics.

While Gabor and Braun identify the economic and political power of contemporary asset managers, they less so articulate how economic (or structure power) is mediated into political power. While much of that is there, it's not the focus of their work.

This is where Stephen Maher’s theorization of the capitalist state and specifically the integral state helps to identity “concrete linkages” between states and corporations through which policies are constructed, in this case, P3s and their surrounding organizations and institutions.14

It captures how state power is articulated through connections between actors formally separated into ‘political’ and ‘civil’ society as a joint venture by the state and capitalists. Corporations are thus seen as political entities, and though not ‘formally’ part of the state are nevertheless crucial foundations for the articulation of capitalist class power, both ‘economic’ and ‘political’.

Crucially, this highlights the importance of state autonomy. Rather than being seen as merely a passive recipient or ‘captured’ by class demands, the state is theorized as an active player. It works both to organize and educate corporate elites by bringing them into the policymaking process and building class consensus. This is important to highlight, as WSC policies using P3s have become a central focal point of returning forms of industrial policy.15

Thus, synthesizing the work of Gabor on P3s with that of the state by Maher can provide a strong framework for understanding these dynamics. Going forward, the following posts will build on connecting the work of these authors. However, I can give a preview of what will be shown.

In the case of the WSC and contemporary infrastructure policy, P3s are a crucial mechanism through which the state facilitates the articulation of class power. The literature on P3s has identified the necessity of an ‘enabling field’ of institutions, laws, and organizations amongst other factors to help facilitate the creation and implementation of P3 projects.

Gabor identifies many of these enabling entities, but Maher provides a framework from which to integrate it into a theory of the state. Identifying these as not only technical but political spaces in which support for P3s and the WSC is articulated helps us to outline more overtly how political hegemony is achieved.

The following series of posts therefore will have a dual purpose. The first is to understand the political economy of infrastructure provision, the second is to highlight it's connect to the contruction of class hegemony.

I will argue that P3s are not only economic agreements between public and private entities, but that P3s and the extensive network of institutions, legal frameworks, and organizations that support their implementation are part of the integral state apparatus of the contemporary capitalist state. This allows them to act as a concrete mechanism which facilitates the articulation of state and corporate power and thus class power altogether. In the case of the WSC, the ways in which P3s articulate national and inter-national capitalist class power vary but have the common goal of the securitization of infrastructure.

The series will be broken down into four broad sections which will encompass multiple posts.First, I will engage with a Marxian theorization of the state, starting with a general outlined of how it supports capital accumulation followed by a deeper engagement with the theory of the integral state. Second, I will outline what constitutes the current period of the New Finance Capital, showing the changing forms of accumulation and the roles of states.

Third, I will discuss P3s, their origins, and contemporary status as part of the WSC. Finally, to illustrate the integral state role of P3s, I will look at a case study of ‘enabling’ institutions and organizations of contemporary P3s in Canada. I will analyse the Canada Infrastructure bank, the newest federal institutions made to support P3 projects, and the Canadian Council for Public-Private Partnerships, a civil society organization that links various actors from the public and private sector to build consensus around P3 policies.

All together, I will demonstrate how P3s are not just contracts for individual projects but are in fact part of the large apparatus of the contemporary state and work to bring together the capitalist class to reproduce their own hegemony.

As of a few days ago, the series is officially complete. Given that I do not have much time for a conclusion, I will leave it as is. Thank you for those who supported me and I hope you enjoyed it. Bellow you will find the updated table of contents to all of the parts in the series.

If you enjoy my work and want to support it further, you can become a paid subscriber to my blog make a one time donation of a revolution here.

1. Series Announcement

2. Introduction: what’s the deal with capitalism and infrastructure?

State Theory

3. How Does the Capitalist State Support the Economy?

4. What is the Relationship Between the Capitalist Class and the Capitalist State?

Contemporary Asset Management: the New Finance Capital and the Wall Street Consensus

5. The New Finance Capital and the Rise of Asset Managers

6. Public Private Partnerships and Global Development: The Wall Street Consensus

7. (BONUS) Method: Marx’s Critique of Political Economy and Capitalist Relations

Case Study: Canadian Experience

8. What even are Public Private Partnerships (P3s)?

9. How the Capitalist Class Organizes Itself: The Canadian Council for Public Private Partnerships and ‘Enabling’ Fields

10. New Finance Capital and the “Long-Term” Plan: The Canada Infrastructure Bank and Institutionalizing P3s

Despite having started posting content more consistently this year, I haven't spoken too much about my main area of research which is the political economy of infrastructure. To be honest, this is partially because it's still something I'm trying to understand. During my two year MA in Political Economy, I mostly spent my time studying finance and labor. The former involved engaging with the academic literature on financialization and the Marxian theorizations of finance. My views on the questions of money, credit, financialization, and corporations changed a lot within that short period of time. When it came time to write a thesis, I chose instead to do a major research paper because it allowed me to take more courses rather than put all my energy into one project.

When it came to writing my paper, I chose to build on research I actually did at the end of my BA which followed the financialization of infrastructure projects in Canada. Since my research on financialization was touching on so many different issues, I chose a project that allowed me to bring a lot of key theoretical and empirical threads together. This included the nature of state financing, asset management, and trends in global development studies. Therefore, I was able to write one paper which also felt like a series of smaller papers. All connected, but also able to exist somewhat in isolation.

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In the end, I came out of my MA with a paper that I was happy with, not because it was perfect, but because it was the start of something to be further developed. In the spirit of that, I've been meaning to turn my major research paper into blog posts. This means the research will get out to more people, and that I will have a few weeks (maybe months) of content to post. Since I will be starting an intensive PhD, I don't know how often I will be able to post during my course work, so turning legacy work into content is a great workaround.

Also, the political economy of infrastructure (as boring as it sounds) is critical to contemporary capitalism. Capitalism is constantly in the process of subsuming and resubsuming elements of our social production into it's relations of accumulation.

The dynamics of infrastructure production under capitalism are present even in places you wouldn't think, such as the ongoing genocide of Palestinians. The revelation of plans to turn colonized territory into the “Gaza Riviera” is horrific, but not surprising to those paying attention.

This is all part of a larger set of trends. As the effects of neoliberal austerity are being felt more and more in recent years, there's been a wave among capitalist states across the globe to push for filling the growing "infrastructure gap". The funding, financing, constructing and operating of infrastructure has become a central concern of both states *and* private industry in the past 30 years. For reasons that I will build on in the following posts, it's only intensifying.

The work was mainly written in the summer of 2023, so of course a lot of things have changed. Furthermore, my thought on these issues has changed and is always changing. Therefore, nothing is definitive. Nonetheless, if I wait for perfect I will get nothing done. The series will tentatively be divided as follows. It will comprise four broad sections which contain multiple smaller posts. It should be coming out in the next few days, so keep an eye out!

1. Series Announcement

2. Introduction: what’s the deal with capitalism and infrastructure?

State Theory

3. How Does the Capitalist State Support the Economy?

4. What is the Relationship Between the Capitalist Class and the Capitalist State?

Contemporary Asset Management: the New Finance Capital and the Wall Street Consensus

5. The New Finance Capital and the Rise of Asset Managers

6. Public Private Partnerships and Global Development: The Wall Street Consensus

7. (BONUS) Method: Marx’s Critique of Political Economy and Capitalist Relations

Case Study: Canadian Experience

8. What even are Public Private Partnerships (P3s)? A Case Study of Canada

9. The Canada Infrastructure Bank and Institutionalizing P3s

If you want to support my writing, please consider becoming a paid subscriber or you could buy me a coffee.

PPC currently operates two strategically located ports: Cristobal in the north, and Balboa in the south. The ports will be run on a 25-year concession deal, as all shipping and port infrastructure in the country is overseen Panama Canal Authority, a state-run agency. A concession is a form of contract typically used in different public-private partnerships (P3s). If you haven’t heard of P3s before, it’s one of the most important types of general agreements today between corporations and states.

P3s are defined by the OECD as agreements between government entities and private actors to deliver public goods and/or services in a manner that “the service delivery objectives of the government are aligned with the profit objectives of private partners and where the effectiveness of the alignment depends on a sufficient transfer of risk from the private partner.”1 In practice, the reverse usually happens, and P3s are often about the public sector taking on the risk of project failures, not the private sector. More on that in a second.

Panama has been in the news ever since Trump pressured President Mulino to rescind their involvement in the Chinese Belt and Road project. This is important given that Panama was the first Latin American state to join the BRI. The sale of the port to BlackRock isn't just about economics, as the political pressure from Trump's threats of annexation prompted CK Hutchison to consider the sale:

“When President Trump won and he started making noise about annexing Canada and Greenland and Panama, the pressure was put on the Panamanians,” one person familiar with the deal said. The person added that CK Hutchison “realised that it was a political headache and they wanted to do something.” (Financial Times 2025)

Now, it might not seem to be that big of a deal. Another acquisition by BlackRock, so what? Don’t they own everything already? Funnily enough there was confusion about the deal to the point that Larry Fink himself said when the news broke out, his kids called him asking “BlackRock bought the Panama Canal? Can we go on it?”.

Fink clarified that the deal is about a lot more than just the canal, as they are purchasing about 44 ports around the globe. He also says the deal is another great example of private capital coming in and filling the demand for infrastructure. Ports, according to Fink, are a “great stable business”.

Now, unless you study infrastructure financing, it’s hard to appreciate what is being said here. This isn’t an isolated example of asset managers purchasing infrastructure. Infrastructure has been on the radar of big asset managers over the past two decades. In fact, yesterday in Fink’s annual letter to investors state that the traditional 60/40 portfolio split (between 60% stocks and 40% bonds) “may no longer fully represent true diversification”. Instead, he states:

The future standard portfolio may look more like 50/30/20 — stocks, bonds and private assets like real estate, infrastructure and private credit.

In fact, this isn’t just Fink but other massive investors that are pushing towards a new divide of assets. This 50/30/20 split is actually a lot closer to what many institutional investors are already doing, and while it gives a lot of returns, there are risks from a lack of liquidity.

It’s not easy for most investors to get into infrastructure investment however, as most aren’t publicly offered like shares in companies or bonds on money markets. That’s why BlackRock has been purchasing a lot of private equity companies (Global Infrastructure Partners, Preqin and HPS Investment Partners) to gain access to these markets. Fink mentioned the importance of private market’s in his recent letter to investors:

Most of us associate "markets" with public markets—stocks, bonds, commodities. But you generally cannot buy shares in a new high-speed rail line or a next-generation power grid on the London or New York Stock Exchange. Instead, infrastructure projects are typically investable only through private markets.

Private markets are, as their name suggests, private. For individual investors, they often require higher minimum investments. And even when the minimums are lower, investing is often limited to people with a certain income or net worth.

Nonetheless, there’s a bigger history here with changes in developing financing that combines with the growth of asset managers. The late 1980s to early 1990s was the era of the Washington Consensus (WC), spearheaded by the global north and institutions such as the International Monetary Fund, OECD, World Bank, and so on.

The WC focused on the “Holy Trinity” of market policies, including “macroeconomic stabilization through lower inflation and fiscal discipline; liberalization of trade and capital flows, of domestic product and factor markets; and privatization of state.”2

However, after the repeated crises of the 1990s, including especially the 1997 East Asian crisis, the model began to fall into question. The 2008 financial crisis was the final nail in the coffin, in that it really forced policy makers to rethink their strategy.

The global development policies around infrastructure have consolidated into a model supporting the contemporary power of asset managers. This set of policies, institutions, and practices have been dubbed the Wall Street Consensus (WSC), a term coined by critical finance economist Daniela Gabor. The WSC is pitched as a solution to both the world’s global infrastructure gap and the savings glut through attracting private capital from institutional investors and asset managers to finance infrastructure projects. By the mid-2000s 2000s global development experts began warning of a growing “infrastructure gap”, a disparity between current vs needed infrastructure in particular countries and across the globe.

To combat this, the WSC promotes projects by transforming public infrastructure/services into bankable investments using public-private partnerships (P3s). A fundamental component of making these projects ‘investable’ involves transforming the loans to finance infrastructure into securities of varying risk profiles. The creation of an infrastructure asset class promotes practices of asset-based accumulation and market-based finance. The use of P3s is pushed not only to ‘crowd-in’ private finance, but also to achieve goals such as a green transition and decarbonization, linking it intimately to climate policy as a crucial pillar of its political appeal.

In theory, this investment gap creates the perfect opportunity for institutional investors and asset managers to unload their excess money-capital and resolve the present savings glut they are facing. In practice, to attract private financing, the state must ‘de-risk’ projects to fully, or nearly, guarantee revenue streams for private actors. Asset managers and institutional investors have made it clear that if states want their capital for infrastructure investment projects, they need to ensure that these projects are sufficiently de-risked. This is achieved through policies that, in one way or another, transfer financial risk and responsibility onto the balance sheet of state and/or quasi-state actors.

Even though most people stereotype finance as ‘shortermist’, asset managers are focused on long-term value creation. As BlackRock outlines in a report entitled “The Making of Long-Term Capitalism”, value creation isn’t about the short-term pump and dump of assets. Rather, it’s about finding a source of revenue that will be lucrative for years to come. This is where infrastructure investments come in.

Can you see the connection now? The ongoing deal with BlackRock is merely an extension of these practices. In fact, BlackRock was ahead of the curve, releasing a report as early as 2015 titled “Infrastructure Rising: An Asset Class Takes Shape”, pushing many of the policies that would become central to the WSC.3 In this case, there’s less clear indication of state support from the Panama government. Two lawyers are suing for the contract to be cancelled for the two ports, claiming they are unconstitutional.

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Now I actually wrote this piece a few weeks ago but put it to the side, but now, I decided it would be good to publish it given recent updates. It seems China is fighting back against the sale. A few weeks after the initial annoucement, CK got backlash from Ta Kung Pao, a Chinese state-run newspaper in Hong Kong which stated the deal “betrayed and sold out all Chinese people”.

Al Jazeera is stating that Xi was upset because he was hoping the ports would be used as a bargaining chip with Trump. They also report that China is apparently looking to investigate the company for antitrust (hilarious words to use about a ‘socialist’ state) to “protect fair competition in the market and safeguard the public interest”.

The owner of CK Hutchison is 96-year-old billionaire and founder Li Ka-shing. He built his reputation as a businessman navigating the West for the Communist Party. He had a close relationship with Deng, but since the rise of Xi, his influence has waned.

As of April 3rd, the day after Trump’s massive tariff announcement, the deal has been indefinitely delayed. Given all that’s going on Trump hasn’t commented on it yet, but it might come soon. I will keep an eye on this story and continue to post about it in the future. I think sometime next week I will comment on Fink’s letter to investors.