ABSTRACT
This chapter argues that the UK played a key role in facilitating the transition to finance-led capitalism and financialization, and that the financial instruments popularized by private equity (PE) through leveraged buyouts spill over to affect the corporate sector more broadly. Observers of comparative political economy have outlined changes in the nature of capitalism that have since the late 1970s. It is suggested that full-employment capitalism was replaced by a finance-led capitalism centered on neo-liberalism. The chapter outlines the negative implications for work and employment as PE instruments enable and encourage investors to appropriate value from firms. It demonstrates the arguments with empirical material drawn from two detailed case studies relating to the AA under PE ownership and the collapse of the British Homes Stores (BHS) pension scheme. The acquisition of BHS by Sir Phillip Green and the Taveta Investment Group followed by its sale to Retail Acquisitions illustrates the regulatory weaknesses in the UK's finance-led capitalism.
