The Chartwells/Compass free school meals package scandal is a teachable moment about capitalism. 1/ Why do so many families need free school meals? Because real wages have stagnated while profits soared...
2/ Why packages and not vouchers? Because the big outsourcers like Compass *lobbied the government* against vouchers, claiming they could use their scale to provide cheaper food...
3/ Here's the business model in a single graphic. Buy food as cheap as possible. Achieve growth by replacing/acquiring smaller, higher-quality providers, hire the cheapest possible labour...("we focus relentlessly on costs")... but it's not done to make huge bottom line profits
4/ If you look at a normal year, Compass and other big outsourcers make relatively meagre profits... they grow, and drive dividends, by acquisition - not by innovation... (except in ways to cut costs)...
5/ Businesses like this were created by the state. They're not the product of the market, or consumer choice, but of regulation. They survive on wafer thin margins because that's how the govt structured the market...