Titans: Tracing the rise and the politics of asset manager capitalism

Benjamin Braun and Adrienne Buller also in Phenomenal World (image: Joëlle Tuerlinckx, ‘the biggest-surface-on-earth scale 1:1’ (‘la-plus-grande-surface-au-monde scale 1:1’), 2006)

In mid October 2021, when BlackRock revealed its third quarter results, the asset management behemoth announced it was just shy of $10 trillion in assets under management. It’s a vast sum, “roughly equivalent to the entire global hedge fund, private equity and venture capital industries combined,” and a nearly ten-fold increase in only a handful of years for a firm that first broke the $1 trillion mark as recently as 2009. Since the 2008 Financial Crisis, we’ve witnessed in BlackRock the rise of an undisputed shareholder superpower, but the firm, while exceptional, is not alone. Alongside its closest rival Vanguard, these two firms control nearly $20 trillion in assets and a combined market share of more than 50 percent in the booming market for exchange-traded funds (ETFs). And they’re not just big—they’re “universal,” controlling major stakes in every firm, asset class, industry, and geography of the global economy. It’s an unprecedented conjuncture of concentration and distribution, one which has prompted fierce debate over what this new era of common, universal, and increasingly passively allocated ownership means. For some, the new regime contains the seeds of a socialist-utopian economic vision; for others, it’s an anticompetitive, “worse than Marxism” nightmare.

At the heart of the debate is the theory of universal ownership, which contends that because today’s asset management giants are universal owners with fully diversified portfolios, they should be structurally motivated to internalize the negative externalities that arise from the conduct of individual corporations or sectors. Whether social inequality or the climate crisis, proponents of universal ownership contend that the enormous externalities of corporate capitalism will, eventually, diminish shareholder returns, and therefore universal owners should and will act to minimize them. It’s an elegant theory, but is it true? Ultimately, the answer to this question hinges on how we understand ownership.

More here.