Three asset managers now dominate almost all major US firms

Evidence

In the wake of the 2008 crisis, as the US government absorbed financial risks and restructured the financial sector, three asset management firms, BlackRock, Vanguard, and State Street, displaced the banks as the most powerful financial institutions. The firms accumulated “ownership with a power and scale never seen before in the history of capitalism,” according to political economists Stephen Maher and Scott Aquanno. Together, the Big Three in asset management are the largest single shareholders in almost 90 percent of the firms listed on the New York Stock Exchange, including Apple, Microsoft, ExxonMobil, General Electric, and Coca-Cola. Their portfolio encompasses 98 percent of firms on the S&P 500 Index, which tracks the largest American companies—with the Big Three owning an average of more than 20 percent of each company. — Clara E. Mattei, Escape from Capitalism, 133

Categorization

• XREF: Connects to the Milgrom reading on how intermediaries and institutional structures concentrate reputational and market power; here the concentration is ownership itself. — connects to: Three index-fund firms now dominate US corporate equity ownership — Andrew deWaard, Derivative Media: How Wall Street…, 124; A sliver of giant firms dominates total sales volume — Samuel Bowles and Herbert Gintis, Schooling in Capitalist America:…, 622

Broader Connections

• Three index-fund firms now dominate US corporate equity ownership #corroborates (0.95) — Andrew deWaard, Derivative Media, 124