BlackRock may not be as much of a household name as other mega-corporations, but its influence over global finance is staggering. In this extract from her book, Vulture Capitalism<\/strong>, Grace Blakeley<\/strong> exposes<\/em> how the world\u2019s largest asset manager controls trillions in investments and shapes markets, corporations and even governments \u2013<\/em> often with little oversight<\/em>. She raises critical concerns about this extreme concentration of money and power.<\/em><\/p>\n Vulture Capitalism: How to Survive in an Age of Corporate Greed<\/a><\/strong><\/em>. Grace Blakeley. Bloomsbury. 2025 (paperback); 2024 (hardback).<\/a><\/strong><\/em><\/p>\n Most people have heard of Amazon, and of Jeff Bezos with his $150 billion personal fortune. Amazon\u2019s monopoly power, like that of other large consumer-facing corporations, is highly visible and is the subject of ongoing political debate. Most people have not heard of BlackRock, and yet Larry Fink, the CEO of the asset manager whose personal fortune of $1 billion pales in comparison to that of Bezos, is in many ways more powerful than the CEO of Amazon.<\/p>\n Fink has been called the \u201cking of Wall Street<\/a>\u201d \u2013 a man who has built a \u201cvast financial empire, the likes of which has never been seen before\u201d. BlackRock began its life as part of Blackstone Financial Management, before splitting with the firm in the early 1990s.<\/p>\n After the dot-com bubble, BlackRock began to grow very quickly indeed. As well as growing organically, Fink was able to achieve rapid growth through mergers and acquisitions financed by cheap debt. By 2006, after a merger with Merrill Lynch Investment Managers, BlackRock finally reached the threshold of $1 trillion assets under management<\/a>.<\/p>\n Today, Amazon is the third largest company in the world by market capitalisation, after Apple and Microsoft, with a market capitalisation of $1.7 trillion. But BlackRock, the world\u2019s largest asset manager, controls more than $10 trillion worth of assets. One or another of the Big Three asset managers \u2013 BlackRock, Vanguard or State Street \u2013 is the largest shareholder in around 88 per cent of S&P500 companies<\/a>. BlackRock alone is the largest investor in thirty-eight such companies, and has a 3.7 per cent stake in Amazon. Together, the big three oversee $22 trillion worth of assets<\/a>, and hold about a fifth of all the shares<\/a> in the S&P500.<\/p>\n BlackRock\u2019s money doesn\u2019t really belong to BlackRock; it belongs to us. Yet that money is being used to augment the power and wealth of those at the top at the expense of everyone else.<\/p>\n<\/blockquote>\n Most of BlackRock\u2019s clients aren\u2019t looking to beat the market in the short term with clever trading strategies; they\u2019re looking for long-term returns and a safe place to put their cash. Historically, asset management was a relatively small sector, dominated by lots of mid-sized players guarding the savings of the very wealthy. But thanks to an ageing global population, pensions privatisation, the erosion of the welfare state and growing wealth inequality \u2013 among other things \u2013 the stock of savings has ballooned.<\/p>\n BlackRock benefited from this trend, and overtook its competitors, by pioneering the use of low-cost passive investment strategies<\/a>. Rather than providing its clients with specialised advice, many of the products BlackRock offers its clients simply track indices like the S&P500 or the FTSE100. This automated process allows BlackRock to outsource its advisory work to an algorithm, which is far cheaper than employing staff to consult with and invest on behalf of clients directly. While many investors were initially sceptical about the value of passive investment strategies, these algorithms have proven increasingly successful<\/a> at beating even the most talented fund managers.<\/p>\n But by pushing investment into a pre-selected group of corporations, without much regard for what those firms are doing, passive funds undermine the operation of the \u201cmarket\u201d for investment.<\/p>\n Investors are supposed to pay attention to decisions being made by senior managers and invest accordingly. Good managers are rewarded, while bad ones are punished. This is the foundation of modern corporate governance. But BlackRock can\u2019t punish managers because it can\u2019t sell its shares. The firm\u2019s stakes in companies like Walmart and Amazon are too large to offload without wrecking the whole market and, in any case, BlackRock\u2019s market-tracking funds are always going to be heavily invested in the largest corporations in those markets. Almost regardless of how these firms perform, they can rely on the fact that BlackRock, Vanguard and State Street aren\u2019t going to sell up<\/a>.<\/p>\n As\u00a0The Economist<\/em>\u00a0pointed out<\/a>, one of the main features of healthy financial markets is \u201ca cacophony of diverse actors coming to different conclusions on the price of things, based on their own idiosyncratic analyses.\u201d But financial markets are increasingly starting to resemble a crowded room in which one or two people have a megaphone.<\/p>\n In fact, asset managers like BlackRock may be helping to drive market concentration across the whole economy. Economists have found consistent evidence of anti-competitive effects of common ownership<\/a> \u2013 the ownership of multiple firms within a sector by one shareholder. Where a few powerful asset managers have a stake in most big firms, why would those investors want these firms to compete with each other? It\u2019s better for BlackRock when the corporations they own collude \u2013 and perhaps merge \u2013 with one another. High levels of common ownership lead to a situation \u201cequivalent to an economywide monopoly\u201d.<\/p>\n But what if this shift is a positive thing? As the \u201cuniversal owners<\/a>\u201d of most of the world\u2019s largest companies, the big three should be less interested in \u2018the performance of each individual firm it owns\u201d and more interested in \u2018the performance of the economy as a whole\u201d. The argument that people like Fink could become the guardians of a new, responsible \u201cstakeholder capitalism<\/a>\u201d is a familiar one, promoted by organisations like the World Economic Forum, hosts of the Davos economic conference. Advocates o tacitly acknowledge that corporations and financial institutions have the power to plan our lives, while pleading with them to do so in the general interest.<\/p>\n Stakeholder capitalism is a kind of \u201cautocritique\u201d of capitalism by capitalists themselves. These critiques tend to emerge when capitalism is in crisis<\/a> without a powerful movement to present an alternative. The \u201cresponsible capitalists\u201d of the world believe that if they can demonstrate a record of self-regulation, stakeholder engagement and philanthropy, they can avoid the threats of regulation, redistribution and unionisation.<\/p>\n A few giant, unwieldy organisations act as the \u2018new permanent owners\u2019 of the world\u2019s largest corporations and the infrastructure upon which we all depend.<\/p>\n<\/blockquote>\n The idea that firms like BlackRock represent the interests of \u201cresponsible\u201d capitalists is what has allowed political parties and central banks to build such strong links with the firm. BlackRock has close relationships with governments and central bankers all over the world and has been described as a global \u201cfourth branch of government<\/a>\u201d. It\u2019s not simply the case that asset managers have extraordinary control over the financial system; massive firms like BlackRock \u201cown, and extract income from, things \u2013 schools, bridges, wind farms and homes \u2013 that are nothing less than foundational to our daily being\u201d. Their control over these assets is, of course, used to maximise their returns. And this requires them to \u201crelentlessly squeeze\u201d profits out of their holdings<\/a> \u2013 whether that means hiking rents for vulnerable tenants, or charging for the use of common infrastructure.<\/p>\n Rather than efficient financial markets that allocate investment based on the best available information, we have a few giant, unwieldy organisations that act as the \u201cnew permanent owners<\/a>\u201d of the world\u2019s largest corporations and the infrastructure upon which we all depend. In fact, it is possible to observe the centralisation of global capitalism empirically. The authors of one paper<\/a> show that \u201cthree-quarters of the world\u2019s 205 largest firms by sales are linked to a single global company network of concentrated (five percent) ownership ties.\u201d<\/p>\n In a truly free market society, pervasive private power should not exist. All capitalist institutions should be \u2013 to a greater or lesser extent \u2013 subject to the overwhelming power of the market mechanism. Instead, we find a world in which private institutions are able to dominate and control markets, while also dominating and controlling workers and manipulating entire states. Capitalism means rule by capital \u2013 not free markets.<\/p>\n Note: <\/strong>The above article is an abridged version of Chapter Five: Buying Time: How Big Banks Plan from the book, Vulture Capitalism: How to Survive in an Age of Corporate Greed <\/strong>by Grace Blakeley.<\/strong> It is reproduced here with the permission of the author and publisher. Copyright \u00a9 Grace Blakeley.<\/em><\/p>\n This book extract gives the views of the author and not the position of the LSE Review of Books blog, nor of the London School of Economics and Political Science.<\/em><\/p>\n Grace Blakeley is speaking in a panel event, Alternatives to Capitalism<\/a><\/em> at 6.30pm on Monday 16 June as part of\u00a0LSE Festival 2025<\/a>.<\/em><\/p>\n Image:<\/em><\/strong> BlackRock CEO Larry Fink by Photo Agency<\/a> on Shutterstock<\/a>.<\/em><\/p>\n Enjoyed this post?\u00a0<\/em>Subscribe to our newsletter<\/em><\/a>\u00a0for a round-up of the latest reviews sent straight to your inbox every other Tuesday.<\/em><\/p>\n![\"LSE](\"https:\/\/blogsmedia.lse.ac.uk\/blogs.dir\/30\/files\/2025\/05\/25_0001_blogs-festival-1024x192.jpg\")
<\/a><\/figure>\nThe hidden world of financial asset management<\/h2>\n
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<\/a>Asset managers are financial institutions that manage other people\u2019s money. If you have a pension, you\u2019ll hand your money over to a pension fund, and chances are that pension fund will hand some of your money over to one of the big three, which will decide how that money is invested. In this sense, BlackRock\u2019s money doesn\u2019t really belong to BlackRock; it belongs to us. Yet that money is being used to augment the power and wealth of those at the top at the expense of everyone else.<\/p>\nHow passive funds undermine the investment market<\/h2>\n
Stakeholder capitalism and its \u201cguardians\u201d<\/h2>\n
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