The Problem of Twelve: When a Few Financial Institutions Control Everything

The "problem of twelve" arises when a small number of institutions acquire outsized influence over a nation's politics and economy. The Big Four index funds and private equity funds control more than 20% of the votes of S&P 500 companies and are eroding the legitimacy and accountability of American capitalism. This transformation in the American economy needs to be considered as a major political and economic issue.

Format: Paperback / softback
Length: 192 pages
Publication date: 21 September 2023
Publisher: Columbia Global Reports

A "problem of twelve" emerges when a limited group of institutions acquire substantial influence over a nation's politics and economy. The Big Four index funds, managed by Vanguard, State Street, Fidelity, and BlackRock, hold over 20% of the voting power in S&P 500 companies, an unprecedented concentration of power in American history. Moreover, the rise of private equity funds, including Apollo, Blackstone, Carlyle, and KKR, has amassed an astounding $2.7 trillion in assets, undermining the legitimacy and accountability of American capitalism. These funds, rather than controlling public companies, acquire them entirely, removing them from public discourse and scrutiny. This gradual accumulation over the past few decades signifies a significant shift in the functioning of the American economy, one that has gone largely unnoticed but demands our immediate attention. Harvard law professor John Coates rightly highlights this issue as one of the most significant political and economic challenges of our time.

Weight: 216g
Dimension: 126 x 190 x 16 (mm)
ISBN-13: 9798987053546