Technofeudalism: What Killed Capitalism

by Yanis Varoufakis

Socialism for the financiers gave rise to another cluster of financial uber-lords to rival the cloudalists – three US companies with powers exceeding those of private equity and all terrestrial capitalists put together: BlackRock, Vanguard and State Street. These three firms, the Big Three as they are known in financial circles, effectively own American capitalism. No, I am not exaggerating. Most people have not heard of them but they have heard of the companies the Big Three own, which include America’s major airlines (American, Delta, United Continental), much of Wall Street (JPMorgan Chase, Wells Fargo, Bank of America, Citigroup) and car makers such as Ford and General Motors. Together, the Big Three are the largest single shareholder in almost 90 per cent of firms listed in the New York Stock Exchange, including Apple, Microsoft, ExxonMobil, General Electric and Coca-Cola. As for the dollar value of the Big Three’s shares, it has too many zeros to mean much. At the time of writing, BlackRock manages nearly $10 trillion in investments, Vanguard $8 trillion and State Street $4 trillion. To make sense of these numbers: they are almost exactly the same as the US national income; or the sum of the national incomes of China and Japan; or the sum of the total income of the eurozone, the UK, Australia, Canada and Switzerland.