An investigation into Blackrocks power and how it could and has changed the world
By: Bluecandy
Blackrock is a mutual fund investment company. As of December 31, 2022 it managed 9.74 trillion in assets. Blackrock is a super powerful company that has changed America, its economy, and the world as a whole. This essay will first explore its history and how it got its power. Then It will talk about what kind of influence it has. Then it will talk about how this power has affected America, its economy and the world as a whole over time.
Larry Fink founded Blackrock and quickly rose in the business world because of his state of the art AI. This AI manages stocks and is super powerful. Using this AI he has helped many strong businesses: “Aladdin (Asset, Liability and Debt and Derivative Investment Network) is an electronic system built by BlackRock Solutions, the risk management division of the largest investment management corporation, BlackRock, Inc. In 2013, it handled about $11 trillion in assets (including BlackRock's $4.1 trillion assets), which was about 7% of the world's financial assets, and kept track of about 30,000 investment portfolios. As of 2020, Aladdin managed $21.6 trillion in assets.” This AI and how it relates to Blackrocks power will be discussed more later in the essay.
Blackrock is a top investment company and a mutual fund provider. This means they own shares on behalf of their clients who are the ones who actually own the shares. Blackrock pools multiple peoples money and invests it across many companies. They then give all of their investors a profit and make a sizable chunk of money themselves. People then often assume that Blackrock has a lot of power because of all its shares. However, Blackrock doesn't actually own the shares, they own them on behalf of their clients. But, Blackrock is allowed to vote on their clients behalf and still have a lot of influence. This isn't the whole story though:
Vanguard is an asset management firm that offers investment accounts and various securities, like stocks and mutual funds. Vanguard has about 8 trillion in global assets under its management. It is the second largest provider of mutual funds and exchange traded funds after Blackrock. According to Vanguard, Vanguard is owned by the people who own the funds managed by the company and is therefore owned by its customers: “Vanguard is the only investment management company owned by its investors*—you and more than 30 million Vanguard investors worldwide.”. However this does not take into account shareholders. Because Vanguard has no CEO it is influenced by its shareholders, of which blackrock is on top.
So, Blackrock basically owns Vanguard because Vanguard has no CEO and is owned by its shareholders, of which Blackrock is a majority shareholder. Together, BlackRock and Vanguard own:
“Eighteen percent of Fox. Sixteen percent of CBS, and therefore also of Sixty Minutes. Thirteen percent of Comcast, which owns NBC, MSNBC, CNBC, and the Sky media group. Twelve percent of CNN. Twelve percent of Disney, which owns ABC and FiveThirtyEight. Between ten and fourteen percent of Gannett, which owns more than 250 Gannett daily newspapers plus USA Today. Ten percent of the Sinclair local television news, which controls seventy-two percent of U.S. households’ local TV. A large unspecified chunk of Graham Media Group, which owns Slate and Foreign Policy.”
Additionally they own these percentages of these major companies:
JNJ - Johnson and Johnson - 7.6% | MRNA - Moderna Inc - 6.7978% | PFE - Pfizer inc - 7.8896% | AMZN - Amazon.com inc - 5.8296% | EBAY - Ebay inc - 8.3983% | ETSY - Etsy Inc - 9.1211% | FDX - FedEx Corporation - 6.6133% | UPS - United Parcel Service, Inc. Class B - 6.6945% | AAPL - Apple Inc - 6.4991% | MSFT - Microsoft Corp - 7.1475% | NFLX - Netflix - 6.2772% | TGT - Target Corp - 7.4484% | BBY - Best Buy Co., inc - 8.7630% | F - Ford Motor Co - 6.6001% | KR - Kroger Co - 9.2155% They also own many more stakes in major companies that were not listed here.
Some people might bring up the fact that Vanguard has a majority share in Blackrock as a counterpoint; however, that doesn't mean Vanguard controls Blackrock. Blackrock has a CEO unlike Vanguard and although the shareholders can vote on things, the shareholders don't control the company like with Vanguard, the CEO does.
So, all of Vanguard's shares are under the influence of Blackrock and Blackrock is run by CEO Larry Fink; what kind of influence does this give Blackrock/Larry Fink? What, if any, influence does Blackrock/Larry Fink have on Vanguard shareheld companies and how much power does Blackrock have by themselves, without Vanguard? This question is partly answered by spokespeople for both Blackrock and Vanguard in an article by reuters.com: “while they do appear to own significant shares in the world’s biggest businesses, those shares are purchased using money belonging to their clients – and therefore the shareholders are ultimately their clients.” ““BlackRock itself is not a shareholder,” a company spokesperson told Reuters, adding that money being managed or invested “belongs to our clients''. “The owners of these securities are our clients, through their investments made on their behalf via the funds managed by Blackrock''. A Vanguard spokesperson told Reuters that its firm was “mutually owned”, meaning the “firm is owned by its funds, which, in turn, are owned by its investors.” But, when investigating who owns Reuters you find that Vanguard owns a 1.2 percent stake; which is probably more than enough to get one article written in their defense. Also, later in the same Reuters article “Professor Pavlova said a concern could be that the two companies “may not accurately represent client preferences” when voting in invested companies on their behalf. She also acknowledged that both “try to be transparent in how they vote (by) publishing this information”.”
So, according to the spokespeople Blackrock is not powerful because of the reason most people think. They do seem scary because they seem to have many shares in all the big companies but according to their spokespeople that doesn't give them any power. They don't actually own their shares, their clients do. They just buy them on their clients behalf. Even if it is true that they don't own the shares and have no power over them Blackrocks real power still comes from the Aladdin AI, which they do fully own and control. This point is proved and shown by the fact that Blackrocks AI even got hired by the US government to help stabilize their money during covid. This means that Blackrock has power at the governmental level. There are even former Blackrock executives and managers in Biden's cabinet as well as a former Blackrock exec in Obama's cabinet and even president Trumps too. Blackrock has made themselves immensely valuable to the United states government. This is dangerous because they are a capitalist company. The government and the public companies are supposed to be separate according to capitalist theory. That's how capitalism is supposed to work according to this theory. Part of the government's job is literally to make sure that no one company has too much power, that they don't become a monopoly. But in the case of Blackrock the government has hired Blackrock on a level where I'm not sure they could “fire” or limit Blackrocks power even if they wanted to, they value them too much. Whether the US government likes it or not it's a fact that Blackrock saved them during the pandemic.
Going further into government influence Blackrocks board of directors is full of immensely wealthy and powerful people. To name some of them you have:
Gordon M. Nixon who was the former President and CEO of Royal Bank of Canada. He is also the lead director of George Weston Limited which: “is a Canadian public company, founded in 1882. George Weston has two operating segments: Loblaw Companies Limited, Canada's largest food and drug retailer and a provider of financial services, and Choice Properties Real Estate Investment Trust, Canada's largest and preeminent diversified REIT.” (Real estate investment trust).
Next you have Bader M. Alsaad who is Chairman of the Board and Director General of the Arab Fund for Economic & Social Development. “The Arab Fund for Economic and Social Development is a Kuwait-based pan-Arab development finance institution. All member-states of the Arab League are members of the AFESD.” The Arab league is a league of countries similar to the EU and resolves conflicts between countries. As of 2003 the Arab Fund for Economic & Social Development held around $7.3 (US) billion in assets.
Another chairman of Blackrock is Charles H. Robbins who is the Chairman and CEO of Cisco Systems, Inc. “Cisco is one of the largest technology companies in the world ranking 74 on the Fortune 100 with over $51 billion in revenue and nearly 80,000 employees.”. He also “serves the World Economic Forum” (an independent international lobbying organization) as the chair for the IT Governors Steering Committee and as a member of the International Business Council. He is a member of the Ford Foundation board of trustees. He is a director “for the Business Roundtable, where he chairs the Immigration Committee.” The Business Roundtable is a nonprofit lobbyist association of which the members are exclusively CEOS (including people such as Tim Cook of Apple and former white house chief of staff Josha Bolten). They lobby for things like lowering corporate taxes in the US as well as internationally.
There is also Cheryl D. Mills who is the Founder and CEO of BlackIvy Group. “BlackIvy builds, operates and scales businesses that drive long-term growth and resilient value in essential sectors – food, housing, healthcare, warehousing and logistics – in Sub-Saharan Africa.” She served as deputy White House Counsel for President Bill Clinton. She has worked for New York University as Senior Vice President, served as Senior Adviser and Counsel for Hillary Clinton's 2008 presidential campaign, and is considered a member of Hillary Clinton's group of core advisers. She also served as counselor and chief of staff to Hillary Clinton during her whole tenure as United States Secretary of State.
Next is Hans E. Vestberg Chairman and CEO of Verizon Communications, Inc. “Vestberg chairs the World Economic Forum's Edison Alliance, a global telecom ecosystem that in 2021 focused on digital inclusion.” “Vestberg serves as a board member on the United Nations Foundation, and the Whitaker Peace & Development Initiative, as well as a commissioner on the Broadband Commission for Sustainable Development.”
Then there is Mark Wilson. Mark Wilson was “appointed the chief executive officer (CEO) of Aviva on 1 January 2013. He stood down from his position on 9 October 2018.” “Aviva plc is a British multinational insurance company headquartered in London, England. It has about 18 million customers across its core markets of the United Kingdom, Ireland and Canada. In the United Kingdom, Aviva is the largest general insurer and a leading life and pensions provider. Aviva is also the second largest general insurer in Canada.”
Lastly is Marco Antonio Slim Domit son of Carlos Slim Domit who was the richest man in the world from 2010 to 2013. Carlos Slim Domit owns América Móvil, América Móvil is a Mexican telecommunications corporation headquartered in Mexico City, Mexico. It is the 7th largest mobile network operator in terms of equity subscribers and one of the largest corporations in the world. Marco himself holds multiple positions himself as chairman and on the board of directors for quite a few companies and manages the financial side of their family's business empire.
There are a lot of people on Blackrocks Board of directors as it is extensive. But nonetheless all of these people are super powerful in their own ways. Many of them have powerful connections to tech and internet companies which makes sense considering Blackrock gets its power from a digital AI but many of them also have power unrelated to the tech industry. This is interesting because of all of the connections to other countries. Countries such as Canada, Africa, Mexico, the Middle East and Europe. With power like this all over the world including power over the American economy and government Blackrock seems to be a super powerful company with only a few people at the top. These people who run Blackrock, when teamed together like they are, seem to have more power than many countries. Blackrock seems to have more power than many countries. This is Unlike anything seen in recent history.
America is considered a mixed market economy. This is important because it means that companies have regulations. They cant do whatever they want. That would be a free market economy. In a free market economy a company could do whatever they want. From lying to customers to employing children. This is why it is dangerous when companies have influence over the government. If A company starts influencing which laws are passed then they will start being able to do whatever they want. They will start operating like they are in a free market economy. Blackrock influences the government in many ways. One notable example is the World Economic Forum, of which quite a few Blackrock board members are a part of. The World Economic Forum is a Lobbying organization made up entirely of CEOs. This means that the Forum has a lot of money to lobby with. When you have the money to pay lawmakers, like they do, you can get anything done that you want. They can do this because they have the money. They are mostly made up of billionaires. They also make it crystal clear what they want by the fact that you have to be a ceo to join. They want to serve the interests of their companies. Which would mean things like less regulation and taxes. All of this will serve their interests and make them, the ultra wealthy, richer.
One example of this can be seen by the fact that according to the Blackrock Transparency project, a non profit watchdog group for Blackrock, claims that in recent years Blackrocks political spending including lobbying money and campaign donations have increased. This increase in spending also “coincided with the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act as well as its successful effort to avoid being designated a Systemically Important Financial Institution (SIFI), more commonly known as “Too Big to Fail.””. According to investopedia “A systemically important financial institution (SIFI) is a company that U.S. regulators determine would pose a serious risk to the economy if it were to collapse.”. Being determined as one means more government regulations in order to protect the economy. These kinds of actions are dangerous to the American economy and America's capitalism. This law is in place for a reason. If monopolies were allowed to run a monk in America then the economy would not serve its purpose to feed and reward the hard work of americans. When Monopolies are allowed to survive competition disappears, which is a very important part of capitalism. Capitalism doesn't work if you can't create competition.
Another way Blackrocks power over governments has been shown is in Mexico. As an article by prospect.org (a non Blackrock owned newsource) explainedBlackrock has a lot of power in Mexico and has been using it as a way to gain profits. They are developing infrastructure in Mexico and getting the Mexican government and people to pay for it. They can do this because they have been investing millions into Mexican pension money. The more infrastructure Blackrock builds the more pension money they can provide the workers. This puts the government in a hard spot. As the article explained they can't stop funding these Blackrock projects because their voters will get mad but if they dont they will have to continue spending money on the projects. Leftist Andrés Manuel López Obrador (AMLO or Obrador for short) who was recently elected was against these Blackrock “projects” and wanted to do something about it. Pena Nieto who was the Mexican government official who preceded Obrador and who has had meetings before and after his election with Blackrock's Larry Fink established many energy reforms which Obrador initially promised to reverse, but after a meeting between Obrador and Fink: “has said he’d merely review PEMEX” (a government oil company’s) contracts. And in meetings with BlackRock and dozens of investment funds, AMLO’s” (Obrador’s) “top adviser said, “We are really not leftist, we are center-left,” while vowing to stay the course on free trade, central bank independence, and a floating currency.”. This is all highly suspicious and makes one wonder just what happened in that meeting. Considering that, as mentioned earlier, the son of Carlos Slim (Mexico's richest man) is on Blackrocks board; its safe to say that Blackrock could have used their influence over Mexico in any number of ways in order to “convince” him.
So, in conclusion, Blackrock has a ton of power. They have a ton of power and they have used it to influence not just the US government but governments around the world in order to advance their own capitalist interests. This is an interesting phenomenon for a few reasons. Blackrock is a business, which means its goals are going to be different then a government's. A government by design has only one goal, to serve the people. If it doesn't then that's what some people would call socialism. So far in recent history governments have been on a power level of their own. No other entity, besides a government, so far has been able to reach their power level. Now, it seems that Blackrock and potentially other businesses have reached this level of power. If one looks at all of history though they can see that situations like this have actually happened before. The East India trading company is a notable example. While Blackrock might not be having conquests for land and controlling their own army, like the East India Trading Company, that's not to say they don't have power. Power nowadays looks different then it did back then. Blackrock doesn't need armies or land in order to make money and gain power. But they still have a ton of power and that power is still on a governmental level, just like the East India Trading Company. This is dangerous, as seen in history. The problem with a capitalist company having power on par with governments is the fact that their goals are so different then a government's. A government only needs to worry about staying in the favor of their people, which is where they get their money. This makes them radically different, and radically safer, then a company like Blackrock. Blackrock doesn't need to worry about staying in the favor of the various general publics because they can get money in other ways. In Blackrocks case that is the online stock market and other conquests. In the East India Trading Companies case that was trading things like spices, which you need armies and land for. This crucial point is why Blackrock and the East India Trading Companies' power, while similar in value, looks so different. Blackrock can make money online and through other ways. In the East India Trading Companies time they needed to ship and produce things in person. This was the most effective way of making money at the time. But regardless people should be aware and cautious of companies like Blackrock and Vanguard. They should be cautious because of the same reasons they are when talking about the East India Trading Company, because they have power at a governmental level and they don't need to serve the people in the same way a government does.
SOURCES
Primary:
ADV Ratings. (n.d.). World's Top Asset Management Firms. Retrieved June 1, 2023, from https://www.advratings.com/top-asset-management-firms
Blackrock. (n.d.). Board of directors. BlackRock, Inc. Retrieved June 1, 2023, from https://ir.blackrock.com/governance/board-of-directors/default.aspx
Greenspon, J. (2019, February 19). How big a problem is it that a few shareholders own stock in so many competing companies? Harvard Business Review. https://hbr.org/2019/02/how-big-a-problem-is-it-that-a-few-shareholders-own-stock-in-so-many-competing-companies
Whale Wisdom. (n.d.). Blackrock INC. Track Hedge Funds Using 13F Filings and Data from the Whales - WhaleWisdom.com. Retrieved June 1, 2023, from https://whalewisdom.com/filer/blackrock-inc#tabholdings_tab_link
Yochim, D. (2019, March 12). Vanguard mutual funds: What they are and how to invest. NerdWallet. https://www.nerdwallet.com/article/investing/vanguard-mutual-funds#:~:text=Vanguard%20is%20an%20asset%20management,more%20than%2030%20million%20investors
Secondary:
References
Ayoola, E. (2021, November 17). Passive investing: What it is and how it works. NerdWallet. https://www.nerdwallet.com/article/investing/passive-investing
Black Ivy. (n.d.). Delivering Life's Essentials in Africa. Endeavors That Matter. https://www.blackivygroup.com/
Blackrock Transparency Project [Blackrock Transparency Project]. (n.d.). BlackRock transparency project [Facebook Page]. Facebook. Retrieved June 1, 2023, from https://www.facebook.com/BlackRockTransparencyProject/
Campaign For Accountability. (2019, October 29). New report details how BlackRock fought off government regulation by spending big in Washington. Campaign for Accountability. https://campaignforaccountability.org/new-report-details-how-blackrock-fought-off-government-regulation-by-spending-big-in-washington/
CNN Business. (n.d.). FNF - Fidelity national financial Inc shareholders - CNNMoney.com. Business News - Latest Headlines on CNN Business | CNN Business. Retrieved June 1, 2023, from https://money.cnn.com/quote/shareholders/shareholders.html?symb=FNF&subView=institutional
Cooperman, J. (2021, September 14). How a company called BlackRock shapes your news, your life, our future. Common Reader. https://commonreader.wustl.edu/how-a-company-called-blackrock-shapes-your-news-your-life-our-future/
Dayen, D. (n.d.). How BlackRock rules the world. The American Prospect. https://prospect.org/economy/blackrock-rules-world/
The Famous People. (n.d.). Who is Marco Antonio slim Domit? Everything you need to know. Famous People in the World - Lists of Trending Celebrities in 2023, Ratings & Bios. Retrieved June 2, 2023, from https://www.thefamouspeople.com/profiles/marco-antonio-slim-domit-43685.php
Finra. (n.d.). Mutual funds. A vibrant market is at its best when it works for everyone. | FINRA.org. https://www.finra.org/investors/investing/investment-products/mutual-funds
Fleming, S. (2019, February 13). Former fed vice-chair Stanley Fischer to join BlackRock. Financial Times. https://www.ft.com/content/44bec8bc-2fa8-11e9-ba00-0251022932c8
George Weston Limited. (2023, May 23). George Weston Ltd. | Home. George Weston Ltd. https://www.weston.ca/en/Home.aspx#:~:text=George%20Weston%20Limited%20is%20a,largest%20and%20preeminent%20diversified%20REIT
Investopedia. (2011, August 28). Systemically important financial institution (SIFI) overview. https://www.investopedia.com/terms/s/systemically-important-financial-institution-sifi.asp#:~:text=A%20systemically%20important%20financial%20institution%20(SIFI)%20is%20a%20company%20that,if%20it%20were%20to%20collapse
Kerber, R. (2023, May 10). US Republicans seek review of BlackRock utility holdings. Reuters. https://www.reuters.com/business/sustainable-business/us-republicans-seek-review-blackrock-utility-holdings-2023-05-10/
Reuters Fact Check. (2022, April 20). Fact check-video claiming BlackRock and vanguard ‘own all the biggest corporations in the world’ is missing context. U.S. https://www.reuters.com/article/factcheck-business-investment/fact-check-video-claiming-blackrock-and-vanguard-own-all-the-biggest-corporations-in-the-world-is-missing-context-idUSL2N2WI1K4
Simply Wall St. (n.d.). Thomson Reuters Corporation insider trading & ownership structure. https://simplywall.st/stocks/ca/commercial-services/tsx-tri/thomson-reuters-shares/ownership#:~:text=Top%20Shareholders&text=RBC%20Global%20Asset%20Management%20Inc.&text=BMO%20Asset%20Management%20Corp.&text=The%20Vanguard%20Group%2C%20Inc
Stock Zoa. (n.d.). BlackRock 13F filings and top holdings and stakes - stockzoa. stockzoa. Retrieved June 1, 2023, from https://stockzoa.com/fund/blackrock/
StockZoa. (n.d.). State street Corporation 13F filings and top holdings and stakes - stockzoa. stockzoa. Retrieved June 1, 2023, from https://stockzoa.com/fund/state-street-corporation/
U.S Securities and Exchange Commission. (2017, February 1). SEC division and office directors. SEC.gov. Retrieved June 1, 2023, from https://www.sec.gov/page/directors-biographies
Vaughan, A. (2022, August 4). BlackRock is the biggest company you've never heard of. Innovation & Tech Today. https://innotechtoday.com/blackrock-is-the-biggest-company-youve-never-heard-of/
Wikipedia. (2021, February 12). Arab fund for economic and social development. Wikipedia, the free encyclopedia. Retrieved June 1, 2023, from https://en.wikipedia.org/wiki/Arab_Fund_for_Economic_and_Social_Development
Wikipedia. (2021, November 14). Chuck Robbins. Wikipedia, the free encyclopedia. Retrieved June 1, 2023, from https://en.wikipedia.org/wiki/Chuck_Robbins
Wikipedia. (2022, November 10). Aviva. Wikipedia, the free encyclopedia. Retrieved June 1, 2023, from https://en.wikipedia.org/wiki/Aviva
Wikipedia. (2022, July 8). Hans Vestberg. Wikipedia, the free encyclopedia. Retrieved June 1, 2023, from https://en.wikipedia.org/wiki/Hans_Vestberg
Wikipedia. (2023, June 1). Aladdin (BlackRock). Wikipedia, the free encyclopedia. Retrieved June 1, 2023, from https://en.wikipedia.org/wiki/Aladdin_(BlackRock)#:~:text=Aladdin%20(BlackRock)%20%2D%20Wikipedia
Wikipedia. (2023, May 30). Arab League. Wikipedia, the free encyclopedia. Retrieved June 1, 2023, from https://en.wikipedia.org/wiki/Arab_League
Wikipedia. (2023, June 1). BlackRock. Wikipedia, the free encyclopedia. Retrieved June 1, 2023, from https://en.wikipedia.org/wiki/BlackRock
Wikipedia. (2023, February 23). Cisco. Wikipedia, the free encyclopedia. Retrieved June 1, 2023, from https://en.wikipedia.org/wiki/Cisco
Wikipedia. (2023, April 3). Gordon Nixon. Wikipedia, the free encyclopedia. Retrieved June 1, 2023, from https://en.wikipedia.org/wiki/Gordon_Nixon
Wikipedia. (2023, March 2). Mark Wilson (businessman). Wikipedia, the free encyclopedia. Retrieved June 1, 2023, from https://en.wikipedia.org/wiki/Mark_Wilson_(businessman)
Wikipedia. (2023, May 31). The vanguard group. Wikipedia, the free encyclopedia. Retrieved June 1, 2023, from https://en.wikipedia.org/wiki/The_Vanguard_Group
Wikipedia. (2023, June 1). World economic forum. Wikipedia, the free encyclopedia. Retrieved June 1, 2023, from https://en.wikipedia.org/wiki/World_Economic_Forum
Yahoo Finance. (n.d.). American vanguard Corporation (AVD). Yahoo Finance - Stock Market Live, Quotes, Business & Finance News. Retrieved June 1, 2023, from https://finance.yahoo.com/quote/AVD/holders?p=AVD&nn=1
This is a paragraph! Here's how you make a link: Neocities.
Here's how you can make bold and italic text.
Here's how you can add an image:
Here's how to make a list:
To learn more HTML/CSS, check out these tutorials!