The CEO of the world’s largest asset manager unsurprisingly wants more people to invest in capital markets.
Loading audio narration…
Larry Fink, the billionaire CEO of $14 trillion BlackRock, wrote in his annual letter to shareholders that putting money to work in capital markets — including public stocks and private credit — is the best way to long-term financial security.
But he’s also clear about the risk for those who do not or cannot invest in things such as the growth of artificial intelligence.
“The old model of global capitalism is fracturing,” he wrote, and “the vast majority of wealth has flowed to people who owned assets, not to people who earned most of their money by working.”
AI “threatens to repeat that pattern at an even larger scale —concentrating wealth among the companies and investors positioned to capture it,” he added.
As the 250th anniversary of America’s founding nears, Fink states that the growing wealth inequality — which could accelerate as AI becomes more embedded in global industries — could imperil elective governments.
“Democracy depends on people feeling they have a genuine stake in their country’s future,” he wrote.
AI, his letter states, rewards the companies with scale and resources. It’s not “inherently problematic,” he writes, but if “ownership remains narrow, prosperity can feel increasingly distant to those on the outside.”
The biggest tech companies, Amazon, Alphabet, Microsoft, and Meta, are expecting to spend hundreds of billions of dollars to build the infrastructure behind AI. Investment firms, including BlackRock, are partnering with these companies to finance some of these projects.
For potential solutions to inequality, Fink highlighted tokenizing investment opportunities to ease access for those unfamiliar with investing, as well as a structural change to Social Security to allow the program’s capital to act more like a pension fund, so it can grow “along the broader economy.”
Fink writes that he’s not calling for privatizing the program, but instead for a “long-overdue conversation” about Social Security.
The “civic miracle” of being a part of your country’s growth via investment is an important connection between citizens and their government, Fink wrote.
“Extending it — so that more people can invest in their country’s growth and share in its rewards — is the task in front of us,” his letter reads.
