Finance
Understanding the Basics of 21st-Century Finance Capitalism
It has been a tumultuous week for the stock market, as Donald Trump’s quest to reshape the global capitalist order has sent investors into a frenzy. Where is all of this headed? Who knows. But going into a possible trade war, it’s worth stepping back to reflect upon the shape of our financial system.
To start: What are the most important developments on Wall Street in recent years? The short answer: massive asset managers — above all, the “Big Three” of BlackRock, Vanguard, and State Street — have become the dominant players in the financial system and the economy more broadly.
What do the Big Three do? They provide a basic financial service to investors: in exchange for a fee, asset managers invest their clients’ money in financial markets, for the most part in the stock market, or “public equities.” That sounds innocuous enough — until one understands just how much money we’re talking about. Take BlackRock. By the end of 2024, this single firm possessed $11.5 trillion in assets under management (AUM). Adding in Vanguard and State Street, the Big Three together manage more than $26 trillion.
What does that amount of money look like in practical terms? Collectively, the Big Three are either the largest or second-largest shareholder of almost every company listed on the S&P 500 — which is to say, of the biggest corporations of the world. On average, they together control more than 20 percent of each of those companies: 25 percent of Chevron, 21 percent of Costco, 20 percent of General Motors, and so on. Not since large banks dominated the United States and German economies in the late-nineteenth and early twentieth centuries have we seen such a fusion of ownership and control of corporations on a scale that warrants the moniker “finance capital.”
Meanwhile, “alternative asset managers” have also grown at a rapid clip in recent decades. Alternative asset management is a broad category that includes private equity, real estate investment, hedge funds, and more. Blackstone, the largest alternative asset manager, now oversees more than $1 trillion.
While not operating on the scale of the Big Three, alternative asset managers collect much higher fees per dollar of AUM and play an important role in modern capitalism. Since the leveraged buyout boom of the 1980s, the threat of being acquired by alternative asset managers like private equity firms has enforced discipline on corporations. This, in turn, reinforces the power of shareholders, including the Big Three. More recently, alternative asset managers have expanded further into infrastructure (e.g., airports, utilities, pipelines), a move that threatens to further privatize public goods. They have also built on “private credit” arms, which enable them to function like banks but without the same regulatory oversight.
Complicating our picture, BlackRock has engaged in a series of acquisitions (Global Infrastructure Partners, HPS Investment Partners, and Preqin) and has even attempted to purchase the firm that operates the Panama Canal. To the extent that this represents an intention among the Big Three to expand beyond publicly traded markets and to establish a greater presence in alternative asset management, their power may well grow still further.
There is a lot of debate about what all of this means, but most observers agree on three basic features of the new finance capital that impact corporate governance.
First, for certain asset managers, “exit” from any given company that they are invested in is not an option. In the past, investors dissatisfied with the performance of a company simply sold or threatened to sell their shares. The Big Three do not have that luxury. Given the scale of their positions, dumping shares would have adverse effects on the entire market; this, in turn, would hurt their overall portfolios. Among the key products they offer investors are cross-market index funds, which by design include just about every company.
Second, for the Big Three, their index funds — mutual funds and exchange traded funds (ETFs), which provide investors with access to the entire market in one swoop — are part of a “passive investment strategy” among asset managers. These firms do not actively try to “beat the market” or bet on winners and against losers. Instead, they are committed to holding the widest range of assets for the long run.
Finally, both of these previous points result from the status of the Big Three as “universal owners,” meaning they almost literally own a bit of everything. Because of their exposure to the entire publicly traded market, and because they operate on a fee-based model, asset managers have an interest in seeing share prices continually appreciate in value. For them, the function of the stock market is not to raise capital that specific businesses can use to expand investments in their companies. Rather, it is simply to enlarge the wealth of investors. Labor in the United States initially responded to finance’s rise by attempting to ride the wave of shareholder primacy, using its growing pension funds to speak as shareholders, filing shareholder proposals, and using other corporate governance mechanisms in the hope of nudging corporations to act responsibly. Over time, unions and other social movements have also sought to engage with larger pools of capital like public pensions, and the asset management industry, with similar goals in mind.
The logic behind this approach is that pension funds, in particular, represent “workers’ capital.” These funds should not, therefore, undertake investments that actively harm the workers whose interests they were established to serve. For instance, it is not hard to see the irrationality of public pension funds — whose beneficiaries are public employees — choosing to invest in firms actively seeking to privatize public goods.
This workers’ capital movement has been part of the broader effort to instill environmental, social, and governance (ESG) principles in institutional investors’ fiduciary calculations. While ESG has become a lightning rod for the political right, the basic idea is hardly radical. Everything from rising sea levels to executive compensation to the threat of strikes introduce risks that investors ought to keep in mind. Over the years, organizers have successfully pushed certain institutional investors to operationalize their ESG frameworks by reducing investments in industries like fossil fuels and tobacco, and working with asset managers to resolve labor disputes at companies held in their portfolios.
Without diminishing the value of these efforts, it is important to stress that the workers’ capital and broader ESG strategies basically take the structural confines of the new finance capital as a given. The problem, however, is that this financial colossus is profoundly and unavoidably integrated with processes that drive exploitation, ecological degradation, and public sector retrenchment.
This is not to say that this is a uniquely “parasitic” system that profits at the expense of the “real economy.” It is true that the incredible growth in Wall Street’s power over the past generation has come to some degree at the expense of authority of individual businesses. But finance’s ability to enforce discipline on the corporation has also strengthened management’s hand over labor. Wall Street and Main Street are inextricably wound up together. Labor and other social movements have related to the new finance capital in a manner similar to that of the proverbial frog in a boiling pot: picking up small victories here and there while the water gets even hotter. Building the kind of working-class power that stands a chance at meaningfully improving living standards and preserving the planet will require a far more serious reckoning with the structure of ownership and control in the twenty-first-century capitalist economy. There is no easy way out of this mess other than breaking the cycle that got us here in the first place.
A girl from a disadvantaged rural family in central China topped this year’s gaokao, attracting numerous live-streamers eager to finance her education, which she declined.
The home of 18-year-old secondary school graduate Han Yaping in a Henan province village was recently bustling with live-streamers.
This attention came after Han achieved an impressive score of 699 out of 750 in the gaokao, China’s national college entrance exam.
She has received offers from China’s two leading universities, Tsinghua University and Peking University.
Han’s accomplishment is particularly remarkable given her family’s impoverished circumstances.
Her mother suffers from ankylosing spondylitis, an inflammatory arthritis affecting the spine, preventing her from working. Her father, who earns a living through farming and odd jobs, serves as the family’s sole provider. Han also has a younger sister.
The UK’s Financial Conduct Authority (FCA) published a landmark review on Monday that proposes recommendations to regulate the impact of artificial intelligence (AI) on the financial decisions made by consumers.
The review, titled the Mills Review, anticipates that both consumers and firms will start delegating “more financial decision-making to AI systems,” including for agreements, initiating transactions, and executing decisions “within agreed parameters.” One of the key findings of the review outlined that while AI can help bridge advice gaps and “support growth,” there remain risks “associated with fraud, cyber security, and consumer harm.” Conducting the review, Sheldon Mills highlighted that “AI can also amplify risks: bias, discrimination, exclusion, opaque decision-making (particularly when multiple AI models interact), misleading or hallucinatory advice and erosion of consumer trust.”
The review stated that presently, one in five adults in the UK are “already open to AI making decisions for them,” particularly when decisions feel “complex or high stakes.” It found that roughly 26 percent of the population “trust general-purpose tools such as ChatGPT, Claude or Gemini for financial advice” with little awareness that such platforms provide no “formal routes to recourse” or protections.
Overall, the Mills Review identified four areas that it anticipates will be impacted by AI in the financial sector: “the transformation of firms,” “new consumer journeys,” “a reshaped competition landscape,” and “amplified financial crime and cyber risk.” The FCA projected the shift in how consumers and firms consult AI to take place by 2030.
The Mills Review put forth seven “priority” recommendations to be considered by the FCA Board. It recommended that any transitions to autonomous AI models be monitored and that regulatory frameworks and perimeters be adapted and secured. The review called for the strengthening of “system-wide coordination and oversight,” the scaling up of the FCA’s AI Lab to enable it to support AI models and innovation for agentic finance, and an “AI-enabled agentic supervisory model” to be built and adopted. Finally, it recommended that a trusted “public-interest AI-enabled financial capability service” be developed.
The FCA announced, in the press release, that it will launch an AI “good and poor practice publication” in late 2026.
Finance
Fayette County Public Schools Board of Education approves audit contract, new finance director position
LEXINGTON, Ky. (WKYT) – The Fayette County Public Schools Board of Education approved a one-year audit contract capped at $131,750 plus $225 per hour during a virtual meeting Monday, along with a new finance director job description.
The contract is with Mauldin & Jenkins Certified Public Accountants, an Atlanta-based firm, and covers the 2025-26 fiscal year and the restatement of the 2024-25 fiscal year and ancillary services through FY 2029-2030. The work is set to be completed by Nov. 15.
The board approved the contract in a 5-0 vote.
Audit contract details
Interim Chief Financial Officer Kyna Koch said the cost is already accounted for in the district’s budget.
“And is actually less than we expected given our current situation — we were thrilled with the bid,” Koch said.
Koch said she believes this is Mauldin & Jenkins’ first school district audit in Kentucky, but that the firm works with school districts of more than 100,000 students throughout the Southeast.
“Quite frankly when I spoke to the folks at KDE they were thrilled because we’re running kind of short of auditors who want to do school district audits — so all around I think this was a win-win for everyone,” Koch said.
New finance director position
The board also approved a new job description for the position of Director of Finance. Acting Superintendent Dr. Bill Bradford said the title will replace two associate director positions.
“Which will not only save the school district money but it’s also going to streamline our work and align internal controls to make room for a more efficient unit,” Bradford said.
Koch said the position will be posted as soon as possible following the board’s approval.
Closed session
The board went into closed session for more than an hour to discuss pending investigations that could lead to employee discipline. When the board returned, it took no action and adjourned the meeting.
Copyright 2026 WKYT. All rights reserved.
-
Los Angeles, Ca40 minutes agoBicyclist killed by hit-and-run driver in Long Beach
-
Detroit, MI57 minutes agoChild shot while riding bike outside home on Detroit’s west side, police say
-
San Francisco, CA1 hour agoBay Area restaurant has strict policy on acceptable children behavior
-
Dallas, TX1 hour agoDetroit Pistons trade Marcus Sasser to Dusty May’s Dallas Mavericks
-
Miami, FL1 hour agoThe offseason has been a massive success for the Miami Heat
-
Boston, MA1 hour agoCan’t afford Boston’s priciest restaurants? Try these instead. – The Boston Globe
-
Denver, CO1 hour agoCity of Denver says images of piling waste a case of illegal dumping
-
Seattle, WA2 hours ago14-year-old dies in electric motorcycle crash at Seattle bike park
