At the heart of the global financial system lies a triad of power that few notice but that shapes every aspect of the modern economy: the Big Three. BlackRock, Vanguard, and State Street are the names behind the numbers, the protagonists of a capitalism that self-sustains and intertwines in an apparently infinite cycle. With assets under management exceeding $26 trillion, these giants are not merely market players but immovable engines of global capitalism.
The Big Three hold direct or indirect stakes in almost all major U.S. companies and many European ones. Their shares are far from negligible: for example, they control more than 37% of Berkshire Hathaway, the financial giant led by Warren Buffett. Their influence extends to iconic firms such as JPMorgan Chase, Johnson & Johnson, Tesla, ExxonMobil, and even The New York Times. In 88% of the top 500 U.S. companies included in the Standard & Poor’s index, at least one of the Big Three is the largest shareholder. This pervasive presence transforms their role: from mere investors, they become true arbiters of the market.
The dominance of Vanguard, BlackRock, and State Street is built on a unique structure of cross-ownership. Vanguard holds a significant stake in BlackRock, while BlackRock owns substantial shares in State Street and Geode Capital. The web of relationships among these funds not only strengthens their power but makes them practically inseparable from the global economic fabric. This system, where capital owns itself, recalls Aristotelian metaphysics: a thought that thinks itself, an entity that self-sustains and perpetuates.
This structure is further reinforced by passive funds, financial instruments that replicate stock market indices. Thanks to advanced systems like Aladdin, a management software developed by BlackRock, the Big Three can optimize investments while eliminating the human cost of decision-making. Aladdin, considered a precursor to artificial intelligence, analyzes vast amounts of market data, combining them with random simulations to manage portfolios worth billions of dollars. Aladdin’s clients include renowned institutions such as the Bank of Israel and Deutsche Bank.
Although these passive funds appear neutral, their influence is far from insignificant. The practice of buybacks – the repurchase of a company’s own shares – is a striking example. Between 1998 and 2020, U.S. companies spent $8.5 trillion on buybacks, a sum that diverts resources from productive investments to artificially inflate stock values. This phenomenon has contributed to the explosion of the Dow Jones index, which rose from 10,000 points in 2010 to over 44,000 today.
The explosive growth of the Big Three has been fueled by two main sources: central bank quantitative easing policies and the privatization of pension funds and healthcare. Between 2007 and 2021, central banks injected at least $14 trillion into the global financial system, creating massive capital flows that poured into funds managed by the Big Three. At the same time, pension funds and insurance companies – even in Europe – guarantee a steady stream of liquidity. In Italy alone, the Big Three hold strategic stakes in companies such as Snam, Leonardo, Enav, and Poste Italiane, as well as in multi-utilities like A2A, Hera, Iren, and Acea, which manage essential services such as energy, water, and waste.
This diffuse power is not only economic but also political. The Big Three influence strategic decisions in the companies they invest in and are often involved in their boards of directors. In 2018, a Vanguard board member opposed Elon Musk’s salary increase, but six years later, they approved a ten-year compensation package worth $45 billion. This episode illustrates how their supposed neutrality is, in fact, highly debatable.
However, the Big Three’s dominance is not immune to challenges. Their expansion was facilitated by globalization, but the geopolitical landscape is changing. Deglobalization policies, trade wars, and international tensions could reshape global economic dynamics. In the United States, for instance, several Republican states have started withdrawing funds managed by BlackRock, accusing it of promoting ESG (Environmental, Social, and Governance) policies deemed incompatible with local interests. This shift marks a potential turning point for a system that, until now, seemed unstoppable.
The Big Three thus represent far more than mere players in the financial market: they are the invisible core of the system, an immovable engine driving the global economy. Yet, their power, rooted in the complexity of markets and global policies, could be tested by an increasingly fragmented world. The question remains: can capital that owns itself adapt to the new challenges of the 21st century?
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