This is exactly why Larry Fink makes these statements: to singal the correct virtues and keep himself out of trouble. This is the modus operandi for most people who possess unfairly oversized influence today.
BlackRock helped to play one of the instrument, but there are many instruments in the game of finance.
See it this way:
In the old world, people produces actual product to get rich, the landlord, the factory owners etc. It worked out fine overall so the world accepted this game mode as an option, in addition to the old lord/emperor mode.
Then, some smart gamblers discovered that they can gamble on promises and expectations to get rich too, and it worked out good overall so the world again accepted it as a new game mode as an option too.
The wealth divide always exists, and historically can largely/only be destroyed by time and/or large scale disasters. But in the new gambler game mode, most people ain't in it (as in "It's a big club and you ain't in it" from George Carlin) and don't have the power to play it. It's a system don't reward honor, loyalty or labor. That's why most people are left out while the riches steams far ahead (then jets far ahead, then rockets far ahead, you get the idea).
Isn't this why this statement should be taken seriously?
But your statement implies the opposite, which is to ignore Larry Fink's warning. That appears irrational.
This is a man who's dedicated his life to enriching passive investors. The people building AI are working hard to push the frontiers of science and technology. They deserve to get rich. Because they're creating new wealth for all of us. Yet for some reason Larry Fink views this as a problem. That tells you all you need to know. His loyalty is to the idle ruling class that's so incompetent they need him to manage their wealth. Blackrock is a business that charges people a fee to take control of their shareholder voting rights basically, which is a power he's abused for years. Financial people don't build anything. Yet somehow the system gives him the authority to dictate decisions for the people who do. That system needs to change.
If you believe in AI hype (which you seem to) you should acknowledge the passive investors are the ones funding the massive data center buildouts, infrastructure investment, and paying for R&D that has not yet proven profitable.
This may make you sad, but the system exists to allocate capital to projects like this. And without large financial institutions and concentrated wealth, none of that would happen.
This is an overly charitable take on the role of AI companies.
A more realistic view would be that they shamelessly plundered the work of millions of people, used it to destroy the livelihood of the original creators, while making a profit for themselves out of this collective nightmare.
> Because they're creating new wealth for all of us
Let's not give them too much credit here. They are aiming to capture the vast majority of that wealth for themselves, the rest of us are going to be fucked
> Says the man who actually widens the wealth divide.
Which doesn't make him wrong about the AI boom being a huge risk in making the wealth divide (already beyond gilded age levels) much worse.
Of course, because he is who he is the only solution he talks about is getting people to "invest in stocks", which, yeah that makes a ton of sense if you already have wealth since the current ruling class have shown that they will not, under any circumstances, let number go down even if none of the economics make sense (sure, they'll orchestrate a little dip here and there so they can profit massively off the insider information, but hey crime is legal bro).
But it does nothing for the many people who are really going to get squeezed here who are already living paycheck to paycheck and watching the water rise up to about their necks at this point.
Until housing is solved the wealth divide will continue to grow whether ai lives up to expectations or not. Higher wealth taxing funding UBI etc. will be largely ineffective without solving housing.
All this new fangled talk about ABUNDANCE yadda yadda I find quite silly. We already live in abundance, most jobs for instance already pay very livable wages for example. It's just not livable because of mainly housing (& more broadly renting & land prices)
Housing is causing a wealth gap. A private company or three being able to rent virtual employees for $100,000 a year and absorbing all white collar work would cause far more of a wealth gap.
The abundance idea is quite interesting in that in the near future we may have an abundance of most stuff people want including healthcare, nice food cars etc. produced partly with AI and robots. At the moment we still need people to make stuff hence the capitalist system continues.
I agree housing is an issue but we are not at the stage where they can say everyone have a house and take a holiday.
Well of course. The whole point of AI is devalue human intelligence (one of the last things someone can use to pull themselves up by their bootstraps) in favor of something a rich guy can buy more than you can imagine with money.
If I need money, and you have money, there are only two ways I can get money from you (ignoring charity):
1. By giving you something worth more than money to you.
2. By promising that giving money to me will make you richer, earning you more than you gave me. (A loan, a business investment, etc.)
The richer you are, the fewer things there in category 1 that I could plausibly deliver. I probably can't get away with lying to you in category 2 for long, so going that way may save me today, but it will make you richer.
Without redistribution of some sort, wealth concentrates, and wealth concentration probably even accelerates. No AI needed. That's just the interesting flavor it takes these days.
There are plenty of inventors that made more money than the capital providers. Nearly every founder (Jobs, Zuck, Musk, Google Guys, Gates) all made more wealth than the investors that bought in along the way.
I didn't say that was impossible. It can happen from time to time. But Jobs, Zuck, Musk etc. are terrible examples of it, because there's a third "type 2", besides investments and loans, that I should have mentioned. It is employment.
An employer, too, isn't going to employ someone in the long run unless they make more money on them than they pay them. Jobs, Zuck's etc. investors succeeded (well, on average) in getting back more money than they gave out. But Jobs, Zuck etc. got rich by convincing a lot of others -- their employees -- to take the same kind of deal: make me richer than I make you.
This is obvious and not an insight. The question is if people like the executives of Blackrock will agree to be taxed more heavily, to draw regulations to make competition more fair to small business, etc. Right now I don’t see anything useful happening.
I mean this is basically the foundation of any cyberpunk novel. You don't need to read that far ... just look at the works of Gibson, Neal Stephenson, Philip K. Dick and Richard Morgan.
From Neuromancer and Snow Crash to Altered Carbon the theme is that technology is not salvation but as another axis of inequality.
The majority of households in the US have no savings of any kind and rural suicide rates have jumped by nearly 50% in the last 25 years. Y'all have just about backed everyone into a corner already.
How much of this is a cultural problem with Americans though?
Immigrant families save a higher percentage than Americans even when they make less money. Americans notoriously overconsume and are not big on saving.
That there are cultural issues around consumption is absolutely not in question. That said I watched one of my great uncles raise three kids and put every one of them through college cultivating ~400 acres with equipment he owned outright and could readily maintain and repair himself when issues arose. Fast forward 40 years and "small" farmers are forced to take on and then service literally millions in debt just to break even (if they're lucky and the weather holds). So while I agree wholeheartedly that the modern cultural acceptance of living well beyond one's means is deeply problematic I'd prioritize breaking big industry's chokehold on all the things before telling folks they should tighten their belt.
I just think if people want results they should focus on the factors they can control. Changing government policy and industry policy is a slow process and can take decades for results and often has unintended consequences.
And that’s just the U.S. - inequality there is comparatively low compared to an awful lot of the world. Brazil, for instance, is just nuts, and resultantly spends a lot of its time teetering around a political sinkhole.
Unfortunately, it’s been the outcome of every system we’ve yet tried - wealth always accumulates. It has, so far, only been redistributed through violence - either direct action by the proletariat, or their mass slaughter in war, allowing redistribution amidst the survivors.
I’d love to imagine that this time we can find a different path, but ten millennia of precedent is a hard trend to buck.
"ten millennia of precedent is a hard trend to buck"
Our species has been on the planet for what, roughly 300,000 years? 290,000 of which was spent mostly on chasing our food. By comparison our modern fumble-fucking around with political systems designed by and for a notional elite class is a blink of the eye. We've beaten worse odds.
I know this is a classic boogeyman, but while large institutional investors are highly visible, they don’t own much of the residential real estate market or contribute to price changes in any meaningful way.
Large institutional investors own < 1% of single family homes and < 3% of single family rentals.
20% of US single family homes are investor owned at all, and 85% of those are held by mom‑and‑pop with <= 5 properties.
It’s retail investors that are pushing up the market for other retail buyers.
While Blackstone and other PE firms are involved in buying those assets directly (part of my old job), Blackrock is also indirectly involved by buying up massive portions of the REITs listed by these firms, which validated the business in the first place. Without the extremely insane amounts of money pumped by Blackrock, Vanguard and State Street into these structures, all for some measly 4-5% return (laughable for most sophisticated investors but apparently good enough for these guys), they were able to put the accelerant to the fire. Neither BX nor any other PE firm would be doing this model if a market didn't exist for it.
While I'm obviously biased here, imo Blackstone is much better still because you don't see Steve Schwarzman go around pontificating while using the voting rights of passive investors to force certain behaviors upon the boards of nearly every company.
Says the man who actually widens the wealth divide. One of the biggest global risks right now is Larry Fink being out of prison.
This is exactly why Larry Fink makes these statements: to singal the correct virtues and keep himself out of trouble. This is the modus operandi for most people who possess unfairly oversized influence today.
he cares because he's worried about the pendulum swinging back and the mob coming at him with pitchforks and guillotines. and he's right.
BlackRock helped to play one of the instrument, but there are many instruments in the game of finance.
See it this way:
In the old world, people produces actual product to get rich, the landlord, the factory owners etc. It worked out fine overall so the world accepted this game mode as an option, in addition to the old lord/emperor mode.
Then, some smart gamblers discovered that they can gamble on promises and expectations to get rich too, and it worked out good overall so the world again accepted it as a new game mode as an option too.
The wealth divide always exists, and historically can largely/only be destroyed by time and/or large scale disasters. But in the new gambler game mode, most people ain't in it (as in "It's a big club and you ain't in it" from George Carlin) and don't have the power to play it. It's a system don't reward honor, loyalty or labor. That's why most people are left out while the riches steams far ahead (then jets far ahead, then rockets far ahead, you get the idea).
Isn't this why this statement should be taken seriously? But your statement implies the opposite, which is to ignore Larry Fink's warning. That appears irrational.
No logically, it would be that Blackrock did not pursue its business any further.
This is a man who's dedicated his life to enriching passive investors. The people building AI are working hard to push the frontiers of science and technology. They deserve to get rich. Because they're creating new wealth for all of us. Yet for some reason Larry Fink views this as a problem. That tells you all you need to know. His loyalty is to the idle ruling class that's so incompetent they need him to manage their wealth. Blackrock is a business that charges people a fee to take control of their shareholder voting rights basically, which is a power he's abused for years. Financial people don't build anything. Yet somehow the system gives him the authority to dictate decisions for the people who do. That system needs to change.
If you believe in AI hype (which you seem to) you should acknowledge the passive investors are the ones funding the massive data center buildouts, infrastructure investment, and paying for R&D that has not yet proven profitable.
This may make you sad, but the system exists to allocate capital to projects like this. And without large financial institutions and concentrated wealth, none of that would happen.
This is an overly charitable take on the role of AI companies. A more realistic view would be that they shamelessly plundered the work of millions of people, used it to destroy the livelihood of the original creators, while making a profit for themselves out of this collective nightmare.
> Because they're creating new wealth for all of us
Let's not give them too much credit here. They are aiming to capture the vast majority of that wealth for themselves, the rest of us are going to be fucked
> Says the man who actually widens the wealth divide.
Which doesn't make him wrong about the AI boom being a huge risk in making the wealth divide (already beyond gilded age levels) much worse.
Of course, because he is who he is the only solution he talks about is getting people to "invest in stocks", which, yeah that makes a ton of sense if you already have wealth since the current ruling class have shown that they will not, under any circumstances, let number go down even if none of the economics make sense (sure, they'll orchestrate a little dip here and there so they can profit massively off the insider information, but hey crime is legal bro).
But it does nothing for the many people who are really going to get squeezed here who are already living paycheck to paycheck and watching the water rise up to about their necks at this point.
Here is the letter if you want the primary source: https://www.blackrock.com/corporate/literature/presentation/...
And if you dont want to read, here is the hourlong audio: https://www.blackrock.com/corporate/investor-relations/larry...
Those looking for a deep explanation, this isnt as much about AI as it is about societal participation in prosperity.
at this point is there a difference? stats show the economy is basically stagnant outside of a handful IT orgs mostly doing AI
Until housing is solved the wealth divide will continue to grow whether ai lives up to expectations or not. Higher wealth taxing funding UBI etc. will be largely ineffective without solving housing.
All this new fangled talk about ABUNDANCE yadda yadda I find quite silly. We already live in abundance, most jobs for instance already pay very livable wages for example. It's just not livable because of mainly housing (& more broadly renting & land prices)
Housing is causing a wealth gap. A private company or three being able to rent virtual employees for $100,000 a year and absorbing all white collar work would cause far more of a wealth gap.
The abundance idea is quite interesting in that in the near future we may have an abundance of most stuff people want including healthcare, nice food cars etc. produced partly with AI and robots. At the moment we still need people to make stuff hence the capitalist system continues.
I agree housing is an issue but we are not at the stage where they can say everyone have a house and take a holiday.
Very convenient how his solution is "bringing more people into the capital markets", also known as "more customers for my company".
Well of course. The whole point of AI is devalue human intelligence (one of the last things someone can use to pull themselves up by their bootstraps) in favor of something a rich guy can buy more than you can imagine with money.
[dead]
Well, he'd know I guess.
If I need money, and you have money, there are only two ways I can get money from you (ignoring charity):
1. By giving you something worth more than money to you.
2. By promising that giving money to me will make you richer, earning you more than you gave me. (A loan, a business investment, etc.)
The richer you are, the fewer things there in category 1 that I could plausibly deliver. I probably can't get away with lying to you in category 2 for long, so going that way may save me today, but it will make you richer.
Without redistribution of some sort, wealth concentrates, and wealth concentration probably even accelerates. No AI needed. That's just the interesting flavor it takes these days.
There are plenty of inventors that made more money than the capital providers. Nearly every founder (Jobs, Zuck, Musk, Google Guys, Gates) all made more wealth than the investors that bought in along the way.
I didn't say that was impossible. It can happen from time to time. But Jobs, Zuck, Musk etc. are terrible examples of it, because there's a third "type 2", besides investments and loans, that I should have mentioned. It is employment.
An employer, too, isn't going to employ someone in the long run unless they make more money on them than they pay them. Jobs, Zuck's etc. investors succeeded (well, on average) in getting back more money than they gave out. But Jobs, Zuck etc. got rich by convincing a lot of others -- their employees -- to take the same kind of deal: make me richer than I make you.
The reverse is also true though. I am not going to work for you unless you pay me more for my time than it is otherwise worth.
This is obvious and not an insight. The question is if people like the executives of Blackrock will agree to be taxed more heavily, to draw regulations to make competition more fair to small business, etc. Right now I don’t see anything useful happening.
I mean this is basically the foundation of any cyberpunk novel. You don't need to read that far ... just look at the works of Gibson, Neal Stephenson, Philip K. Dick and Richard Morgan.
From Neuromancer and Snow Crash to Altered Carbon the theme is that technology is not salvation but as another axis of inequality.
Yes, we were warned. It turns out we are not good at heeding warnings, at all.
something something Torment Nexus something
Yup
People will downvote you for talking about fiction, meanwhile we're sleepwalking straight into the worst societies that fiction authors predicted
The majority of households in the US have no savings of any kind and rural suicide rates have jumped by nearly 50% in the last 25 years. Y'all have just about backed everyone into a corner already.
How much of this is a cultural problem with Americans though?
Immigrant families save a higher percentage than Americans even when they make less money. Americans notoriously overconsume and are not big on saving.
That there are cultural issues around consumption is absolutely not in question. That said I watched one of my great uncles raise three kids and put every one of them through college cultivating ~400 acres with equipment he owned outright and could readily maintain and repair himself when issues arose. Fast forward 40 years and "small" farmers are forced to take on and then service literally millions in debt just to break even (if they're lucky and the weather holds). So while I agree wholeheartedly that the modern cultural acceptance of living well beyond one's means is deeply problematic I'd prioritize breaking big industry's chokehold on all the things before telling folks they should tighten their belt.
Agreed it’s a multitude of issues.
I just think if people want results they should focus on the factors they can control. Changing government policy and industry policy is a slow process and can take decades for results and often has unintended consequences.
Reducing consumption helps immediately.
That's all the proof you need they'll try to draft them into a kinetic ground war with Iran. It's better to burn out than to fade away.
And that’s just the U.S. - inequality there is comparatively low compared to an awful lot of the world. Brazil, for instance, is just nuts, and resultantly spends a lot of its time teetering around a political sinkhole.
https://en.wikipedia.org/wiki/Gini_coefficient
Unfortunately, it’s been the outcome of every system we’ve yet tried - wealth always accumulates. It has, so far, only been redistributed through violence - either direct action by the proletariat, or their mass slaughter in war, allowing redistribution amidst the survivors.
I’d love to imagine that this time we can find a different path, but ten millennia of precedent is a hard trend to buck.
"ten millennia of precedent is a hard trend to buck"
Our species has been on the planet for what, roughly 300,000 years? 290,000 of which was spent mostly on chasing our food. By comparison our modern fumble-fucking around with political systems designed by and for a notional elite class is a blink of the eye. We've beaten worse odds.
Legalize debt for all and all are in debt. Strange and surprising.
It's almost like they are about to rediscover taxes.
doesnt larry fink need a bailout
Would be nice if Blackrock weren't outbidding first time homebuyers to purchase residential properties to rent out at inflated rates.
I know this is a classic boogeyman, but while large institutional investors are highly visible, they don’t own much of the residential real estate market or contribute to price changes in any meaningful way.
Large institutional investors own < 1% of single family homes and < 3% of single family rentals.
20% of US single family homes are investor owned at all, and 85% of those are held by mom‑and‑pop with <= 5 properties.
It’s retail investors that are pushing up the market for other retail buyers.
https://thedailyrecord.com/2025/07/08/investor-homebuying-hi...
https://www.aei.org/research-products/report/institutional-i...
You've got them mixed up with Blackstone.
While Blackstone and other PE firms are involved in buying those assets directly (part of my old job), Blackrock is also indirectly involved by buying up massive portions of the REITs listed by these firms, which validated the business in the first place. Without the extremely insane amounts of money pumped by Blackrock, Vanguard and State Street into these structures, all for some measly 4-5% return (laughable for most sophisticated investors but apparently good enough for these guys), they were able to put the accelerant to the fire. Neither BX nor any other PE firm would be doing this model if a market didn't exist for it.
While I'm obviously biased here, imo Blackstone is much better still because you don't see Steve Schwarzman go around pontificating while using the voting rights of passive investors to force certain behaviors upon the boards of nearly every company.