Asset Manager Capitalism as a Corporate Governance Regime

Abstract

<p>Who holds power in corporate America? Scholars have invariably answered this question in the language of ownership and control. This paper argues that tackling this question today requires a new language. Whereas the comparative political economy literature has long treated dispersed ownership and weak shareholders as core features of the U.S. political economy, a century-long process of re-concentration has consolidated shareholdings in the hands of a few very large asset management companies. In an historically unprecedented configuration, this emerging asset manager capitalism is dominated by shareholders that are fully diversified ‘universal owners’, while lacking direct economic interest in the performance of portfolio companies. The paper reconstructs the history of this institutional configuration and examines the fault lines of the new political economy of corporate governance.</p>

The Wall Street Consensus

“…But their systemic importance in WSC circles is not accidental. It reflects the political economy of macro‐financial reform in high‐income countries after the global financial crisis (Dafermos et al., 2020; Storm, 2018; also Braun, 2020b). Worried primarily by the ‘global banking glut’ (Shin, 2012), that is, excessive cross‐border global bank lending, high‐income countries tightened global banking rules while simultaneously promoting market‐based finance, a ‘resilient’ form of shadow banking dominated by institutional investors and their asset managers (Gabor, 2020; Storm, 2018).…”

“…The growing footprint of these ‘new power brokers of modern capital markets’ (Fisch et al., 2019: 19; also Fichtner et al., 2017) reflects the weakening capacity of the state to tax multinational corporations and high‐net‐worth individuals (that pour their cash into institutional investment vehicles) and to provide traditional welfare to its citizens via public health, pensions, education (prompting them to turn to asset‐based welfare via pension funds and insurance companies), often under the pressure of fiscal austerity discourses (Helgadóttir, 2016). These macro‐financial forces created a portfolio glut, characterized by an unprecedented concentration of capital in the hands of a few global asset managers such as BlackRock (Braun, 2020b).…”

The Wall Street Consensus

“…These political forces together have created a portfolio glut. Mirroring the 'banking glut' of the pre-2008 period of financial globalisation, generated by a handful of global banks, the portfolio glut is also characterised unprecedented concentration of capital in the hands of a few global asset managers such as Blackrock (Braun, 2020b).…”

Die Relevanz der deutschen Internationalen Beziehungen und die Notwendigkeit polit-ökonomischer Konfliktanalyse

“…Die gesamte gesellschaftliche Reproduktion hängt von einer offenen Wirtschaft wie der deutschen von diesen Beziehungen ab. Die Vergleichende Politische Ökonomie bearbeitet diesen Topos seit Jahrzehnten (Braun 2020).…”