The 4 Companies That Secretly Control the World

Tim Cook of Apple, Sundar Pichai of Google, Elon Musk, Jeff Bezos, the president of the United States - when you think of the people controlling the world, these names come to mind. But the truth is, while these people have a significant influence over our lives, four companies secretly control the world. Only a handful of people hold significant power in those companies. These are the people who have the potential to change your life for better or worse without you ever realizing what's happening.

I made a video talking about how BlackRock controls the world, and unsurprisingly, they are one of the four companies we'll discuss today. Altogether, these four companies manage almost $24 trillion worth of assets. They have the most influence over the United States's monetary policy and operate with very little oversight, which means they're free to do almost anything they want. Their power doesn't end in the United States; these companies also own a significant stake in the vast majority of European companies that are listed on the US Stock Exchange.

Now, you might think this is an exaggeration. How can four companies control so much wealth? But it is true, and the information is available once you just look for it. From the largest retail stores like Walmart and Home Depot to transportation companies like GMC and Boeing, pharmaceutical companies like Pfizer and Johnson & Johnson, and media companies like Disney, Viacom, News Corp, NBC, CBS, Time Warner, and AT&T, they influence the banking system as they're involved in every decision made at the largest financial institutions like Bank of America, JP Morgan, Goldman Sachs, and Citigroup.

In the United States, the US Federal Reserve, the country's central banking institution, has board members who represent these four investment firms. Global financial institutions like the International Monetary Fund and the World Bank are influenced heavily by these companies. So, who exactly are these four companies?

Before I answer the question, when researching this topic, I was bombarded with a lot of data: the money these companies control, the businesses they've invested in, and all that can be very difficult to explain properly in these videos. To help me out with this, I went on brilliant.org, the best place to learn STEM subjects interactively, and took their "Exploring Data Visually" course. It's transformed how I see and interact with the complex data and statistics and also helped me convey those numbers to you guys in a way that's easily digestible.

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Back to our story. The largest of the four companies, BlackRock, was founded in 1988 by Larry Fink. Like the other three firms, BlackRock is a fiduciary, which means that a person has placed trust in them to act in their best financial interest. BlackRock does this primarily through mutual funds, a collection of assets that invest in stocks, bonds, and other securities like real estate. BlackRock currently has 70 offices in 30 countries around the globe and holds $10 trillion in assets. The company is currently worth $20 trillion, which is half of the U.S.'s yearly Gross Domestic Product (GDP); this is the measure of value created by a country by producing goods and services.

The other three companies are Vanguard, State Street, and Fidelity Investments. Vanguard manages $7.6 trillion in assets and is the world's largest issuer of mutual funds. At the end of 2022, it had 203 U.S. funds and 227 international funds which served its 50 million investors. Vanguard's founder, John Bogle, created the index investment fund in 1976, now known as the Vanguard 500 Index Fund.

You might be wondering the difference between an index and a mutual fund. An index fund is a type of mutual fund that is passively managed, as opposed to other mutual funds which are actively managed. So when Bogle invented this index fund, he created a formula to track returns on the market and invest accordingly. State Street is owned by Vanguard now, but it is the second oldest continually operating U.S. bank; its predecessor, Union Bank, was founded in 1792. State Street manages $3 trillion in investment assets. Along with Vanguard and BlackRock, it is one of the prominent three index fund managers that dominate Corporate America.

Fidelity Investments manages $4.3 trillion in assets. It was founded by Edward Johnson II in 1946 and has remained a family-owned and operated business ever since. Fidelity was the first major American finance firm to market mutual funds to everyone via mail and door-to-door sales. Before they opened their doors, the mere idea of investing had been reserved for wealthy individuals.

Hearing that alone, you might be wondering what exactly is wrong with these companies. They all sound like industry pioneers who have done incredible work to stay in business for so long, and while that is entirely right, it's only half the story. To figure out the other half, let's start with what these companies tell us they do. Each of these firms helps everyday people invest their money, and whether you're a multi-millionaire or an hourly worker looking to create a small investment fund for your family, they've helped democratize investing.

Often, investing with them can seem like a good idea, especially lately, because in today's world, we're not just worried about making money; we're concerned about making money and helping move society forward. That's where ESG investing comes in. ESG, which stands for Environmental, Social, and Governance, is a type of investing that considers social and environmental factors. Essentially, what is the company you're investing in doing about environmental issues like climate change?

All four of these firms advertise their commitment to ESG, as you would expect. Some people have mocked these firms' stance on ESG, calling it "woke investing." In response, companies like BlackRock have stated that it's not woke; it's capitalism. The way they see it, climate change poses a risk, so investing in companies that further the effects of climate change is also a risk. On the flip side, investing in companies trying to mitigate that risk is good business.

To give them all the credit, they've put their money where their mouths are. In 2021, Vanguard, BlackRock, and State Street successfully shook up the board of ExxonMobil by installing new members who promised to take on climate change. BlackRock led the state of West Virginia, a huge coal producer, out of their pledge to invest in net-zero companies. But when you peel back the curtain, it’s not as wholesome as these firms would like to make it sound, especially when it comes to ESG investing.

Every single one of these companies is about as hypocritical as they get. Vanguard specifically praises its own ESG investing while also owning $86 billion in coal companies, making it the world's largest investor in the industry. BlackRock is the top investor in fossil fuels, deforestation, war profiteering, and doing business with human rights violators. Look no further than BlackRock's deal with the Chinese government. The firm became the first company to have access to China's vast mutual fund market, followed by Fidelity. This left many skeptics wondering what they promised President Xi Jinping with this deal.

These two companies will be pouring more and more money into Chinese companies, which are primarily controlled by the Chinese government, a growing adversary of Western democracies. Even more controversial are the firms' investments in Russia. All of these companies had assets invested in Russian companies, and once the war broke out in Ukraine, they all responded, at least publicly, by freezing those investments or pulling out of them altogether.

Whether or not those assets will stay out of Russia long-term is questionable. Regardless, years and years of investments from these four companies undoubtedly helped fund Putin's invasion of Ukraine. No matter how you slice it, these companies are riddled with conflicts of interest. In Ukraine, BlackRock is one of the leaders trying to advise the country on rebuilding once the conflict is resolved. This might seem benevolent, but not all that glitters is gold.

In reality, BlackRock is simply capitalizing on a war that their funds helped finance so they can make more money. Closer to home than the others, the Johnson family, which founded and runs Fidelity, also runs a venture capital arm that competes with Fidelity's investments. This means the family benefits while Fidelity investors get a crappy deal. For example, from 2011 to 2012, F-Prime Capital, the family's venture capital arm, invested $1 million in Ultragenyx Pharmaceutical Incorporated before it went public. This investment prevented Fidelity's mutual funds from making the same play because if it did, it would have violated U.S. securities laws.

So, the family-owned fund got the better stock value, while the public funds, which invested in the company at a higher rate, kind of got screwed. Essentially, these companies, which have immense power and control in our world, tell us a manicured PR statement about what they're doing, but in reality, the story is much more complicated and problematic. None of their success would have been possible without the various proprietary technologies that developed to help their investing strategies.

The prime example is BlackRock's Aladdin technology, which began the trend of using technology to minimize the risk of investing. It manages $20 trillion in assets and predicts the outcome of every single investment while getting information and personal data on everyone who knowingly or unknowingly gave BlackRock their money. This technology and others like it are perfect for investors. They've helped to lower the cost of managing the investment while improving returns.

This type of technology is what makes companies like BlackRock and others grow; it gives them an edge. It allows them to apply their investing strategy company-wide. It enables investors to diversify their portfolios more effectively. Technologies like this democratize investing, allowing anyone of any level of wealth to benefit from a sound investment strategy. This is why over 80% of all assets invested over the last decade have gone to these four companies.

But at what cost? If these companies continue to revolutionize, advance their technologies, and control more and more investor assets, then what is the risk of ownership concentration? If BlackRock, Vanguard, Fidelity, and State Street continue increasing their influence over the biggest companies across every industry, competition is just going to decrease. They'll be competing with themselves, which isn't competing at all. This leads to less consumer choice and higher prices, and we can see this already happening in the airline industry; over the last 14 years, airfares have increased by as much as 7% because there's less pressure to compete.

BlackRock and Vanguard are among the five largest shareholders of the biggest three operators. But this isn't just about the companies; it's about the people who run and own them, the people who make the decisions, pull the levers, and hold so much power you can't imagine. Starting with Larry Fink, the founder, chairman, and CEO of BlackRock. He started out at a New York-based investment bank where he rose to manage the firm's bond department.

Unfortunately, his career there ended when he lost his department $100 million after an incorrect prediction about interest rates. This led him to focus his next venture on investing in risk management, and BlackRock was born. He founded the firm in 1988 and grew it from $5 million to $8 billion in just five years. Abigail Johnson, CEO of Fidelity Investments, didn't grow the company she leads from the ground up; she's the granddaughter of Fidelity's founder, Edward Johnson II.

She started as an analyst and portfolio manager at the company before being promoted to the president of Fidelity's Asset Management division in this position in the early 2000s. Like in an episode of "Succession," Johnson unsuccessfully attempted to remove her father as CEO over disagreements about how to lead the company. It wouldn't take too long for her time to come, though; in 2014, she was named CEO. State Street CEO Ronald O'Hanley has ties to Fidelity, having previously served as the president of asset management and corporate services there before entering his current role.

The world of finance is a lot smaller than you think. Vanguard, uniquely, is owned by its clients or instead by the funds they invest in. Its president and CEO, Mortimer J. Buckley, started his career as an assistant to the company's founder, John Bogle. Bogle, the guy who essentially invented the index fund, may not like the direction his business is going in. His warning of ownership concentration, saying that too much money is in too few hands, is undeniable.

Asset management has made Mr. Bogle a very wealthy man, but perhaps he sees beyond that. Maybe he understands the power he and others like him have over every industry they invest in and every investor who entrusts them. He may be issuing a warning to us all, but it's not one we're likely able to do anything about because these four companies are just too influential.

Our global financial system meant to empower individual investors has empowered a select few instead. So while we get distracted by celebrities' faces on the front of magazines or flashing by in our social media posts, these company leaders are behind the scenes pulling the levers and secretly deciding the financial future of our world, whether we like it or not. The worst of them all is BlackRock. Watch this video next to understand why.