The Dispossessed Shareholder: How the American Citizen Lost Control of the American State

Who's the owner of your country?

Prologue — The Great American Lie

“You own this country.” This is the foundational myth of the American civic religion, the catechism taught to every child. The ballot is your share of power, the tax your contribution to the common enterprise, the flag your inheritance. It is a powerful and enduring story, one that frames citizenship as the ultimate form of ownership. But ownership, in any meaningful sense, requires two fundamental rights: control and dividends. Control is the capacity to direct an asset toward one's chosen ends. Dividends are the right to benefit from the proceeds that asset generates. The average American citizen, upon closer inspection, possesses neither.

The promise of control is vested in the vote, a sacred right presented as the primary instrument of popular will. Yet this instrument is heavily constrained. The American political landscape is dominated by a two-party system that presents a binary choice, often between two platforms that converge on the most fundamental questions of economic and foreign policy. Voters are compelled to select a candidate, but the evidence suggests they are merely electing a pre-determined policy package rather than influencing its contents. The original constitutional promise, the right “to petition the Government for a redress of grievances,” has been warped from a tool of citizen influence into a professionalized, multi-billion-dollar industry of corporate and foreign lobbying, a system in which the citizen’s voice is drowned out by the roar of capital.

The promise of dividends—a share in the nation's prosperity—has proven equally illusory. For decades following World War II, a rising economic tide did lift most boats. But beginning in the 1970s, the link between the productivity of the American worker and their compensation was severed. The nation’s economic engine became vastly more powerful, but the rewards were systematically funneled to the apex of the economic pyramid, enriching a small class of capital owners and corporate managers while the median citizen’s economic fortunes stagnated.

This report is an audit of a stealth expropriation. It tells the story of how the American citizen was transformed from a majority shareholder in a republic to a disempowered, non-voting, minority stakeholder in a globalized empire. The great American lie is not a simple falsehood but a sophisticated piece of social engineering. It operates by conflating the symbols of ownership—the flag, the ballot, the patriotic rhetoric—with the substance of ownership. This symbolic framework is essential for maintaining social cohesion. A populace that believes it is in control is far less likely to revolt against its own disenfranchisement. The ritual of voting becomes a cathartic release of political energy, a biennial ceremony that reinforces the illusion of control while the actual levers of power are operated elsewhere, in corporate boardrooms, on Wall Street trading desks, and in the capitals of foreign nations. This narrative is not just a lie; it is the most critical asset of the new ownership class. Before any power can be reclaimed, the citizen must first understand how thoroughly they have been dispossessed. This is the story of how the empire was sold, while the citizens who funded it were told they still owned the deed.

Financial Dilution: From Stockholder to Serf

The primary mechanism of the American citizen’s dispossession was not a foreign invasion or a political coup, but a quiet, internal revolution in the structure of capital. Over the past half-century, the very concept of ownership in the American economy was re-engineered. The citizen’s own wealth—held in retirement accounts and public pension funds—was aggregated, consolidated, and redeployed by a new class of financial overlords. This capital, once a potential source of national strength and broadly shared prosperity, was weaponized to serve a global agenda that often ran directly counter to the interests of the American worker and consumer. The citizen was systematically diluted, transformed from a direct stockholder in the national enterprise into a passive, non-voting serf in a financialized global fiefdom.

The Rise of the New Overlords: BlackRock, Vanguard, and State Street

A new and unelected power has consolidated control over the commanding heights of corporate America. The passive index fund industry, dominated by a triumvirate of asset managers—BlackRock, Vanguard, and State Street, known as the “Big Three”—has achieved a level of market concentration without historical precedent. Together, these three firms constitute the largest shareholder in an astonishing 88 percent of the companies listed in the S&P 500 index. The scale of this power is difficult to comprehend. BlackRock, the largest of the three, manages assets totaling $11.5 trillion as of 2024, a sum that dwarfs the gross domestic product of every nation on Earth save for the United States and China.

This concentration of ownership is the result of a massive, historically unprecedented swing in investment behavior. Between 2008 and 2015 alone, investors pulled roughly $800 billion from actively managed funds while pouring approximately $1 trillion into passively managed ones. This tidal wave of capital, driven by the appeal of lower fees and diversified market exposure, had the paradoxical effect of concentrating voting power in the hands of the few firms that manage these indices. The Big Three do not merely own a piece of corporate America; in many ways, they are corporate America. Their influence is so pervasive that federal regulators have begun to take notice. The Federal Trade Commission (FTC) and the Department of Justice (DOJ) have filed statements of interest in legal cases alleging that the Big Three use their immense shareholder power to engage in anticompetitive conspiracies, such as colluding to drive down coal production to advance Environmental, Social, and Governance (ESG) goals, ultimately forcing consumers to pay higher energy prices.

This is not just ownership; it is a phenomenon known as “common ownership,” where a single set of investors owns significant stakes in supposedly competing firms. When BlackRock is a top shareholder in both Coca-Cola and PepsiCo, or in JPMorgan Chase, Bank of America, and Citigroup, its incentive is not for one firm to aggressively compete against the other, but for the overall industry to maximize profits. This structure inherently discourages price wars, wage competition, and disruptive innovation. The economic consequences are staggering. One 2018 study estimated that common ownership by large investment firms raised corporate profits by $378 billion in a single year, while simultaneously lowering the consumer surplus by an estimated $799 billion—a massive transfer of wealth from the public to concentrated capital, generating a deadweight loss to the economy equivalent to 4 percent of the total surplus produced by U.S. public corporations. The very structure of modern American capital has been rewired to stifle competition and extract value from the citizen.

The Citizen's Capital, Weaponized Against Them

The fuel for this global financial machine is not the private wealth of a few billionaires, but the aggregated retirement savings of millions of American citizens. The life savings of teachers, firefighters, police officers, and other public servants, held in massive public pension funds, have become the primary capital base for the Big Three’s global operations. Over the past few decades, these pension funds have undergone a radical transformation in their investment strategy. Once conservative portfolios heavily weighted toward fixed-income securities, they have diversified aggressively into global public equities and so-called “alternative investments” like private equity and hedge funds—asset classes managed by firms like BlackRock.

This shift was driven by a structural necessity. On average, over 60 percent of public pension benefit payments are funded not by employee or employer contributions, but by investment returns. To meet their obligations to retirees, fund managers are legally and professionally bound to seek the highest possible returns, regardless of geographic or social consequences. This creates a deeply perverse incentive structure that pits the American citizen against themselves. The pension fund manager in California, acting as a prudent fiduciary for a retired teacher, is compelled to allocate capital to the investment vehicle that promises the highest yield. That vehicle, managed by BlackRock, may in turn invest in a Chinese manufacturing firm that offers higher margins and lower labor costs than its American competitor. The success of that Chinese firm leads to the closure of a factory in Ohio, devastating a local community and eliminating the job of an American worker.

This dynamic gives concrete meaning to the aphorism: “You didn’t lose your job to China—you lost it to your own pension fund investing in China.” The system forces the citizen to participate in the financing of their own economic undoing. Their interest as a long-term retiree (maximizing investment returns) is placed in direct conflict with their interest as a present-day worker (maintaining domestic industry and employment). Global capital, managed by an unaccountable technocratic elite at the Big Three, acts as the arbiter, and its logic is simple: capital flows to where it is treated best, and national allegiance is not a factor in its calculation. The citizen’s own retirement security has been harnessed to power the engine of globalization that has eroded their economic sovereignty.

The Great Uncoupling: Citizen ROI Since 1971

While the citizen’s capital was being used to globalize production and concentrate corporate control, the direct economic returns to the citizen-shareholder were systematically suppressed. The period following the 1971 decision to uncouple the U.S. dollar from the gold standard—an event that untethered the global financial system from any physical anchor—marks a great and tragic divergence in the American economic story. For the first time in the post-war era, the fortunes of the average worker became detached from the growth of the economy they helped create.

The data paints a stark and undeniable picture of this decoupling. From 1979 to 2024, the net productivity of the American worker—a measure of the economic value they produced per hour—skyrocketed by 80.9 percent. Yet, over that same period, their average hourly compensation, adjusted for inflation, grew by a mere 29.4 percent. Productivity grew at a rate 2.7 times faster than worker pay. This chasm between productivity and pay represents trillions of dollars in national income that did not flow to the workers who generated it.

That wealth was instead transferred upward, fueling one of the most dramatic increases in inequality in modern history. Between 1979 and 2021, the average income of the richest 1 percent of American households grew to be 139 times as large as the average income of the bottom 20 percent. The concentration was even more extreme at the very top. Since 1970, the top 1 percent has seen its share of national income increase by 10 percentage points. This income concentration translated directly into wealth concentration. Today, the top 10 percent of households hold over two-thirds of the nation’s total wealth, while the bottom 50 percent hold less than 4 percent.

Meanwhile, the traditional pillar of middle-class wealth accumulation—homeownership—has faltered. After rising for decades, the U.S. homeownership rate peaked in the early 2000s and has since stagnated or declined. The rate in 2024 stood at 65.6 percent, exactly the same level as it was in 1980, meaning an entire generation has seen no progress in this key metric of economic security.

Table 1: Citizen ROI Since 1971 — The Great Decoupling

This table provides the central exhibit for the citizen’s economic disenfranchisement. It visually demonstrates that as the American economic pie grew larger and more valuable, the slice allocated to the average citizen shrank in relative terms. The "dividends" of the American enterprise were no longer broadly shared. They were captured by a small class of capital owners and corporate executives, the very groups whose interests are championed by the financial behemoths on Wall Street.

The shift to passive index investing was sold to the public as a low-cost, democratizing force, a way for the small investor to participate in the gains of the market. It has proven to be the opposite. By choosing a "safe" and "diversified" S&P 500 index fund for their 401(k), the average citizen unwittingly casts a vote for the consolidation of corporate power into the hands of an unaccountable oligarchy. The very act of seeking individual financial security through diversification has, in aggregate, produced the most concentrated and powerful structure of economic control in history. The genius of this system is that it harnesses the rational, risk-averse behavior of millions of individuals to build the apparatus of their collective disenfranchisement. This new form of private, technocratic governance, which operates from the boardrooms of BlackRock and its peers, has effectively superseded the public, democratic one, all while using the public’s own money as its foundation.

The Israel Exception — A Golden Share in the American Machine

While domestic financial forces were diluting the citizen’s economic stake, a unique geopolitical arrangement was carving out a piece of their political sovereignty. The relationship between the United States and Israel cannot be understood through the standard lens of international alliances. It represents something far more profound: the acquisition by a foreign stakeholder of what amounts to a "golden share" in the American state. This special class of equity grants its holder influence over U.S. foreign policy, military appropriations, and public narrative that is unparalleled by any domestic constituency or voting bloc. This power is not accidental; it is the product of a meticulously engineered and self-perpetuating cycle of financial aid, industrial feedback loops, and one of the most formidable lobbying operations in modern history, all of which operates with a sacred bipartisan consensus that insulates it from the turbulence of normal political debate.