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- Republican candidate Vivek Ramaswamy has taken aim at some of America's biggest money managers.
- He described BlackRock, State Street, and Vanguard as "the most powerful cartel in human history".
- The 'Big Three' investment firms hold significant shareholder rights in most S&P 500 companies, according to him.
Republican candidate Vivek Ramaswamy has taken aim at some of the world's biggest money managers as part of his campaign against the environmental, social and governance (ESG) framework.
The GOP presidential longshot said in a post on X on Sunday that the 'Big Three' investment firms – BlackRock, State Street, and Vanguard – represent 'arguably the most powerful cartel in human history'.
"They're the largest shareholders of nearly every major public company (even of each other)," he wrote.
"And they use *your* own money to foist ESG agendas onto corporate boards - voting for "racial equity audits" & "Scope 3 emissions caps" that don't advance your best financial interests. This raises serious fiduciary, antitrust, and conflict-of-interest concerns."
Ramaswamy's comments echoed the Wall Street Journal's 2022 op-ed on breaking up ESG investing giants into political rhetoric, which argued that the 'Big Three' have "long used their dominance in passive-investment funds to force corporations to comply with their preferred set of environmental, social and governance policies."
The idea can be traced back to a 2017 academic paper which found that BlackRock, State Street and Vanguard together constitute the largest shareholder in 88 percent of S&P 500 firms. According to its authors, the firms' illiquid and permanent positions affords them heavy influence in shareholder voting at the expense of passive index investors themselves.
For Ramaswamy, this point forms just one part of his crusade against the idea of ESG as a whole.
In a video accompanying his post on X, he expresses further skepticism on stakeholder capitalism's relationship with wider social issues.
"My practical answer is if it comes in an acronym — FTC, SEC, FBI, DOJ, WEF, WHO, NATO, UN — we may have good reasons to be skeptical of the purpose of any acronymized institution. I say that only half flippantly," Ramaswamy said.
The fact that these are initialisms and not acronyms seems not to have deterred his fanbase, who paid rapt attention to the investor-turned-politician's anti-woke, anti-ESG speech at the Nixon Library in Yorba Linda, California.
Ramaswamy contends with Florida governor Ron DeSantis for second place in the polls – both of whom lag behind former President Donald Trump in the fight for the 2024 Republican presidential nomination.
Earlier this week, Nobel economist Paul Krugman took aim at the GOP hopeful, mocking Ramaswamy's understanding of economics.
"He probably believes that he knows what he's talking about," Krugman remarked on Sunday.
"Rich men in general, and tech bros in particular, are often under the delusion that they have deep insights into monetary economics, usually coming from what they vaguely remember from Atlas Shrugged."