Bernie Sanders Warns That the U.S. Is at Risk: ‘Democracy Will Not Survive’

By: Julia Mehalko | Published: Mar 04, 2024

Vermont Senator Bernie Sanders recently took to X, formerly known as Twitter, to declare that the U.S. government’s democracy could become an oligarchy. According to Sanders, this is because three major institutional investors hold quite a lot of power.

Sanders singled out BlackRock, Vanguard, and State Street. In his tweet, he explained that these three Wall Street firms manage trillions in wealth. All three also are major shareholders in the 500 largest companies in the United States.

Bernie Sanders Issues a Grave Warning

On X, Sanders wrote, “This is what oligarchy is about. Today just 3 Wall Street firms, BlackRock, Vanguard & State Street manage $20.7 trillion in assets. These 3 firms are major shareholders in 95% of S&P 500 companies. Democracy will not survive with this concentration of economic & political power.”

Bernie Sanders speaking at a podium into a microphone in front of a city skyline in the daytime.

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In this tweet, Sanders expressed his concern over the immense power that these three firms have. He has publicly criticized firms like BlackRock in the past.


A Look Into Powerful Wall Street Firms

BlackRock and Vanguard are investment management companies, while State Street is considered a financial services company. However, all three deal with investments and assets in different ways. They all also control a lot of wealth between them.

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BlackRock, Vanguard, and State Street are considered massive institutional investors that manage index funds. Through these index funds, they are also considered large shareholders for some of the biggest companies and banks in America.

The Nation’s Largest Shareholders

Sanders is correct in his statement about these three firms being some of the largest shareholders of various companies. One criticism Sanders has often had for these firms is that they are the largest shareholders of competing companies.

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For example, they’re the top shareholders of the largest banks in the U.S., such as Bank of America and JP Morgan Chase & Co.

The Practice Of Horizontal Shareholding

While Sanders has criticized this type of shareholding, some financial analysts have differed. This practice, called horizontal shareholding, occurs when an investment firm such as BlackRock holds large stakes in various companies that are in the same industry.

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These three firms are large shareholders in many industries, such as the banking, tech, and pharmaceutical industries. To critics, this power is too great. These investment firms can have a massive influence on the stock market because of their large stakes.

Sanders’ Criticism Of Horizontal Shareholding

Sanders has long criticized many aspects of BlackRock and others. However, he’s also specifically called out the practice of horizontal shareholding.

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Sanders believes that horizontal shareholding can easily curb competition within the stock market. He believes this curbing of competition can also harm regular, working-class Americans who are attempting to invest. Many Americans try to build wealth through investing — and Sanders believes they cannot do this easily thanks to horizontal shareholding.


How Antitrust Laws Can Limit Issues

Sanders believes that horizontal shareholding can discourage competition in the stock market. He isn’t alone in this criticism. Many studies have been done that agree with his assessment and show that horizontal shareholding can have this negative impact.

Bernie Sanders standing in front of a podium outside.

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However, others believe that antitrust laws help promote competition — and help protect consumers. Some critics believe that antitrust laws should do more to reduce the negative effect horizontal shareholding can have on the stock market.


What Is An Oligarchy?

Because of investment firms’ stock market moves, Sanders has said that the U.S. will no longer be a democracy — and instead will be an oligarchy. So, what is an oligarchy?

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An oligarchy is a form of government that is run by only a few people. Often, these people are considered to be “elite” and wealthy. This group of people can be anything from billionaires and business owners to military members. Today, examples of oligarchies are Russia, China, and Iran.


Sanders Has Discussed Oligarchies Before

Sanders has often stressed that the U.S. will become an oligarchy thanks to the practices of the richest people in the country. However, in some recent cases, he’s even gone as far as to say the U.S. is already an oligarchy.

Bernie Sanders speaking into a microphone in front of a podium with a black background behind him.

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In an interview with The Guardian, Sanders said, “Oligarchs run Russia. But guess what? They run the U.S. as well.”


Sanders’ Ideal Version Of The U.S.

For years now, Sanders has discussed how the U.S. must change to better the middle class. On his website, he says, “The enormous concentration of ownership within the financial sector is hurting the middle class and damaging the economy by limiting choices and raising prices for consumers and small businesses.”

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Sanders has also warned that democracy is at stake in the U.S. He believes that the country has only two futures: either the billionaire oligarchs continue to run the show, or a “powerful unionized middle class” is formed.


Conservatives Now Go After BlackRock, Too

Sanders has said he is a democratic socialist. Other progressive Democrats, such as Senator Elizabeth Warren, have also criticized Wall Street firms like BlackRock, saying that they have no federal regulation and that they finance the climate crisis.

A view of Wall Street in New York City during the daytime, with many people walking and cars driving by.

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However, recently more conservatives have begun to criticize firms like BlackRock. To Republicans, BlackRock has made moves to push “woke” agendas.


What Critics Of Sanders Say

Though some politicians have blasted these major asset firms, others have said their criticisms are misguided. To some financial experts, the Wall Street system isn’t broken. To these experts, these firms are making money for investors, which is positive.

Bernie Sanders walking with his hand waving amid a blue and black background.

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These critics of Sanders state that the S&P 500 has done well. In 2023, it experienced a 24% gain. So, they say it’s not stagnant or lacking competition, as Sanders has said.