Larry Fink, CEO of BlackRock recently released its annual letter from its president and highlighted the significance of America’s 250th birthday this year, drawing parallels to a similar milestone for the modern economy.
“In July, the United States will celebrate the 250th anniversary of the country. But 2026 is much more than an American celebration,” Fink wrote.
“It is a quirk of history that in 1776, while Thomas Jefferson was writing the Declaration of Independence in Philadelphia, Adam Smith was publishing ‘The Wealth of Nations’ in Scotland – the founding text of modern economics.”
“But what started as a coincidence has, over time, become an interdependence. The two concepts are mutually reinforcing: democracy depends on citizens feeling that they have a genuine stake in the future of their country. And capital markets are now the mechanism that can make this real – real in dollars, in euros, in yen,” he said.
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Larry Fink, CEO of BlackRock, said that democracy and capitalism have become interdependent over the past 250 years. (Paul Morigi/Getty Images)
“Think how new this all is. In 1776, there was no vast system of capital markets connecting ordinary citizens to economic growth. Today, the value of global financial markets – public and private – is approaching $300 trillion. And most of that growth has happened in the last four decades,” Fink said.
“BlackRock has grown alongside this transformation. And what we’ve seen, country after country, is that the stories I’ve just shared are just the beginning,” he wrote.
“Much of the world is still in the early stages of building markets that enable people to not only fuel their economies, but also take a meaningful share in the growth they create.”
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The United States will celebrate its 250th anniversary as a country in July, while this year will also mark the anniversary of Adam Smith’s “The Wealth of Nations,” which is the founding text of modern economics. (Michael Nagle/Bloomberg via Getty Images)
Fink’s letter explained how long term investment can achieve a kind of “civic miracle” in the way financial markets stimulate economic growth.
“When people invest their savings – over decades, not days – capital markets put that money to work, financing businesses, infrastructure and jobs. And when this cycle happens in your own country, your future and that of your nation become linked,” Fink wrote.
“You help fund its growth. It helps fund yours,” he said.
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Fink said long-term investment can be a “civic miracle” that spurs economic growth. (James Carbone/Newsday RM via Getty Images)
Fink added that his belief in the civic miracle of long-term investing is not only shaped by his decades of work in the sector financial sectorbut also through his education with a father who owned a shoe store and a mother who was an English teacher.
“They didn’t have a lot of money… But they saved what they could and invested it,” he said.
“This was in the 1950s and 1960s, just as the interstate highway system was being built, mid-century. industrial boom was taking off and the automobile industry was reshaping American life. And in their small way, they helped finance all of this. They were part of the capital that built modern America. »
“Over time, the earnings came back to them. By the time they retired, they had enough savings to live comfortably past age 100. Because their wealth grew along with the U.S. economy,” Fink said.
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He added that the process continues to unfold around the world and that BlackRock’s goal is to help facilitate this civic miracle to increase the wealth of Americans.
“This civic miracle continues to unfold around the world. Expanding it – so that more people can invest in their country’s growth and share in its fruits – is the task before us,” Fink wrote.