Larry Fink links America’s 250th anniversary to the rise of capital markets

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BlackRock CEO Larry Fink recently published his annual chairman’s letter and noted the significance of America’s 250th anniversary this year, drawing a parallel to a similar milestone for the modern economy.

“In July, the United States will celebrate the country’s 250th birthday. But 2026 is more than an American celebration,” Fink wrote.

“It’s a quirk of history that in 1776, as Thomas Jefferson was drafting the Declaration of Independence in Philadelphia, Adam Smith was publishing ‘The Wealth of Nations’ in Scotland – the foundational text of modern economics.”

“But what began as a coincidence has, over time, become interdependence. The two concepts strengthen each other: Democracy depends on people feeling they have a genuine stake in their country’s future. And the capital markets are now the mechanism that can make that stake real – real in dollars, euros, yen,” he said.

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BlackRock CEO Larry Fink said democracy and capitalism have become interdependent in the last 250 years. (Paul Morigi/Getty Images)

“Think about how new this all is. In 1776, there was no broad system of capital markets connecting ordinary citizens to economic growth. Today, the global capital markets – public and private – approach $300 trillion in value. And most of that growth happened in the last four decades,” Fink said.

“BlackRock has grown up alongside this transformation. And what we’ve seen, in country after country, is that the stories I’ve just shared are only the beginning,” he wrote. 

“Much of the world is still in the early stages of building markets that allow people not only to fuel their economies – but also to own a meaningful stake in the growth they create.”

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The U.S. will mark its 250th anniversary as a country this July, while this year also marks the anniversary of Adam Smith’s “The Wealth of Nations,” which is the foundational text of modern economics. (Michael Nagle/Bloomberg via Getty Images)

Fink’s letter discussed how long-term investing can perform a kind of “civic miracle” in how financial markets spur economic growth.

“When people invest their savings – over decades, not days – the capital markets put that money to work, financing companies, infrastructure, and jobs. And when that cycle happens in your own country, your future and your nation’s future become linked,” Fink wrote. 

“You help finance its growth. It helps finance yours,” he said.

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Fink said long-term investing can serve as a “civic miracle” that spurs economic growth. (James Carbone/Newsday RM via Getty Images)

Fink went on to say that his belief in the civic miracle of long-term investing is shaped not only by his decades of work in the financial sector, but also by his upbringing with a father who owned a shoe store and a mother who was an English teacher.

“They didn’t come from a lot of money… But they saved what they could and invested it,” he said.

“This was the 1950s and ’60s, right when the Interstate Highway System was being built, the mid-century industrial boom was taking off, and the auto sector was reshaping American life. And in their own small way, they helped finance all of that. They were part of the capital that built modern America.”

“Over time, the gains flowed back to them. By the time they retired, they had enough savings to live comfortably well past 100. Because their wealth compounded alongside the American economy,” Fink said.

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He added that the process is continuing to play out around the world and that BlackRock’s goal is to help facilitate that civic miracle to grow the wealth of Americans.

“That civic miracle continues to unfold around the world. Extending it – so that more people can invest in their country’s growth and share in its rewards – is the task in front of us,” Fink wrote.

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