A THOUSAND POINTS OF WEALTH

The sources of capital, which in the industrial age…

…were once consolidated in a few banks and individual “capitalists,” are now fragmenting into millions of networked bank accounts, mutual funds, and private investments throughout society. Elite, centralized banks used to have a monopoly on capital–the engine of capitalism. Bankers loaned their assets as debt, and from this debt, industry rose. But with increased knowledge and communication, investors realized that partnerships–or investments where the investor shares risk–yield significantly more wealth in the long run. Technology has accelerated the migration from making loans to making investments. The ease of computerized accounting allows almost anyone with as little as $100 to plug into the network of equity. Despite the rise of a few gigantic global banks, increasing amounts of the wealth are now held in equity, and not in debt. Today, for instance, 28% of U.S. household assets are kept in equities–more than is kept in banks–and 44% of U.S. households own stock.