Why Do We Consider ETFs to Restrict Decentralization?
Concentrates Ownership in the Hands of a Few Companies
BlackRock, Vanguard, and State Street control most of the assets in passive ETFs.
These companies hold significant stakes in most companies listed on the US market (often 5-15% in each major company).
Ownership is not truly distributed among millions of individuals, but concentrated in the hands of 3-5 giant entities.
Transforms Investment from "Active" to "Passive" Collectively
Most new inflows go to passive ETFs that track indices (like the S&P 500).
Funds are automatically invested in large companies regardless of their performance or true value → greater concentration and distortion of the free market mechanism.
Centralized Voting on Behalf of Millions
ETF managers vote on behalf of millions of small investors.
Decisions of major companies (ESG policies, executive compensations, mergers...) are effectively made by a very small number of people in these large companies → centralization in decision-making.
The Final Outcome
Instead of markets being distributed and decentralized (each investor evaluates and chooses for themselves), markets have become unprecedentedly centralized at the level of ownership and influence.
Large passive ETFs have become a mechanism for concentrating economic power in the hands of a small number of asset managers.
Summary from My Perspective:
The primary and most important goal behind ETFs is restricting true decentralization and re-concentrating wealth and power in the hands of a few large asset management companies.
They appear "democratic" on the surface (easy and cheap for individuals), but in reality, they are a tool for concentration at the systemic level.
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