[skybrian]

And yet, lots of people own index funds. It's more like more and more people own tiny shares of lots of different things and don't make any actual decisions about what they own. Owning some tiny fraction of Netflix doesn't let you make any decisions.

The decision-making gets outsourced to managers, who pay themselves more and more.

On the other hand, consumers do collectively decide which products win and lose, even when renting.

[kakarot]

This is an interesting parallel to what's been happening across America (and possibly other countries) since the late 80's.

The fraction of people who hold leadership roles or at least actively engage in local civil groups is smaller than ever since the boom of the 40-60's.

Less and less people are participating in these groups, yet ironically, group membership around the nation is at an all-time high because of the rise of the mail-order activism group. Americans may be involved in 2x or 3x as many social groups, but the chances of this involvement growing past a recurring donation is increasingly small.

Now, group membership means donating a few dollars in the mail every few months while other people make decisions for you, instead of being involved in the decision-making process yourself.

[eldavido]

Discussed at length in Putnam's "Bowling Alone" under the heading "professionalization of politics".

[kakarot]

Great book, but "at length" is right. I think Putnam's message would have a lot more palatable if a lot of the supporting content was moved into a separate section and the first section presented a more streamlined argument.

[JoshTriplett]

> The decision-making gets outsourced to managers, who pay themselves more and more.

Not in a good index fund. Vanguard's funds effectively own Vanguard.

[skybrian]

I meant the management of individual businesses and the trend in CEO compensation.

[eldavido]

Bogle's book "Investment vs Speculation" discusses this point at length. He calls the world today the "double-agent society" in that there are two levels of intermediation (corporate management and investment management) between productive activity, and the ultimate owners of capital.