Wealth, the value of what people own minus their debt, shapes far more than financial security in a moment. It determines if one can withstand a crisis, buy a home, start a business, and retire comfortably. The lack of opportunities for younger generations to build wealth, alongside the enormous share of overall wealth accumulated by older generations, is no longer a secret. At least, the hardships facing young members of Gen Z are no longer disputed with the same passion that millennials encountered. Millennials were the first generation to find themselves unusually unable to reach the level of wealth their parents had enjoyed at the same age, yet they were told to blame their problems on too many Starbucks coffees, avocados, and travel.

Still, it is tempting to regard the generational divide as temporary. Politicians have little incentive to raise the issue because their constituencies—or at least their most politically active members—are predominantly older. Remember Trump’s famous promise to push housing prices even higher. His opponents on the left, meanwhile, share an unwillingness to disturb “mom-and-pop landlords.” After all, the people standing on opposite sides of the divide often belong to the same families. But the more important task is to acknowledge the crisis and create space to search for solutions rather than simply dismissing it.

One of the most popular arguments for why the problem will resolve itself is the theory of the Great Wealth Transfer, with “great” referring to the unprecedented amount of wealth currently held by the populous baby boomer and Silent generations. The promise of the Great Wealth Transfer ultimately rests on human mortality. But if we accept that the crisis emerged from an unnatural imbalance, it would be strange to expect it to resolve itself through natural cycles.

The concentration of wealth has begun to attract the attention of businesses feeling the decline in spending among the age groups that would normally be the most economically active. Last week, Visa published a Business and Economic Insights study questioning how much wealth will actually reach ordinary heirs and how much of it they will spend.

The first conclusion is staggering. The Great Wealth Transfer becomes almost three times less great by the time it reaches the heirs. After liabilities, retirement spending, charitable giving, taxes, and fees, Visa estimates that only about $36 trillion of the original $93 trillion will pass to heirs over the next twenty years. Then comes especially bad news for Visa: only about $8 trillion of that inherited wealth is expected to enter the economy through spending. The rest will remain where it has been all along, invested in assets.

Inheritance arrives late in the recipient’s life. Federal Reserve data shows that the probability of receiving an inheritance peaks at around age 60. Money received at that age is more likely to be used for retirement, debt repayment, further investment, or support for the recipient’s own children than for decisions that could have transformed the recipient’s earlier life. It cannot retroactively make housing affordable at 30, make it easier to start a family at 35, or provide security during the most economically active decades.

Because the money often remains invested even after it changes hands, the transfer may continue to raise asset prices rather than generate new consumption. It gives pension funds and other institutional investors still more capital to direct toward highly valued, cash-burning companies, even as the economy beneath those valuations weakens.

An aging population also changes the direction in which jobs and spending grow. Older Americans create greater demand for healthcare, home care, and long-term care services. The Bureau of Labor Statistics projects healthcare and social assistance to be the fastest-growing major employment sector in the United States between 2024 and 2034. Aging is therefore beginning to shape not only who holds wealth but also where the economy directs its labor and resources. Instead of expanding the systems of care needed by younger generations—education, childcare, and support for young families—more jobs and money flow toward an economy organized around the needs of older people.

Instead of producing a timely redistribution of wealth, the current system allows wealth to continue gravitating toward older generations. Their assets appreciate, but much of that wealth does not become an engine of broader economic activity because it does not circulate. And because older Americans remain the economy’s center of financial gravity, investment and employment increasingly follow the needs of the people who already hold the most money.

The Great Wealth Transfer will still be substantial, although the amount reaching heirs is likely to be far smaller than the headline estimates suggest. But this “natural solution” will arrive so late that much of the wealth will not reach the next generation in time to shape the choices that matter.

This week’s essay comes together with a major contribution from Megan Carnegie, one of my favorite writers on technology, work, and business through the lens of younger generations’ struggles and intergenerational inequality. You may have come across Megan’s work in WIRED, Business Insider, Fast Company, the BBC, and others.

Everyone’s afraid of AI taking their job. Almost no one is afraid of what happens after. When enough of these jobs disappear that the system meant to support you in retirement starts running out of fuel. Fear shouldn’t be unemployment alone. It should be what mass professional displacement does to a $49 trillion retirement system that was never built to survive a shrinking contributor base.

The full damage AI is doing to the labor market might not be concrete or wholly visible yet, however there are smoke signals that it’s rerouting career paths. A study by the Lumina Foundation and Gallup found that 16% of students have already changed majors because of AI’s potential impact, and 47% have seriously considered it. Concern is highest among students in technology and vocational fields. The same survey shows students increasingly turning to AI for career advice, which is a use case with no real precedent before now, even if it doesn’t map directly onto the major-switching figures.

If students are veering away from the jobs exposed to AI-related contraction, what happens to the pipeline of future earners, savers, and pension contributors? In Q4 2025, US retirement assets hit $49.1 trillion, roughly half the size of the entire US public equity market, and comparable to the US national debt. These are not static reserves in the broader economy; they’re continuously restocked with payroll deductions, employer matches, and new member inflows. That means the risk of automation isn’t simply fewer jobs, but slower accumulation within a system that depends on contributions that compound over decades. If pension capital starts pulling positions to cover shortfalls, the shock won’t stay contained to retirement accounts, it will cut through equities, bonds, and the credit markets those funds prop up.

Shattering jobs and career ladders

Most AI and jobs coverage zooms in on unemployment, retraining, and productivity gains. But the more alarming story, sitting just below the surface, is about retirement finance. Pensions and private savings systems depend on long, stable, middle- and upper-middle-income careers: consultancy, finance, and legal sectors. All that keeps generating contributions year after year. These are also, by most estimates, the occupations holding the largest share of 401(k) wealth: balances tend to track closely with pay and tenure, since better-paid workers are also more likely to get generous employer matches.

Labor-market analysis by Anthropic finds that computer programmers, customer service representatives, and financial analysts are among the most exposed occupations, and hiring into exposed roles has slowed for workers aged 22-25. That’s important because the first rung of the career ladder is where people start compounding earnings into retirement wealth.

The warning signs aren’t coming from AI firms alone. Stanford researchers found that early career workers in AI-exposed occupations experienced a 16% decline in employment in relative terms. The pressure is showing up at the point careers usually start to flourish.

So where do displaced workers actually land? Rutledge points to research on past disruptions: workers who lose a job later in their career, after spending it in one occupation, tend to fare worst. Some never fully return to the labor force. Younger or more broadly-skilled workers tend to land closer to where they started, retirement benefits included, though they may never fully catch up. The key variable isn’t AI itself, he argues, but how specialized a worker’s skills are and how quickly the broader job market can absorb them, and crucially, about half the US workforce doesn’t have access to an employer-sponsored retirement plan to begin with, a baseline crisis that displacement doesn’t change so much as deepen.

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If AI compresses professional ladders and fewer highly paid workers enter or stay in these fields, the effect goes beyond household income. It means less money flows into 401(k)s, fewer employer matches, weaker public pension payrolls, and slower build-up inside the huge asset pools that depend on steady, long-duration earnings. It’s the same mechanism as the displaced-worker problem above, just scaled up: fewer people on the ladder means fewer people feeding the funds.

That’s why this isn’t just a labor-market disruption, but a capital formation problem. Within the total $49.1 trillion retirement assets, IRAs held $19.2 trillion, defined contribution plans held $14.2 trillion, government DB plans held $10 trillion, and private sector DB plans held $3.1 trillion. Even a modest slowdown in contributions across professional classes could have broad consequences.

Public vs. private

Private-sector pensions can absorb a shrinking membership base for a while, but only up to a point. The Department of Labor says Form 5500 is the key public dataset for private plans because it records participants, contributions, investments, funding and operations — in other words, the first place aggregate stress should appear if professional payrolls weaken.

It’s worth noting that private plans do not collapse overnight; they become weaker, smaller and more expensive to maintain. Fewer active members means slower contribution growth, more reliance on investment returns, and a less robust ecosystem of administrators, advisers and asset managers built around continuous inflows.

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Public pensions are much more vulnerable to shocks. They depend directly on a steady inflow of active workers from schools, government offices and other public services. So if a profession shrinks, the ratio of contributors to retirees deteriorates even while benefits remain legally owed. Rutledge notes that DB plans, already rare in the private sector, are concentrated in occupations like teaching and first response, which he considers comparatively well-protected from AI itself. The strain on teacher pensions, in other words, isn’t really an AI-displacement story; it’s a demographic one. Rutledge points to what happened with auto manufacturers in the two decades leading up to the Great Recession, when workers were steadily replaced by machines: “Most DBs operate on a pay-as-you-go basis, with employers underpaying current workers to continue paying retirees, and when current workers are retired their employers will have to underpay future workers.” When there aren’t enough current workers to underpay, there isn’t enough to pay retirees, which is what happened to the Big Three (General Motors, Ford, and Stellantis) in the late 2000s.

Teaching is a useful litmus test profession here because the system is large, demographically sensitive and already under excessive strain. NCTQ estimates that teacher pension systems had almost $390 billion in unfunded liabilities in its 2012 analysis, and the organization argues that current structures are costly, inflexible and built around low mobility and career stability. Equable’s 2025 State of Pensions report says state and local plans are still “fragile,” even after a year of improved markets, and puts 2025 unfunded liabilities at $1.27 trillion, with employer contributions averaging 31.65% of payroll.

The demographic backdrop only worsens the reality. Since the mid-2010s, the number of public school students in kindergarten through to 12th grade has fallen in 30 states due to declining birth rates, and it’s happening in both urban school districts and smaller suburban areas. Declining school-age populations and slower teacher recruitment equal fewer new members entering systems that were designed around replacing retirees with younger workers. All that’s to say, the pension problem is amplified when a profession is hit by both automation pressure and a smaller inflow of new workers.

Erosion and shock aren’t mutually exclusive

Retirement accounts are among the economy’s biggest asset holders, so if contribution growth slows, asset accumulation follows. That’s critical for public equities, bonds, private markets and credit, where these accounts provide some of the most durable long-term capital. “If we get mass AI-induced job displacement, employers would have less incentive to provide retirement benefits, if desperate workers are plentiful,” says Rutledge.

Although as long as employers still feel a need to attract workers, Rutledge believes they will still offer retirement benefits because they want to be seen to provide a “good” job.

Contribution growth erosion is a slow burner in this story. Slow inflows and sudden outflows contribute to the shrinking contributor base that also need to rebalance or cover obligations, that can mean abrupt position withdrawals. The risk doesn’t end here, the processes in general thins out the system to make it more fragile to a fast shock when one inevitably comes.

The Federal Reserve Board’s Survey of Consumer Finances reports that 53% of US households owned stocks in 2019, up from 32% in 1989, meaning 67.7 million households were invested directly or indirectly through funds, which are often through 401(k) plans and IRAs. Retirement accounts are the linchpin of market buoyancy.

The US system is especially exposed. It relies unusually heavily on private capital accumulation through defined-contribution plans and IRAs, which totalled $33.4 trillion at the end of 2025. Public plans, holding $13.1 trillion, are more exposed to payroll volatility.

Other countries have more collective, state-linked retirement structures that could absorb payroll shocks differently. Europe’s pay-as-you-go systems, for instance, lean on current taxes rather than pre-funded assets. But that model carries its own tradeoff: pay-as-you-go systems typically require longer working lives to stay solvent, meaning the burden shows up not as a funding gap but as workers retiring later for a smaller eventual payout.

Yet this is a global issue. The World Economic Forum’s 2025 Future of Jobs report forecasts 22% of jobs disrupted by 2030, with 92m displaced and 170m created worldwide — a structural transition that will test retirement systems everywhere.
There’s recent precedent for how badly displaced workers can be scarred long-term. Manufacturing workers laid off in the recessions of the 1980s still had earnings 20% lower two decades later, in part because one layoff made them vulnerable to repeat ones before they’d recovered from the first. Workers of all ages also struggled to bounce back after the Great Recession, as long-term unemployment became more common. Both episodes suggest that how a downturn unfolds. how long unemployment lasts, how specialized the displaced workers are, matters as much as the headline job-loss number for what it eventually does to retirement wealth.

So what happens to a financial architecture built on the assumption that professional workers will keep earning, saving and contributing for decades? If AI hollows out the professions that finance the pension economy — lawyers, consultants, engineers, accountants — the disruption will bleed households, public systems and capital markets.

There are multiple authors that follow the pension matters closely which would help you to get more informed about the pensions being cut because of the decrease of the workforce.

The 2nd Order on the demographic arithmetic behind the collapsing contributor-to-retiree ratio.

The 2nd Order

The Pension Bomb: Boomers Will Doom Us All

There is a sentence that still does not appear in any campaign platform, central bank communiqué, earnings call, or any official fiscal forecast from any government in the developed world that you’d want to see…

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4 months ago · 75 likes · 24 comments · Emerald

Kaiser Bauch stress-tests global pension systems against the same shrinking-workforce dynamics.

Kaiser Bauch

The Pension Apocalypse: Who Will Survive?

I have just returned from a week-long trip to Denmark, specifically from the coastal region in Central Denmark not far from the small port town of Ebeltoft. It is a beautiful and picturesque land — the rolling green hills and the coast full of pine trees and recreational cabins done in the characteristic Danish style of tasteful, cozy decency. The trip took us also to the lovely lake town of Neuruppin in Brandenburg, Germany — a town called “the most Prussian of all Prussian towns” — where anyone expecting battalions of soldiers marching as one man under the strict orders of their officer would have been disappointed. The only battalions I encountered were of retirees…

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3 months ago · 50 likes · 11 comments · Kaiser Bauch

Andy Spence (Work3) on what happens to work, income and the social contract when jobs stop being the default unit of employment.

Work3 - The Future of Work

What Comes After the Job?

This edition of Work3 is sponsored by Glean's launch of Independent Agents…

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2 months ago · 15 likes · 2 comments · Andy Spence

Hanno Lustig (The Two Cents) highlight the political discussion in France about the intergenerational equality.

The Two Cents

Junior doesn't vote

One of the best political interviews I’ve seen in years is François Bayrou’s interview, the French PM, on the French evening news by Gilles Bouleau on Wednesday, 27 August 2025 8 p.m. news…

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2 months ago · 31 likes · 7 comments · Hanno Lustig

We also noted that pension money could have pursued alternative paths: investments that are at least as if not less risky, and whose benefits land much closer to home. Affordable housing is one example. It belongs equally to the abundance-seeking, “let’s build,” and affordability agendas because it addresses a housing crisis that is undermining younger generations’ ability to build the future economy needed to fulfill the pension promise.

Keep your hands off my pension

Housing crisis is one of the biggest drivers of today’s intergenerational wealth gap is housing. The United States is one of the clearest examples, with an estimated shortage of between one million and five million homes.

New York is constantly in the spotlight for having one of the nation’s largest housing deficits. Recently, median asking rents in the city rose to 20% above pre-pandemic levels. In 2026, it is safe to say that New York has become a place where many people can barely afford to live. In April, a major commitment was announced to invest pension fund capital in affordable housing. The initiative came from Mark Levine, the New York City comptroller, who agreed to invest $4 billion in affordable housing across the five boroughs. On paper, billions of dollars are going toward something the general population desperately needs. The response, however, tells a different story.

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“The pension fund is for pensions. Period”. Just one of the comments you may see under the news article or a message board signaling about the initiative. People, especially those working in public service, are not happy about the thought of their pension being spent for something that can ultimately drop off due to the myriad of factors: safety, environment, construction obstacles etc. It also comes at the time when NYC is facing a budget deficit, and city mayor Zohran Mamdani considers delaying pension payments in order to ease the burden. Something’s missing from the big picture though.

The overall budget of the NYC pension fund led by Levine is $320 billion. $4 billion is about 1.25% of its total which is a significant sum but is in no way compared to other pension fund investments. Just to compare, NYC is, even with the cuts, still on track of investing around $50 billion in climate solutions in the next 15 years. We’ve also covered pension investments into riskier ventures, so the housing $4 billion may look like a great target for people to attack, however, it may be the right solution for the housing crisis.

Housing affordability is solvable

News from New York City comes at the same time as the race for New York State comptroller primaries election. Tom DiNapoli became a New York State Comptroller in 2007 and since ran unopposed every 4 years during his servitude. He’s an effective but a conservative asset manager for one of the most eyecatching states of the US. He’s the second in longevity in the history of the state which leads to some saying that he’s the definition of the state comptroller and his picture should appear in the dictionary under the word “comptroller”, yet a poll by Siena University suggests that two thirds of surveyed are unfamiliar with this person and don’t really know who he is. DiNapoli is that part of the state that is not full of younger energy attributed to Mayor of New York Zohran Mamdani, he’s a part of the old school gang together with the Governor Kathy Hochul and attorney general Letitia James.

But this year is different, DiNapoli is facing a challenge from two Democratic candidates, Drew Warshaw and Raj Goyle. Even though these are two different people, they both are running with a similar platform that DiNapoli failed to manage the $291 billion pension fund fairly, relying too much on Wall Street fees and did nothing to help the state resolve its housing problem. They say, while utility rates in New York have been soaring, DiNapoli, incumbent state comptroller, was idle and seemingly indifferent to the problem.

Contesting DiNapoli’s status-quo is Drew Warshaw, previously an energy executive, and, most recently, a chief operating officer of Enterprise Community Partners, a national affordable housing nonprofit. A year ago, Warshaw claimed that the housing affordability is solvable, yet it lacks imagination. In 2025, the now running candidate published an op-ed saying that the housing crisis is not a “crisis of resources” or “shortage of land”, it simply needs the right direction for the fund distribution.

Now Warshaw eyes the NYS comptroller’s job with the intention to invest $20 billion from the pension fund into affordable housing relying on his experience as a former executive for a housing non-profit. It’s five times bigger than the NYC initiative and probably won’t be met with open arms by the general public but Warshaw’s platform may have a point.

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Affordable housing as an investment

If you read mass audience comments, the biggest issue with affordable housing is that it’s a bad investment. But is it actually?

Nowadays, there’s plenty of proof that affordable housing construction is a better investment than many. What’s even more reassuring is that the upside is not a high risk as it may be the case with private ventures. According to Mark S. McDaniel, president and CEO of Cinnaire Corp., a community development non-profit organisation, in 2023 noted that the returns on affordable housing space range from 4 to 7.25%. This range is on par or even higher that the return on ten year treasury bonds.

Of course, over the long term the index spread investments by pension funds such as into S&P 500 delivers an average annual return exceeding 10% but the portfolio needs to be diversified. In 2024, The Federal Reserve Bank of New York found that pension funds in recent years had increased investments in affordable housing in part because it could be more stable over the long term than market-rate housing.

So, if we take New York in whole as a setting, financing of affordable housing by pension money can actually be a great solution. Volume in the portfolio is never the issue, other states are taking the lead on this one. Connecticut, for example, has agreed to invest $50M across 5 years in affordable housing with the money from the union fund, and it’s still a small proportion of overall accessible money.

Other countries in North America also show how it can be done. In Canada, OPTrust, one of the largest pension investors, holds a 50% interest in the Senakw development alongside the Squamish nation.

In the words of Drew Warshaw:

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Retirement savings are a primary source of finance in the modern world economy. And yet they are rarely, if ever, named in conversations about specific funding needs, largely because the public is understandably sensitive to the idea of “tapping the ocean” of pension money.

Still, retirement capital is uniquely equipped to address many dimensions of crises such as housing affordability. It can support construction directly, providing every form of financing from credit to equity investment. As a seasoned venture capitalist, it can also fund housing innovation aimed at reducing both the cost and the time required to build. It can amplify the focus on starter homes, affordable housing, and social housing.

The question, then, is not whether pension capital has a role to play, but how it can be directed toward these needs in ways that serve both retirees and the generations whose future productivity will ultimately sustain the pension promise.

These days, everyone is weighing in on the SpaceX IPO. What we do not often see, though, is a joint letter from three of the biggest U.S. pension funds stepping in, seemingly trying to prevent it. Also unprecedented are the new fast-entry index rules, which could help inflate SpaceX’s stock price even further. Because of all this, the pre-IPO conversation has shifted away from the “active” money of hedgers, short sellers, skeptics, and believers, and toward the “passive” money of ordinary people’s retirement savings.

On the surface, it is the Ontario Teachers’ Pension Plan that may win big from the SpaceX IPO. What is hidden, on the other hand, is that a much bigger shift in the U.S. pension economy has been happening for a while, creating a liability for the U.S. economy overall. And the SpaceX IPO may become a trigger for a huge swing in retirement money — one that the interested parties may fail to notice in time.

IPO in the fast lane

SpaceX’s IPO is scheduled for Friday, June 12. The company will list its stock on the Nasdaq exchange under the ticker SPCX. It will be priced at $135 per share, giving SpaceX an initial market capitalization of $1.77 trillion. But that figure could be much larger by the time the market closes. Less than 5% of SpaceX stock will become available to the public and everything seems to be set up to make the public fight for it even without wanting to.

SpaceX is losing billions, and its market capitalization is highly contested. However, ahead of the IPO, Wall Street tossed guardrails created to protect investors in order to fast track the company into index funds, and people’s retirement savings. Two of the four largest index providers have already created new fast-entry rules and relaxed financial viability requirements in order to accommodate upcoming mega-IPOs, such as SpaceX and Anthropic (more on that later), in major indexes quicker than ever before. Nasdaq and FTSE Russell are cutting their timeframes for inclusion from three months to five and 15 days. Once it happens, passive index funds where the majority of retirement savings are stored will not have a choice, and would have to invest nonetheless. “A diversified index is the most cost-effective way to minimize risk <...> We wouldn’t directly participate in an IPO, but we will have exposure once it is added to the index”, a spokesperson for CalSTRS says in an interview to Pensions & Investments.

The Great Retirement Money Machine

The amount of forced passive buying expected to flow into SpaceX stock is estimated at $14 billion to $20 billion. That is a substantial share of the available float (depending on the day-five price) and it will clearly boost SpaceX’s market capitalization. But on the larger scale of retirement money, it is almost nothing.

Total US retirement assets were $49.1 trillion as of December 31, 2025. For comparison, the entire U.S. public equities market has just reached an all-time high of $69 trillion. If we add U.S. national debt, we can see that retirement money owns roughly half of all U.S. public companies and half of U.S. debt.

This money is not entirely passive, either. Only about two-thirds of the $49.1 trillion in U.S. retirement assets are held in retirement savings accounts such as IRAs or in defined-contribution plans such as 401(k)s. These accounts are indeed largely limited to public equities (mostly through index funds, and mostly in large-cap companies) and bonds.

About 63 million workers, or roughly 50% of the entire U.S. private-sector full- and part-time workforce, are enrolled in defined-contribution plans. Through index funds, many of them will effectively become holders of SpaceX stock. And let’s not forget that they probably already have indirect exposure to SpaceX through their investments in Alphabet, whose venture arm Google Ventures owns a 7% pre-IPO stake in the company (and maybe even more direct through Fidelity Contrafund or other Fidelity mutual funds on the captable.)

All of this happens passively, and, more importantly, without a fiduciary responsibility for guaranteeing the safety of the money. Defined-contribution plans do not provide a guaranteed pension or a guaranteed return on investment.

So what about the other third, or roughly $18 trillion? In the U.S., a “pension fund” is an organization that manages money for workers enrolled in a defined-benefit plan. These plans provide guaranteed pension payments regardless of the performance of the pension fund itself. They remain the primary form of retirement plan for government employees, with nearly universal enrollment, while the private sector has largely stopped enrolling new workers in defined-benefit plans — though the assets in those plans have continued to grow.

Pension funds and riskier bets

New York City Comptroller Mark Levine, managing a combined $1 trillion in assets have made a joint letter addressing SpaceX and raising concerns about “perpetual super voting shares”, a CEO removal restriction (requiring CEO’s own consent) and many more. Now why would three of the biggest asset managers in the US break silence and escalate the matter? A previous encounter of a similar volume was back in 2017 prefacing Snap’s March 2017 IPO, almost 10 years ago. Snap pioneered the practice of giving zero voting rights to publicly traded shares. The market largest investors were not pleased.

Although the letters made no difference, either 10 years ago or now, they still serve as an important declaration, and probably as a safeguard for fund managers. Pension funds care less about early index-trading exposure than about the long-term future of an asset. Their mandate is much broader than that of a 401(k) account provider.

The bigger picture is that SpaceX can also be considered an AI company as of recent, adding to the long list of AI companies funded by US pension funds. SpaceX acquired xAI in February, the artificial intelligence company behind Grok and also owned by Musk, and, actually, the combined entity is seeking money in the public market. Which is also a concern because it shows even a bigger exposure.

Switching the spotlight to Anthropic and to the specific case. One of Anthropic’s earliest and most successful venture capital backers is Spark Capital (recently included in Forbes’ Midas list of exceptionally successful investors), leading the company’s Series C $450 million in total with $75 million funding back in May 2023. Today the company is valued at $965 billion, and Spark Capital’s bet is standing at a whopping $3 billion. Now, we’re looking into pension scheme exposure, why should we be concerned about the VC fund? It’s all in the headlines, where the Spark Capital money is coming from.

So, while SpaceX’s IPO is making huge ripples to the market by removing the guardrails with the help of Wall Street and getting a huge bet of pension money even incentivising the biggest asset managers to step up, the real story is happening beneath. And it’s that the exposure of pension money is bigger that we may see. Stakes in IPO assets can be tracked while stakes in private companies and funds can’t. And in the last decade pension funds started putting more money into high-risk investments which is venture capital by definition.

Some of the biggest venture investors to SpaceX are pension backed. Valor Equity Partners manage funds on behalf of many public employee retirement plans including CalPERS, CalSTRS, NYSTRS, NYCERS and others, while their founder Antonio Gracias has served on the boards of Tesla and SpaceX. Sequoia entered SpaceX during the 2021 Series J round through vehicles where the public pension LPs sit: Washington State’s up-to-$350M commitment to Global Growth Fund III was the first public pension commitment to a Sequoia fund, with Alaska Permanent Fund also among of its 19 LPs. And taking pension money for venture funding is becoming more and more trendy with investors. CalPERS invested in a16z for the first time in 2023, at the same time the fund invested $750 million in SpaceX.

In the recent years CalPERS and other public pension funds directed the money flow into private equity, hedge funds, and venture capital. According to Stanford study, between 2001 and 2021, allocations to alternative assets went from 14% of pensions’ “risky” investments to 39%. By Dealroom data, pension funds provide more capital to top-performing VCs than any other LP class.

The Great Consequences

So, whether the population wants it or not, they are funding private companies, including ones in the AI niche that might as well replace their work position. Fair trade? They’ll get the profit if AI companies continue to grow, after all.

“The workers facing the greatest risk of displacement from AI automation <...> are disproportionately the workers who depend most on 401(k)s,” writes Hera Hiyeonseo Lee of Binghamton University in her article “Your 401(k) Is Propping Up the AI Bubble.” The ten largest companies in the S&P 500 now account for 40% of the entire index’s weight, while being AI-adjacent. That figure has doubled over the past 10 years, yet most employees enrolled in retirement plans may not be aware of the change. As Lee notes in her article: “A municipal employee in Texas who <...> has a substantial portion of her retirement riding on whether Nvidia’s data center revenue keeps growing. She did not choose this exposure.”

Who would pay the difference if pension money starts to lose value? One example, cited by Edward Siedle in his Pension Warriors newsletter, is that in 2021, 100,000 public school employees had to pay more into their retirement system because of accounting issues and the pension fund’s performance data. “Risky” investments made by pension funds are already being targeted for poor performance, as was recently seen in the House Republicans’ probe of CalPERS:

On October 28, the Committee learned that CalPERS lost 71 percent of its nearly half-a-billion-dollar investment in the private-equity CalPERS Clean Energy and Technology Fund, or CETF. Since committing to CETF in 2007, CalPERS has channeled more than $468 million into the fund. As of March 31, 2025, the investment’s value was less than $138.1 million.

Even worse, questionable stakes can also affect associated municipal bonds, since poor investment decisions create repayment risk for investors in those bonds.

So, while SpaceX’s IPO has already managed to draw attention to pension assets and their management, June 12, the date of the IPO, may become a turning point for the future policy of retirement funds. What we see right now is that pension money flows into high-risk venture investments that rely on industrial momentum rather than social need. Then, when those ventures go public, the same pension money helps inflate their valuations. Yet there is an abundance of initiatives that pension money could support instead.

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There are multiple authors that follow the pension matters closely which would help you to get more informed about asset management and how it should be changed.

Hanno Lustig in his The Two Cents newsletter shares a model based on Norway pension fund, that shows a better way of retirement asset management.

The Two Cents

Who's looking out for passive investors?

When you think about asset management, managing other people’s money, the first thing you have to worry about is the alignment of incentives. To be more precise, you worry about the alignment of the incentives of those who manage the money, e.g., the GPs at hedge funds, private equity funds, and the managers of the mutual funds, with the objective func…

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3 months ago · 31 likes · 1 comment · Hanno Lustig

Unpresidented, independent news organization, make a claim that retirement accounts are essentially a bail out for SpaceX purposes.

UnPresidented

Elon Musk could force Americans to bail out SpaceX with their retirement accounts

By Scott C. Galenti…

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3 months ago · 51 likes · 18 comments · UnPresidented

Caleb Ecarma recently touched on the topic of how the retirement savings would make Elon Musk a trillionaire while setting all the employees even further in terms of wealth.

Oligarch Watch

Your retirement savings are about to make Elon Musk a trillionaire

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3 months ago · 236 likes · 4 comments · Caleb Ecarma

In the distant past, families invested in children day to day, keeping them healthy and building skills tied to the family’s primary source of livelihood. Children were seen as investments in parents’ later security.

Mass pension schemes, emerging in 19th-century Germany with Bismarck’s pension and winning over the developed world by the 1970s, created a different reality. Having children was no longer the best retirement strategy. In the U.S., rising state and federal contributions to pension funds coincided a steep rise in college costs. In response, states introduced the first education savings accounts (ESAs) to emphasize the parents’ role in making college affordable for their children.

These days, as the generational wealth gap widens and AI anxiety intensifies, more voices are arguing for UBI-like solutions: pour more public money into stock on behalf of each citizen so that everyone owns a slice of the growth. “Trump accounts” fit this instinct — universal child accounts meant to attract public, parental, and even nonprofit dollars that might otherwise fund direct services. Should parents and donors follow that lead? Or does it repeat the same logic that produced the generational wealth gap?

The idea of pooling public and private money to invest in stocks has seemingly proven its credibility. The 1980s, the same decade higher education costs exploded, also loosened limitations for public pension funds. Pension capital then flooded both public and private equity markets. Invested for the long term, and often backstopped by state budgets in downturns, this money helped sustain the next 50 years of stock-market rallies. The last decade, in particular, delivered unusually stable and remarkable growth. That kind of stability that can even embolden risky geopolitics: when any war, whether real or trade, if started on a Friday night, may result, at most, in a tiny market dip on Monday, with an inevitable bounce back.

It;’s tempting to give children a share in this growth that may support them in the future. The problem is that children need resources now, even if they’ll also need money at 18 or 65. The best predictors of academic outcomes are present-tense: parents’ involvement and the household income-to-need ratio. Raising a child to modern standards is getting more expensive. Children, even the brightest, can’t go far without help. As a New Yorker article written by a former “Prep for Prep” student (a program for gifted low-income children of color that helped them get into selective private schools in New York) described his cohort: “What we had most in common were noodgy, hard-driving parents, the type of people who’d push their children to attend supplemental schooling for a year and a half.”

Being this type of parent is increasingly expected. In the 2010s, some states began funding education savings-style accounts that families could use more flexibly. The pandemic accelerated distrust of public schools, and by 2025, school voucher policies spread rapidly. But the money comes from the same education budgets. It’s not additional support amid growing hardship, but a re-routing of existing dollars.

These public money has already not been enough and the rerouting can create a harsher reality: more burden on parents while the systems that once carried part of the burden lose capacity. The more discretion we demand from families, the more we punish the children of parents with the least time, information, and flexibility.

So simply moving taxpayer money into parents’ and nonprofits’ hands can make outcomes more unequal, or at least unpredictable, and does not solve the problem that children are left out of market growth. So why don’t we settle for universal investment accounts, like Trump’s, and hope for a future where our grown-up children live off interest from their booming investments?

First, there’s no evidence the 1980s pension economy model is indefinitely sustainable. We built a world where pension money pours into equities to keep long-term promises intact. If we add universal child investment accounts on top of that, we’re simply adding fuel to the same pile of capital that may already be distorting the economy: inflated asset prices, brittle labor markets, concentration that swallows any sprouts of competition, as we’re seeing with generative AI technology, and politics increasingly shaped by the need to keep markets growing.

Trump accounts also take money meant for childhood and send it into adulthood. But children need resources while they grow. There’s no evidence that a payout at 18 can compensate for missed opportunities in early development, enrichment, and sports. Nonprofit donors face same dilemma. Before committing a massive $6.25 billion to Trump accounts, Michael and Susan Dell supported a wide range of programs for children, families, and young adults in the US and around the world. The future of these programs wasn’t clear from the commitment announcement, and since then many other donors have hurried to follow.

And finally, there’s a liquidity problem. The accounts restrict withdrawals, so families can’t respond to real-life volatility. Job loss is increasingly likely if you accept the AI premise. Or medical bills that are surging, in part, because public and private equity drive healthcare costs and may be further fueled by same money in Trump accounts. As parents, we also can’t be certain about schooling costs after the pandemic shock. If a household truly has extra money, it might be a time for more flexible instruments than a locked box that assumes more decades of uninterrupted market growth.

So why don’t we instead make sure the education budget goes to education, not to fund pensions, however practical it may seem.

Why don’t we make an unthinkable move and dip into pension money’s profits to fund deficits in education, support parents, and create more public policies that support youth at 18 and beyond.

Why don’t we rethink protecting retirement promises as sacred while treating childhood investment as optional, even though childhood is the phase where returns are highest and reversals are hardest.

And why don’t we look for ways to invest in people — an investment that always beats stocks and bonds.

The structural absurdity is this: for decades California has been transferring an increasing share of its education budget directly into CalSTRS to cover a long-term unfunded liability and years of volatile markets. Researchers call it the pension crowd-out effect, where the cost of yesterday’s retirement promises consumes the money that would otherwise pay for today’s classrooms and the people working in them. The system is, in the most literal sense, cannibalizing its own workforce to feed its own balance sheet.

Balanced portfolio

LAUSD serves only 9% of all students in California. Still, its annual budget deficit is less than a respectable share of CalSTRS’s asset growth in the same year. Yet no one even starts a conversation about whether it’s time to pay down the debts. Pension money are untouchable. It’s today’s children and younger teachers who are always expected to take the cut.

Apparently, such logic is very good for the business of pension funds who sit on accumulated money and receive regular contributions from the education budget. They enjoy a sophisticated investor’s, or a Roman emperor’s logic, “money doesn’t smell”. Since 2025, CalSTRS has even held an “indirect exposure” to Bitcoin, tiny compared to its size, just $50M. The rest of the funds is more conservative investments: 42% is in private markets with the largest holdings across tech giants (at some point CalSTRS owned 1% of Meta and Nvidia), but also Exxon Mobil, Warren Buffett’s Berkshire Hathaway, and Elon Musk’s Tesla.

Notorious private equity is another 15%, plus 12% in real estate, which is 25 times bigger than Trump’s real estate portfolio, and includes far more hotel properties, for example the AKA-branded hotels in Beverly Hills, Central Park, Times Square, etc. While looking through the pages of the CalSTRS annual report, I recalled the time I stayed at AKA Central Park. Like a typical Manhattan hotel, it was overpriced and the only window faced a wall. If I’d known, given all my feelings towards pension funds, I would probably have stayed in a Trump-branded place instead. However, the numbers say it’s also likely to be owned by CalSTRS or another pension fund. The gravity of pension money allows them to crowd out not only today’s children’s educational needs.

Comforting denial

Ironically, it was the discovery of transfers from the California educational budget to CalSTRS which inspired the investment in people idea and our work at Humanism Fund. It grew out of a friendly argument about the reasons for expanding student debt and the cost of education in the US. These unfortunate facts are usually explained by shrinking educational budgets. However, from our times of growing in Russia, we love to double-check the public’s assumptions about public spending. And we found that, indeed, the educational budgets were growing - it was just that pension allocations grew much faster.

This reality, and its complete obscurity to the general public was so impressive that we tasked ourselves with finding a way for institutional capital to fund the younger generations instead of stripping them of resources that their future is built upon. Our work in Humanism Fund was about offering financial instruments for direct investment in people. Through this work, we talked to dozens, if not a hundred, institutional investment managers. With some honorable exceptions, almost none of them understood or even thought about their role in building the system that disadvantages younger generations at global scale.

As LAUSD is preparing to cut staff under a current fiscal crisis, by the logic of seniority, the newest teachers go first - the ones who are still paying off their own student loans. Similar cuts have been happening around the country with notable frequency, and it’s always unclear how all those teacher strikes have done nothing to stop them. Moreover, after achieving some results in raising the state’s pension contribution rate further, union leaders quickly forget the fight for increased teacher hiring.

Neither tech, nor fertility rates

LAUSD explains current cuts with the sharp drop in enrollment rates. To make the numbers look scarier the press release focuses attention on a decline over a whooping 25 years - 46% since 2001. Even this number is tweaked, because in fact it only represents a decline of elementary enrollment and excludes charter schools funded from the same budget, while the number taking into account all LAUSD students would be much less - 25% decline over 25 years. Still, a huge number, but the trick is that LAUSD doesn’t mention the drop in teacher hiring rates for understandable reasons. According to the National Center for Education Statistics, the change in the student-to-teacher ratio was far more modest - from 19.9 students per teacher in 2001 to 19.2 now. An actual improvement of just 3.4% at a time when we would love to think of our society as at least slightly evolving from overcrowded classrooms as a norm 25 years ago.

The youngest teachers being hit the most, alongside their even younger students, is another grim side of the system. The economy is pulling the chair out from under this generation in different ways. The government prioritizes spending for the elderly over programs supporting children and young adults. The market redistributes wealth through asset ownership to older generations and cuts opportunities for the younger ones. As a result, the parents of these children are exhausted, and they get less and less from schools.

In recent years, technology came in handy to blame for Gen Z being the first generation scoring, on average, lower on tests than the previous one. But the best predictors of academic achievement have always been parents involvement and the income-to-need ratio, so it’d be more reasonable to admit that Gen Z are more likely, on average, to have less involved parents, who are struggling. No amount of institutional capital poured into public stock or real estate could fix it. But we can still stop sacrificing the present to pay for the past.

Today, global savings, worth nearly twice global GDP, are accumulated inside an opaque, increasingly automated system: the asset-management industry. That capital owns the world and holds our lives in a tight grip. That’s where the actual shocks of AI adoption are likely to come from. And venture capital is not safe.

A fundraise game

Matt Shumer’s essay “Something Big is Happening“, which predicts that people will lose their jobs to AI sooner than expected, landed right in the middle of Anthropic’s first massive promotional campaign, and might even got a friendly boost from the same budget. Anyways, the YouTube-like number of views, 80M on Twitter alone, are hard to explain. Bad Bunny’s halftime show has only 100M views so far.

It wouldn’t surprise me, because the essay and Anthropic’s publicity are all aimed at the same audience: AI investors. Even Anthropic’s Super Bowl ads seemed designed to reassure investors that it’s serious about taking on OpenAI for consumers, while OpenAI is busy pitching that it’s coming for Anthropic’s business customers. At times, it even feels like good old business competition. But users won’t win this fight, because it’s a fight for capital.

It is remarkable how fear dominates the AI hype messaging. The Information’s Jessica Lessin writes: “I have not seen a gap between the public narrative and the business reality this wide since the early days of crypto.” This essay by David Oks has a good collection of explainers why Matt Shumer might be wrong about ordinary people’s jobs.

Still, Matt Shumer was right about something. His own job as a VC fund manager is in danger, as is the entire industry. He used “build up savings” as a metaphor and, by accident, called out the spirit of capital itself.

Something really big

Global savings, even by modest estimates, reached $160-188T last year. Institutional investors are the entities set up to steward this money with discretion and a social license: pension and sovereign funds, insurers, and endowments. By now they own about 60-75% of what Goldman Sachs has described as a $250T “world portfolio” of all investable assets. With that much ownership, institutional investors have structural advantages over everyone else. They hold more than 80% of the most valuable public stocks, like the Magnificent Ten, and close to 100% of venture-backed startups, including capital-hungry private AI giants.

Institutional investors manage collective savings. They are too important to fail in their mission, and that mission is simple: grow savings by a respectable percentage, every year, without a pause. Over the past 50 years, as pension schemes and sovereign funds began pouring into public markets in the 1980s, markets rose, and fast. Canadian public pension funds, for example, were among the first to move beyond state-guaranteed, low-performing bonds into riskier, more efficient portfolios that included public equities and foreign bonds, and their assets grew 20x.

PwC suggests that $150T of world assets are managed by third-parties for a fee ($27T by three largest managers: Blackrock, Vanguard, and Fidelity - compare it to the US GDP of $34T). And the fee is shrinking. Profit as a share of assets under management has fallen 20% since 2018. Net assets under management are growing less than 2% a year. Asset managers are under enormous pressure to keep returns up on portfolios that support the lives and pensions of almost everyone. Fee pressure pushes them to cut costs faster than most industries. And because the sector is already concentrated and heavily automated, they are likely to be among the first and most efficient adopters of AI.

The consequences are as hard to imagine as the $188T itself. The shock of even more of the world’s investment decisions being analyzed and reshuffled by generative AI will be felt everywhere. Private equity boosting prices for essential services to the moon. Credit access collapsing further for younger generations. All deserve their own share of bot-scare. Matt Shumer’s own domain, technology innovation and venture capital, is also in imminent danger, and so is his job. This post is already getting too big, so I’ll focus on that shock for now.

Alternative for alternative assets

Venture capital is a tiny dot in the institutional portfolio. It sits inside private equity, within a broader “alternative assets” bucket that averages around 15% of portfolios and includes gold, real estate, and, more recently, some crypto. Alternatives roughly doubled their share in institutional portfolios between 2005 and 2013, as managers sold “diversification” products to clients shaken by the GFC. Now the category is under the most scrutiny, and many are hoping AI will make sense of this messy and illiquid group of assets.

Will venture capital survive a reality check by a sophisticated AI agent? It promises outsized upside and technical revolutions, yet it often makes decisions based on a founder’s Ivy League admission, proximity to Silicon Valley, fire in the eyes, and maleness. On paper, it performs on par with other categories, but it stands out for unpredictability.

With the enormous volatility of venture capital compared to other alternative assets and similarly enormous fees of vc management firms, it doesn’t seem too much of a stretch to ask: what are the odds that venture capital still exists in 12 to 18 months, once AI starts taking over institutional decision-making?

Okay, maybe the shift won’t be that abrupt (not like Matt Shumer’s prognosis), and some VC firms will keep their place in the world portfolio by learning how to speak to an LLM’s soul. A16z may be twice as right to build out its media machine through the New Media. At the end of the day, it’s through content, not in-person networking, that you communicate your message to an LLM.

But something big is happening already. BlackRock has been building its Aladdin system for decades, and by now it manages investments well beyond BlackRock. It’s hard, and for good reasons, to find clear information on how far Aladdin has gone with generative AI adoption. I found a very informative post on Medium that includes no source links, though much of its historical detail can be checked against Blackrock corporate reports (an impressive read) and Larry Fink’s rare interview to Vanity Fair. The post raises a familiar concern: Aladdin can create “synchronized responses” that amplify market moves.

Indeed, imagine what your friend ChatGPT would do if you asked it to optimize Blackrock clients’ portfolios using all available data on what an “optimal” portfolio looks like. Goodbye, bonds. And in the chaos, we might barely notice venture capital elimination.

The disappearance of the venture capital world or its shrinking down to a few language-heavy firms will be very much in line with the anti-innovation, risk-averse, and capital-concentration nature of the asset-management economy. Tech founders will remember the golden days of easy fundraising and talent-centered term sheets with nostalgia, as we bring our wild ideas to the judgment of the alternative asset class that remains: private debt.

The biases entrenched in the pension fund economy will likely be amplified by generative AI. Busy optimizing portfolios to compensate for shrinking fees, LLMs are unlikely to stop and ask whether the fee squeeze is a sign that the original institutionalization effect is fading. Or maybe it was always a bubble: too much money pulled from the future and packed into a handful of assets and countries that look “safe” to managers, instead of being invested more evenly into global industrialization, transportation, education, housing.

The trend, which started well before ChatGPT’s release, is a sign of a well-documented feature of our modern economy—its tendency to hurt youth—simply accelerated by the excuses AI has provided to employers.

Convenient narrative

In a recent article in The Atlantic, Rose Horowitch cited overwhelming numbers for 2025: a more than 16% drop in published vacancies on a specialized website for recent graduates. The Atlantic’s article offered “plausible” explanations mostly wrapped around the weakening of signals HR allegedly used to decide which recent graduates were worthy of a job. Namely, GPA, which is simply never used in normal business-sector hiring, and, out of all things, cover letters, which were generic and supplementary long before ChatGPT.

I would have never guessed from this article that its author was herself a recent graduate hire at The Atlantic, who got her BA in history from Yale just a couple years ago. And it’s hard to read her writing as the voice of the generation being hit the hardest. Which is a great symptom by itself and shows what Gen Z has to do these days for a job. Or, more likely, how successfully this generation is being gaslit.

Horowitch writes a lot about college education, and in her writing, her generation is presented in a typical light. They are dumber than prior generations, expect too much, and are guilty of hurting themselves by paying too much for education, etc. I remember her 2024 article “The Elite College Students Who Can’t Read Books.” It was widely cited by older people and concerned parents like me. What I didn’t see as much in my bubble was the backlash from recent graduates themselves, including responses in student papers, even Yale’s.

In their angry reflections, students pointed out that they now have to submit something like 150 applications just to have a shot at an internship (when are they supposed to read for pleasure?!) In her next article, Horowitch cited the exact same number named by the head of career engagement in UC Berkeley as an absurd increase compared to earlier years. She concluded “The easier AI makes it to apply for a job, the harder it becomes to actually get one.”

Not really

But the research shows that AI has nothing to do with such outcomes. Among many, ironically, is a work by Yale researchers, who found no changes in the employment trends since the release of ChatGPT. This overview by Economic Innovation Group summarizes different findings confirming that the decline in employment for early-career workers wasn’t driven by AI.

What the early-career workers are experiencing today is simply living in an economic downturn (and for quite a while already). What is indeed new is the drop in college graduate hiring. LinkedIn confirmed that even in the countries where entry-level hiring keeps pace with broader trends, recent graduates face a sharper slowdown.

But as the data by the Federal Reserve Bank of New York shows, in the US it started before the release of ChatGPT, even before the pandemic, meaning it’s likely not a shift in occupation driven by technological innovation. It’s a sign of something more serious and gloomier: an economy that has become risk-averse, rent-extracting, and structurally unwilling to invest in the next cohort. Even when the tools for productivity are supposedly improving.

What a boom would look like

The essential 2018 analysis by the US Census Bureau made on extensive data from a decade both before and after the 2008 crisis revealed the consistent trend of young employees being hit the most by an economic downturn. Alongside the less-educated workers (studied as a separate group), all the young are disproportionately losing jobs or getting stuck at low paid less productive firms and have the hardest time recovering during economic booms.

This data also says something about where the economy is now standing. If AI were to trigger a true productivity boom, we would expect to see high-productivity firms expanding aggressively. We would see them poaching young workers from lower-productivity firms and pulling young people from non-employment into employment. Low productivity firms would lose employment among all groups except the youngest workers whom they would replace from non-employment.

We don’t see that pattern. We are not living during economic expansions right now obviously. But it may not mean AI isn’t powerful, productivity boosting tool. It may mean that the economy’s extraction logic is now overwhelming the innovation logic.

So the real question isn’t “Is AI a great innovation?” The question is: Can even a great innovation reverse productivity stagnation in a society that extracts resources from its youth?

Debt, no leverage, no voice

In a rent-extracting, asset-management economy, there is less and less to extract from a recent graduate.

By graduation, many students are already in debt, with fragile support systems and limited bargaining power. Total U.S. student loan debt has crossed $1.8 trillion, with the average borrower entering the workforce owing roughly $38,000 before they’ve even earned their first paycheck. But in the rich countries with less financialized education, youth are excluded from social policy support. A massive body of research by now documented a widespread “pension bias” in developed countries with ever‐rising spending on the elderly at the expense of programs for younger generations.

Meanwhile, wealth inequality between generations keeps widening. That makes even elite graduates dependent on whether their parents can share assets with them. Millennials felt this dependency. Gen Z is inheriting it in a more concentrated and unforgiving form. And then we add insult to injury: we call them “salary-obsessed” because wages matter most to them—when wages are the one thing they can’t borrow from the past.

The entry-level hiring collapse is a social fracture, a signal that our economy is becoming less capable of reproducing itself. AI did not invent this; it just temporarily made it easier to pretend that everything is fine.

The New York Times just labeled Larry Fink the “New Mayor of Davos”; it is the most incisive metaphor we have seen in years.

We are no longer living in traditional market capitalism. We are living in asset management capitalism. When one firm manages more capital than the GDP of most nations and owns stakes in all the companies you may have thought of, the “market” effectively ceases to exist. BlackRock isn’t just a player. It is the economy.

The curious constitution of BlackRock raises the question: is it still capitalism? A world where Larry Fink, with a net worth of merely $1 billion and a company that doesn’t even rank among the top 100 in the world, neither by revenue nor by capitalization, takes over Davos, and all the most powerful people flock there to put on a show.

It doesn’t seem like too many people understand what this new world is. Even Larry Fink himself, probably. He is a classical, old-school entrepreneur who started a company in a new, promising market of asset management in 1988 and has led it ever since. He wasn’t a visionary, an celebrated thinker, or a guru like Peter Drucker, who in 1976 predicted this new world and insisted that we should call it “pension fund socialism,” not “capitalism.” But is it socialism either, what we observe after 50 years?

Though the moment of clarity is close, and revelation has started to surface. In his highly praised speech, the new Canadian prime minister reminded the world what Canada is. He mentioned the talent and the capital. And though the talent is still humans, the capital is no longer human capitalists.

In the 80s, the Canadian pension system took Drucker’s predictions seriously and grew over 20× since then, to now be ranked 2–3 globally by assets under management, which explains why Canada was giving the primary keynote at Larry Fink’s gathering and why its prime minister is well positioned to proclaim the new world order.

It’s understandable why the “Deep State” label sticks. This concentration of power could feel like a conspiracy. In reality, it might be simpler and more systemic: it is the natural conclusion of a financial architecture that has been rewarding the ownership of the past over the creation of the future.

Fink is called “Mayor” because he is the ultimate convener. He doesn’t need to be visible; he just needs to gather everyone in a room to “hang out.” But in that room, the future is managed. In this room, people are gathered with a single goal – how to continue the steady growth of the assets he manages under the impossible circumstances of population decline and aging.

Have they been successful so far, or are these circumstances the consequences of their success?

Is it possible to build a “new life” in an economy that is so heavily optimized to protect accumulated property?

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I’ve been in a very festive mood recently, which I’m eager to share, along with some tips on how to get into one. A number-one suggestion on my list is a perfect family movie, or actually, a mini-series, which makes in potentially extendable, as we did this past weekend, extending it to two perfect family night. A family movie night sounds like a cliche, but the reality, which all the families out there know too well, is that the genre is in deep crisis. With all the variety of addictive content we have access to today, it’s extremely hard to find something that will work for the entire family.

At the same time, the pressure is mounting to make your family get together without a single phone in someone’s hand. My son’s high school recently sent out a parent survey bearing Stanford’s name. The questions were important and mysterious, as usual in such surveys, but one really made me pause. It asked how often during a weekday our entire household spends time together, all in one room, without phones (the high-schooler included!) “Only once“ was a minimum, which implied that our carefully crafted and proudly observed family dinners are not longer enough.

Even though the subtle abuse of unrealistic expectations doesn’t go unnoticed (people are increasingly choosing to have fewer children), it’s also clear that, as families, we need tools to get together. And, as modern families, we need tools that are not abusive, but inclusive. This is a road of compromise, as nothing fits us all, but we don’t want to sacrifice all our joy for the children, and vice versa, we don’t really want a teenager or a toddler to suffer simply for the sake of a family gathering. Intergenerational peace is our next frontier.

Someone wise said that only two things have the potential to be truly inclusive — food and stories. It’s still hard, and largely unpredictable, with picky eaters, but by following one of these two paths, we have a chance. Even in my family, with children who differ dramatically in age and, on top of it all, grew up in different countries and speak different languages, this holds true. This is why we were so excited when Netflix released the Man vs. Baby mini series.

The show is a follow-up to our family’s other favorite Man vs. Bee. In 2022, when Man vs. Bee was released, it coincided with short-lived popularity of “hate the rich“ dark satires, started by The White Lotus and fully exploding with Triangle of Sadness and The Menu. Rowan Atkinson’s comedy came largely unnoticed in such company, but was, to my liking, the best of the genre. It didn’t only prove that Mr. Bean can still be relevant and teach a lesson about the obsession in a world that is much more accepting of people who act outside social norms. The show also managed to tell a credible story about the funny and ephemeral nature of excessive wealth. The lightness of the message helped it to stay relevant even when the popularity of the genre faded away. Long story short, I’d really recommend Man vs. Bee for family time too, but there’s no real need to watch it before enjoying Man vs. Baby which is fresher, shorter, and more festive.

In a true holiday spirit, the follow-up show is more subtle in its class consciousness, and even a bit reconciling, or at least not destructive. Man vs. Baby tells a story of an awkward man who gets a dream job as a house-sitter over the holidays and, unexpectedly, has to also take care of a roughly 6-month-old baby. It’s such a linkedin-esque story, so I had started typing this text there at first, before it got too long.

The freshness of this show is another thing I really appreciated. We have our beloved classics, and during the holidays Home Alone is always there to save the day, but… although some parts of it are timeless, many are ancient. For children who were born decades after Macaulay Culkin, the reality of his childhood is quite foreign.

Men vs. Baby, standing on the shoulders of centuries of tropes, from the Bible to Dickens to Harry Potter, tells a very modern story - not at all cruel, but sad.

The Baby is a miracle, but as a society we seem to forget what to do with that - and the adult characters of the show are so adorably confused.

A young family with a child is portrayed as completely broke, but without any plausible reason that could lead them into such despair. No sign of drug abuse or something. It looks like the housing is the only reason why otherwise perfectly functional young people became insolvent. So modern!

The plot keeps referring what immense potential a baby in a manger possesses, but everybody finds it cute at best. No one is there to become a parent. No one is fascinated by the potential, nor believes in their role in nurturing it. Even a few days of caring for a baby threatens the worst of careers. Even the least normal people understand that babysitting is one thing, but being a parent - impossible.

As I grew up with a different kind of stories, I was still expecting the British show to follow some kind of an Oliver Twist trope. When the final credits appeared and it became clear that Mr. Bean is not becoming a dad again (busy caring for his grown child of college age) I felt a sad appreciation. I’d love the real side of the world my children are stepping into to be shown to them in such a delicate manner. As they cheered at the final joke, I grew hopeful that, if not me, they will find a way to fix this awkward dead end our economy has got itself into, where the most valuable thing struggles to prove its value.

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