The number of public owned stocks listed on US stock exchanges has declined almost 50% since 1996, with a slight uptick recently that probably won’t last long.

There are two main reasons for this — private equity firms, so called vulture capitalists, putting up the money for operations like Space-X that are not subject to the regulations and required public financial accounting that publicly-held stock companies are required to provide, and even more importantly, according to a study by academic economists that has been revised three times since initial publication in 2019, and still shows the same factor to be pre-eminent — is “M&A” — mergers and acquisitions,  Big Tech and other financial giants gobbling up smaller companies that might pose a competitive threat.

This is Capital’s tendency toward concentration and centralization that Karl Marx and Frederick Engels analyzed over 150 years continuing to play itself out even as capitalism devolves past its moribund monopolistic financial capital state of imperialism into a necrotic system that thrives on death and destruction.

The paper “Dissecting the Listing Gap: Mergers, Private Equity, or Regulation?”, last revised in April of 2023, is by Gabriele Lattanzio of the University of Melbourne, Faculty of Business and Economics, William L. Megginson of the University of Oklahoma, and Ali Sanati, of American University.

As for the economy as a whole, according to Chartr, which published the chart illustrating this story, Sanati recently coauthored a research paper looking at the potential effects of the drop in publicly traded stocks, suggesting that public companies are better than private-equity firms at turning investment into higher revenues and innovations, quantified via patent filings. It suggests the shrinking universe of publicly traded stocks might be a problem. “The growth rates in the economy,” Sanati said, “kind of depend on the existence of healthy public markets.”

Or as George Clinton of Parliament/Funkadelic put it years ago, “America Eats Its Young.”

If you enjoyed this post, please consider leaving a comment or subscribing to the RSS feed to have future articles delivered to your feed reader.