“Divide and Conquer”: Risk Displacement Through Labor Domination in Asset Management Capitalism

The increasing economic relevance of asset managers is one of the key manifestations of how capitalism unfolds in the 21st century. This paper explains how alternative asset managers enforce domination over labor by spreading underperformance risk . Through their risk spreading embedded in their investment’ strategies, alternative asset managers put at odds the interests of workers: contributions made by asset managers to pension funds and their pensioners are making working conditions more difficult for other corporate workers and making housing less affordable to contributors themselves. By looking into the paradigmatic case of the economic relationships between CalPERS and Blackstone, the world’s largest public pension fund and “alternative” asset manager respectively, this paper analyses (i) why the revenues coming from asset managers becomes one of the main sources of liquidity for pension funds (ii) how the intermediation role of asset managers has heightened antagonistic interests amongst workers and exposed society to market risks. We explain the specific form by which capital domination over labor is manifested through alternative asset managers, by exploring how the nexus between asset managers and pension funds is articulated and the concrete implications for both workers and pensioners.