Vanguard: The communist capitalist who saved investors a trillion dollars (Audio)

The cost matters hypothesis, mutual ownership, and how one disagreeable idealist transferred a trillion dollars from Wall Street to ordinary investors.

With Ben Gilbert & David Rosenthal

"I realized that a mutual company would never provide me with the personal fortune that so many denizens of Wall Street would earn, but it offered, I believe, my last best chance to resume my career." — Jack Bogle

Ben Gilbert & David Rosenthal, on the episode

Ben Gilbert and David Rosenthal spend this episode of Acquired tracing the full arc of Vanguard and its founder Jack Bogle, from Depression-era poverty through a boardroom firing that accidentally birthed the modern index fund. The pop framing of Vanguard is that it is a scrappy low-fee alternative to Wall Street. The actual operating system is stranger and more radical: a company that is legally incapable of generating profits for shareholders because the shareholders are the customers. Bogle did not build this out of pure idealism. He built it because he had been fired and needed a vehicle to continue his career, and the mutual structure was the only move left. What he set in motion, deliberately or not, has transferred an estimated one trillion dollars in fees out of the finance industry and into the pockets of ordinary investors since 1975.