Capitalism is a simple transaction: you provide cash, and in exchange you receive a share of ownership. Owning property comes with rights, including the right to vote who will represent you on the board of directors, the right to request and receive information needed to decide whether to sell or buy more shares, and the right to speak with management to raise material issues that affect the value of your assets.
This implicit bargain drives the greatest engine of wealth creation in human history. However, under the current government, “capital” is being stripped out of capitalism.
exist a recent conversation I warned Reuters that the White House and SEC were effectively dismantling the machinery of our public markets. By threatening to revoke SK regulations, refusing to adjudicate shareholder resolutions, not allowing shareholders with assets under $5 million to submit exempt solicitations, and not requiring disclosure of material risks, they are transforming public companies into private fiefdoms with no liability. The government is telling capital owners — you, me, retirees, pension funds and endowments — that we have no recourse. We should be writing checks instead of asking questions.
These unprecedented actions amount to a seizure of our property rights. This is blatantly anti-capitalist.
When you purchase a home, you have the right to have the foundation inspected. If the government suddenly passed a law prohibiting you from asking whether your house was built on a sinkhole, you would have grounds to claim it violated your property rights. However, this is exactly what happened to our portfolio.
When the SEC told shareholders that we could no longer ask about supply chain challenges, workforce instability, fundamental governance, or explain to other investors the financial rationale for submitting shareholder resolutions, they blinded investors to material risks and fulfilled our fiduciary duties.
Let’s call this attempt to keep shareholders in the dark what it really is: the imposition of systemic ignorance.
Information is the lifeblood of efficient markets. Investors need data to price risk. If a company relies on a supply chain that’s vulnerable to extreme weather, or it creates a work culture that alienates employees, that’s not a “political” message; Material financial information. When governments encourage irresponsible corporations to suppress these financial risks to their shareholders, they are not protecting corporations; They’re brewing a catastrophic collapse because you can’t manage risk that doesn’t allow you to measure it.
It is ironic that a government that claims to embrace free markets is actively undermining the free flow of information that makes markets function. By isolating management from shareholder oversight, they are recreating the conditions of 1929—a market built on opacity, speculation, and internal controls.
We’ve seen the consequences. As U.S. markets turn into a black box, smart investors are looking elsewhere. Europe and other global jurisdictions recognize that in modern capitalism, transparency is a competitive advantage. If the United States insists on racing to the bottom, capital will inevitably follow suit.
Investors are not here to score political points. We want a return on investment. Achieving this goal will become more difficult if ownership rules are rewritten to exclude owners.
The best management teams value shareholders and will continue to voluntarily measure and address relevant risks and provide material disclosures. Others have chosen to do whatever it takes to evade punishment from shareholders, locking themselves away without oversight, thereby undermining the trust that underpins the free market. In the long run, this divide between companies that value investors and those that don’t will determine which public companies succeed and which fail.
Now is the time for the investment community—from the largest asset managers to individual 401(k) holders—to demand that the SEC, the agency created to protect us, restore our fundamental rights. We must loudly remind politicians in Washington that money flows where it is respected, and there is no capitalism without capital.
The views expressed in Fortune opinion pieces are solely those of the author and do not necessarily reflect the views and beliefs of: wealth.