When Capital Implodes: Why Extreme Wealth Is a Systemic Threat (ENG)

Hans Stegeman

Inspired by Hans Stegeman's open call to investors

We talk a lot about impact. We track carbon footprints, diversity targets, water use, governance structures. But rarely do we talk about the most corrosive force of them all: extreme wealth. Not wealth in the abstract - but the concentrated accumulation of capital that bends markets, erodes democracy, and hollows out the very systems we claim to protect.

That’s why Hans Stegeman’s recent column hit a nerve. As Chief Economist at Triodos Bank, and a voice from within the investment community, he breaks a deep silence. He doesn’t just suggest that inequality is unfortunate - he names it as a consequence of the financial system itself. He makes it clear: capital is not neutral. All money has impact. And when too much of it flows to too few, the system begins to fail.

"In today’s financial world, making money with money is seen as a neutral – even admirable – pursuit. But we must push back against this silence. Because all money has impact – not only in what it finances, but also in where it ends up."

The loop that feeds itself

Stegeman outlines how executive compensation, shareholder returns, and capital allocation form a self-reinforcing loop:

• The more capital you have, the better returns you can access.

• The more shares you own, the more you influence the system.

• The more companies focus on boosting share price, the more executives and shareholders gain—often at the cost of workers, innovation, and social cohesion.

This is not a bug in the system. It is the system. As Stegeman puts it, “It’s a mutually reinforcing loop. And it’s become a runaway engine.”

And we feel it everywhere:

• When public goods are hollowed out while private fortunes soar.

• When platform monopolies dominate entire ecosystems.

• When even “impact investing” is co-opted by the same old extractive logics, wrapped in greener language.

Inequality isn’t a side effect. It is the design.

This, perhaps, is Stegeman’s most important insight: that capital allocation itself - who gets funded, who earns returns, who holds power - is one of the most overlooked forms of impact in our time. And it’s not just about money. It’s about democracy, trust, and legitimacy.

"Extreme inequality corrodes democracy, fuels political extremism and weakens institutional performance. In such conditions, even the most 'impactful' investments risk losing meaning."

In a time when investor language often dances around “purpose” and “ESG” metrics, it’s powerful to hear someone within the industry speak plainly. That the emperor, in fact, has no clothes. That redistributing capital is climate action. That limiting wealth concentration is not envy - it’s repair.

The investor as steward

Stegeman’s message doesn’t end in critique. He calls on investors - individual and institutional alike - to stop pretending neutrality is possible. Ownership comes with influence. Influence comes with responsibility.

He’s not alone. Across the world, small-scale initiatives, community funds, and regenerative finance movements are beginning to ask deeper questions:

• What is money for?

• Who gets to decide what value means?

• How do we move from capital extraction to capital stewardship?

Because ultimately, this isn’t just a call for fairer pay ratios or better corporate governance. It’s an invitation to reckon with the architecture of the financial system itself. When vast wealth accumulates in the hands of a few, it doesn’t just distort markets - it erodes democracy, corrodes trust, and locks us into extractive loops that undermine the very conditions for life and cooperation.

In that light, Stegeman’s words are more than critique - they’re a signal that even from within, the system is beginning to see its own limits.

Read more of Hans Stegemans work on his Substack "System Economics.