In the jilted age of cynicism towards our institutions, the enormous success of capitalism over the past 60 years can be summed into the above chart. It represents the cumulative effect of households systematically investing in equities, and then selling them at higher prices.
Secondary to this story is the continual shift away from direct equity ownership into mutual funds.
What is most striking, however, is the fact that the non-financial corporate sector has operated almost entirely without outside capital for the past decade:
Contrast this the 90s, where equity issuance went negative in the latter half, but companies still raised capital on the credit markets:
You haven’t spent much time on the finance blogosphere if you haven’t seen the conspiracy theories surrounded evaporating trading volumes. The simple fact is that companies have contracted equity supply.
Moreover, the need for outside capital has nearly vanished.