John Bogle upsets many titans of Wall Street, when he harshly criticizes what he views as their greed and waste. And yet Bogle is also a highly respected voice of finance. He invented the “index fund”, which merely attains the stock market average—an idea for which he was widely ridiculed. But Bogle was undeterred, having realized as a college undergraduate that most mutual fund managers underperform even the average. So with little effort (and therefore low expenses) his method has become the core strategy for people who wish to grow their savings. Even super-investor Warren Buffett announced that upon his death, almost all of his billions will be deposited in an index fund. Vanguard, the family of funds Bogle founded in 1974, now manages trillions in assets, primarily through this deceptively simple technique. And in his gentlemanly manner, Bogle offers a devastating critique of high finance in this episode of Humankind.
We have a misshapen financial system, where the rewards are grotesquely disproportionate to the contribution to their society. So you could argue, and I think probably successfully argue, that much of what goes on—you could even say most of what goes on—in finance is a waste of the nation’s resources. It is a value-consuming, rather than value-adding business.”
—John C. Bogle, Founder of Vanguard