Data on shareholder numbers also suggest that there was a trend in favor of dispersion of share ownership at the beginning of the twentieth century. The National Civic Federation’s Distribution of Ownership in Investments Subcommittee compiled shareholder statistics for seventy-five large corporations from 1901 to 1913, and its unpublished research showed that the aggregate number of shareholders in these firms rose from 141,000 to 415,000 during this period. These findings revealed, according to law professor Lawrence Mitchell, “a signifi cant spread in share ownership across the population[,] . . . both directly, in holdings of less than one hundred shares, and indirectly in the form of increased stock ownership by insurance companies and savings banks.”37
The authors are interested in responding to another historian's arguments about how and when the divergence of ownership and control emerged in the United States. Don't let their argument distract you from the facts the two apparently agree on: The Great Depression was preceded by a big increase in the diversity of ownership.
Without seeing similar figures, it's hard to say for sure. But based on the average number of shares outstanding in many publicly traded companies and the daily volume in trades, I'd be very suprised if the numbers aren't at least 10x what they were in 1913. Moreover, I'd be surprised if the biggest increase in those numbers hasn't come over the period between 1990 and 2008. The emergence of the bond market in the 1980s concentrated ownership; the emergence of mutual funds and hedge funds diffused it.
For me at least, the question of what scale of diversification in ownership is sustainable is an open one. A compelling argument can be made that the current scale does not provide a sustainable mechanism for maintaining alignment between managers and shareholders. This was implied also in Richard Posner's article in the Journal of Institutional Economics.
There is a fundamental tension between the need for liquidity and the need for stability and consistency. Achieving the right balance requires dynamic, market-based mechanisms to be set against each other. Without a market-based mechanism for concentrating corporate ownership (such as the good LBO funds), managers will tend to increase diversity by issuing equity until there is less constraint upon their autonomy.
Incidentally, this is one of the most important reasons why owner-operated companies (including especially founder-owned and operated companies) tend to outperform over long periods. Larry Ellison may be sharp in his dealings with competitors; but so long as he holds 30% of Oracle's stock, you're safe from him as a coinvestor. On the other hand, should Larry start selling, it would be wise for you to follow suit!
See here for a not-unrelated discussion of the tension between complexity and resilience on the Clay Shirky blog.