I just feel like, within living memory, there were “public companies,” in which you could invest, and “private companies,” in which you couldn’t. I mean, someone could: Many private companies took no outside investment, but some did, and so if you ran the right sort of pool of capital and had the right connections you could end up with a collection of investments in private companies. But there was not a thing called, like, the “private market.” You couldn’t pick from a menu of big private companies and just go buy their shares. “Private companies” was not a clear unified category. There were startups with venture capital investments, and companies acquired by private equity in leveraged buyouts, and private partnerships of lawyers or doctors or investment bankers, and the odd large bootstrapped profitable private business, and thousands of local hardware stores, but there was no special conceptual connection between them.
What they were was not public. “Public companies” were a thing: US public companies are all subject to similar disclosure requirements, they trade on the same exchanges, they are open to all investors equally and they are often largely owned by the same few dozen big investment firms. There was something coherent about lumping all the public companies together, or comparing them to each other. In fact, you could go further and ignore the differences between them: You could say “ahh I can’t pick between the companies, I’ll just buy all of them.” This is, approximately, the theory of a broad market index fund: The stock index reflects the prices of all of the stocks, and an index fund allows you to buy all of the stocks and get the overall performance of the market. The stock market. The “public company” market. You just invested in all of the public companies.