‘The idea that a few bankers control a large chunk of the global economy might not seem like news to New York’s Occupy Wall Street movement and protesters elsewhere (see photo). But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world’s transnational corporations (TNCs).
From Orbis 2007, a database listing 37 million companies and investors worldwide, they pulled out all 43,060 TNCs and the share ownerships linking them. Then they constructed a model of which companies controlled others through shareholding networks, coupled with each company’s operating revenues, to map the structure of economic power.
The work, to be published in PloS One, revealed a core of 1318 companies with interlocking ownerships (see image). Each of the 1318 had ties to two or more other companies, and on average they were connected to 20. What’s more, although they represented 20 per cent of global operating revenues, the 1318 appeared to collectively own through their shares the majority of the world’s large blue chip and manufacturing firms – the “real” economy – representing a further 60 per cent of global revenues.
When the team further untangled the web of ownership, it found much of it tracked back to a “super-entity” of 147 even more tightly knit companies – all of their ownership was held by other members of the super-entity – that controlled 40 per cent of the total wealth in the network. “In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network,” says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.’
It’s the banks and associated money launderers who do own the lion’s share of the world’s wealth, and these are owned by their shareholders, who are largely other banks and money launderers, an interconnectivity which has serious implications for global economic stability. Still,
#OccupyHastingsStreet notes that Noosa is so dense with rich people that it is known as the Monaco of Australia thus making it an ideal, strategic target for the Occupy movement.
One thing won’t chime with some of the protesters’ claims: the super-entity is unlikely to be the intentional result of a conspiracy to rule the world. “Such structures are common in nature,” says Sugihara.
Newcomers to any network connect preferentially to highly connected members. TNCs buy shares in each other for business reasons, not for world domination. If connectedness clusters, so does wealth, says Dan Braha of NECSI: in similar models, money flows towards the most highly connected members. The Zurich study, says Sugihara, “is strong evidence that simple rules governing TNCs give rise spontaneously to highly connected groups”. Or as Braha puts it: “The Occupy Wall Street claim that 1 per cent of people have most of the wealth reflects a logical phase of the self-organising economy.”
So, the super-entity may not result from conspiracy. The real question, says the Zurich team, is whether it can exert concerted political power. Driffill feels 147 is too many to sustain collusion. Braha suspects they will compete in the market but act together on common interests. Resisting changes to the network structure may be one such common interest.
Western hegemony relies on exploitation and oppression of indigenous people – time to challenge capitalism, end colonialism and dismantle the new feudalism. The colonisation of Australia is ongoing – before migaloos arrived there was no need to #OccupyHastingsStreet – time for a treaty and compensation to Australian Aboriginals. Give it back!
The social relationship constituted by value is only complete, its domination over labor is only really free, if the power of property is no longer a requirement fulfilled by previous accumulation, but a function of its future expansion. This reversal is the great motor of growth and the source of capitalism’s legendary dynamism.
Palestine / Israel Links
This is also what has happened with Israel’s own Basic Laws. The people with clout, who were represented in the Knesset by ostensibly independent research institutes, lobbyists and Knesset members on their behalf, are the ones who dictated the sanctification of property rights and the exclusion of welfare rights. It is not by chance that the Basic Law on Human Dignity and Freedom was passed in the middle of the night by a minority of Knesset members and without public debate, even for the sake of appearances. A constitution of this sort is one of the main means for the preservation of control by the elite groups.
Today, the wealthiest 20% of Australians own 61% of the nation’s wealth; the poorest 20% own just 1%. Although the income disparities are less marked, they too have been growing. While we are collectively wealthier than we have ever been, that wealth is spread less evenly than in the ’60s and ’70s and we are now a good deal less equal than countries such as Japan, Sweden and Norway. We are one of the most unequal developed countries, keeping company with the US and Britain.