Revealed – the capitalist network that runs the world

[Home Guy]

Revealed ? the capitalist network that runs the world

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 revealed a core of 1318 companies with interlocking ownerships. 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.

The top 50 of the 147 superconnected companies

1. Barclays plc
2. Capital Group Companies Inc
3. FMR Corporation
4. AXA
5. State Street Corporation
6. JP Morgan Chase & Co
7. Legal & General Group plc
8. Vanguard Group Inc
9. UBS AG
10. Merrill Lynch & Co Inc
11. Wellington Management Co LLP
12. Deutsche Bank AG
13. Franklin Resources Inc
14. Credit Suisse Group
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp
17. Natixis
18. Goldman Sachs Group Inc
19. T Rowe Price Group Inc
20. Legg Mason Inc
21. Morgan Stanley
22. Mitsubishi UFJ Financial Group Inc
23. Northern Trust Corporation
24. Société Générale
25. Bank of America Corporation
26. Lloyds TSB Group plc
27. Invesco plc
28. Allianz SE
29. TIAA
30. Old Mutual Public Limited Company
31. Aviva plc
32. Schroders plc
33. Dodge & Cox
34. Lehman Brothers Holdings Inc (*)
35. Sun Life Financial Inc
36. Standard Life plc
37. CNCE
38. Nomura Holdings Inc
39. The Depository Trust Company
40. Massachusetts Mutual Life Insurance
41. ING Groep NV
42. Brandes Investment Partners LP
43. Unicredito Italiano SPA
44. Deposit Insurance Corporation of Japan
45. Vereniging Aegon
46. BNP Paribas
47. Affiliated Managers Group Inc
48. Resona Holdings Inc
49. Capital Group International Inc
50. China Petrochemical Group Company

• Lehman still existed in the 2007 dataset used

[dgk]

Slightly off-topic but pretty interesting read.

[HeyBub]

>

Agreed, but not precisely due to the results obtained.

Carl Jung, the Swiss psychoanalyst, proposed a genetic disposition on the part of humans to discover a cause for an observed effect. This, of course, was a survival mechanism. If people died as a result of a certain snake's bite, it made sense - from a survival perspective - to associate the two.

The downside of this compulsion to assign a cause to an observed effect is the imperative to assign a cause to EVERY effect. Where a cause is not immediately available, the human mind usually INVENTS a reason. This is most evident in convoluted conspiracy theories, or attributing lights in the sky and bad dreams to space aliens.

"But what else could it be?" is the common argument stopper - as if ignorance was a proof.

[dgk]

>>

... .

However in this case, these corporations do run the world, it isn't really a conspiracy theory. Whether they get together and work for common goals isn't really the point. They do work for a common goal; make more money. That's what corporations are designed to do.

That isn't what our founding fathers had in mind however, because they had been on the receving end of the power of one of the first big corporations, the Dutch West India Company. Each state was allowed to issue corporate charters, but those charters specified that a corporation must act in the public interest and be for a set period of time for a designated purpose.

One state decided that they could make a lot of money by selling corporate charters without those restrictions, and that is why so many banks and "to big to fail" corporations are incorporated in Delaware.

That's why corporations have no problem shipping the jobs overseas. Even if they are profitable, there is no actual loyalty to America. If they can make more money screwing America, they do so.

[gpsman]

Yeah. The most commonly ignored but fundamental scientific principle is "correlation does not imply causation".

Psychologists have determined we make up our minds first, then seek out the information that supports it.

These universal human tendencies are the basis of the simple tricks politicians and religions use to convince people bullshit is fact, and it is ridiculously easy and effective, e.g. "flip flopper" means changing your mind is a mental or moral defect. -----

- gpsman

[dgk]

Please explain to me the correlation and causation in this instance. Interlocking corporations (through boards and maybe golf course outings) do have enormous power and use it to get what they want.

[gpsman]

I don't understand the relevance. -----

- gpsman

[HeyBub]

Uh, yeah. Adam Smith settled this noise in the 18th Century when he demonstrated the "invisible hand" notion that when each acts in his own best interest everybody profits.

Again, Adam Smith, in his "Inquiry Into the Wealth of Nations" revealed that there is a net gain to everybody when each nation does what it does best. Let's take a trivial example:

Suppose there are 10 major manufacturers of some gizmo in the U.S. These gizmos are sold at several price-points, from $7.99 to $24.99. The entire industry employs 500 people.

Now suppose a foreign manufacturer steps in to produce virtually identical gizmos with retail prices varying from $2.50 to $12.00. Soon the ten U.S. manufacturers are out of business.

Result: 500 people lose their jobs while 50 million people come out ahead.

Which is better overall? Let me think...

[gpsman]

This appears to be among the unintended consequences of the US attempting to finance the expansion of the "global economy".

Now, third world nations manufacture products for US corporations and the US is largely unemployed, but that isn't a problem for them or the corporations because of the expanding global economy we financed.

It's a vicious circle, and its spin rate is not slowing. Congress doesn't want to do squat because they can't predict when the shit is going to finally hit the fan full force and they want to be able to say, "We dint do dat!" and be hard to refute.

I blame Clinton, if anyone wonders...

Man, I got diarrhea of the keyboard today! -----

- gpsman

[dgk]

Democrat or Republican, it doesn't matter too much. Republicans are owned by the corporations and many Democrats are leased. The bottom line is that the US middle class is getting screwed and the richer are getting richer.

[RicodJour]

We'll have to come up with some new terms. What do you call a downwardly mobile rich guy who's still rich compared to the rank and file? Richish? Pseudo-rich?

All of the general classifications are getting an unasked for downgrade, except for the very top tier, who are running on greased wheels. That's what I'm waiting for - for the richish people to wake up and realize that their fortunes aren't going to seem so fortunate for long if this keeps up and that it's in everyone's (+/-1%) best interest to rein in the land grab.

R

[JIMMIE]

Not surprising since companies with large surpluses of cash tend to invest it in other companies stocks....even their competitor's.

Jimmie