Does one ‘super-corporation’ run the global economy?
Interesting question, eh? Rob Waugh in the Mail Online explains this graphic:
The caption for the graphic:
The 1,318 transnational corporations that form the core of the globalised economy – connections show partial ownership of one another, and the size of the circles corresponds to revenue. The companies ‘own’ through shares the majority of the ‘real’ economy
The article itself begins:
A University of Zurich study ‘proves’ that a small group of companies – mainly banks – wields huge power over the global economy.
The study is the first to look at all 43,060 transnational corporations and the web of ownership between them – and created a ‘map’ of 1,318 companies at the heart of the global economy.
The study found that 147 companies formed a ‘super entity’ within this, controlling 40 per cent of its wealth. All own part or all of one another. Most are banks – the top 20 includes Barclays and Goldman Sachs. But the close connections mean that the network could be vulnerable to collapse.
‘In effect, less than one per cent of the companies were able to control 40 per cent of the entire network,’ says James Glattfelder, a complex systems theorist at the Swiss Federal Institute in Zurich, who co-wrote the research, to be published in the journal PLoS One.
Some of the assumptions underlying the study have come in for criticism – such as . . .
Conspiracy theorists will not like what I have to say. I think the entire notion is sheer drivel. While it is true that multinational corporations have relationships with one another, they are often supplier/customer relationships not ownership. And to accuse the banks of being at the center of the web is patently ridiculous. US law prohibits (I say again, prohibits) regular commercial banks from owning equity interests in the companies who are their clients. Making a loan secured by publicly traded stock is not the same as the bank owning the stock. Investment banks may be a different story, as I don’t know about the laws pertaining to them.
Anonymous
23 October 2011 at 2:16 pm
It is amazing, given the degree to which businesses praise competition, that any group of corporations in an industry or region would cooperate to drive prices higher, isn’t it? Still, given the specific goal and legal requirement for corporations to grow profit no matter what, it is not surprising that corporations will cooperate if they believe it will increase their profits. And—this is going to come as a shock, so sit down—corporations have been found to break the law, despite instances in which the law is clear and the corporations have legions of lawyers. Surely you’ve read instances of this. The US, like many other nations, prohibits (I say again, prohibits) corporations from breaking the law. Yet they do.
Be careful about throwing around the word “drivel.” It may come back to haunt you.
If you’re unfamiliar with the phenomenon of corporations doing things that law prohibits (I say again, louder, PROHIBITS), I would be happy to provide examples. But I bet, once you put your mind to it, you can think of some yourself.
LeisureGuy
23 October 2011 at 4:02 pm
I do recall Mr. Beetner and I having a conversation on how to put a stop to crime: make it against the law. However, we were joking.
LeisureGuy
23 October 2011 at 5:41 pm
@Anonymous:
Since the Glass-Steagall Act was repealed in 1999, the nation’s six largest commercial banks were also allowed to become investment banks. That’s also when leverage requirements got thrown out, and instead requiring 6-1 leverage, these large banks were (and are now) over-leveraged by up to 6,000-to-1. One small disaster will send banks, countries, currencies, and economies to collapse.
zaine_ridling
23 October 2011 at 7:54 pm
I guess you don’t have to worry about doing things against the law once you gain control of the government and can legalize the things you want to do. Which was more or less the mission Phil Gramm undertook for the financial industry.
LeisureGuy
23 October 2011 at 8:14 pm
I’ve heard rumors that the Rothschilds (owner of the first central bank in Germany and later owner of all other subsequent central banks including IMF and World Bank own over half the worlds wealth.)
J Dogg
24 October 2011 at 12:39 pm