COMMENT: From The New Scientist comes an article featuring a detailed computer analysis of the concentration of economic power wielded by trans-national corporations.
Although this is not exactly revelatory, the detail and scientific approach do provide depth and gravitas to the awareness that growing concentration of economic power dominates the world in which we live.
EXCERPT: AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters’ worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.
The study’s assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further, they say, could help to identify ways of making global capitalism more stable.
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).
“Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market,” says James Glattfelder. “Our analysis is reality-based.”
Previous studies have found that a few TNCs own large chunks of the world’s economy, but they included only a limited number of companies and omitted indirect ownerships, so could not say how this affected the global economy — whether it made it more or less stable, for instance. . . .
Ha, I saw that article earlier and immediately thought of Dave.
I agree with its conclusions but like some of the commentators I have problems with the methodology, which mainly focuses on direct and indirect stock ownership. Barclays came out #1, I believe largely through its ownership of the BGI division, which it since sold (it would be interesting to see how the rankings changed after the 2008 crisis). BGI, now part of BlackRock, engages in mainly passive investments of pension and sovereign funds, and insofar as they are active investors it only goes as far as buying and selling shares, not directly influencing boards. CalPERS at least will put pressure on boards to make management changes occasionally.
You have long mentioned “interlocking boards”, which I think is a more accurate measure of where economic and political power truly lies (no pun intended).
Good article Dave! It looks like people are finally waking up to the truth. Let’s hope the ‘Neo’-Nazis and other fascists aren’t able to hijack our movements much more than they already have........