Wednesday, 20 November 2013

the capitalist network that runs the world

Science has confirmed my own and I dare say, a great many others worse fears; that a relatively small group of companies, mainly banks, with disproportionate power (to the offences they had committed) over the global economy, actually runs the world, or rather I should say control and influence our world, that they think it’s theirs to have, hold, own and do just what they like in the pursuit of profits and evermore none ending financial gain.
The idea that a few bankers control a large chunk of the global economy might not seem like news to real Socialists, or the Occupy movement and protesters that have sprung up elsewhere in most recent years. But research, root and branch, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich in 2007, was the first to go far 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 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. It 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 of scientists went further and 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. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan, Chase & Co, and of course The Goldman Sachs Group.
As the world learned in 2008, such networks are unstable. 2008 was also a leap year, but more than anything else, that year will be remembered for stock markets around the world plunging amid growing fears of a U.S. recession, fueled by the 2007 subprime mortgage crisis, and of course here at home in the UK, the queues of people lining up in the streets trying to withdraw their money from Northern Rock the 5th largest mortgage bank in the land before the Brown government introduced emergency legislation temporarily to nationalize Northern Rock; and as they say the rest is history still very fresh in a great many peoples minds today, who then became the suffering victims of this capitalist crisis, and has led us to austerity at home and abroad. It will always define Gordon Brown as the no return to  boom and bust man, what a legacy for him to take to his grave.

 If I may, I would like to finish this post by sharing this thought with those who read it:
Capitalism is only unbeatable as long as everybody thinks it is. As soon as everybody thinks it is finished, then it will be finished. We therefore need to keep in touch, with what others are thinking. And we need to be able to explain, tirelessly if need be, where the only viable future for the human race lies - in the post-capitalist society of common endeavor and common concern through common ownership of the world not by the few, but by the many. It is impossible to be neutral in this desperate struggle.

1 comment:

Unknown said...

Thanks for this and other great articles on your blog. I was not aware that this piece of work had been done, but long suspected that was happening. However, the guys from the Swiss Federal Institute of Technology in Zurich should have gone further, and traced ownership of top 20 who own the world.

I suspect that 20 would go down to 8 family owners, 3 being 'old money' families and the remainder 'new money' financiers from the turn of the previous century. All can be linked back to The City of London, which is the central hub of this global money making machine. I just hope these families aren't able to sleep well at night. With the despicable actions they've taken to get where they are today, they don't deserve to have any sleep at all.

Hope things are going well for you and that you keep on giving us your thoughts.

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