The Corporate 1 Percent: Just 147 Companies Control 40% of Global Economy
One of the things the Occupy Wall Street movement is protesting, or trying to raise awareness about, is the concentration of wealth and power among financial institutions. What good is democracy if the only voices being heard belong to a small slice of trans-national corporations?
New analysis by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich has determined that 147 companies, mainly banks, control the bulk of the world’s economy.
The data set was taken from 2007, so it’s possible even less companies are in play, since the information they were working with pre-dated the 2008 economic collapse. Still, it paints a sobering picture of how the economy is dependent less on “Main St.” and more on big business.
New Scientist breaks down the trio’s methodology:
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.
Let’s repeat that for emphasis: Less than 1 percent of trans-national companies controlled 40 percent of the world’s capital. Sound familiar? Certainly a study like this would be a boon to the #OWS crowd. It really reinforces their point, not just about American democracy being controlled by a small sliver, but by the world at large being influenced by the 1 percent.
The trio responsible for the analysis said concentration of power is neither good nor bad, but as the collapse of 2008 demonstrates, when one of these companies falls, it doesn’t take much to start a disastrous economic chain reaction.
“It’s disconcerting to see how connected things really are,” George Sugihara, a complex systems expert at the Scripps Institution of Oceanography in La Jolla, Calif. told New Scientist.
Other experts stressed that ownership doesn’t necessarily equate to power or control, but that further analysis should be done on this front. It’s also worth keeping in mind the study didn’t include privately held companies like Koch Industries, Cargill or Price Waterhouse Coopers.
Equally as frustrating, the study was 36 pages long, minutely explaining the analysis and methodology, but then the study authors only bothered to list 50 out of the 147 trans-national corporations.
That just seems lazy.
Hit the next page to see the top 50 companies based on this analysis…
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