Revealed – the Capitalist Network that Runs the World

Revealed – the Capitalist Network that Runs the World

by Andy Coghlan and Debora MacKenzie


This article first appeared in New Scientist

The 1318 transnational corporations that form the core of the economy. Superconnected companies are red, very connected companies are yellow. The size of the dot represents revenue (Image: PLoS One)

1 more image

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.

The Zurich team can. 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, 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.

John Driffill of the University of London, a macroeconomics expert, says the value of the analysis is not just to see if a small number of people controls the global economy, but rather its insights into economic stability.

Concentration of power is not good or bad in itself, says the Zurich team, but the core’s tight interconnections could be. As the world learned in 2008, such networks are unstable. “If one [company] suffers distress,” says Glattfelder, “this propagates.”

“It’s disconcerting to see how connected things really are,” agrees George Sugihara of the Scripps Institution of Oceanography in La Jolla, California, a complex systems expert who has advised Deutsche Bank.

Yaneer Bar-Yam, head of the New England Complex Systems Institute (NECSI), warns that the analysis assumes ownership equates to control, which is not always true. Most company shares are held by fund managers who may or may not control what the companies they part-own actually do. The impact of this on the system’s behaviour, he says, requires more analysis.

Crucially, by identifying the architecture of global economic power, the analysis could help make it more stable. By finding the vulnerable aspects of the system, economists can suggest measures to prevent future collapses spreading through the entire economy. Glattfelder says we may need global anti-trust rules, which now exist only at national level, to limit over-connection among TNCs. Bar-Yam says the analysis suggests one possible solution: firms should be taxed for excess interconnectivity to discourage this risk.

One thing won’t chime with some of the protesters’ claims: the super-entity is unlikely to be the intentional result of a conspiracy to rule the world. “Such structures are common in nature,” says Sugihara.

Newcomers to any network connect preferentially to highly connected members. TNCs buy shares in each other for business reasons, not for world domination. If connectedness clusters, so does wealth, says Dan Braha of NECSI: in similar models, money flows towards the most highly connected members. The Zurich study, says Sugihara, “is strong evidence that simple rules governing TNCs give rise spontaneously to highly connected groups”. Or as Braha puts it: “The Occupy Wall Street claim that 1 per cent of people have most of the wealth reflects a logical phase of the self-organising economy.”

So, the super-entity may not result from conspiracy. The real question, says the Zurich team, is whether it can exert concerted political power. Driffill feels 147 is too many to sustain collusion. Braha suspects they will compete in the market but act together on common interests. Resisting changes to the network structure may be one such common interest.

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
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

Graphic: The 1318 transnational corporations that form the core of the economy

(Data: PLoS One)

Global Research Articles by Andy Coghlan

Global Research Articles by Debora MacKenzie



4 responses to “Revealed – the Capitalist Network that Runs the World


    : “Anti-Semitism” used to stir controversy at Occupy Wall …
    Another excellent post by Andie 531.

    Yes, when Jews and Wall Street decide that the protests are no longer useful to distract the masses and to harmlessly vent public anger, they will dissolve the protests by having the corporate media (not just the Jewish media) collectively brand them “anti-Semitic.”

    This will scatter the protesters faster than calling them “terrorists.” It will make the clowns vanish faster than having police vehicles fire on them with cannons and machine guns.

    Those plastic handcuffs applied by the NYPD? They are nothing compared to the shackles that the protesters carry inside their heads. They champion “free speech, but they uphold the taboos imposed by Jews and Wall Street. They are useless.

    David Smith is heckled when he holds up a sign that says “Google Zionists control Wall St.” From my perspective. Smith’s purpose is as much to expose the mindless hypocrisy of the protesters as to expose Jews.

    On a different note, these clowns rail against “capitalism.” That’s stupid. It is not capitalism when banks keep all the profits, and dump all losses on the masses. It is not capitalism when banks are deemed “too big to fail.” That’s socialism for the banks. And banks only become “systemic” when they are backed by taxpayers.

    When the protesters equate the kleptocracy with “capitalism,” they distract from the kleptocracy, and thus support it. Instead, the protesters should carry signs that say, “REAL capitalism now!” With REAL capitalism, there is no such thing as “too big to ail.” Even Alan Greenspan admitted that, “Too big to fail is too big.”

    I myself hate capitalism, because I am a National Socialist who regards capitalism as essentially Jewish and globalist, since it owes no allegiance to any people or place. But capitalism is better than what we have now, which is socialism for the rich. It’s better than our current feudalism, in which peasants must pay rent and tribute (i.e. debt payments) to Jewish lords.

    By the way, Danny Cline is himself a Jew. The “nutpicking” ad from the Emergency Committee for Israel edits out the part of the video where Cline admits this.

    Moving on…

    The reality is that the Occupy Wall Street movement is filled with Jews.

    I agree. See

    Fester wants the protesters to name names (Lloyd Bankfien, Jamie Dimon, etc). I agree. By railing against “the system,” the protesters give the criminals a free pass.

    There’s nothing new in all this. (Meet the new boss; same as the old boss.) The much-ballyhooed Roosevelt “New Deal” gave so many special contracts to Jews that many Americans referred to it as the “Jew Deal.”

    Though the anti-Vietnam war protests were widely popular, they accomplished nothing. The war continued for another 7 years.

    Yes, what finally put a dent in the warmongers was a mass revolt by U.S. soldiers in Vietnam who refused to fight. The revolts started among drafted Black soldiers, and spread from there. Even the Special Forces (Green Berets) revolted. When, during one single offensive, more bombs were dropped on Vietnam than were used during the whole of World War II (by all sides), the Navy also revolted. The myth about soldiers being “patriots” who came home and were spat on is a lie perpetrated by warmongers and right-wing politicians. See the 2005 documentary titled “Sir, No Sir!”

    Today we see no revolt among soldiers, because we are in a Depression, and the military is the only livelihood available to military personel.

    Nor will we see a revolt among the Wall Street ranks (i.e. a revolt from inside Wall Street) since the financial sector is currently laying off hundreds of thousands at the middle and lower levels.

    Heydrich | Fri, 2011-10-21 05:23
    Re: “Anti-Semitism” used to stir controversy at Occupy Wall …
    One other thought.

    Some protesters think we should nationalize the Fed.

    Nonsense. Nationalization is a bailout. It is a socialization of debts incurred by private speculators. It means that debts on the balance sheets of private bankers that own the Fed are dumped onto the masses.

    Do NOT nationalize the Fed, or any of the big banks. Simply end the Fed, and let the big banks die. Meanwhile we set up a genuinely public central bank in which finance and the currency system are treated as a public utility, such that money works for people, rather than people working for money (i.e. slaving for private bankers).

    Don’t just “end the Fed.” Replace it with a genuinely public central bank that has no private owners.

    Do this, and our world will be transformed. Human creativity will be unleashed, and all things will become possible.

    Heydrich | Fri, 2011-10-21 07:22
    Re: “Anti-Semitism” used to stir controversy at Occupy Wall …
    Occupy Wall Street protests taking on a Jewish flavor
    NEW YORK (JTA) — Rachel Feldman originally had meant to attend a traditional synagogue Kol Nidre service. Aimee Weiss hadn’t found a place to daven but was looking for something more interesting than a “big box synagogue.”

    Come Yom Kippur eve, they and several hundred other Jews found themselves drawn to lower Manhattan, where under the gaze of curious onlookers, they held an open-air Kol Nidre service organized to support the Occupy Wall Street protesters near Zuccotti Park.

    “Kol Nidre reminds us that though we make commitments under duress, ultimately we are accountable only to the higher values of justice and righteousness,” the organizer of the service, Dan Sieradski, said at the event, reading from a labor leader’s Midrash.

    The service was the most salient but hardly the only sign of a growing attempt to infuse the economic protests with a Jewish flavor — at least, for the Jews involved.

    From progressive activists who seek to conflate the protesters’ aspirations with Jewish values to Chabadniks looking for opportunities to have Jews to perform mitzvahs such as sitting in a sukkah, the Occupy Wall Street protests are becoming a fulcrum of Jewish ferment. In Boston and Philadelphia, too, Jewish activists held Yom Kippur services at the site of the demonstrations.

    “For many of us, social justice is where we find our Judaism,” said Regina Weiss, the communications director for the Progressive Jewish Alliance & Jewish Funds for Justice. “For many there is no more important way to stand up and express Judaism on the holiest night of the year than to stand with people who are hurting and to stand up for greater equality in the country.”

    The person credited with the idea of holding the Kol Nidre services at the protests, Rabbi Arthur Waskow, director of the Shalom Center, told JTA that protesting is a key part of Judaism.

    “The reason there is a Jewish place in these protests is that there is a protest place in Judaism,” he said. “From the Exodus, from Isaiah, from Jeremiah and all the way down to rabbinic Judaism, there is a sense that Judaism is constantly struggling against top-down power of the Pharaoh.

    “Judaism calls for freedom, democracy and feeding the hungry,” he added.

    Some Jews involved with the protesters said they’re also trying to combat a minority strain of anti-Zionism and anti-Semitism running through the movement.

    “There was a guy with a sign ‘Zionists control the financial world,’ ” said Kobi Skolnick, an ex-Chabadnik who once attended a yeshiva in the West Bank. “They have freedom of speech, but so do I. What we did is we wrote on a big, 10 times bigger, sign: ‘This sign sucks, and it is not representative here.’ ”

    Sieradski, too, said there are some anti-Zionist ideologues involved in the Occupy Wall Street protests who believe that Israel is central to U.S. economic issues.

    They “think that the issue of the Israeli occupation is inseparable from the economic situation. They think that Israel is an outpost of American imperialism, including economic imperialism,” he said. “There is a tendency on the left to make Jews who identify with Israel uncomfortable. I hope we can overcome that. There are plenty people against the Israel occupation, but that’s not what this is about.”

    For Yoni Reskin, a Chabadnik who owns the PopUp Sukkah company, the protests were about an opportunity to have Jews fulfill the mitzvahs of Sukkot. In the lead-up to the holiday, he made plans to build a sukkah at the site of the New York protests.

    “It’s not a political angle,” he told JTA. “I truly believe that on Sukkot everyone should be able to celebrate the holiday. When I found that this opportunity was available, I wanted to be able to help perform the mitzvah.”

    The Conservative movement’s Rabbinical Assembly donated 120 High Holidays prayer books for the Yom Kippur service.

    “Wherever there is an opportunity to bring Torah and learning to Jews, wherever they are, we want to be there,” said Rabbi Julie Schonfeld, the organization’s executive vice president.

    Last Friday night, the drumbeat at the plaza protesters have occupied since Sept. 17 was drowned out by the sounds of Kol Nidre.

    Congregants arranged themselves in concentric circles around the bimah and a Torah scroll on loan from an Orthodox synagogue, chanting and singing so that the words of the service could carry back to the edges of the crowd. It was hard to tell whether the Kol Nidre call and response was borrowed from an old labor tactic or Jewish summer camp. Halal food carts ringed the congregation.

    Feldman, 26, an activist who had demonstrated in Zuccotti Park earlier in the week, noted that the service drew many of her friends who would never go to services.

    “This is what shul should feel like,” said Feldman, surrounded by a congregation wearing a mix of sneakers, ties, tallitot, yarmulkes, jeans and T-shirts. “Overwhelmed by community.”





    HENCE THEY RAKE IT IN ££££££££$$$$$$$$$$


    The one movement, Zionism, aimed at reassembling a dispersed nation in a territory promised to it by the Jewish god; the second movement, Communism, aimed at the destruction of separate nationhood as such.

    Thus these two movements appeared at first sight to be fixedly opposed to each other, for the one made nationalism its religion, even its god, and the other dec1ared war to the death on nationalism. This antagonism was only apparent, and in truth the two movements ran on parallel tracks, not head on towards a collision on the same line. For the god who promised land to the nation to be gathered-in also promised to set it “above all people that are upon the face of the earth” and to destroy all other nations “with a mighty destruction until they be destroyed”. The world-revolution, which pursued the second of these aims, thus fulfilled the condition set for the first of them; either by accident or by design, it too was doing the will of Jehovah.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s