Corporatocracy - how the owners of money rule the world

2024 Author: Seth Attwood | [email protected]. Last modified: 2023-12-16 15:55

TOP-50 of 147 "super-organizations" that make up the network of global corporate control. And these are only those, information about which is in open sources.

Somehow, a couple of years ago, I came across a video presentation of one of the Swiss scientists who analyzed the connections between 43 thousand transnational corporations. Scientists have identified a relatively small group of organizations that have a real impact on the global economy (just in case, it was in 2007). To analyze the relationships between corporations, researchers from the Swiss Higher Technical School of Zurich used a mathematical model of data analysis, writes New Scientist.

As a result of systems analysis, scientists have identified the so-called network of global corporate control, consisting of 1318 corporations with mutual owners: each of these companies is closely related to at least two other companies, and the average number of ties between them is twenty. Together, they earn 20% of global operating revenue, but through their shares and through their subsidiaries, they control most of the world's leading real-world businesses, accounting for about 60% of global revenue.

Further research revealed the core of this network - an even more closely related group of "superorganizations", which included 147 companies, most of which are financial institutions such as Barclays, JP Morgan Chase, Goldman Sachs, Merrill Lynch, Morgan Stanley, Bank of America, UBS, Deutsche Bank, Société Générale, Credit Suisse and others. Their assets overlap with each other, allowing them to control 40% of global corporate wealth. Thus, a core of less than 1% of companies is effectively a global economic superstructure that controls almost half of the world economy. The researchers point to signs that the superstructure they identified, despite its small size, complexity and intricacy of interconnections within the core, collectively exercises most of the total control of the corporate network. As an example, the paper considers a small part of well-known financial players and their connections, which give an idea of the level of entanglement of the entire kernel. The authors of the work explain that so far only small local samples of the system have been studied, and for assessing management on a global scale, the corresponding methodology has yet to be created.

The researchers offered a visual illustration of the global corporate control network. The network of 1318 companies is represented by two groups: 147 super-integrated companies (indicated by red dots) and the remaining 1171 highly integrated companies (indicated by yellow dots). The dot size represents the relative earnings of the company.

The impact of this phenomenon on the economic system, according to scientists, raises important new questions for researchers and policymakers. Concentration of power in and of itself is neither a bad nor a good factor. The analysis shows that the emergence of such a global superstructure is not the result of some conspiracy to govern the world, it only reflects the logical phase of self-organization of the modern corporate economy. If the connectedness of the members of an economic system contributes to the production of wealth, cash flows inevitably shift towards the most closely connected members of the system. Therefore, multinational corporations own related assets for commercial rather than political reasons.

Scientists believe that the study can explain the susceptibility of the global economy to financial crises. Concentrating economic power in the hands of a small number of closely related organizations is dangerous because such networks are unstable. Problems in one organization quickly spread to others associated with it, which can cause a domino effect. James Glattfelder comments: “The world learned in 2008 that such networks are unstable. If one of these companies, like Lehman Brothers, is in distress, others will inevitably suffer.”

Below is the TOP-50 of 147 "super-organizations" that make up the network of global corporate control, which the authors of the study cite in their article:

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

9. UBS AG

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

Basically, this list includes banks and financial groups, which is understandable, since banks own assets 10 times larger than equity capital (depending on the capital adequacy ratio in each country), which ordinary companies cannot afford.

For example, the largest company by capitalization Apple 724, 733 billion dollars. The US as of March 2015 is not comparable to the world's largest bank ICBC with assets of 3.322 trillion US dollars.

Now the rating of the largest banks and financial groups in the world looks like this:

B- billions of US dollars

The composition has changed slightly, but such persons as Barclays, JP Morgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, UBS, Deutsche Bank, Société Générale, Credit Suisse have been and have remained.