The 1% Revealed: The Capitalist Network that Runs the World

[vanlose kid]

have a feeling this might have been posted before. not sure though. couldn't find it either so...

*

Revealed – the capitalist network that runs the world

Updated 13:15 24 October 2011 by Andy Coghlan and Debora MacKenzie
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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)


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. Sugihara 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.

When this article was first posted, the comment in the final sentence of the paragraph beginning "Crucially, by identifying the architecture of global economic power…" was misattributed.

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
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

* Lehman still existed in the 2007 dataset used

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

(Data: PLoS One)

http://www.newscientist.com/article/mg2 ... print=true

*

it's one answer to Mac's question "Why should anyone have more money that anyone else?"

the finding being that it's all natural innit? why worry?

*

[JackRiddler]

.

This "Top 50" list by being based on known connections (and presumably nominal asset valuations) rather than revenues from production and positioning within power structures excludes four sectors that have enormous leverage over the political economy without needing to be in direct financial relationships with most other firms (as financial institutions tend to be). These are 1) ENERGY (only one on the list?), 2) military-security-intel-deepstate, 3) drugs-pharmaceuticals, and, of course, 4) the system's social brainstem of the corporate media and related bullshit industries (the multimedia advertising-PR-marketing-legal-branding-educational-academic-sponsorship complex). Also, the leverage that comes from 5) non-profit guises and other unaccounted and offshore cash power. It's all interrelated, the latter obviously extends into the deep state, churches, private fortunes, drug trade (a la Ruppert paradigm), etc. Smaller amounts can be positioned for enormous structural influence within the system as a whole, if they can be hidden. In one sense these Top 50 are a large part of the ultimate ownership of the rest of the game, and don't make for a bad list, but even with most of the power concentrated in 10-20,000 worldwide, the system has to function as a whole.

.

[Wombaticus Rex]

Figure I'll pose it here -- in the CAFR thread it's claimed "Government owns everything" in terms of the having a majority shareholder stake in the Fortune 500 corporations, via federal and state pensions and slush funds. Are there tools to identify and verify who the shareholders of these publicly traded corporations are?

Personally, I'm not even interested in corporate fronts. Those are easy to find and they're there for a reason: to obfuscate and obscure the actual Owners.

Side Note: This study has been "published" at least a dozen times in the past three years. How do they keep doing it? It's gotta be the most amazing streak of content exploitation I've seen in Internets History. I get 10-20 people emailing me this study every time it "comes out."

[JackRiddler]

Figure I'll pose it here -- in the CAFR thread it's claimed "Government owns everything" in terms of the having a majority shareholder stake in the Fortune 500 corporations, via federal and state pensions and slush funds. Are there tools to identify and verify who the shareholders of these publicly traded corporations are?

God, that is such bullshit, and we've been hearing it for at least 20 years. Pension funds are not "government" even if they are public sector, despite the common right-libertarian trope of lumping all public entities together even as they claim private entities are locked in competition with each other and therefore not corrupt. Pension funds almost never make but follow the market -- and how I wish they DID make the market! For example, California could start one of the world's largest banks overnight by moving its pension funds into a state bank that then developed California and built the next generation of the electric car that GM killed, instead of improving BoAGoldmanFargo's balances. Paper ownership is not automatically power. Pension funds often do little more than provide the till for plunder by private money managers. And man, have they been plundered. The personnel switch back and forth between Wall Street and fund management in a revolving door system just as corrupt as the Pentagon's.

I thought I'd seen that list before. In fact, I probably did on this board, and made the same response.

.

[Simulist]

Revealed – the capitalist network that runs the world

[…]



The 1318 transnational corporations that form the core of the economy.

At last, GHWB's "thousand points of light" are revealed.

[Nordic]

Not to veer too much off topic, but the mention of pension funds brings up an issue In California I've been meaning to mention --

Now, when you get Unemployment Compensation in CA, instead of a simple paper check, you get a B of A debit card.
It's so fucked up. You can deposit into your bank account, but it takes a while at the bank to do, and you have to tell them the exact amount on the card, and they can only try it once. This will keep most people from depositing theb entire amount, and they will use it as a debit card. When it gets down below 5 or 10 bucks, a lot of people will just quit using it. Who keeps the money? Well I suppose B of A does

How they weaseled their way into providing that "service" is beyond me.

[Wombaticus Rex]

JP Morgan does food stamps:
http://dailybail.com/home/jp-morgans-fo ... -fall.html

J.P. Morgan is getting rich off of poverty.

JP Morgan is the largest processor of food stamp benefits in the United States. JP Morgan has contracted to provide food stamp debit cards in 26 U.S. states and the District of Columbia. JP Morgan is paid for each case that it handles, so that means that the more Americans that go on food stamps, the more profits JP Morgan makes. Yes, you read that correctly.

In the video posted above, JP Morgan executive Christopher Paton admits that this is "a very important business to JP Morgan" and that it is doing very well. Considering the fact that the number of Americans on food stamps has exploded from 26 million in 2007 to 43 million today, one can only imagine how much JP Morgan's profits in this area have soared. But doesn't this give JP Morgan an incentive to keep the number of Americans enrolled in the food stamp program as high as possible?

There are just some things that are a little too "creepy" to be "outsourced" to private corporations. The JP Morgan executive in the interview below does his best to put a positive spin on all this, but it just seems really unsavory for a big Wall Street bank to be making so much money off of the suffering of tens of millions of Americans....

So if unemployment goes down will this ruin JP Morgan's food stamp business?

Well, apparently not. In the interview Paton says that 40% of food stamp recipients are currently working, and he seems convinced that there could be further "growth" in that segment.

[Elvis]

.

This "Top 50" list by being based on known connections (and presumably nominal asset valuations) rather than revenues from production and positioning within power structures excludes four sectors that have enormous leverage over the political economy without needing to be in direct financial relationships with most other firms (as financial institutions tend to be). These are 1) ENERGY (only one on the list?), 2) military-security-intel-deepstate, 3) drugs-pharmaceuticals, and, of course, 4) the system's social brainstem of the corporate media and related bullshit industries (the multimedia advertising-PR-marketing-legal-branding-educational-academic-sponsorship complex). Also, the leverage that comes from 5) non-profit guises and other unaccounted and offshore cash power. It's all interrelated

Add to those the megalithic insurance industry.

[JackRiddler]

.

This "Top 50" list etc. etc.

Add to those the megalithic insurance industry.

A bunch of them are on the "Top 50" list, which is all FIRE.

.

[justdrew]

http://en.wikipedia.org/wiki/Eminent_domain

[Skunkboy]

Simulist said:

At last, GHWB's "thousand points of light" are revealed

For a kinder, gentler, machine gun hand.

[crikkett]

.

This "Top 50" list by being based on known connections (and presumably nominal asset valuations) rather than revenues from production and positioning within power structures excludes four sectors that have enormous leverage over the political economy without needing to be in direct financial relationships with most other firms (as financial institutions tend to be). These are 1) ENERGY (only one on the list?), 2) military-security-intel-deepstate, 3) drugs-pharmaceuticals, and, of course, 4) the system's social brainstem of the corporate media and related bullshit industries (the multimedia advertising-PR-marketing-legal-branding-educational-academic-sponsorship complex). Also, the leverage that comes from 5) non-profit guises and other unaccounted and offshore cash power. It's all interrelated

Add to those the megalithic insurance industry.

Yes! My husband and I were just talking about how insurance companies have us all over a barrel.

In other news, you can rent a zip car with insurance and tax included. A few years ago I called around trying to get an insurance policy to drive other people's cars and rentals, and the only options available were absurd.

[Searcher08]

http://en.wikipedia.org/wiki/Eminent_domain

"ALL YOUR EVERYTHINGZ BELONGZ TO US"

[Nordic]

I've often said if you could get the client list of Kissinger and Associates, you would probably get a pretty good handle on who the real PTB's were.

Well here's a guy who reportedly was a managing director of K&A who's written a book about it.


https://www.amazon.com/Superclass-Globa ... 3024558830

Description
From Publishers Weekly
Starred Review. Books on world elites tend to focus on the superwealthy, but political scholar Rothkopf ( Running the World) has written a serious and eminently readable evaluation of the superpowerful. Until recent decades, great-power governments provided most of the superclass, accompanied by a few heads of international movements (i.e., the pope) and entrepreneurs (Rothschilds, Rockefellers). Today, economic clout—fueled by the explosive expansion of international trade, travel and communication—rules. The nation state's power has diminished, according to Rothkopf, shrinking politicians to minority power broker status. Leaders in international business, finance and the defense industry not only dominate the superclass, they move freely into high positions in their nations' governments and back to private life largely beyond the notice of elected legislatures (including the U.S. Congress), which remain abysmally ignorant of affairs beyond their borders. The superelites' disproportionate influence over national policy is often constructive, but always self-interested. Across the world, the author contends, few object to corruption and oppressive governments provided they can do business in these countries. Neither hand-wringing nor worshipful, this book delivers an unsettling account of what the immense and growing power of this superclass bodes for the future. (Mar.)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
Product Description
Each of them is one in a million. They number six thousand on a planet of six billion. They run our governments, our largest corporations, the powerhouses of international finance, the media, world religions, and, from the shadows, the world's most dangerous criminal and terrorist organizations. They are the global superclass, and they are shaping the history of our time.

Today's superclass has achieved unprecedented levels of wealth and power. They have globalized more rapidly than any other group. But do they have more in common with one another than with their own countrymen, as nationalist critics have argued? They control globalization more than anyone else. But has their influence fed the growing economic and social inequity that divides the world? What happens behind closeddoor meetings in Davos or aboard corporate jets at 41,000 feet? Conspiracy or collaboration? Deal-making or idle self-indulgence? What does the rise of Asia and Latin America mean for the conventional wisdom that shapes our destinies? Who sets the rules for a group that operates beyond national laws?

Drawn from scores of exclusive interviews and extensive original reporting, Superclass answers all of these questions and more. It draws back the curtain on a privileged society that most of us know little about, even though it profoundly affects our everyday lives. It is the first in-depth examination of the connections between the global communities of leaders who are at the helm of every major enterprise on the planet and control its greatest wealth. And it is an unprecedented examination of the trends within the superclass, which are likely to alter our politics, our institutions, and the shape of the world in which we live.

Review
“Whether you like it or not, there is no way to deny the enormous, disproportionate, concentration of power and wealth in the hands of a relatively small number of people in the world today. David Rothkopf has vividly described who they are, and how they operate and interact, in his valuable (and often disturbing) new book.” ―Richard Holbrooke, Former U.S. Ambassador to the United Nations

“No, no vast conspiracy runs the world. But, according to Rothkopf's book, a tiny but diverse global elite, a Superclass, comes close. His finely-honed prose takes the reader on a joyous, entertaining, and erudite romp around the globe in search of that class.” ―Alan Blinder, Former Vice Chairman of the Federal Reserve Bank of the United States

“Thanks to Rothkopf's special blend of analysis, direct interaction with his subjects and vivid writing, this is a must read book for people interested in understanding the genesis of leadership in the new global economy.” ―Ernesto Zedillo, Director of the Yale Center for the Study of Globalization and Former President of Mexico

“David Rothkopf has written a super book about the people presently executing an historic shift of world economic and political power and about how they are doing it and why. If you want to know how your choices are being determined and the circumstances of your life conditioned, you must read this book.” ―Clyde Prestowitz, President of the Economic Strategy Institute and author of Three Billion New Capitalists

“The activities of a growing cosmopolitan elite are having profound effects. They can be highly desirable when they promote international cooperation or more problematic when the interests of the elites diverge from those of their citizens. David Rothkopf's Superclass skillfully probes these issues and many more and should be read by all those concerned with the international economy and the evolving global system.” ―Lawrence Summers, former U.S. Secretary of the Treasury

“Superclass is a timely and detailed analysis of the disproportionate power and hence responsibility of an incredibly small group of individuals: the global power elites whose strongest allegiances are not with their countries but with each other. Understanding the implications of this shift beyond the nation-state is of great importance and Rothkopf has made a significant first step.” ―Bob Wright, Vice Chairman, General Electric, and former President and CEO, NBC Universal

“An entertaining and well researched taxonomy of the rich and powerful who shape foreign policy and business in our globalized world. Rothkopf gives us the story behind Davos Man.” ―Joseph E. Stiglitz, Nobel Prize Winner in Economics and author of Making Globalization Work and Globalization and its Discontents

“A masterful portrait of this century's global elite: who they are, how they run the world, and why you should worry about the increasing concentration of influence, wealth and power they represent. An insider and a globalizer himself, Rothkopf knows his people and his politics, and uses history, psychology, economics and a lot of awfully good stories to ask troubling new questions about globalization as we know it. It's smart and it's fun. And if you are a globophile who trusts greater prosperity and stability to disinterested markets, it will make you think again.” ―Nancy Birdsall, President, Center for Global Development

“In his lively and brilliantly written book Superclass, David Rothkopf has captured the multitude and density of cross-border connections and interactions among the influential, rich and famous throughout the world. He compellingly describes how those links are shaping the global economic and political landscape today--and how they will powerfully influence the future institutions and politics of our planet.” ―Robert Hormats, Vice Chairman, Goldman Sachs (International) and author of The Price of Liberty: Paying for America's Wars

About the Author
David Rothkopf is the widely acclaimed author of Running the World: The Inside Story of the National Security Council and the Architects of American Power. He is the president and chief executive of Garten Rothkopf, an international advisory firm; a visiting scholar at the Carnegie Endowment for International Peace; and a teacher of international affairs at Columbia University's Graduate School of International and Public Affairs.

From The Washington Post
Reviewed by Anne-Marie Slaughter

Go to http://www.theyrule.net. A white page appears with a deliberately shadowy image of a boardroom table and chairs. Sentences materialize: "They sit on the boards of the largest companies in America." "Many sit on government committees." "They make decisions that affect our lives." Finally, "They rule." The site allows visitors to trace the connections between individuals who serve on the boards of top corporations, universities, think thanks, foundations and other elite institutions. Created by the presumably pseudonymous Josh On, "They Rule" can be dismissed as classic conspiracy theory. Or it can be viewed, along with David Rothkopf's Superclass, as a map of how the world really works.

In Superclass, Rothkopf, a former managing director of Kissinger Associates and an international trade official in the Clinton Administration, has identified roughly 6,000 individuals who have "the ability to regularly influence the lives of millions of people in multiple countries worldwide." They are the "superclass" of the 21st century, spreading across borders in an ever thickening web, with a growing allegiance, Rothkopf argues, to each other rather than to any particular nation.

Rothkopf's archetypal member of the superclass is Blackstone Group executive Stephen Schwarzman, who is not only fabulously wealthy, but also chairman of the Kennedy Center, a board member of the New York Public Library, the New York City Ballet, the Film Society of Lincoln Center and the New York City Partnership. These boards, along with the over 100 businesses Blackstone has invested in, the other business councils and advisory boards he sits on, and his Yale and Harvard education, mean that Schwarzman is only one or two affiliations away from any center of power in the world. Rothkopf actually traces the "daisy chain" of Schwarzman's connections through his board memberships -- linking him to Ratan Tata, one of India's richest men, former Mexican president Ernesto Zedillo and many others. It is these links that create access that translates to influence and determines how the levers of power are pulled.

Fame alone doesn't get you into the global power elite: Tom Cruise and Katie Holmes are out while Angelina Jolie and Bono are in. High office is generally enough for politicians and even their spouses, but membership in the superclass can be fleeting -- Mikhail Gorbachev and Cherie Blair are now out, while Henry Kissinger and Bill Clinton are still in. Rothkopf harps on the Pareto principle of distribution, or the "80/20 rule," whereby 20 percent of the causes of anything are responsible for 80 percent of the consequences. That means 20 percent of the money-makers make 80 percent of the money and 20 percent of the politicians make 80 percent of the important decisions. That 20 percent belongs to the superclass.

On closer inspection, however, Rothkopf has no actual methodology for determining who is in and who is out. Each chapter identifies individuals who are said to count in a field, conclusions backed up by trendspotting and anecdotes about Rothkopf's encounters at Davos and New York dinner parties that make the reader feel vaguely voyeuristic. When Rothkopf ventures away from his core expertise in politics and finance, and into such subjects as asymmetrical warfare, mega-churches and freemasonry, the pastiche-like quality of his research becomes evident.

Still, Superclass is often thought-provoking. For one thing, it is as much about who is not part of the superclass as who is. As I read Rothkopf's chronicles of elite gatherings -- Davos, Bilderberg, the Bohemian Grove (all male), Fathers and Sons (all male) -- I was repeatedly struck by the near absence of women. Fortune magazine's annual Most Powerful Women Summit, the only elite gathering I know of that is restricted to women, didn't even rate a mention. And indeed, when Rothkopf summarizes "how to become a member of the superclass," his first rule is "be born a man." Only 6 percent of the superclass is female.

Superclass is written in part as a consciousness-raising exercise for members of the superclass themselves. Rothkopf worries that "the world they are making" is deeply unequal and ultimately unstable. He hopes that the current global elite will use their power to do more than egg each other on to high-profile philanthropy. Elites in radically unequal countries such as Chile, for instance, might decide to open their cozy circles of power to allow the emergence of a genuine middle class. New York bankers might realize that they can no longer peddle loans to developing countries in good times but then pressure the U.S. Treasury and the International Monetary Fund to bail out those same governments when they suddenly default on their debts (ensuring, of course, that the bankers get paid). The agribusinesses that reap billions from domestic subsidies in developed countries might consider the longer-term value of trade rather than aid for countries at the bottom of the global food chain.

Perhaps. But it's likely to take more than exhortation. In the words of former Navy Secretary John Lehman, "Power corrupts. Absolute power is kind of neat." Why would the superclass want to give it up?


Copyright 2008, The Washington Post. All Rights Reserved.