The Occupy Wall Street movement, recently attacked by law enforcement in Oakland, is all about the 99%, as opposed to the 1% of wealthy folks that enjoy a Newt Gingrich-sized portion of the nation’s wealth.
Now it appears we have another 1% to worry about, this time in the world of multinational or transnational corporations.
A commenter on this blog (HLGaskins) directed me to a most fascinating story from New Scientist: “Revealed—the capitalist network that runs the world.” What the story amounts to is that some very smart people (“complex systems theorists at the Swiss Federal Institute of Technology in Zürich”) decided to analyze how,
The structure of the control network of transnational corporations affects global market competition and financial stability.
The analysts studied “the architecture of the international ownership network” and their admittedly tentative conclusion is this:
We find that transnational corporations form a giant bow-tie structure and that a large portion of control flows to a small tightly-knit core of financial institutions. This core can be seen as an economic “super-entity” that raises new important issues both for researchers and policy makers.
It turns out, from the article, that it just might be that “a few bankers control a large chunk of the global economy,” or in the words of one of the researchers:
In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network.
Those companies, as we should have expected, are mostly financial institutions like JPMorgan Chase (bailed out with $25 billion), and Goldman Sachs (bailed out with $10 billion) and Barclays Bank (beneficiary of other bailed-out banks).
The article notes that the Zürich analysts say concentration of power is not good or bad in itself, but the interconnectedness of the core group of companies could pose a risk for the stability of the world’s economy because,
If one suffers distress, this propagates.
That, of course, is a description of the 2008 financial disaster. And as the article points out, the real point of this kind of analysis is to identify “the architecture of global economic power” and find “vulnerable aspects of the system” so that “economists can suggest measures to prevent future collapses spreading through the entire economy.” In other words, we should use this type of science to find ways to make the system more stable.
Finally, besides stressing that this analysis is not without its critics (read the article), I also want to stress that there is no support for some kind of notion of world-wide conspiracy here, as some protesters in the Occupy Wall Street movement may want to maintain. The article pointed out:
..the super-entity is unlikely to be the intentional result of a conspiracy to rule the world.
Why? Because, as one complex systems expert avers, such super-entities are “common in nature.” The article explains:
Newcomers to any network connect preferentially to highly connected members. [Transnational corporations] buy shares in each other for business reasons, not for world domination. If connectedness clusters, so does wealth…
So, the super-entity may not result from conspiracy. The real question, says the Zürich team, is whether it can exert concerted political power…
Yes, that is the real question, and that is why the Occupy Wall Street movement—which is exerting its own form of concerted political power—is so important.