Who controls the world?
Recently, Swiss economic researchers have completed the first ever global network analysis of the world’s most powerful transnational corporations and have found out that a core of 737 firms control more than 80% of the world’s global network – confirming conspiracy theories about a powerful alliances controlling the global market place.
Resulting network
The results display an architectural structure of the global network, showing that global transnational corporations form a bow-tie structure (almost exactly the same as the bowtie structure used to show strong connected components of websites in the world wide web). This bowtie structure shows that ‘a large portion of control flows to a small tightly-knit core of financial institutions’ – a.k.a. an ‘economic super entity’. Many of these corporations are familiar household names – Barclays PLC, JP Morgan Chase & Co., Merril Lynch & Co., Deutsche Bank AG DE etc. These corporations have extending their power through mergers and acquisitions, global dominance and ongoing development.
Bowtie structure of corporations
Researchers began with a list of 43,060 corporations and eliminated corporations according to guidelines and requirements outlined by the Organization of Economic Co-operation and Development’s definition of a transnational corporation. Links were produced between these nodes by running them through an algorithm. This resulted in a network of 600,508 with 1,006,987 links between corporations. The largest component encompassed ¾ of the nodes contained the corporations of the largest value and accounted for 94.2% of the total transnational corporation operating revenue. This large component did not only comprise of the largest and most wealthy institutions but were also densely connected with each other, with each node having on average, 20 links to other node.
The fact that a small handful of powerful corporations dominate much of the world’s commerce and financial transactions poses both a moral and political problem for some. We can see that this study perhaps provides much support for ongoing Occupy Wall Street protests. Furthermore, there are other economic implications – what are the implications for market competition and what are the implications for economic stability? Researchers responded by stating that this highly connected network of corporation significantly reduces market competition. In regard to economic stability, researchers are unsure. This is the first time that such an analysis has been completed and documented – further studies will have to be done for sure to fully comprehend the effects of this network.
http://planetsave.com/2011/08/28/who-runs-the-world-network-analysis-reveals-super-entity-of-global-corporate-control/