After about five centuries of modern science, since the Scientific Revolution, Science has finally officially confirmed a global oligarchy. Although for, conservatively, 10,000 years ruling families have crafted civilization into a dominating matrix, not until this week has Science confirmed the Truth – or, more accurately, the half-truth.
With movements like the Tea Party, Occupy Wall Street and the Silver Liberation Army attempting to gain influence in global decision making, “science may have confirmed the protesters’ worst fears.”
In a study of the relationships between 43,000 transnational corporations a “relatively small group of companies, mainly banks” have been cited as institutions wielding a disproportionate amount of power and influence over the globe. But, whether or not this power results in undue influence over political processes remains a mystery to Science, according to the study.
Certain axiomatic foundations in the study have gained criticism by certain brokers of Science, but the study still remains a unique and complex systems analysis of the global power structure. Sober history books step aside, for your verbose narratives and portrayal of events is no match for the raw power of science and reason alone. First-hand experience counts for nil. The Experts have weighed in on the way things are, and, for apparently the first time, Science can confirm the oligarchy.
So, if the on-the-ground facts were not proof enough of where power on earth lies – think trillions of dollars of liquidity provided to banks through a bailout culture – or the grassroots movements such as the Tea Party, Occupy Wall Street and Silver Liberation Army that have all posited corporate greed and banker occupation of the planet as a major hurdle towards peace and freedom, finally theory has been put to reality.
Conducted by three complex systems theorists out of the Swiss Federal Institute of Technology in Zurich, the study, according to the New Scientist, “is the first to go beyond ideology to empirically identify such a network of power.” The method used combines mathematics used for a long time to model the makeup of natural systems with detailed data on the corporate world to then map the puzzle of ownership of the world’s transnational corporations.
“Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market,” says a nonsensical James Glattfelder. “Our analysis is reality-based.”
The issue I take up with the aforementioned enunciation is that I do not see the relationship between conspiracy theories and the free market. If I am not mistaken, I believe a free-market is a social condition, whereas a conspiracy theory is a view of an event or the world. And so, conspiracy theories can take place inside the free-market, but the free-market cannot, in any empirically provable manner, exist inside a conspiracy. I am not sure what kind of scienceing this scientist is trying to get away with, but it does not make any rational sense. Furthermore, why does he presume conspiracy theories and free-markets are not reality-based? It seems like Scientist Glattfelder is partaking in his own educated brand of dogma.
Surely, innumerable other studies have researched how very few TNCs own swathes of the world’s economy and its resources, but each of these studies included only some companies and omitted indirect ownerships, and so therefore were incapable of contemplating how the relationship of power affected the globe’s economy – whether it made it more or less stable, for example.
However, in its scientific glory, the Zurich team can do this. From Orbis 2007, a database listing 37 million companies and investors across the globe, they separated all 43,060 transnational corporations and the share ownerships between them. They then made a model demonstrating which companies controlled other companies through shareholding networks, alongside each company’s operating revenues.
The Great Work “revealed” a core of 1,318 companies with interlocking ownerships. Each of these companies had direct relationships with two or more different companies. On average they were linked to 20. Moreover, whilst they represented 20% of the globe’s operating revenues, the 1,318 companies appeared to collectively own, through their shares, the majority of the world’s large blue chip and manufacturing firms, “representing a further 60 percent of the global revenues.”
As the team pulled back the shadowy curtain of the corporate world, it discovered a “super-entity:” that is, 147 very tightly knit companies. The ownership of all these companies was held by other members of the super-entity. This entity controlled 40 percent of the total wealth in the overall network. Therefore, less than 1 percent of the companies controlled 40 percent of the entire network,” according to Glattfelder. Most of these were financial institutions. On the top twenty are featured Barclays Bank, JPMorgan Chase & Co., and The Goldman Sachs Group.
A University of London macroeconomics expert, John Driffil, says the value of the analysis to the scientific community is not that a small number of people control the world, but rather what the study demonstrates in regards to economic stability. I submit that a small number of people controlling the world automatically creates instability, as the political and economic processes of civilization are not governed by the will of sovereign individuals, but instead by the decisions of businessmen and technocrats, whose morality could, due to their unique social status, divorce from the values of most people.
In a barrage of scientific verbiage, the Zurich trio maintains that the concentration of power is not inherently good or bad, “but the core’s tight interconnections could be.” The world learned in 2008 that such a highly concentrated network is 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, who heads the New England Complex Systems Institute (NECSI), warns that the analysis has some wrongheaded assumptions, such as equating ownership with control. Most company shares are held by fund managers who may or may not control how the companies they part-own conduct business. The system’s behavior, he says in scientific elitism, is too complex to just yet be understood by the study, and that more analysis is needed.
The analysis, the New Scientist goes on, could save the world. By pinpointing vulnerable parts of the System, economists can now suggest measures and policies to prevent future collapses from bringing down the global economy. Glattfelder suggests we may need global anti-trust rules, which currently only exist at the national level, to limit over-connection among transnational corporations. Sugihara maintains the analysis suggests one possible solution: firms should be taxed for excess inter-connectivity to discourage this risk. In other words, Science has concluded that global governance is needed to manage acute concentration of power among transnational corporations.
The super-entity, the New Scientist proposes, is not the intentional result of a conspiracy to rule the world, for “such structures are common in nature,” says Sugihara. Newcomers to any network do their best to connect with the most highly connected members. Transnational corporations buy shares in each other for business reasons, and not for world domination, claims the article. If connectedness clusters, so too then does wealth, according to Dan Braha of NECSI. In other models created of wealth flow, money tends to flow towards the most highly connected members. The Zurich study, according to Sugihara, “is strong evidence that simple rules governing transtional corporations creates spontaneously highly connected groups.” As Braha presents it, “The Occupy Wall Street claim that 1 percent of people have most of the wealth reflects a logical phase of the self-organizing economy.”
So, Science has confirmed an oligarchy, but has disproved a conspiracy to rule the world. The Zurich team suggests that one real question is whether the super-entity can exert political power over nations. Driffil maintains that 147 is too many to sustain collusion. Braha reasons that they will compete in the market but act together on common interests. Resisting changes the pyramid structures may be one such interest.
Although the study highlights the concentration of power within transnational corporations, the study does not track the evolution of this power. In other words, what path of history was taken for such an inordinate amount of power to be consolidated by so few shareholders, and what are the long-term implications for global stability.
When a sober analysis of the evolution of power in history is taken into consideration, one can reasonably and emotionally see that concentrated power by an oligarchy does not lead to stability, but, instead, to wars and famine such as those experienced by so many during the twentieth century, as demonstrated clear-as-a-southern-California-day by the historiography. These are wars and famines that cannot be quelled by the policy suggestions of economists, but only by a complete reset of the project of civilization by man, which means an ending to the dominant culture of power, control and authoritarianism as researched by the Zurich study.
The top 50 of the 147 superconnected companies
1. Barclays plc
2. Capital Group Companies Inc
3. FMR Corporation
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
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
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