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Forum Post: Scientific Study Proves --->A Relatively Small Group of Companies, Mainly Banks, with Disproportionate Power Over the Global Economy

Posted 12 years ago on Oct. 22, 2011, 6:43 p.m. EST by AmericanRedWhiteBlue (126)
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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).

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.

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.

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. Bar-Yam says the analysis suggests one possible solution: firms should be taxed for excess interconnectivity to discourage this risk.



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[-] 2 points by unfleecedbysheep (153) 12 years ago

The top corporations are almost entirely banks and financial groups.It seems these interconnected groups of corporations at the top will naturally try to influence legislators to affect positive change for themselves, but when it comes to regulations that would restrict all of them they work together to stop it. Possibly without direct knowledge of this common influence. When any of these corporations becomes unstable, others become unstable because they are so interconnected. A number of board members are on the boards of a large number of other corporations. They own each others stocks. The instability that ensues is only corrected by passing it down the chain of corporations through changes in stocks,values and buyouts, spreading the risk. Possibly diffusing the direct responsibility for the instability. Although the same people run all of them, and they are not going to fire themselves.

[-] 1 points by AmericanRedWhiteBlue (126) 12 years ago

Put to the top!

[-] 0 points by roloff (244) 12 years ago

I knew it, the SOB, I bet George Bush has something to do with this. Now I heard about this invention that was made at the world renowned Freedom School, which can tell what somebody is lying through the TV. George Bush was always setting this thing off. You ever heard of that study, I think their related, probably Freedom School.