Who Runs the World ?

Here the opening paragraphs of an article from Planetsave . You can read the whole thing here.

Who Runs the World ? – Network Analysis Reveals ‘Super Entity’ of Global Corporate Control

AUGUST 28, 2011 BY 

In the first such analysis ever conducted, Swiss economic researchers have conducted a global network analysis of the most powerful transnational corporations (TNCs). Their results have revealed a core of 787 firms with control of 80% of this network, and a “super entity” comprised of 147 corporations that have a controlling interest in 40% of the network’s TNCs.

global netweook analysis of corporate control, strongly connected coreStrongly Connected Component (SCC); layout of the SCC (1318 nodes and 12,191 links). Node size scales logarithmically with operation revenue, node color with network control (from yellow to red). Link color scales with weight.

[Note to the reader: see the very end of this article for a ranking of the top 50 ‘control holders’]

When we hear conspiracy theorist talk about this or that powerful group (or alliance of said groups) “pulling strings” behind the scenes, we tend to dismiss or minimize such claims, even though, deep down, we may suspect that there’s some degree of truth to it, however distorted by the theorists’ slightly paranoid perception of the world. But perhaps our tendency to dismiss such claims as exaggerations (at best) comes from our inability to get even a slight grip on the complexity of global corporate ownership; it’s all too vast and complicated to get any clear sense of the reality.

But now we have the results of a global network analysis (Vitali, Glattfelder, Battiston) that, for the first time, lays bare the “architecture” of the global ownership network. In the paper abstract, the authors state:

“We present the first investigation of the architecture of the international ownership network, along with the computation of the control held by each global player. 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.” [emphasis added]

* This “bow tie” structure is similar to the structure of the WWW (analyzing for most influential/most trafficked websites); see diagram below.

bow tie structure of global corporate controlA bow-tie consists of in-section (IN), out-section (OUT), strongly connected component or core (SCC), and tubes and tendrils (T&T).

Data from previous studies neither fully supported nor completely disproved the idea that a small handful of powerful corporations dominate much or most of the world’s commerce. The researchers acknowledge previous attempts to analyze such networks, but note that these were limited in scope to national networks which “neglected the structure of control at a global level.”

What was needed, assert the researchers, was a complex network analysis.

“A quantitative investigation is not a trivial task because firms may exert control over other firms via a web of direct and indirect ownership relations which extends over many countries. Therefore, a complex network analysis is needed in order to uncover the structure of control and its implications. “

To start their analysis, the researchers began with a list of 43,060 TNCs which were taken from a sample of 30 million “economic actors” contained in the Orbis 2007 database [see end note]. TNCs were identified according to the Organization of Economic Co-operation and Development (OECD) definition of a transnational corporation [see end note]. They next applied a recursive search algorithm which singled out the “network of all the ownership pathways originating from and pointing to these TNCs.”

The resulting TNC network includes 600,508 nodes and 1,006,987 ownership ties.

Source: Planetsave (http://s.tt/138oe)

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Comment on “Who Runs the World ?”

  1. Nice piece of work, not that I look to Planetsave for my economic and business news but a nice piece of work all the same. It even looks good! Though it does amaze me that anyone could believe that this many disparate corporations with their wildly varing philosophies, proprietary interests and international leaders could agree on a plan to conquer and enslave the world. That much agreement in your Senate, amongst fewer people of the same nationality, would solve the economic problems of the U.S. Planetsave might better serve their readers by joining the now laughable IPCC in attempting to debunk ‘The Delinquent Teenager (Who was mistaken for the world’s top climate expert)’. That would fill up their time in an area where they have some expertise. Besides, what are they planning for these corporations? Are they proposing closure or turning their operation over to the drummers currently occupying Wall Street? For the record, a ‘drummer’ is old timer talk for a salesman. Now that I find interesting. Hopefully we’ll find out soon what they’re selling. Needless to say, I’m an old time ‘drummer’ meself.

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