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Who Really Runs the World ? – Network Analysis Reveals ‘Super Entity’ of Global Corporate Control
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.
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]
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.
In terms of the connectivity of the network, the researchers found that it consists of many small connected components, but the largest one (encompassing 3/4 of all nodes) “contains all the top TNCs by economic value, accounting for 94.2% of the total TNC operating revenue.”
Two generalized characteristics were identified:
1] A strongly connected component (SCC), that is, a set of firms in which every member owns directly and/or indirectly shares in every other member. The emergence of such a structure can be explained as a means of preventing take-overs, reducing transaction costs, risk sharing and increasing trust between “groups of interest.”
and
2] The largest connect[ed] component contains only one dominant, strongly connected component (comprised of 1347 nodes). This network, like the WWW, has a bow tie structure. What’s more, they found that this component, or core, is also very densely connected; on average, members of this core have ties to 20 other members. “Top actors” occupy the center of the bow tie. In fact, a randomly chosen TNC in the core has about 50% chance of also being among the top holders, as compared to, e.g., 6% for the in-section. [emphasis added]
“As a result, about 3/4 of the ownership of firms in the core remains in the hands of firms of the core itself. In other words, this is a tightly-knit group of corporations that cumulatively hold the majority share of each other.”
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7 Responses to Who Really Runs the World ? – Network Analysis Reveals ‘Super Entity’ of Global Corporate Control
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Jo Smif
August 29, 2011 at 12:08 pm
Interesting how you completely leave Google out of the picture. Meanwhile, you have Google Ads on your sidebar that track every click and time spent by users on your site.
Hypocritical much?
You’re literally accruing information for one of the world’s most powerful TNCs in order to make a buck. In doing so you betray the trust and privacy of every user who visits your site.
You reveal where your real priorities are in doing this: MONEY.
OzHouse
August 29, 2011 at 1:16 pm
the hosting costs cannot be paid with thin air? do you have a host that I can pay with thin air?
Sure, stab away, make your accusations, Id be lucky to make $200-400 in a whole year from those ads. It doesnt even cover the sites expenses.
I spend hours everyday on it instead of earning money at a job, I work part time so I can actually put significant time into the site…If money was my motivation, I wouldnt have become a musician and I wouldnt be working part time – I would be working full time asking for overtime.
My blog and my music pay very little. But I must be some kind of money junkie according to your hateful mind…
Also, Google is not near the top of the food chain when talking about corporate entities and even if you avoid google, big brother is watching. Where have you been? Do you seriously think the NSA is not watching you when you go through a different search engine? Every single site you go to tracks info about you, its not just google. And if you think there is not a backdoor to your OS? well, keep on dreaming. The backdoors have been found in Linux and if you could look at the source code for windows and macOS, you;d find them too. Avoiding google is FUTILE. The military industrial complex gave us the internet so that they could spy on us. Google is just a popular face. What does the NSA reading all your emails have to do with google? NOTHING.
I am not sure how you can not notice a Read more underneath the article. If that is there, I did not write the article brainiac. So don’t reply to me as if I did…use that lonely brain cell you have to determine if I wrote the article or not.
And to top it off, I am under a blog network, I am not even in control of the ads. Sometimes a google ad comes up, sometimes it is adchoices or something else…You are under no obligation to click on them. Importantmedia.org organizes the ads. I have nothing to do with them. Mike rivero has ads, everyone has ads coz the site aint free and the bills aint free…
So just keep being an asshole. I am not going anywhere and my site is not going anywhere. Get used to us. The more you get nasty, the more it drives me on. You are encouraging me.
PS – If I wanted to make money from blogging, I would have picked technology or finance like everyone else you twit. There is no money in conspiracies unless your name is alex jones…
mikal
August 29, 2011 at 7:16 pm
nice stuff ozsense.
over and over again
intellectual cowards who lack the backbone
to take on real problems
finger point at GOOGLE because
it makes them look like righteous freedom fighters
and it accomplishes nothing.
google PROVIDES INFORMATION about all the actual Big Brother cons in the world, without fail. but weakasses wanna make themselves look big, if they were really so bad ass they would be taking on Rockefeller/Cheney/Rothschild et all instead of pissing into the wind trying to do what is done here. sort of STUPID.
Jo Smif
August 29, 2011 at 12:09 pm
Also, you moderate your comments? Interesting. I look forward to seeing if you approve my comment or if you’re a gatekeeping site no better than the worst mainstream media publications.
OzHouse
August 29, 2011 at 1:20 pm
once you hit 2 comments it auto approves, there is anti spam going on, if you don’t have protection, then you get 10,000 bots posting spam comments…. again – keep being an asshole for the whole world to see, geez you make me laugh…And the author of that who really runs the world article is on the SAME network as me…go look idiot…
He has ads on his site, Mike Rivero has ads on what really happened, EVERYONE has ads running TO PAY FOR THE BLOODY SITE WHICH IS NOT FREE…are you some kind of socialist that thinks the government should hand out free websites to activists?
Kringa
August 30, 2011 at 4:37 am
Interesting analysis, OzHouse. I think it would be useful to take the study one level further to examine ownership and control of the larger corporations in question. SEC documents show this information (at least the top shareholders). One needs to take note that there are some corporations where control is held by owners of a different class of stock (e.g., where one share of “Class B” stock has 10 votes, as opposed to the one vote of more commonly held “Class A” shares).
That’s just on the ownership / equity side. A complimentary analysis could be done to see who holds significant levels of debt in the companies in question.
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