James B. Glattfelder and his co-authors issued the report "The Network of Global Corporate Control" in October 2011, just over a month after Occupy Wall Street's catchphrase, "We are the 99%," went viral across the country and around the world. The study provided a scientific examination of the world economy by demonstrating how power moves between individuals and businesses, like water, through various types of pipes, some thick and some thin. The conclusion is that a small group of very powerful individuals control a disproportionate amount of our economy.
James Glattfelder clarifies that the motivation behind their study was not to affirm the views of global protesters but to comprehend the underlying principles governing the current world. This approach is akin to understanding the physical laws of nature. Glattfelder, along with his colleagues Stefania Vitali and Stefano Battiston, are experts in complex systems theory. This field views entities, such as ant colonies or the human brain, not merely as aggregates of their individual components but as intricate systems where the interactions between parts are crucial.
Complexity theory focuses on the relationships within these systems, seeking to uncover simple underlying rules from the complex interactions when viewed collectively.
Glattfelder expresses a desire for this complexity perspective to transcend personal ideologies in finance, economics, and politics, hoping it can provide a common foundation for resolving ideological stalemates that seem to hinder global progress. He acknowledges the immense complexity of reality and the need to move beyond rigid doctrines, though he also notes this viewpoint as his personal ideology.
To address the question “Who controls the world?” the study analyzed ownership networks. This involved breaking down the data into nodes (such as firms, people, and foundations), links (indicating ownership percentages), and their corresponding values. The study encompassed:
13 million ownership relations
43,000 transnational corporations
1 million links
Glattfelder showcases a 3D rendering illustrating all the connections analyzed in the study. The visualization includes dots representing transnational corporations, nodes, and links, offering a detailed representation of the global economic network.
In their comprehensive study, the researchers assigned a degree of influence to each entity within the global economic system. They discovered that the top 737 shareholders, predominantly financial institutions from the US and UK, have the potential to exert control over 80% of the value of all transnational corporations. The leading 10 shareholders in this group are:
Capital Group Companies Inc.
State Street Corporation
JP Morgan Chase & Co.
Legal & General Group plc
Vanguard Group Inc.
Merrill Lynch & Co Inc.
Concentration of Power
The study’s findings also highlight an even more pronounced concentration of power. A mere 146 top entities within the core, representing just about 0.024% of all nodes analyzed, were found capable of controlling approximately 40% of the total value of transnational corporations. This significant level of interconnectivity suggests a scenario where not only a small number of entities have substantial influence but also where their potential financial distress could rapidly propagate throughout the global economic system.
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