Friday, September 21, 2012

Consolidation of Ownership in the Evolving Neofeudal Economy


Majia Writes: Ownership of the world’s resources, including stock in the powerful industries of banking and energy, tends to be very consolidated. Globally, in 2006, prior to the Great Recession, one percent of the world’s population was believed to control forty percent of the world’s wealth.[i]

  One analysis of 43,000 global corporations revealed a core group of 1318 corporations with interlocking ownerships.[ii] The study, conducted by Stefania Vitali, James B. Glattfelder, and Stefano Battiston, used network analysis to explicate the degree of consolidation of corporate control. Their findings revealed unprecedented global consolidation of corporate ownership and control. Each of the core 1318 corporations had ownership links to two or more other companies, although most were linked to twenty other corporations. The 1318 corporations owned through their shares the majority of blue chip and manufacturing companies, controlling sixty percent of global revenues. Further analysis revealed a tightly linked “super entity” of 147 corporations, mainly in finance, with interconnected ownership. Consequently, less than one percent of corporations essentially controlled forty percent of the entire network. 

Furthermore, the study found that 734 “top holders of stock accumulate 80% of the control over the value of all TNCs.” The authors conclude: “this means that network control is much more unequally distributed than wealth. In particular, the top ranked actors hold a control ten times bigger than what could be expected based on their wealth.”[iii]

See this chart of interlocking corporate ownership found by my student Lauren http://occupyeducated.org/wp-content/uploads/2012/06/corporateconnection.jpg




[i]  40% of world's wealth owned by 1% of population. CBCNews (December 5, 2006), http://www.cbc.ca/news/business/story/2006/12/05/globalwealth.html and James Randerson. World's richest 1% own 40% of all wealth, UN report discovers. The Guardian (December 6, 2006), http://www.guardian.co.uk/money/2006/dec/06/business.internationalnews.

[ii]  S. Vitali, J.B. Glattfelder, and S. Battiston, “The Network of Global Corporate Control,” Swiss Federal Institute of Technology (arXiv:1107.5728v1 [q-fin.GN], 28 Jul 2011), available http://www.scribd.com/doc/72201631/Network-of-Global-Corporate-Control-Swiss-Federal-Institute-of-Technology-in-Zurich.

[iii]  S. Vitali, J.B. Glattfelder, and S. Battiston Page 36.


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