Here is the link to Chomsky's speech:
Majia here: Here is an excerpt from an essay I wrote about consolidation of ownership of the world's resources:
Majia here: Here is an excerpt from an essay I wrote about consolidation of ownership of the world's resources:
Emerging in the aftermath of the global financial crisis that began in late 2007 is a world order dominated by a few governments and corporations that have unprecedented control over global resources and appear to have little-to-no-regard for the welfare of the vast majority of the world’s populace, even within developed economies such as the U.S. and Japan. Within the U.S., government prioritization of corporate interests over public welfare during the financial crisis was reflected in the lopsided allocation of funds to banks, including the bailout of investment banks that should not have been eligible for relief, and the unlimited backstopping of AIG’s credit default swaps while average Americans, who saw work hours and income collapse, received little-to-no support. During the height of the great financial crisis, secret Federal Reserve loans to the biggest banks totaling $7.7 trillion enabled them to reap $13 billion in profits.[i] U.S homeowners, who faced around $6.5 million in delinquent and foreclosed mortgages, saw little to no relief.”[ii] In 2009, Graham Bowley reported in The New York Times that the federal financial “bailout helps fuel a new era of Wall Street wealth” enabling “hefty bonuses” to corporate Wall Street executives.[iii] Goldman Sachs alone received $70 billion in combined funds from TARP, the Federal Reserve, AIG, and the FDIC.[iv] As of 2010, six U.S. banks, held assets in excess of 63 percent of the U.S. Gross Domestic.[v] Perhaps most telling, the US government largely declined to prosecute those financial agents responsible for the crisis within these monopolists, many of which profited from rampant foreclosure fraud in the wake of the crisis. Reflecting on these data, Economist Simon Johnson observed: "The US increasingly displays characteristics that we have seen many times in middle-income “emerging markets” – new dimensions of vast inequality, forms of financial instability that benefit the best connected, and consistently easy credit for the privileged."[vi]
Monopolies by large corporations are not restricted to finance: carbon-based and nuclear energy industries are also consolidated. Nuclear and carbon energy industries are extraordinarily consolidated internationally and exert undue influence on regulators, leading to severe accidents threatening human health. Despite the considerable lobbying of the global nuclear industry, six countries generate 73 percent (in 2009) of the world’s nuclear power.[vii] The largest privately held players in nuclear engineering include Mitsubishi Heavy Industries, General Electric, Hitachi, Toshiba, Alstom, USEC, Cameco, and Shanghai Electric. State owned groups include Areva, Rosatom, AECL, and Korean Electric Power Corporation (KEPCO).[viii] Six companies - GE and Westinghouse of America, Areva of France, and Toshiba, Hitachi and Mitsubishi Heavy Industries – have dominated the industry for decades.[ix] Often times, as in the case in Japan, national regulatory agencies both promote and regulate the nuclear industry.[x] In the US the Nuclear Regulatory Commission (NRC) is technically separate from the Department of Energy, which promotes nuclear power; although empirical analysis suggests that the NRC also promotes nuclear energy. The US nuclear industry was de-regulated in the 1990s, resulting in market consolidation. Davis and Wolfram reported in 2011 that the three largest nuclear energy companies control more than one third of all US nuclear capacity.[xi] Operations of nuclear power plants are also highly consolidated. Exelon, formed in 2011, is the largest nuclear power operator in the USA and the third largest in the world.[xii] Nuclear energy is extraordinarily expensive to run and the aging infrastructure of most of the world’s nuclear plants will cause costs to rise still farther.[xiii] However, this powerful industry has launched international public relations and sales campaigns aimed at promoting expansion of nuclear power globally as a “green” source of energy despite the intensive carbon expenditures required to mine, process and decommission nuclear fuel. The lack of regulatory oversight by Japan’s nuclear regulatory agency contributed directly to the ongoing Fukushima nuclear accident in Japan.
The oil and gas industry are also highly consolidated and extraordinarily powerful. In 2009, five oil companies topped the list of the top 25 global energy companies: Exxon Mobil Corp Chevron Corp, Royal Dutch Shell, BP, and Total SA.[xiv] The oil supermajors’ annual profits exceed the Gross Domestic Product of many nations and their influence is seemingly unlimited. The oil “supermajors” power is limited more by the rise of national oil companies that assert rights to control many of the world’s largest oil reserves than it is limited by national regulations. In the U.S., the supermajors have essentially corrupted the government’s extractive industries’ regulatory arm, the Minerals Management Service (MMS).[xv] These industries have pushed for more access to offshore oil and gas deposits, sidelining concerns by environmentalists and citizens concerned about impacts on their communities. The lack of regulatory oversight and cost-cutting practices by the supermajors were directly responsible for major oil environmental disasters in the US, including the Exxon Valdez spill in 1989 and the BP oil spill in 2010.[xvi]
The global influence of the nuclear and carbon industries is perhaps unprecedented, approached only by the influence of banking and arms’ producers. Decades of unbridled power have shaped the worldview of those in these industries. They are prone to disregard the externalities of their operations on publics globally and have historically fought aggressively against any new technologies seen as limiting their future influence. Infrastructures built in the post-World War II era in developed economies, particularly the U.S., ensure public dependence upon oil for transportation while the consumer culture fostered during that seem period requires ever-larger amounts of electricity generation to feed consumer machines and automated production. Dependence upon ceaseless energy production is an important component of the crux of these industries’ influence. Yet, the effluents from these industries are steadily making the world unfit for human habitation. Despite increasingly apocalyptic accidents, such as the Fukushima nuclear and BP oil accidents, these industries remain hegemonic in large part because of their strategic influence and the vested interests benefitting from ownership. The five largest oil companies generated profits in 2011 of $375 million per day, or $137 billion a year.[xvii] Over 50 percent of profits were dedicated to stock re-purchases benefitting board members, senior managers, and the largest shareholders. The oil and gas industry spent $150 million on lobbying in the US in 2011.
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.[xviii] One analysis of 43,000 global corporations revealed a core group of 1318 corporations with interlocking ownerships.[xix] 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.”[xx]
[i] Bob Ivry, Bradley Keoun and Phil Kuntz “Secret Fed Loans Helped Banks Net $13B,” Bloomberg.com (2011, November 27): http://www.bloomberg.com/news/2011-11-28/secret-fed-loans-undisclosed-to-congress-gave-banks-13-billion-in-income.html.
Bradlye Keoun and Phil Kuntz “Wall Street Aristocracy Got $1.2 Trillion from Fed,” Bloomberg (2011, August 22): http://www.bloomberg.com/news/2011-08-21/wall-street-aristocracy-got-1-2-trillion-in-fed-s-secret-loans.html
Graham Bowley “Bailout Helps Fuel a New Era of Wall Street Wealth,” The New York Times (2009, October 17): http://www.nytimes.com/2009/10/17/business/economy/17wall.html?_r=1&th&emc=th
Dylan Ratigan “Goldman Sachs' Black Magic, Here's How They Did It,” The Huffington Post (2009, October 16): http://www.huffingtonpost.com/dylan-ratigan/goldman-sachs-black-magic_b_324095.html
[v] Bill Moyers, Simon Johnson and James Kwak Bill Moyers Journal [on-line] (2010, April 16): http://www.pbs.org/moyers/journal/04162010/profile.html
Simon Johnson “Who is Carlos Slim,” Baseline Scenario (2009, October 17): http://baselinescenario.com/2009/10/17/who-is-carlos-slim/.
[vii] Mycle Schneider, Antony Froggatt, and Steve Thomas. Nuclear Power in a Post-Fukushima World: 25 YEARS AFTER THE CHERNOBYL ACCIDENT (2011, April) http://www.worldwatch.org/system/files/WorldNuclearIndustryStatusReport2011_%20FINAL.pdf.
[viii] Xerfi Global. World Nuclear Power Companies (2010, June) http://www.xerfi.fr/emailing/0xche10_world-nuclear-power-companies.pdf and Unexpected Reaction; The nuclear industry. The Economist 394.8668 (2010, February 6), 69-70.
[ix] Unexpected Reaction; The nuclear industry. The Economist 394.8668 (2010, February 6), 69-70.
[x] Yuka Hayashi. Disaster in Japan: Nuclear Regulator Tied to Industry. The Wall Street Journal (2011, May 28), A6.
[xi] Lucas W. Davis and Catherine Wolfram. Deregulation, Consolidation, and Efficiency: Evidence from U.S. Nuclear Power NBER Working Paper No. 17341 ( 2011, August): http://www.nber.org/papers/w17341.
[xii] World Nuclear Association. Nuclear Power in the US (2012, August 14), http://www.world-nuclear.org/info/inf41.html.
[xiii] See Mycle Schneider, Antony Froggatt & Steve Thomas. Nuclear Power in a Post-Fukushima World. The World Nuclear Industry Status Report 2010-2011. Worldwatch Institute.
[xiv] David Hunkar. The Top 25 Global Energy Companies According to Platts. Seeking Alpha (2009, November 23), http://seekingalpha.com/article/174820-the-top-25-global-energy-companies-according-to-platts
[xv] See Anthony E. Ladd. Pandora’s Well: Hubris, Deregulation, Fossil Fuels, and the BP Oil Disaster in the Gulf. American Behavioral Scientist, 56 (2012), 104-127 and Robert Kennedy. Sex, Lies and Oil Spills, Huffington Post (2010, May 5), http://www.huffingtonpost.com/robert-f-kennedy-jr/sex-lies-and-oil-spills_b_564163.html.
[xvi] See Steve Coll. Private Empire: ExxonMobil and American Power. New York: The Penguin Press, 2012 and Ladd “Pandora’s Well” and Kennedy “Sex, Lies, and Oil Spills.”
[xvii] Rebecca Leber. What Oil Companies Do With Their $375 Million a Day Profits. Think Progress. (2012 26 July), http://readersupportednews.org/news-section2/320-80/12617-what-oil-companies-do-with-their-375-million-a-day-profits.
[xviii] 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.
[xix] 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.
[xx] S. Vitali, J.B. Glattfelder, and S. Battiston Page 36.