Sunday, March 25, 2018

Financial Oligarchy and the Amplification of Risk


In my book, Crisis Communication, Liberal Democracy and Ecological Sustainability I examine systemic risk in finance and energy.

One of the most significant factors increasing systemic risk is the centralized consolidation of power, as explained quite succinctly by Charles Perrow, among others.

We see the centralized consolidation of power amplifying again in the post-2007 recession period, as described in this article addressing the commercial banking oligarchy:
Rachel Louise Ensigh (2018, March 23). Largest US banks extend their dominance in deposits. The Wall Street Journal, p. A1

...The three larges US banks by assets have added more than $2.4 trillion in domestic deposits over the past 10 years, a 180% increase, according to a Wall Street Journal analysis of regulatory data. That amount exceeds what hte top eight banks had in such deposits combined in 2007.... At the end of 2007, the three banks held 20% of deposits. By the end of 2017, they held 32%, or $3.8 trillion.
The centralization of capital in just a few institutions is building as the Trump administration de-regulates Wall Street by lifting provisions of Dodd-Frank allowing the largest banks to acquire smaller ones with less oversight.


Centralized consolidation of wealth has accelerated across the twenty-first century, as I describe in my book. Elite individuals and institutions control an ever larger percentage of global wealth.

Globally, in 2006, prior to the Great Recession, one percent of the world’s population was believed to control 40 percent of the world’s wealth.[i]  At the close of 2015, one percent of the world’s population was believed to control over 50 percent of the world’s wealth.[ii]

Oxfam, the British NGO, recently reported that in 2017, the richest 1 percent of the world's population acquired 82% of the wealth created that year:
Richest 1 percent bagged 82 percent of wealth created last year - poorest half of humanity got nothing. (2018, January 22). Oxfam. Available, https://www.oxfam.org/en/pressroom/pressreleases/2018-01-22/richest-1-percent-bagged-82-percent-wealth-created-last-year
Reward Work, Not Wealth reveals how the global economy enables a wealthy elite to accumulate vast fortunes while hundreds of millions of people are struggling to survive on poverty pay.
  1. Billionaire wealth has risen by an annual average of 13 percent since 2010 – six times faster than the wages of ordinary workers, which have risen by a yearly average of just 2 percent. The number of billionaires rose at an unprecedented rate of one every two days between March 2016 and March 2017.
  2. It takes just four days for a CEO from one of the top five global fashion brands to earn what a Bangladeshi garment worker will earn in her lifetime. In the US, it takes slightly over one working day for a CEO to earn what an ordinary worker makes in a year.
  3. It would cost $2.2 billion a year to increase the wages of all 2.5 million Vietnamese garment workers to a living wage. This is about a third of the amount paid out to wealthy shareholders by the top 5 companies in the garment sector in 2016.
 Likewise, ownership of the world’s largest corporations is highly centralized in a core group of 1318 corporations with interlocking ownerships, according to a revealing network analysis of 43,000 global corporations published in 2011 by Stefania Vitali, James B. Glattfelder, and Stefano Battiston.[iii]

Each of the core 1318 corporations was found to have ownership links to two or more other companies, although most are linked to twenty other corporations. The 1318 corporations own through their shares the majority of blue chip and manufacturing companies, controlling 60 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 40 percent of the entire network when this study was published.

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.”[iv] Consolidated ownership results in consolidated control over decision-making over important societal issues – such as finance and energy – impacting future generations.

Corporate wealth and power have become even more consolidated since this study by Vitali et al was published.The centralized consolidation of wealth described here amplifies systemic risk in ways that I have described in great detail in my published works. The 2007 financial crisis, the 2010 BP oil spill, and the 2011 Fukushima Daiichi nuclear disaster illustrate what happens when consolidated power loses sight of legal, social and ecological responsibilities.


RESOURCES

[i] “40% of World's Wealth Owned by 1% of Population,” CBC News, December 5, 2006, accessed January, 3 2012, 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, accessed January 3, 2012, http://www.guardian.co.uk/money/2006/dec/06/business.internationalnews.

[ii] Jon Slater, “Richest 1% Will Own More Than All the Rest by 2016,” Oxfam, January 19, 2015, accessed January 19, 2016, http://www.oxfam.org.uk/blogs/2015/01/richest-1-per-cent-will-own-more-than-all-the-rest-by-2016.

[iii] Stefania Vitali, James Glattfelder, and Stefano Battiston, “The Network of Global Corporate Control,” PLOS One, 6 (2011), accessed December 3, 2011, doi: 10.1371/journal.pone.0025995.

[iv] Vitali, Glattfelder, and Battiston, “The Network of Global,” 36.

4 comments:

  1. Cannot trust internet, it has grown into an intrusive , manipulative tool of the oligarchs.

    Most people got off facebook, a while ago.

    In the last great depression, most oligarchical characters, tycoon types were wiped out. The playing field was reset. There were some of the  billionaires, that survived it. Their wealth was threatened by complete societal failure. The environmental threats posed by the excesses of money accumulators were not apparent then, as they are now. They could however, wage war, to rebuild and strengthen their fortunes.




    In this age, these resource gulpers, exploiters, psychopaths, use scams, financial frauds, war and bubbles, to keep value in their money, leverage it, and recoup loses when they lose, in the casino type markets, that exist now. 

    The cyles have been going on since 1980.
    The accumulators of money, want that money to be worth something. They push war, nuclear energy, nuclear weapons to hedge their money. They enjoy the leverage, of being able to buy anything, to do anything they want. The problem is, that they are destroying the world life-support system, so rapidly now, that they are creating a situation, where there is no safe, place for them either. 

    The victims of their criminal looting,  suffer from the wars they persecute, the sadistic maltreatment of the poor and enslaved,  the wholesale poisoning of subjects, who have been rendered powerless to stop the criminality. The is incarceration.  Cancer and other debilitating cruel painful illneses are rampant. There is grotesque and criminal, disregard and victimization of children.


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  2. Wars they prosecute

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  3. All radionuclides are considered to be extremely, genotoxic and teratogenic. Very few naturally-occuring substances, are considered to be genotoxins. 
    There are select groups of synthetic and chemical, genotoxins. Those genotoxins are usually free radicals, or strong oxidizing agents. 

    Teratogens are  much more carefully studied because, of corporate and pharmaceutical company liabilities. There lot a of them. The teratogenicity of all substances, that are not radiation emitters, are in a whole different category than radionuclides. 

    All Radionuclides cause  teratoginicity in developing fetuses, in extremely low concentrations . Concentrations of  10 to the minus 6th or less. Radionuclides can cause teratogenicity with short-term exposure, to the fetus.  Such teratogenicity is not nearly as common, with other substances.

    There are multiple books and, expert texts on the teratogenicity of drugs, pesticides, synthetic chemicals, herbs, and even many plants. 
    There are few books and text few on radionuclide teratogenicity.  Same for genotoxins. Kinda makes ya scratch your head. The national security book-censors, have been out in full force for 75 years.



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