CORPORATE GLOBAL POWER October 11, 2011Posted by wmmbb in Humankind/Planet Earth, Modern History, Social Environment.
The question is not of that of global power and influence, or of global government but of identifying appearance and reality.
For example the exercise of the veto at the UN Security Council is not democratic in any form and does not in practice either support or enhance human rights and justice. It is of interest to identify the influence of non-state actors – the transnational corporations – including the major Wall Street Banks, recently bailed out as too big to fail by the taxpayers in the US and other countries.
Michael Ricciardi reports:
. . . the analysis also showed that only 737 top holders accumulate 80% of the control over the value of all TNCs (in the analyzed network). Further,
“…despite its small size, the core holds collectively a large fraction of the total network control. In detail, nearly 4/10 of the control over the economic value of TNCs in the world is held, via a complicated web of ownership relations, by a group of 147 TNCs in the core, which has almost full control over itself. The top holders within the core can thus be thought of as an economic “super-entity” in the global network of corporations.” [emphasis added]
Concerning the implications of this super entity, the researchers asked two fundamental questions: First, what are the implications for market competition, and, second, what are the implications for economic stability?
Regarding the first question, the authors assert that no matter the origin of the SCC, due to its high degree of TNC network control, “it weakens market competition”.
It is clear just from the history of anti-trust laws in this country (the U.S.) that concentrated ownership stifles free market competition and innovation, reduces over-all employment, and leads to excessive pricing.
Zoom on some major TNCs in the ﬁnancial sector. Some cycles are highlighted. Note: data for this analysis comes from the 2007 Orbis database — prior to the 2008 financial crisis, thus, firms such as Bear Stearns and Lehman Bros. are included.
In regards to the second question, the researchers note that “the existence of such a core in the global market was never documented before and thus, so far, no scientific study demonstrates or excludes that this international ‘super-entity’ has ever acted as a bloc.“
However, there is historical data — such as within the airline, auto and steel industries — supporting this possibility.
“…top holders are at least in the position to exert considerable control, either formally (e.g., voting in shareholder and board meetings) or via informal negotiations.”
Additionally, recent studies (Stiglitz J.E., 2010, Battiston S. et al, 2009) have shown that densely connected ﬁnancial networks are highly susceptible to systemic risk. Despite the fact that such networks may seem robust in good economic times, in times of crisis however, member firms tend to enter ‘distress mode’ simultaneously. This was seen recently in the 2008 (“near”) financial collapse (note: 3/4 of the network core in this analysis are ﬁnancial intermediaries).
Calling their findings “remarkable”, they suggest that because “international data sets as well as methods to handle large networks became available only very recently, [this] may explain how this ﬁnding could go unnoticed for so long.”