Random thoughts on control, power and super-entities

These days I don’t very often get a chance to watch the Spanish news on SBS. But when I do, like this morning, my heart sinks. Crushing unemployment, banks on the verge of collapse, a recession that deepens by the day. And I worry about family and friends.

Then I see the multitudes of outraged citizens in every plaza of every city and I am sure that it will take a lot to bring Spain down.

Protest

And yet, I also fear that the forces at work are much larger than what we imagine.

No, I’m not about to reveal yet another unexplainable conspiracy theory. I’m simply stating what is now a mathematically proven fact. That for decades, if not centuries, power and control has been in the hands of an elite. Nothing new, sure. We all knew that greed paved the way for the global situation as it stands today.

There is a group of privileged financiers and bankers that are forever ready and willing to take risks in the name of profit and career advancement. The system rewards their ‘innovation’ by protecting them in cases of failure and they are often bailout by different means. In the meantime, working groups continue to be at the mercy of their games which now expand the bubble, then burst it, then expand it again. While governments are unwilling and completely ineffective in regulating this risk-favourable system, crises will continue to hit us all hard. The global nature of the international system makes the slap on the face of workers even harder since a domino effect occurs and soon damages caused by financial elites in one country affect the financial system in another.

A Super-entity above us all

But the plot is thicker than what we think.

When I said above that control by a few is now a proven mathematical fact, I refer to the results obtained by pioneering group of Swiss researchers last year. The network of global corporate control, confirmed that a “super-entity” made up by 147 financial institutions controls the international ownership network. Yes, I know how it sounds. Conspiracy material for sure. But, let’s have a look at it.

From a database listing 37 million companies and investors worldwide, the Zurich team pulled out all 43,060 Trans National Corporations (TNCs) and the share ownerships linking them. Then they constructed a model of which companies controlled others through shareholding networks, coupled with each company’s operating revenues, to map the structure of economic power.

The work exposed a core of 1318 companies with interlocking ownerships, each of them with ties to two or more other companies (on average they were connected to 20). But, although they represented 20 % of global operating revenues, the 1318 appeared to collectively own through their shares the majority of the world’s large blue chip and manufacturing firms, that is a further 60 % of global revenues. Chipping the wood al little more, and the team unveiled a “super-entity” of 147 even more tightly knit companies – all of their ownership was held by other members of the super-entity – that controlled 40 %f the total wealth in the network.

Conclusion: 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.

How does this super-entity affect Joe Citizens like us?

This level of inter-connected, concentrated control harms fair trade, the environment, and other causes essential to sustainability but secondary to free market capitalism. Also, and very importantly, concentrated ownership weakens competition and innovation, reduces employment and results in overpriced commodities.

Additionally, and despite the fact that  densely connected financial networks may appear to be strong, they are in fact, highly susceptible to systemic risk. In times of crisis the member firms that compose these networks tend to enter ‘distress mode’ simultaneously. This was seen recently in the 2008 Global Financial Crisis.

Does the super-nova reach extend to control of knowledge?

A question I ask myself is:  If we assume that digital content is not immune to ideology from public polities and private agents like corporations, consultancy firms, think tanks and other entities which, as shown by Vitali et al, monopolise the financial power in today’s “weighless” economy, then:

  • Does this group of  profit-seeking financial institutions exercise their influence over the formation and dissemination of digital knowledge?.
  •  how about the degree of control this entity has over the formation and dissemination of knowledge?
  • To what degree does it own intellectual assets like advertising, financial and consulting services, name brands, corporate identity, corporate ideology?
  • How is the digital text categorised by these companies? What is considered real and what is considered legitimate?
  • How are digital domains pictured and indexed? How does digital knowledge get ordered? Which processes are followed?
  • Is there a process of standardisation of knowledge?

Is this super-entity subtly permeating our reality without us becoming aware of it?

Ok, maybe I’ll stop here. I just wish I could look deeper into this.

For the time being, I’ll just live it at that. A lesson from the 2008 crisis ( that the current system is a vulnerable, unpredictable network of private and public actors who, lead by a culture of greed, take advantage of a poorly regulated financial system, causing distress internationally and enhancing inequality amongst countries and persons),  and a freakish hypothesis that the reach of the super-entity extends beyond the material into the weighless domain in which, you and I, roam about every day.

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