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An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy. The study by complex systems theorists at the Swiss Federal Institute of Technology is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world's transnational corporations (TNCs).

The study's assumptions have attracted criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. The analysis could help identify ways of making global capitalism more stable. The study looked at all 43,060 TNCs in the Orbis database and the share ownerships linking them. Then they constructed a model of which companies controlled others, coupled with each company's operating revenues, to map the structure of economic power.

The work, to be published in PLoS ONE, revealed a core of 1,318 companies with interlocking ownerships. Each of the 1,318 had ties to two or more other companies, and on average they were connected to 20. What is more, although they represented 20% of global operating revenues, the 1,318 appeared to collectively own through their shares the majority of the world's large blue chip and manufacturing firms -- the "real" economy -- representing a further 60% of global revenues.

When the team further untangled the web of ownership, it found much of it tracked back to 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% of the total wealth in the network. In effect, less than 1% of the companies were able to control 40% of the entire network, the study showed. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.

http://www.newscientist.com/article/mg21228354.500-revealed--the-capitalist-network-that-runs-the-world.html