Sunday, October 30, 2011

New Data on Global Corporate Control Confirms Lenin's "Imperialism"

By Deirdre Griswold
Published Oct 27, 2011 8:49 PM

Researchers in Zurich, Switzerland, have used a powerful computer database to analyze which transnational companies dominate the world economy. Their findings, called “The network of global corporate control,” appeared this summer at, an online publisher of scientific material.

Using information from the financial database ORBIS, which provided them with data on “37 million economic actors, both physical persons and firms located in 194 countries, and roughly 13 million directed and weighted ownership links (equity relations),” the team of scientists from ETH Zurich, headed by Stefania Vitali, used a new mathematical analysis to tease out the structures linking transnational corporations to their subsidiaries and to each other.

The result? Out of this vast number of corporate actors, in 2007 “a mere 147 companies controlled nearly 40 percent of the monetary value of all transnational corporations,” wrote Rachel Ehrenberg in an article summarizing the group’s findings. (“Financial world dominated by a few,” Science News, Sept. 24)

The authors say their work is the first attempt ever made to plot the myriad connections among the transnationals, defined as companies that have at least 10 percent of their wealth in more than one country. They describe the structure that emerged as resembling a “bowtie,” with lots of corporate entities in the periphery but a small group at the center controlling the flow of wealth.

While the global capitalist economy today is vastly larger and more complex than a century ago when V.I. Lenin wrote his groundbreaking book “Imperialism,” this attempt by mathematicians to penetrate the murky world of corporate and finance capital confirms what the leader of the Russian Revolution wrote in 1916.

Lenin showed how even then the big banks, insurance companies and other financial institutions of Europe and the United States had grown to dominate over all other forms of capital. He used the data then available to show that they had formed giant cartels that divided up the world markets into “spheres of influence.”

Written during World War I, the book explained what drove capitalist nations to half-exterminate each other in the struggle for superprofits around the world. The message was clear: War and exploitation will continue as long as there is capitalism.

There is no such message in these recent findings. Rather, the research is directed at capitalist governments and multinational institutions that the authors hope will shape better policies.

However, coming at a time when the capitalist system is in a deepening crisis of overproduction that is being felt all over the world, this study dispels the theory that capitalism has somehow become more democratic because, for example, millions of people have to rely on pensions that invest in mutual funds.

As the Occupy Wall Street movement says, only a tiny number of the world’s people really control the wealth. They are really much less than 1 percent and are concentrated in the major imperialist countries.

The top 50 control-holders in the world are listed in a table at the end of the study. Twenty-four of them are from the U.S. Most of their names are obscure: FMR Corp., The Capital Group and State Street are among the largest. But behind these names are many of the same old ruling-class families that have picked presidents and secretaries of state for generations to ensure that the U.S. government puts their class interests before anything else.

In the recent period, this has meant getting their hands on trillions of dollars in government bailout money when the markets turned sour, even as millions of workers lose their jobs and homes.

Lenin called imperialism “the highest and last stage of capitalism.” How much longer will such a horrible system be allowed to endure?

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