Studies show that powerful corporations do control the world financial system

Studies show that powerful corporations do control the world financial system

Network topology, connecting some of the largest multinational corporations financial sector. For years we have heard suggestions that the whole world is in the hands of the financial elite, or a more recent version of that popular opinion, a handful of the largest transnational corporations (TNCs).

New research conducted by a team of scientists on the basis of the Swiss Technical College of Zurich (Switzerland's most prestigious university, approx. Mixednews), have shown that these fears are not groundless. Their results, researchers have filled in the pre-publication server arXiv.

To do this, the first of its kind study, researchers used information database ORBIS (global database with detailed reporting on the financial activities of private and public companies).

They analyzed data on more than 43-thousand corporations, found all the links between them, and found that when these relationships graphically portray, you get something that resembles a bow tie with a knot of 147 corporations, which control almost 40 percent of total assets transnational corporations.

The focus of this work, scientists have paid to corporations, which, apart from its own capital, had an effect on other similar formations, and through them have access to the management of the second, third, fourth, etc. items in the financial chain.

Thus, a certain, very limited number of TNCs spread its influence further and further, forming a network of the largest corporations in the world. After analyzing the data, and to map the network of corporations, researchers also attempted to uncover the structure and mechanisms to manage the dark world of corporate finance and property.

To focus on the most powerful transnational corporations, researchers from each of the 30 millionth list of economic "players" who are registered in the database ORBIS, 43 060 of the largest corporations.

They then used a recursive algorithm developed in order to detect and to identify among all the participants in the experiment property relations. The result is a graphical representation of the network TNCs 600,508 nodes and 1,006,987 trunks.

They then organize the data for some other principles, which revealed different ways in which is owned assets. And at every stage of the study confirmed the basic assumption: a very small number of TNCs through direct and indirect ownership (via stocks, bonds, etc.) controls the activity of smaller corporations, and through them has a huge impact on all of us.

His report concludes with a question researchers may rhetorically: what can we expect from a system where in the hands of a few concentrated enormous power, and what may be the effect of such an organization in the global competition?

Summary

The structure of the managed network TNK certainly has an impact on global competition and financial stability. To date, managed to study only a small part of the global network. For a large-scale study is necessary to develop a methodology that would assess the extent and depth of the impact of TNCs on the global financial system.

This is the first attempt to study the architecture of the international network of property relations and calculate available for each major player's sphere of influence. We found that transnational corporations form a structure resembling a giant "butterfly", and that the lion's share of influence flow passes through the tight knot of financial institutions.

This node can be called economic "super-organism", and the fact of its existence raises new important issues both for researchers and policy makers to.

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