Report: Who Really Controls Global Economy?

Last Updated Oct 24, 2011 10:48 AM EDT

Chalk one up for the Occupy Wall Street movement. A small group of super-connected transnational companies -- mostly banks -- really does hold disproportionate power over the global economy, according to new research by Swiss academics.

After scrutinizing corporate ownership networks with mathematical analysis used to model natural systems, researchers at Swiss Federal Institute of Technology in Zurich discovered a core of about 1,300 companies holding an outsized chunk of global wealth, NewScientist reports:

Although they represented 20 percent of global operating revenues, the 1,318 [companies] 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 percent of global revenues.
Even more disquieting, deeper analysis of the ownership networks among those 1,318 companies revealed a group of 147 even more tightly knit companies lurking within -- a so-called "super-entity" in which all of the ownership was held by other companies of the group.

"In effect, less than 1 percent of the companies were able to control 40 percent of the entire network," Dr. James Glattfelder, one of the study's authors, told NewScientist. "Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group."

Other financial firms in the super-entity included asset managers Capital Group Companies, best known for owning American Funds, and FMR Corp., which controls Fidelity Investments.

Insurance giants with massive and diverse portfolios of securities were also prominent, including France's AXA and U.K.-based Legal & General Group.

See the list of the top 20 super-connected companies, courtesy of NewScientist, below:


Image courtesy of Wikimedia Commons, CC 3.0.
More on MoneyWatch:

  • Dan Burrows On Twitter»

    >> View all articles

    Dan Burrows, a veteran of Aol's DailyFinance, SmartMoney and MarketWatch from Dow Jones, covers the markets and economy with an eye toward investing for the long haul.