January 2012        

The extent of monopolisation and the concentration of control

Researchers at the Swiss Federal Institute of Technology in Zürich recently published an important piece of research into the extent of monopolisation, entitled “The network of global corporate control.”
     The article is interesting and important because of its specific look at the feature of control, as distinct from wealth and income, in revealing the degree of monopolisation that is the dominant feature of contemporary capitalism.
     A lot of reports and papers emphasise the degree of monopolisation of wealth that exists and the huge disparity in income, but not much work has been done (to the best of my knowledge) in presenting the degree of monopolisation of corporate control—the ability of a few to control and dominate the production and accumulation process for the entire global economy.
     The research, presented by Stefania Vitali, James Glattfelder, and Stefano Battiston, analysed 43,060 transnational corporations, using the OECD definition, taken from a list of more than 30 million economic entities identified in the Orbis 2007 list. Their research found that a little over 730 entities control 80 per cent of these corporations, and a mere 147 control more than 40 per cent. Of these 147 controlling entities, 75 per cent are financial institutions. The ten entities with the largest control are:
     • Barclays PLC
     • Capital Group Companies
     • FMR Corporation
     • Axa
     • State Street
     • J. P. Morgan
     • Legal and General Group
     • Vanguard Group
     • UBS
     • Merrill Lynch
     Geographically, the United States, Britain, France and Japan appear most among the top fifty.
     The result of this network of control, as the researchers describe it, is that the accumulation process of capital is controlled to meet the designs and needs of a very small number of largely financial organisations. The control of production is even further divorced from demand, and consequently over-production, speculative bubbles and crisis have become a constant feature of monopoly capitalism.
     Important to note too is that these large entities also engage in constant undisclosed lending and borrowing among each other, which makes contagion a reality and the suppression of information a constant necessity to hide potentially damaging risks.
     With production this tightly controlled by financial entities, it is no wonder that there is little opposition to bailing out the banks from other streams of capital and other sections of the capitalist class.

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