Daily Archives: 22/08/2011

( Conventional wisdom says a few sticky, fat fingers control a disproportionate slice of the world economy’s pie. A new analysis suggests that the conventional wisdom is right on the money.

Diagramming the relationships between more than 43,000 corporations reveals a tightly connected core of top economic actors. In 2007, a mere 147 companies controlled nearly 40 percent of the monetary value of all transnational corporations, researchers report in a paper published online July 28 at

“This is empirical evidence of what’s been understood anecdotally for years,” says information theorist Brandy Aven of the Tepper School of Business at Carnegie Mellon in Pittsburgh.

The analysis is a first effort to document the international web of relationships among companies and to examine who owns shares — and how many — in whom. Tapping into the financial information database Orbis, scientists from ETH Zurich in Switzerland examined transnational companies, which they defined as having at least 10 percent of their holdings in more than one country. Then the team looked at upstream and downstream connections, yielding a network of 600,508 economic actors connected through more than a million ownership ties.

This network takes on a bowtie shape, with a large number of diffuse actors in the wings and a few major players tangled up in the tie’s knot. So while it’s true that ownership of publicly held corporations is broadly distributed, says complex systems scientist James Glattfelder, a coauthor of the new work, “take a step back and it’s all flowing into the same few hands.”

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( It was a week of opposites. As stock markets around the world continued to nosedive into financial meltdown, the world’s third wealthiest man told US Congress to stop coddling the super-rich; Forbes, the ultimate magazine of the rich and famous, warned about the “coming global class war“; and Nouriel Roubini, one of the world’s leading economists, told the Wall Street Journal that Karl Marx was actually right in saying that capitalism is doomed.

And as if that string of radical comments from some of the world’s least radical sources weren’t enough, Business Insider piled onto the scrimmage stating that “Karl Marx is hot” and TIME Magazine called on the West to “heed Marx’s warning” and realize that capitalism simply won’t survive without heavy-handed state intervention. Even on Wall Street a specter was haunting investors, with several leading analysts quoting Marx favorably in important research notes.

What’s going on here? Why this sudden mainstream interest in issues that the radical left has been crying out about at the fringes of the political debate for the past 20-30 years? Certainly these capitalists didn’t turn into revolutionary socialists overnight? Indeed, all of them make it very clear that they disagree with Marx on the crucial issue of socialism. They just believe he “might have been right” about capitalism’s tendency to self-destruct.

In other words, the sudden (superficial) interest in the work of Marx points at the growing sense of fear among the ruling classes. As Business Insider put it, “you know it’s a real panic when everyone’s trotting out the old guys, and even capitalists think Marx got the endgame right.” In an op-ed, Roubini pointed out that “Karl Marx was right that globalization, financial intermediation, and income redistribution could lead capitalism to self-destruct.”

But it’s not just the fear of financial collapse that’s driving Marx’s comeback. Apparently, the ruling classes are fearing an imminent rising of the masses. As Fortune wrote, “the riots that hit London and other English cities last week have the potential to spread beyond the British Isles. Class rage isn’t unique to England; in fact, it represents part of a growing global class chasm that threatens to undermine capitalism itself.”

The only “logical” conclusion for the more enlightened bourgeois press, therefore, is old-fashioned progressive liberal reformism. Consider TIME‘s conclusion: “capitalism can be saved from the excesses that Marx warned would be its downfall, but only through the sort of state intervention that has become almost as politically unfashionable as Karl Marx himself.” In other words: capitalism needs socialism to survive — but we still want to keep capitalism!

Stefan Stern, a professor in management at Cass Business School in London, just echoed a similar conclusion in the Independent: “Marx said that while interpreting the world was all very well, the point was to change it. If capitalists want to keep their world safe for capitalism, they need to face up to what is wrong with it, and change it, fast.” But is changing capitalism to save the system really the same as “changing the world“? It certainly doesn’t seem to be.

Indeed, what we are witnessing here is the ultimate case of a “passive revolution“. As Antonio Gramsci (wiki), the great Italian philosopher, wrote in his Prison Notebooks, Marx was wrong to put so much faith in his “economic determinism”. Capitalism, Gramsci observed, did not rule merely through force or oppression. Neither would its internal contradictions automatically lead to a socialist revolution. Instead, Gramsci accorded a major role to culture.

For Gramsci, the ruling groups in society maintained their position in two ways: firstly, through the traditional Marxist form of physical and economic oppression; and, secondly, through cultural hegemony, which operates via ideological consent. Thus Gramsci opened up a major new battlefield in the revolutionary process: civil society. There, outside of the realm of the state or the economy, ruling groups clashed with subordinate ones in a discursive “war of position” to gain or retain popular legitimacy.

It was this brilliant theoretical innovation that allowed Gramsci to explain capitalism’s resiliency to an all-out popular revolution. When their dominant position came under fire, Gramsci observed, and the ruling classes were about to lose the crucial consent of the people, they could always accommodate for the concerns of the masses by going against their own direct short-term interests in order to retain the dominant social order in the long-term.

In this respect, while we may feel an intuitive moral appreciation for the seeming selflessness of Warren Buffet or the sheer frankness of Nouriel Roubini, we have to realize that these enlightened capitalists, for all their “Marxian” rhetoric, are even more dangerous than the blunt ones like Lloyd Blankfein or the Koch brothers. For it is the Buffets and Roubinis of this world who, through their passive reformism, will allow the latter to keep controlling the rest of us.

by Jérôme E. Roos on August 20, 2011


(bloomberg)  Citigroup Inc. (C) and Bank of America Corp. (BAC) were the reigning champions of finance in 2006 as home prices peaked, leading the 10 biggest U.S. banks and brokerage firms to their best year ever with $104 billion of profits.

By 2008, the housing market’s collapse forced those companies to take more than six times as much, $669 billion, in emergency loans from the U.S. Federal Reserve. The loans dwarfed the $160 billion in public bailouts the top 10 got from the U.S. Treasury, yet until now the full amounts have remained secret.

Fed Chairman Ben S. Bernanke’s unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages. The largest borrower, Morgan Stanley (MS), got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion, according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress.

“These are all whopping numbers,” said Robert Litan, a former Justice Department official who in the 1990s served on a commission probing the causes of the savings and loan crisis. “You’re talking about the aristocracy of American finance going down the tubes without the federal money.”

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Scott Crow is an Austin-based anarchist community organizer, political activist, and writer. His grassroots organizing projects include the post-Katrina Common Ground Collective in New Orleans, which has been called the largest anarchist-influenced organization in modern U.S. history. Scott has worked with groups like Greenpeace, ACORN, and the Rainforest Action Network, and currently works at an anarchist recycling center cooperative in Austin. Scott’s political activities have led the FBI to label him a “domestic terrorist,” and earlier this year he was featured in a front page article in The New York Times about FBI surveillance of political activists. Scott’s book, Black Flags and Windmills: Hope, Anarchy and the Common Ground Collective, will be published by PM Press in September, 2011. Rag Radio is produced in the studios of KOOP 91.7-FM in Austin, Texas, in association with The Rag Blog ( and the New Journalism Project. Host and producer: Thorne Dreyer; Engineer and Co-Producer: Tracey Schulz. Video produced for Austin Indymedia by Jeff Zavala. A ZGraphix video production.