Posted 2 years ago on June 14, 2013, 3:42 p.m. EST by LeoYo
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Global Power Project, Part 1: Exposing the Transnational Capitalist Class
Friday, 14 June 2013 09:14 By Andrew Gavin Marshall, Occupy.com | News Analysis
The Global Power Project, an investigative series produced by Occupy.com, aims to identify and connect the worldwide institutions and individuals who comprise today's global power oligarchy. By studying the relationships and varying levels of leadership that govern our planet's most influential institutions — from banks, corporations and financial institutions to think tanks, foundations and universities — this project seeks to expose the complex, highly integrated network of influence wielded by relatively few individuals on a national and transnational basis. This is not a study of wealth, but a study of power.
Many now know the rhetoric of the 1% very well: the imagery of a small elite owning most of the wealth while the 99% take the table scraps. This rhetoric and imagery was made popular by the growth of the Occupy movement, so it seems appropriate that a project of Occupy.com should expand on this understanding and bring the activities of the global elite further to light.
In 2006, a UN report revealed that the world’s richest 1% own 40% of the world’s wealth, with those in the financial and internet sectors comprising the “super rich.” More than a third of the world’s super-rich live in the U.S., with roughly 27% in Japan, 6% in the U.K., and 5% in France. The world’s richest 10% accounted for roughly 85% of the planet's total assets, while the bottom half of the population – more than 3 billion people – owned less than 1% of the world’s wealth.
Looking specifically at the United States, the top 1% own more than 36% of the national wealth and more than the combined wealth of the bottom 95%. Almost all of the wealth gains over the previous decade went to the top 1%. In the mid-1970s, the top 1% earned 8% of all national income; this number rose to 21% by 2010. At the highest sliver at the top, the 400 wealthiest individuals in America have more wealth than the bottom 150 million.
A 2005 report from Citigroup coined the term “plutonomy” to describe countries “where economic growth is powered by and largely consumed by the wealthy few.” The report specifically identified the U.K., Canada, Australia and the United States as four plutonomies. Published three years before the onset of the financial crisis in 2008, the Citigroup report stated: “Asset booms, a rising profit share and favorable treatment by market-friendly governments have allowed the rich to prosper and become a greater share of the economy in the plutonomy countries.”
"The rich," said the report, "are in great shape, financially.” In early 2013, Oxfam reported that the fortunes made by the world’s 100 richest people over the course of 2012 – roughly $240 billion – would be enough to lift the world’s poorest people out of poverty four times over. In the Oxfam report, "The Cost of Inequality: How Wealth and Income Extremes Hurt Us All," the international charity noted that in the past 20 years, the richest 1% had increased their incomes by 60%. Barbara Stocking, an Oxfam executive, noted that this type of extreme wealth is “economically inefficient, politically corrosive, socially divisive and environmentally destructive...We can no longer pretend that the creation of wealth for a few will inevitably benefit the many – too often the reverse is true.”
The report added: “In the UK, inequality is rapidly returning to levels not seen since the time of Charles Dickens. In China the top 10% now take home nearly 60% of the income. Chinese inequality levels are now similar to those in South Africa, which is now the most unequal country on Earth and significantly more unequal than at the end of apartheid.” In the United States, the share of national income going to the top 1% has doubled from 10 to 20% since 1980, and for the top 0.01% in the United States, “the share of national income is above levels last seen in the 1920s.”
Previously, in July of 2012, James Henry, a former chief economist at McKinsey, a major global consultancy, published a major report on tax havens for the Tax Justice Network which compiled data from the Bank for International Settlements (BIS), the IMF and other private sector entities to reveal that the world’s super-rich have hidden between $21 and $32 trillion offshore to avoid taxation.
Henry stated: “This offshore economy is large enough to have a major impact on estimates of inequality of wealth and income; on estimates of national income and debt ratios; and – most importantly – to have very significant negative impacts on the domestic tax bases of ‘source’ countries.” John Christensen of the Tax Justice Network further commented that “Inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people... This new data shows the exact opposite has happened: for three decades extraordinary wealth has been cascading into the offshore accounts of a tiny number of super-rich.”
With roughly half of the world’s offshore wealth, or some $10 trillion, belonging to 92,000 of the planet's richest individuals —representing not the top 1% but the top 0.001% — we see a far more extreme global disparity taking shape than the one invoked by the Occupy movement. Henry commented: “The very existence of the global offshore industry, and the tax-free status of the enormous sums invested by their wealthy clients, is predicated on secrecy.”
In his 2008 book, Superclass: The Global Power Elite and the World They Are Making, David Rothkopf, a man firmly entrenched within the institutions of global power and the elites which run them, compiled a census of roughly 6,000 individuals whom he referred to as the “superclass.” They were defined not simply by their wealth, he said, but by the influence they exercised within the realms of business, finance, politics, military, culture, the arts and beyond. Rothkopf noted: “Each member is set apart by his ability to regularly influence the lives of millions of people in multiple countries worldwide. Each actively exercises this power and often amplifies it through the development of relationships with other superclass members.”
The global elite are of course not defined by their wealth alone, but through the institutional, ideological and individual connections and networks in which they wield their influence. The most obvious example of these types of institutions are the multinational banks and corporations which dominate the global economy. In the first scientific study of its kind, Swiss researchers analyzed the relationship between 43,000 transnational corporations and “identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.”
In their report, "The Network of Global Corporate Control", researchers noted that this network – which they defined as "ownership" by a person or firm over another firm, whether partially or entirely – “is much more unequally distributed than wealth” and that “the top ranked actors hold a control ten times bigger than what could be expected based on their wealth.” The “core” of this network – which consists of the world's top 737 corporations – control 80% of all transnational corporations (TNCs). Even more extreme, the top 147 transnational corporations control roughly 40% of the entire economic value of the world’s TNCs, forming their own network known as the “super-entity.” The super-entity conglomerates all control each other, and thus control a significant portion of the rest of the world’s corporations with the “core” of the global corporate network consisting primarily of financial corporations and intermediaries.
In December of 2011, the former deputy secretary of the Treasury in the Clinton administration, Roger Altman, wrote an article for the Financial Times in which he described financial markets as “a global supra-government” which can “oust entrenched regimes... force austerity, banking bail-outs and other major policy changes.” Altman said bluntly that the influence of this entity “dwarfs multilateral institutions such as the International Monetary Fund” as “they have become the most powerful force on earth.”
With the formation of this “super-entity” – a veritable global supra-government – made up of the world’s largest banks and corporations exerting immense influence over all other corporations, a new global class structure has evolved. It is this rarefied group of individuals and firms, and the relations they hold with one another, that we wish to further understand.
According to the 2012 report, "Corporate Clout Distributed: The Influence of the World’s Largest 100 Economic Entities," of the world’s 100 largest economic entities in 2010, 42% were corporations while the rest were governments. Among the largest 150 economic entities, 58% were corporations. Wal-Mart was the largest corporation in 2010 and the 25th largest economic entity on earth, with greater revenue than the GDPs of no less than 171 countries.
According to the Fortune Global 500 list of corporations for 2011, Royal Dutch Shell next became the largest conglomerate on earth, followed by Exxon, Wal-Mart, and BP. The Global 500 made record revenue in 2011 totaling some $29.5 trillion — more than a 13% increase from 2010.