Study Says World’s Stocks Controlled by Select Few

spider webCompanies from US, UK and Australia have the most concentrated financial power.

Aug 25, 2009 By Lauren Schenkman Inside Science News Service

WASHINGTON — A recent analysis of the 2007 financial markets of 48 countries has revealed that the world’s finances are in the hands of just a few mutual funds, banks, and corporations. This is the first clear picture of the global concentration of financial power, and point out the worldwide financial system’s vulnerability as it stood on the brink of the current economic crisis.

A pair of physicists at the Swiss Federal Institute of Technology in Zurich did a physics-based analysis of the world economy as it looked in early 2007. Stefano Battiston and James Glattfelder extracted the information from the tangled yarn that links 24,877 stocks and 106,141 shareholding entities in 48 countries, revealing what they called the “backbone” of each country’s financial market. These backbones represented the owners of 80 percent of a country’s market capital, yet consisted of remarkably few shareholders…….Matthew Jackson, an economist from Stanford University in Calif.

who studies social and economic networks, said that Glattfelder and Battiston’s approach could be used to answer more pointed questions about corporate control and how companies interact.
 

 

The most pared-down backbones exist in Anglo-Saxon countries, including the U.S., Australia, and the U.K. …..while each American company may link to many owners, Glattfelder and Battiston’s analysis found that the owners varied little from stock to stock, meaning that comparatively few hands are holding the reins of the entire market.
“If you would look at this locally, it’s always distributed,” Glattfelder said. “If you then look at who is at the end of these links, you find that it’s the same guys, [which] is not something you’d expect from the local view.”

read entire article

 

4 responses to “Study Says World’s Stocks Controlled by Select Few

  1. scary thought, eh? but haven’t we heard this our entire lives?

    “2% of the world controls 90% of the wealth”

    It’s nice to know it’s confirmed by solid research.

    I once saw this very complicated diagram of the power in Ohio – all these weblike connections, but basically the same families that were ruining things 150 years ago still ruin them today.

  2. Looks like it might be well less than 2%, especially in English-speaking countries. The concentration is increasing, while people’s power ebbs.

    And it’s interesting that this research was done by physicists! not economists or sociologists who were evidently co-opted long ago.

  3. Jefferson's Guardian

    You’re both thinking like the vast majority of progressives who know the score. Before I completely read the article, I was thinking about 2%. Bingo!

    As Krugman explains in his book, The Conscience of a Liberal, the middle class only grows and prospers when there’s a “great compression”; i.e., there isn’t a large standard deviation separating the incomes from the very rich from the incomes from the poor. It used to be that way, after WWII and into the late 1960s. But things started to change radically after that — especially during the Reagan Revolution, and it continues to spiral out of control today.

    The middle class is being squeezed out of existence, and the rich get richer and the poor get poorer.

  4. yup! see the list of directors etc, and investors for CSL for eg, and bingo! same mob, much money, many boards, same crew keep coming up.
    I have always been poor, yet never as poor as last few years, costs more to keep the same low standards.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s