Networks involving people have been around since
the dawn of civilization. The apparent democratization of the social network
scene is an interesting demonstration of how far reaching they can get, as
daily global contact is simple and cheap. But global networks are not new and
they can have strong effects on us even though we haven’t signed up.
Large global corporations have grown larger in both
wealth and power and the illusion is that each corporation has a global network
competing with a large number of other similar independent networks. Now, a
recent paper by Vitali et al from
Zurich and published in the Public Library of Science has taken a peek inside
the kimono of the global corporate control network built up from a group of
43,060 trans-national corporations (1).
It’s not a pretty sight. Like any network, some
nodes are bigger than others, but in this case we need to think in terms of
ownership/control ties. There is a strong core in this network that contains
three-quarters of all the nodes and represents 94% of the operating revenue.
More explicitly, the topology has the classic
“bow-tie architecture” with very few inputting control to the core, which in
turn controls a very large number of entities. The core consists of 147 global
corporations and they control 40% of the economic value of all of the world’s
global corporations, but it is important to note that 75% of the core are
financial intermediaries (those sleek investment bankers).
The authors suggest that this small strong core is
an “economic super-entity” and, as this is the first time that this type of
global analysis has been done, our policy makers should broaden their outlook.
It is nice to see the anatomy of this
global control network laid bare and confirm our intuition, but the real
question now is “how are we going to merge the universe occupied by the guys in
the control of the core with the one that the rest of us live in?” Are we going
to need a financial black hole to warp the structure sufficiently to bend what
were parallel tracks so that they merge?
