Magazine article New Statesman (1996)

Always Making Ours a 99

Magazine article New Statesman (1996)

Always Making Ours a 99

Article excerpt

When St Paul's Cathedral closed its doors in the face of the Occupy movement, the order might have come direct from the Top. After all, the Gospels show Jesus shrugging that the poor will always be with us, and that to those that have, more will always be given. And both predictions are confirmed in a new scientific analysis of the global financial system.

A group of Zurich-based mathematicians has dissected a database of 37 million companies and investors to see who owns what in the modern world. From the data available, they drew a map of the shareholding networks of the world's transnational companies. Most fascinating was the discovery that 147 companies owned 40 per cent of the total wealth. The top 20 contains all the names you might expect: Barclays Bank, JPMorgan Chase &. Co, the Goldman Sachs Group and so on.

Although it sounds like ammunition for the anti-capitalist movement, the banks can argue that the system will never work any other way. Anyone seeking to join a global financial system will want to connect to the institutions that are strongest and most successful--giving them ever more power and success.

In fact, finding yourself in financial thrall to the "I per cent" is the inevitable result of being part of this self-organising network. Researchers have been seeing this characteristic in networks of various kinds since the early 1990s. It was first observed on the internet: some sites have disproportionate influence in terms of the number of sites that connect to them. Network theory characterises this in a "power law" that defines how many sites will have a particular number of connections.

The power law is the network equivalent of the Bell curve. This applies to characteristics--the height or intelligence of individuals is distributed, most people being average or near-average and with a rapid fall-off in the number of "outliers". …

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