Infographic Of The Day: Is "The 1%" Inevitable, Given How Networks Work?

The viral protest meme known as "Occupy Wall Street" is still going strong, and according to some provocative research to be published in PLoS One, it may never have reason to run out of steam. Why? Because "the 1%"--#OWS-speak for the tiny subgroup of wealthy interests that exerts outsize influence over "the 99%" comprising the rest of us--may be a mathematically inevitable consequence of the way networks self-organize.

The paper, entitled "The network of global corporate control", is an attempt by complex systems theorists at the Swiss Federal Institute of Technology in Zurich to "go beyond ideology to empirically identify such a network of power," according to New Scientist. The researchers' method: analyzing the ownership connections between 43,000 transnational corporations and seeing where the bulk of network control coalesces. The results, visualized in an infographic, appear to show that a "core" of 1,318 companies representing 20% of the global economy collectively own (through stock shares) an additional 60% of global revenues. If that doesn't freak you out, within that core is a still smaller "super-entity" of 147 companies--mostly financial institutions, depicted as red dots--that appear to control 40% of the total revenue in the network.

The study and infographic have generated lots of press and intense debate about the researchers' methodology and assumptions (for example, that stock ownership is a proxy for direct influence/control). But the most provocative interpretation, validated by other systems theorists contacted by New Scientist, is that this sinister-looking concentration of influence is basically unavoidable in any network, capitalist or otherwise. One researcher says that similar clustering is common in similar networks found in nature; while Dan Braha of the New England Complex Systems Institute minces even fewer words: "The Occupy Wall Street claim that 1 per cent of people have most of the wealth reflects a logical phase of the self-organising economy."

[Via New Scientist]

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3 Comments

  • johnwerneken

    DUH. Anyone can see that that is the case. For one thing PEOPLE are natural so unequal, the top 1% of 1% of 1% outclasss all the rest combined. Egalitarianism is a holdover from universal hunter-gatherer poverty and even there there is social leadership = social dominance. Just look at a pack of wolves, or of any other creatures where two or more cooperate to any extent (which all do to some extent).

  • Kenneth DeVeau

    It's more than that the 1% exists; they always have.  It's that they apparently arrogantly expect to prosper even more in this down economy when many of the 99% are unemployed or under employed, struggling to survive as a result of that same economy with little expectation of improvement.  The added prosperity for the 1% does not appear to the OWSers to be a result of merit, which would be fair, but of greed. Investment of that wealth in early stage entrepreneurs and in existing small businesses that have good products/services trying to remain solvent would go a long way to turn the situation around.

  • Wize Adz

    Also, that membership in the 1% seems to be fixed, and not merit-based.  It's not like you become a member by working harder than 99 of your closest friends -- that will get you a PHD, but not enough income to pay for daycare for a second kid.