Thursday, July 18, 2013


Please look at this list below of the top 25 of 147 ‘super connected companies’. What do you suppose are their countries of origin, or where they are based, legally? Ask yourself if they can be characterized as ‘transnational’.
Randal wrote “With this reference point in mind the authors of "The Global 1%" utilize data from Orbis 2007, a database listing thirty-seven million companies and investors, the Swiss researchers applied mathematical models—usually used to model natural systems—to the world economy. The study is the first to look at all 43,060 transnational corporations and the web of ownership between them. The research created a “map” of 1,318 companies at the heart of the global economy. The study found that 147 companies formed a “super entity” within this map, controlling some 40 percent of its wealth. The top twenty-five of the 147 super-connected companies includes:
1. Barclays PLC*
2. Capital Group Companies Inc.
3. FMR Corporation
4. AXA
5. State Street Corporation
6. J. P. Morgan Chase & Co.*
7. Legal & General Group PLC
8. Vanguard Group Inc.
10. Merrill Lynch & Co. Inc.*
11. Wellington Management Co. LLP
12. Deutsche Bank AG
13. Franklin Resources Inc.
14. Credit Suisse Group*
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp
17. Natixis
18. Goldman Sachs Group Inc.*
19. T Rowe Price Group Inc.
20. Legg Mason Inc.
21. Morgan Stanley*
22. Mitsubishi UFJ Financial Group Inc.
23. Northern Trust Corporation
24. Société Générale
25. Bank of America Corporation*
* BlackRock Directors

I wrote to Randal:
Note the nationality of these corporations...mainly US and Japanese based. No wonder Business English is one of the most sought after classes around the world.  I think this term 'transnational' is a misnomer. Maybe it will become so in the future, but this list bears out Sklair's research that 60% of so called 'transnational' wealth is in legally housed in either Japan and the US. What's also interesting is how many banks are in this list.

Sarah found an article in  the Economist on the global ruling class, which she writes, is a simplified term for the transnational class. “This article attempts to define a typical global class ruler as someone who attends either Harvard, Stanford, or the University of Chicago. They work at Goldman Sachs, and sit on the same direction boards. It is a revision of old money or WASP society redefined global style.”
Note here also, the preponderance of American universities, mostly Ivy League.
Global ruling class to me is a more accurate term than ‘transnational capital’ which implies that capital is being transferred around the world. Clearly it’s not, if you compare national GDPs:
USA=$15 trillion out of $70 trillion world GDP…approx.. figures according to the CIA Factbook. That’s 1/6th of global GDP. Compare to ratio of population: US=350 million. World=7 billion, roughly 5%. That means that 5% of the world’s population accounts for 22% of the world’s wealth.
 Compare to Russia: $2 trillion,  UK (a tiny island, but remember the City of London is the global center of banking) at $2 trillion; China : $8 trillion …an official figure that the CIA disputes and believes is higher…
To say that US wealth is bound by a ‘transnational state’ , as claimed by Robinson and Sklair…doesn’t make sense. Of course, there are offshore banks and islands, where corporations can siphon off profits in order to avoid taxation. President Obama is trying to call a halt to this.
Corporate loopholes don’t necessarily mean sheltering profits in the Cayman Islands. Lucrative legal headquarters exist in the US. Here is an example about Starbucks:
“Starbucks had already mastered the art of doing business on multiple continents as it grew from a niche coffee retailer in Seattle into a global brand with thousands of outlets from Saudi Arabia to Peru. Now the company smelled a fresh opportunity that required a presence in mysterious territory with its own unique culture: Washington, D.C.
It was 2004 and Congress was considering a law that would provide substantial tax breaks to nearly any company engaged in manufacturing. Though this term conjured images of textile factories and steel mills, Starbucks argued that the definition of manufacturing should -- for purposes of calculating its tax bill -- be stretched to include the roasting of coffee beans.
Starbucks hired an outside lobbyist, Michael Evans of the Washington powerhouse K&L Gates, paying his firm $60,000 that year, according to lobbying reports. Evans was only a year removed from his previous incarnation as a top lawyer on the Senate Finance Committee, the panel that writes the nitty-gritty of tax law. At his urging, lawmakers soon delivered what became known as "the Starbucks footnote," a clause added to a 243-page tax bill called the American Jobs Creation Act.
The provision enabled Starbucks to claim something called a "domestic production activities" tax deduction on each cup of coffee sold in one of its American retail stores. The measure has since saved Starbucks $88 million, according to the company.
Starbucks asserts that its tax savings are entirely legitimate. “

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