If I ruled the world …

Rulers of the worldNow it may or may not have any connection with the debate about the pros and cons of the “Occupy …” movement in Australia or elsewhere, but the following story by Cory Doctorow from techblog BoingBoing is both fascinating and disturbing, as much for the superb associated image as the facts:

The network of global corporate control (PDF), a study published in PLOS One, analyzes the ownership structures of the world’s corporations and finds a tightly-knit cluster of 147 entities control 40 percent of the world’s wealth. Not only is this creepy inasmuch as it puts a lot of power into a small number of hands, but it also suggests that the governance of much of the world’s wealth is closely correlated, so one disaster could sweep like wildfire across them all …

“In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network,” says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.

Not as instantly striking as the “1 percent/99 percent” meme but at least as interesting.

And then there’s this story:

Leaks of U.S. proposals for the Trans-Pacific Free Trade Agreement (FTA) reveal that the Obama administration has reversed reforms designed to enhance access to affordable medicines made during the George W. Bush administration and is instead demanding new rights for pharmaceutical firms to challenge pricing and other drug formulary policies used by many developed countries to keep down prices. The leaked draft text raises multiple concerns, including the following:

EMPOWERING BIG PHARMA TO ATTACK COST-SAVING DRUG FORMULARIES

This is a new proposal to empower pharmaceutical firms to attack the medicine formulary systems that New Zealand, Australia and other developed countries have used so successfully to reduce sky-high drug prices. …

NEW MONOPOLY PATENT RIGHTS FOR BIG PHARMA THAT WILL UNDERMINE ACCESS TO MEDICINE

The leaked texts show that U.S. officials’ recently-announced medicines “access window” is window dressing for piling on monopoly privileges for Big Pharma that will in fact undermine access to medicine for millions. This U.S. intellectual property proposal, which rolls back initial reforms made in a trade pact that the Bush administration signed with Peru only four years ago, would lengthen pharmaceutical monopolies, eliminate safeguards against patent abuse, grant additional exclusive controls over clinical trial data and favor the giant pharmaceutical companies’ monopoly interests at every stage.

You don’t have to be a mung bean-eating, air-headed Socialist Alliance type to be worried about such trends.  You can be a classical liberal believer in the virtues of capitalism and free trade (like me) and still think that things have gone too far in some respects.  The interests of major corporates don’t always coincide with the public interest, a proposition that should be self-evident but apparently isn’t, even to some of the highly intelligent and well-read readers of this blog.  Shrill corporate opposition to the mining super-profits tax, cigarette plain packaging and poker machine pre-commitment laws are obvious examples of sound public interest policies portrayed as evil or incompetent by the corporate sector and its media shills.  Maybe, just maybe, the “Occupy …” protests might be part of a necessary correction despite their chaotic and often silly aspects.

 

About Ken Parish

Ken Parish is a legal academic, with research areas in public law (constitutional and administrative law), civil procedure and teaching & learning theory and practice. He has been a legal academic for almost 20 years. Before that he ran a legal practice in Darwin for 15 years and was a Member of the NT Legislative Assembly for almost 4 years in the early 1990s.
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Fyodor
10 years ago

Look at the list, Ken. It is dominated by the world’s largest fund managers, which don’t own stakes in various companies in their own right, but on behalf of the beneficiaries of pension funds, who provide the bulk of the money they manage.

The report is a colossal cluster-fuck of financial illiteracy.

Yobbo
Yobbo
10 years ago

Shrill corporate opposition to the mining super-profits tax, cigarette plain packaging and poker machine pre-commitment laws are obvious examples of sound public interest policies portrayed as evil or incompetent by the corporate sector and its media shills.

There’s nothing “sound” about increasing company tax and nuisance regulations. You don’t have to be a “corporate shill” to know that. You just have to have a basic understanding of economics.

There’s no “public interest” at all involved in the mining super-profits tax. It’s just a money grab by the federal government who wish to control a larger percentage of the total tax take. The cigarette and pokie regulations are nothing more than a small subsection of busybodies trying to enforce their preferences on the general population.

You can be a classical liberal believer in the virtues of capitalism and free trade (like me)

You’re so full of it Ken.

Anthony
Anthony
10 years ago

Interesting Ken, but the New Scientist is looking like a bit of a joke when it claims this study is “unique” or “the first to go beyond ideology” and “conspiracy theories”. There is a strong tradition in empirical sociology of examining corporate interlocks: John Scott overseas is one example, Malcolm Alexander and Georgina Murray are two domestic examples.

Sally
Sally
10 years ago

Good to see the crony capitalist courtiers and apologists attempt to dissemble and scramble to catch up in the face of ideological defeat.

It has been noted, though, that you have hitherto lurked, shirked and skulked, and that what you’ve thereby defended, overtly and covertly, by your pathetic cowardly self-serving rationales, obfuscation, ignorance and silence is simply this: exploitation, expropriation, desecration and corruption on a massive scale.

JC
JC
10 years ago

Look at the list, Ken. It is dominated by the world’s largest fund managers, which don’t own stakes in various companies in their own right, but on behalf of the beneficiaries of pension funds, who provide the bulk of the money they manage.

Sactly.

Blackrock for instance manages around $3.7 trillion. They don’t control their investments in any direct way. Control and ownership/partial ownership are not the same thing.

The study, if it could be called that, seems fixed in time without giving any consideration to the dynamics that occurs to size of firms and relative movement. Mid 1990’s or so Apple computer was virtually in bankruptcy. It’s now the largest firm in the world, or the second depending how its stock price is performing against Exxon. The US banks used to have relatively largest market capitalization but now are relative minnows compared to other large caps.

Blackrock itself was conceived in 1988 and in just over 20 years have become the biggest asset aggregator in the world which in itself is extraordinary.

If you’re looking for stasis then you can’t go past socialism. If its dynamism you want then capitalism is the way to go.

Lastly what an absolutely appalling article by New Scientist. If this is the sort of example they present in real science, then it ought be offered the same level of seriousness as The Onion. In fact, I’m wondering if its actually an mock New Scientist piece in The Onion.

KB Keynes
KB Keynes
10 years ago

Yobbo shows the usual economic illiteracy on mining super profits.

You only increase the tax take when there are super profits. They are not perpetual.
The tax , if not offset by spending, will obviate the increase in national income which is a good thing unless you are enmoured with higher interest rates.

No a lot of problem gamblers use other people’s money.Cutting this out is a very good thing.

JC
JC
10 years ago

Take a looksee at the dynamism of the Dow, the marker for large cap US.

There are no original participants in the Dow 30 which goes back to 1896. Du Pont Exxon, Proctor&Gmable and United Technolgies are the only four firms that go back to the 30’s.

Look the “old” mainstays..

Boeing… 1987

Amex…1982

JPmorgan… 1991

Wal-Mart… 1997

Intel..1999

As for the mining tax…mining assets belong to the states as per the Constitution. It ought to be their decision what happens their leases, not Canberra. There’s something truly unjust about WA having to share their money with the Greens created basket case like Tasmania where 65% of the population lives on mainland largesse (Welfare).

JC
JC
10 years ago

The tax , if not offset by spending, will obviate the increase in national income which is a good thing unless you are enmoured with higher interest rates.

What the hell? Have you lost all sense of reason and rationality Homes?

KB Keynes
KB Keynes
10 years ago

No,

You appear not to understnd what the tax was all about.

JC
JC
10 years ago

Homes

Mining went through a 20-year depression, so who’s paying for that?. If you look at the long-term return for mining going back 100 years or so, it’s been an absolute shit investment, barely keeping up with the rate of interest. In fact if you invested in every mining company for the past 100 years you would have lost your capital. The only time you can make money from mining is when you surf the commodity bull market and get out before the prices turn down again and the punters take a hit.

Buffest never invests in mining because he has the horse sense to understand the risks.

If you think this is a super profits industry, you would have to be in some other universe.

If you’re looking to tax super profits I suggest you start taxing a boring old detergent and soap maker (Proctor&Gamble) as they have consistently made ‘super” profits since inception.

I do “understnd” the tax. You clearly don’t.

If I counted the times you told people they don’t understand what you do or send them off on your boring reading assignments there wouldn’t enough numbers in the universe. Stop it with the crap as you’re not Einstein, Homes. Far, far from it.

KB Keynes
KB Keynes
10 years ago

you heard it here first from that economic genius JC. If you think mining companies are making super profits ( on the back of very high commodity prices) you leave in another universe.

no-one needs to say anything more

Dan
Dan
10 years ago

*BHP alone* just returned a profit equal to the *Australian national surplus* in the most halcyon days of the last Coalition government. Marius Kloppers himself said BHP could pay more tax.

I’d say that’s a super-profit, and I want some more of it spent on schools, hospitals, education, and ports/railways.

Sally
Sally
10 years ago

BHP is a classic case study in the exploitation of a large-scale and diverse NESB and female labour force employed in sweatshop conditions that literally killed and maimed countless employees over several generations and systematically ripped off its workforce through the payment of low wages relative to the company’s massive privately expropriated profits.

conrad
conrad
10 years ago

“BHP is a classic case study in the exploitation of a large-scale and diverse NESB and female labour force employed in sweatshop conditions”

Last time I checked, I think BHP had about 2 female employees.

JC
JC
10 years ago

you heard it here first from that economic genius JC. If you think mining companies are making super profits ( on the back of very high commodity prices) you leave in another universe.

Homer, are you always at the back of the class? Of course the mining companies are making money from high commods. What eggsactly is the point of that very redundantly silly assertion. Australian mining also happens to be perhaps the most efficient in the world.

——–
Dan says:

*BHP alone* just returned a profit equal to the *Australian national surplus* in the most halcyon days of the last Coalition government. Marius Kloppers himself said BHP could pay more tax.

Which means what exactly? Should we now compare the current deficit to median earnings and turn your comment around and say the average secretary has an income higher than the national deficit?

That’s an absolutely meaningless statement. in so many ways.

Where did Kloppers say he wanted BHP to be taxed more? I’d like to see the evidence.

I’d say that’s a super-profit, and I want some more of it spent on schools, hospitals, education, and ports/railways.

Sure thing, the states should decide if and how they tax mining. The feds need to butt out as it’s not their tax regime.

Yobbo
Yobbo
10 years ago

BHP is a classic case study in the exploitation of a large-scale and diverse NESB and female labour force employed in sweatshop conditions that literally killed and maimed countless employees over several generations and systematically ripped off its workforce through the payment of low wages relative to the company’s massive privately expropriated profits.

Do you have a link that can substantiate any of your drivel, or are you just yet another idiot leftist who thinks all corporations are evil?

Dan
Dan
10 years ago

JC:

I think we’ll probably have to agree to disagree that those sorts of profits are excessive. The national economy thing gives it some context but obviously one that you take exception to. I’ll leave it for others to make their minds up.

The Kloppers one I’ll have to take on notice but it was in the context of the Henry tax review.

As for states vs feds – accountability and responsibility for all sorts of stuff moves between state and federal levels all the time; that’s what the Intergovernmental Agreement on Federal Financial Relations was all about, that’s what all the national agreements and national partnerships are about. I have a heck of a lot to do with COAG, so I know. Saying “the feds need to butt out” is just code for “I’d like the feds to butt out”.

JC
JC
10 years ago

Nope, sorry Dan. I don’t agree to disagree about that at all. Not even remotely so.

The Kloppers one I’ll have to take on notice but it was in the context of the Henry tax review.

Yea, but the Henry review was different to what eventually came out, so you’re not being straight here. The Henry review talked about materially lowering the corporate tax rate too. It would be good to get a better handle on what was said as I don’t see it’s rational that a CEO would consciously demand a higher tax regime. I could be wrong though and would like to see the comment and what was being said around it.

As for states vs feds – accountability and responsibility for all sorts of stuff moves between state and federal levels all the time; that’s what the Intergovernmental Agreement on Federal Financial Relations was all about, that’s what all the national agreements and national partnerships are about.

Really? And here’s me thinking most of the policy always seemed to move one way: to the Feds.

I have a heck of a lot to do with COAG, so I know. Saying “the feds need to butt out” is just code for “I’d like the feds to butt out”.

Yes, that too. I would like to see the Feds butt the hell out of a great deal of things and leave it up to the states.

However there is also the constitution that gives the states specific taxing power for what’s in the ground, not the Feds. So the Federal government should stay right out of it. Furthermore taking tax money out of WA and Queensland to hand over to Tasmania is not optimal, as Tasmania is a basket case of its own making.

Let them dig themselves out of it (no pun intended). They keep voting Green so let them earn their keep from Eco-tourism, as Brown and Milne referred to it. Driving a log truck one day then advising which French source goes with a medium cooked steak frittes would be easily transferable according to those two geniuses. Seems to be working well with 65% of the population on some form of welfare.

JC
JC
10 years ago

oops…sauce…

Dan
Dan
10 years ago

He didn’t demand a higher tax regime and that’s not what I claimed. I said he said (we’ll use the word “conceded” if you like) that BHP can pay more tax.

If you think the RSPT (or its watered-down cousin) is unconstitutional, why hasn’t it gone to court? It’s not like the resource companies are short a dollar for a lawyer.

As for the movement of power from the states to the C’wealth – it’s not all one way; the national agreements are significantly less proscriptive than the tied funding agreements they replaced.

For the record, I favour federalism, but wasn’t always of this persuasion, I can promise you.

JC
JC
10 years ago

Conceded as in a person about to be executed accepting his fate? I can see that.

The tax issue is a state/Federal issue so the firms really have no argument to make and hence no legal dispute. However WA say can and most likely will take issue with the tax either through the court or through political pressure.

It isn’t going anywhere.

Going back to the BHP comment. I think the miners were aware the writing was on the wall that their taxes were going up… that is, royalties by the States. So if was equal to BHP’s expectations he most likely was commenting on tax in general. BHP doesn’t really give a toss if it cuts an cheque to the ATO or the state revenue office.

Dan
Dan
10 years ago

I’ll try and find the reference – I think it’ll involve some asking around at work. Kloppers certainly wasn’t saying he wanted to pay more tax (what businessman does?) but given what followed with the RSPT I don’t think he’s in the business of conceding in the sense of accepting being bent over barrels meekly.

Patrick
Patrick
10 years ago

I’m amazed that everyone is distracted by a relatively inane study (seriously, the average occupier couldn’t stay awake if you started to explain to them what the Depositary Trust Company or Vanguard Group Inc actually do).

The far more upsetting part is surely Obama’s latest edition of ‘rich leftists always sell their unfathomably poorer cousins down the river’? I for one would be appalled if a Bush or Perry was contemplating that. I guess this is of a kind with Obama’s refusal to even ratify the free-trade treaties Bush had agreed until very recently, for fear of upsetting the unions.

One of the great ironies is that the Bush administration was in many ways the halcyon days of American foreign aid, but isn’t represented as such since the Bush USAID tended to ignore the entrenched snouts who duly proclaimed his government stingy and cruel.

Sally
Sally
10 years ago

@16

It’s not “left” history so much as history widely known and understood, though yes the left cared the most to write about it. Not sure how right-winger Helen Hughes came to write “The Australian Iron and Steel Industry 1848-1962” Melbourne UP, 1964) Perhaps she was once a leftie. But she has a lot of relevant and damning data on wages and conditions and her book is not a bad place to start. The journal ‘Labour History’ has lots of stuff on BHP and its workforce as do the various histories of the towns where BHP had its mining, iron ore, steel and metal manufacturing operations, Labor Councils and individual unions, in particular, the Federated Ironworkers’ Union.

Colloquially, for generations, the BHP steelworks in Newcastle was referred to in the local community as “the Abattoir”. In Wollongong, it was “the Blood House”. How many workers were killed on the job? No definite figure. Some steelworks’ sources say 15 workers a year in the first 40 years of operations. Others say one a week in the 1940s when production was high for the war effort.

BHP had an appalling OH&S record for most of its history and still does. Not to mention the broader community contamination from its effluents.

Yobbo
Yobbo
10 years ago

So in other words, it’s just “the vibe”. Got it.

Pedro
Pedro
10 years ago

The failure of the RSPT was due to the uselessness of its proponents. For a mining company director, publicly supporting it would be a breach of the Corp Act.

The extension of IP rights is a serious problem and should only happen when clearly in the public interest.

Ken Parish
Ken Parish
10 years ago

“The extension of IP rights is a serious problem…”

I’m glad someone has finally picked up on that aspect of my primary post. In many ways I think that’s the more serious issue of the two my post highlighted. It’s noteworthy that it isn’t getting much coverage in the MSM. The worry is that by the time it becomes a matter of public debate a treaty will have been negotiated and it will be too late (as with US-Aust FTA which was effectively a done deal before the copyright extension aspects became widely discussed).

Chris Lloyd
Chris Lloyd
10 years ago

Yobbo says: “There’s no “public interest” at all involved in the mining super-profits tax.” Government takes money from mining companies largely owned by foreigners and distributes back to public. No public interest in that….

JC@10: “The only time you can make money from mining is when you surf the commodity bull market and get out before the prices turn down again and the punters take a hit.” Or, if you are the owner, you can tax the profits in the good times and lay off in the bad times.

You guys just don’t like money in the hand of the government. You would rather see it on Marius Kloppers balance sheet. But wait…Golden goose, biting hand that feeds, yadda, yadda