• Posted on October 20, 2011 6:12 pm
    By Max
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    capitalist network that runs the world Revealed – the capitalist network that runs the world · 19 October 2011 by Andy Coghlan and Debora MacKenzie · Magazine issue 2835. Subscribe and save · For similar stories, visit the Finance and Economics Topic Guide AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters' worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy. The study's assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further, they say, could help to identify ways of making global capitalism more stable. The idea that a few bankers control a large chunk of the global economy might not seem like news to New York's Occupy Wall Streetmovement and protesters elsewhere (see photo). But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world's transnational corporations (TNCs). "Reality is so complex, we must move away from dogma, whether it's conspiracy theories or free-market," says James Glattfelder. "Our analysis is reality-based." Previous studies have found that a few TNCs own large chunks of the world's economy, but they included only a limited number of companies and omitted indirect ownerships, so could not say how this affected the global economy - whether it made it more or less stable, for instance. The Zurich team can. From Orbis 2007, a database listing 37 million companies and investors worldwide, they pulled out all 43,060 TNCs and the share ownerships linking them. Then they constructed a model of which companies controlled others through shareholding networks, coupled with each company's operating revenues, to map the structure of economic power. The work, to be published in PloS One, revealed a core of 1318 companies with interlocking ownerships (see image). Each of the 1318 had ties to two or more other companies, and on average they were connected to 20. What's more, although they represented 20 per cent of global operating revenues, the 1318 appeared to collectively own through their shares the majority of the world's large blue chip and manufacturing firms - the "real" economy - representing a further 60 per cent of global revenues. When the team further untangled the web of ownership, it found much of it tracked back to a "super-entity" of 147 even more tightly knit companies - all of their ownership was held by other members of the super-entity - that controlled 40 per cent of the total wealth in the network. "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. John Driffill of the University of London, a macroeconomics expert, says the value of the analysis is not just to see if a small number of people controls the global economy, but rather its insights into economic stability. Concentration of power is not good or bad in itself, says the Zurich team, but the core's tight interconnections could be. As the world learned in 2008, such networks are unstable. "If one [company] suffers distress," says Glattfelder, "this propagates." "It's disconcerting to see how connected things really are," agrees George Sugihara of the Scripps Institution of Oceanography in La Jolla, California, a complex systems expert who has advised Deutsche Bank. Yaneer Bar-Yam, head of the New England Complex Systems Institute (NECSI), warns that the analysis assumes ownership equates to control, which is not always true. Most company shares are held by fund managers who may or may not control what the companies they part-own actually do. The impact of this on the system's behaviour, he says, requires more analysis. Crucially, by identifying the architecture of global economic power, the analysis could help make it more stable. By finding the vulnerable aspects of the system, economists can suggest measures to prevent future collapses spreading through the entire economy. Glattfelder says we may need global anti-trust rules, which now exist only at national level, to limit over-connection among TNCs. Bar-Yam says the analysis suggests one possible solution: firms should be taxed for excess interconnectivity to discourage this risk. One thing won't chime with some of the protesters' claims: the super-entity is unlikely to be the intentional result of a conspiracy to rule the world. "Such structures are common in nature," says Sugihara. Newcomers to any network connect preferentially to highly connected members. TNCs buy shares in each other for business reasons, not for world domination. If connectedness clusters, so does wealth, says Dan Braha of NECSI: in similar models, money flows towards the most highly connected members. The Zurich study, says Sugihara, "is strong evidence that simple rules governing TNCs give rise spontaneously to highly connected groups". Or as Braha puts it: "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." So, the super-entity may not result from conspiracy. The real question, says the Zurich team, is whether it can exert concerted political power. Driffill feels 147 is too many to sustain collusion. Braha suspects they will compete in the market but act together on common interests. Resisting changes to the network structure may be one such common interest. The top 50 of the 147 superconnected companies 1. Barclays plc 2. Capital Group Companies Inc 3. FMR Corporation 4. AXA 5. State Street Corporation 6. JP Morgan Chase & Co 7. Legal & General Group plc 8. Vanguard Group Inc 9. UBS AG 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 26. Lloyds TSB Group plc 27. Invesco plc 28. Allianz SE 29. TIAA 30. Old Mutual Public Limited Company 31. Aviva plc 32. Schroders plc 33. Dodge & Cox 34. Lehman Brothers Holdings Inc* 35. Sun Life Financial Inc 36. Standard Life plc 37. CNCE 38. Nomura Holdings Inc 39. The Depository Trust Company 40. Massachusetts Mutual Life Insurance 41. ING Groep NV 42. Brandes Investment Partners LP 43. Unicredito Italiano SPA 44. Deposit Insurance Corporation of Japan 45. Vereniging Aegon 46. BNP Paribas 47. Affiliated Managers Group Inc 48. Resona Holdings Inc 49. Capital Group International Inc 50. China Petrochemical Group Company * Lehman still existed in the 2007 dataset used Graphic: The 1318 transnational corporations that form the core of the economy (Data: PLoS One)           

    2012
  • Posted on August 10, 2011 10:52 pm
    By Max
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    Power companies prepare as solar storms set to hit Earth     NEW YORK | Sat Aug 6, 2011 1:04pm EDT (Reuters) - Three large explosions from the Sun over the past few days have prompted U.S. government scientists to caution users of satellite, telecommunications and electric equipment to prepare for possible disruptions over the next few days. "The magnetic storm that is soon to develop probably will be in the moderate to strong level," said Joseph Kunches, a space weather scientist at the Space Weather Prediction Center, a division of the U.S. National Oceanic and Atmospheric Administration (NOAA). He said solar storms this week could affect communications and global positioning system (GPS) satellites and might even produce an aurora visible as far south as Minnesota and Wisconsin. An aurora, called aurora borealis or the northern lights in northern latitudes, is a natural light display in the sky in the Arctic and Antarctic regions caused by the collision of energetic charged particles with atoms in the high altitude atmosphere. Major disruptions from solar activity are rare but have had serious impacts in the past. In 1989, a solar storm took down the power grid in Quebec, Canada, leaving about six million people without power for several hours. The largest solar storm ever recorded was in 1859 when communications infrastructure was limited to telegraphs. The 1859 solar storm hit telegraph offices around the world and caused a giant aurora visible as far south as the Caribbean Islands. Some telegraph operators reported electric shocks. Papers caught fire. And many telegraph systems continued to send and receive signals even after operators disconnected batteries, NOAA said on its website. A storm of similar magnitude today could cause up to $2 trillion in damage globally, according to a 2008 report by the National Research Council. "I don't think this week's solar storms will be anywhere near that. This will be a two or three out of five on the NOAA Space Weather Scale," said Kunches. SOLAR SCALE The NOAA Space Weather Scale measures the intensity of a solar storm from one being the lowest intensity to five being the highest, similar to scales that measure the severity of hurricanes, tornadoes and earthquakes. The first of the three solar explosions from the sun this week already passed the Earth on Thursday with little impact, Kunches said, noting, the second was passing the Earth now and "seems to be stronger." And the third, he said, "We'll have to see what happens over the next few days. It could exacerbate the disturbance in the Earth's magnetic field caused by the second (storm) or do nothing at all." Power grid managers receive alerts from the Space Weather Prediction Center to tell them to prepare for solar events, which peak about every 12 years, Tom Bogdan, director of the center said. He said the next peak, called a solar maximum, was expected in 2013. "We're coming up to the next solar maximum, so we expect to see more of these storms coming from the sun over the next three to five years," Bogdan said. (Reporting by Scott DiSavino; Editing by Alden Bentley)  

    2012
  • Posted on March 23, 2011 7:14 pm
    By Max
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    Source: http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8393984/Safe-nuclear-does-exist-and-China-is-leading-the-way-with-thorium.html Safe nuclear does exist, and China is leading the way with thorium A few weeks before the tsunami struck Fukushima’s uranium reactors and shattered public faith in nuclear power, China revealed that it was launching a rival technology to build a safer, cleaner, and ultimately cheaper network of reactors based on thorium. By Ambrose Evans-Pritchard 9:30PM GMT 20 Mar 2011 This passed unnoticed –except by a small of band of thorium enthusiasts – but it may mark the passage of strategic leadership in energy policy from an inert and status-quo West to a rising technological power willing to break the mould. If China’s dash for thorium power succeeds, it will vastly alter the global energy landscape and may avert a calamitous conflict over resources as Asia’s industrial revolutions clash head-on with the West’s entrenched consumption. China’s Academy of Sciences said it had chosen a “thorium-based molten salt reactor system”. The liquid fuel idea was pioneered by US physicists at Oak Ridge National Lab in the 1960s, but the US has long since dropped the ball. Further evidence of Barack `Obama’s “Sputnik moment”, you could say. Chinese scientists claim that hazardous waste will be a thousand times less than with uranium. The system is inherently less prone to disaster. “The reactor has an amazing safety feature,” said Kirk Sorensen, a former NASA engineer at Teledyne Brown and a thorium expert. RELATED ARTICLES Japan crisis forces rethink on the nuclear option 20 Mar 2011 Obama pushes on with nuclear plan 16 Mar 2011 Shale revolution has an audience from Blackpool to Algeria 14 Mar 2011 US Fed: 'commodity prices are transitory' 15 Mar 2011 Government to slash subsidies for solar power 18 Mar 2011 “If it begins to overheat, a little plug melts and the salts drain into a pan. There is no need for computers, or the sort of electrical pumps that were crippled by the tsunami. The reactor saves itself,” he said. “They operate at atmospheric pressure so you don’t have the sort of hydrogen explosions we’ve seen in Japan. One of these reactors would have come through the tsunami just fine. There would have been no radiation release.” Thorium is a silvery metal named after the Norse god of thunder. The metal has its own “issues” but no thorium reactor could easily spin out of control in the manner of Three Mile Island, Chernobyl, or now Fukushima. Professor Robert Cywinksi from Huddersfield University said thorium must be bombarded with neutrons to drive the fission process. “There is no chain reaction. Fission dies the moment you switch off the photon beam. There are not enough neutrons for it continue of its own accord,” he said. Dr Cywinski, who anchors a UK-wide thorium team, said the residual heat left behind in a crisis would be “orders of magnitude less” than in a uranium reactor. The earth’s crust holds 80 years of uranium at expected usage rates, he said. Thorium is as common as lead. America has buried tons as a by-product of rare earth metals mining. Norway has so much that Oslo is planning a post-oil era where thorium might drive the country’s next great phase of wealth. Even Britain has seams in Wales and in the granite cliffs of Cornwall. Almost all the mineral is usable as fuel, compared to 0.7pc of uranium. There is enough to power civilization for thousands of years. I write before knowing the outcome of the Fukushima drama, but as yet none of 15,000 deaths are linked to nuclear failure. Indeed, there has never been a verified death from nuclear power in the West in half a century. Perspective is in order. We cannot avoid the fact that two to three billion extra people now expect – and will obtain – a western lifestyle. China alone plans to produce 100m cars and buses every year by 2020. The International Atomic Energy Agency said the world currently has 442 nuclear reactors. They generate 372 gigawatts of power, providing 14pc of global electricity. Nuclear output must double over twenty years just to keep pace with the rise of the China and India. If a string of countries cancel or cut back future reactors, let alone follow Germany’s Angela Merkel in shutting some down, they shift the strain onto gas, oil, and coal. Since the West is also cutting solar subsidies, they can hardly expect the solar industry to plug the gap. BP’s disaster at Macondo should teach us not to expect too much from oil reserves deep below the oceans, beneath layers of blinding salt. Meanwhile, we rely uneasily on Wahabi repression to crush dissent in the Gulf and keep Arabian crude flowing our way. So where can we turn, unless we revert to coal and give up on the ice caps altogether? That would be courting fate. US physicists in the late 1940s explored thorium fuel for power. It has a higher neutron yield than uranium, a better fission rating, longer fuel cycles, and does not require the extra cost of isotope separation. The plans were shelved because thorium does not produce plutonium for bombs. As a happy bonus, it can burn up plutonium and toxic waste from old reactors, reducing radio-toxicity and acting as an eco-cleaner. Dr Cywinski is developing an accelerator driven sub-critical reactor for thorium, a cutting-edge project worldwide. It needs to £300m of public money for the next phase, and £1.5bn of commercial investment to produce the first working plant. Thereafter, economies of scale kick in fast. The idea is to make pint-size 600MW reactors. Yet any hope of state support seems to have died with the Coalition budget cuts, and with it hopes that Britain could take a lead in the energy revolution. It is understandable, of course. Funds are scarce. The UK has already put its efforts into the next generation of uranium reactors. Yet critics say vested interests with sunk costs in uranium technology succeeded in chilling enthusiasm. The same happened a decade ago to a parallel project by Nobel laureate Carlo Rubbia at CERN (European Organization for Nuclear Research). France’s nuclear industry killed proposals for funding from Brussels, though a French group is now working on thorium in Grenoble. Norway’s Aker Solution has bought Professor Rubbia’s patent. It had hoped to build the first sub-critical reactor in the UK, but seems to be giving up on Britain and locking up a deal to build it in China instead, where minds and wallets are more open. So the Chinese will soon lead on this thorium technology as well as molten-salts. Good luck to them. They are doing Mankind a favour. We may get through the century without tearing each other apart over scarce energy and wrecking the planet. This is my last column for a while. I am withdrawing to the Mayan uplands.

    Survival