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

Occupy Wall Street's bête noire may be mathematically inevitable, according to a data visualization created by Swiss scientists.

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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19 Comments

  • The_Mighty_Phoenix

    All of this is an opportunity to hear the Voice of Gaia.  Right?  The living Earth communicates constantly.  What do we hear?  She communicates through politicians, through earthquakes, through a child laughing...  best to put ourselves on the back of a whale (to visualize it, at least) and feel the intense loneliness of a majestic intelligent family oriented species roaming mal-nourished though lonely cold plastic filled seas.  These interconnections, the mega-wealthy, these people are heartless because they haven't supported in slowing down and listening... in looking deep within and assessing their Values; what they really care about.  I believe we will ALL share those values soon.

  • zzz05

    Which is why any attempt to level the playing field needs to contain negative feedback to a degree large enough to stabilize the system, given how much positive feedback it contains naturally. This is not news to anybody with a head for systems, or electronic design, or biology, or lots of other things. 

  • Yaneer Bar-Yam

    There are a variety of different self-organizing dynamic processes. While many of them have inequality in the resulting distributions of links or other measures of "authority", the extent to which there is inequality depends on the specifics of the process.  So while  it is a "logical phase," a specific form is not inevitable.

  • Dave Marsay

    Perhaps of more concern is the proportion of wealth going to the lower deciles. Some people believe that unregulated markets indirectly lead to better outcomes for almost everyone. It would be good to see some evidence of this. For example, who was gaining before 2008, who wasesponsible for the crash, and who is losing out now?

  • Dave Garry

    This article doesn't take into account the real reason behind the 1%'s vast wealth....the "privilege" they have of printing money through the Federal Reserve, Bank of England, IMF etc., ancient tight-knit bloodlines, secret societies, secret allegiances, and hidden occult knowledge, like the Kabbalah.

  • cerulean_ninja

    What does not have to be inevitable is the growing distance and disparity between the 1% and the rest.

    Nature and the natural order of things shows that there are feed-back loops that equally occur within any given system. However it is abundantly clear that the 1% have managed to shut the main valve on any wealth trickle down effect.

    Chaos theory has taught (some of) us that a re-alignment will eventually and inevitably occur and the more extreme the fluctuation the more extreme will be the counter effect.

    The debate now is whether the 1% should be allowed to manage the valve and make clear to them that in the absence of any other re-adjustment the ultimate system failure may soon be upon them in the form of political revolution.

    Of course these people are not the sharpest knives in the box and getting them to confront the actualities is near impossible and it is for that precise reason that human history is littered with revolutionary events and no coincidence that those in control are the most suprised when it comes their time to be sent to the Guillotine. 

    When bankers are hanging from improvised gibbets in Wall St. and the City of London it will be the 1% alone who are wondering how such a thing came to pass.

  • Osawa charles

    well, its like gravity and yes it is inevitable. Why can't we think of "who" holds that rather than "ooh-la la, the 1%, the 1%" and discuss what to do, for whom to do for and why?

    It's great to see infographics these days uncovering facts and all but, hey let's face it, it's humanity intention. 

    Everyone in the high-up knows everyone is connected and by nature, we all do business with people we know. Which makes the lesser concentrate of us to own wealth, but HEY let's face it. 

    If people start "sharing" and "caring" more, then well, most problems are solved. It's a pity I can't just straight up share my shares to people on the street due to tax and IRS and laws and feds snooking up but life is really not about picking on eachother's flaws or perfection (like design), but mostly about love. 

    Wow have we gone that far to forget that?
    Have we gone that far to get out of focus? To let this massive poverty and stress happen to 99% of us?

    Designers and artists nowdays are speaking out. Hardcore scientists like Dr. Hal Lewis has been speaking out since last year and yes everyone is starting to raise their voice, but hey, let's face the reality. 

    Isn't it all our fault?
    Here's to yall.

    Everybody should care about everybody - Andy Warhol

  • BlainRempel

    The Occupy Wall Street "movement" itself may be a good illustration of this very phenomenon. It's doubtful OWS itself will achieve much of anything until it "self organizes" into a state where there is concentration of influence to "direct and coordinate" the movement's efforts.

    Small groups can self-organize into a "leaderless" state and achieve objectives, whereas large, leaderless groups cannot achieve a "consensus of action" and need to be directed - even in situations where a large unorganized group "achieves" something, it will be because of the actions of a few (still a concentration of influence, albeit it in a different manner).

    My perspective.

  • asg749d

    Money moves the world (for better or worse) so this concentration of influential financial organizations makes sense. Whether we like it or not is a completely different matter. 

  • Stef Marcinkowski

    This phenomenon is quite natural. For proof, look at any social network. A very select few are lovingly supported by a great many. This is why celebrities and established brands have squillions of unironic followers. The 1% reaps the rewards of the 99%'s efforts; the 99% aspires to be the 1%. Everyone in the system goes along for the ride without giving it much thought.

  • gbacoder

    The title says it all, "according". The maths behind this is little understood. And I must point out it was the complex maths that wall street used to calculate hedge funds etc that played failed to properly estimate risk - and payed a big part in the crash. Bottomline: When maths appears to offer some universal "truth" that is hard believe - it probably too good to be true. Poor journalism from fastcodesign I must say to publish this in such a way. 

  • Briandrpm

    This story has been out there for a while.  You are not living up to your magazine's name and are simply repeating what so many others have said without really adding anything.  The idea that it is a function of systems is not really a contribution. I suspect that there is more to this when one looks at the details. Forbes Magazine pointed out some.

  • Marc Brodeur

    This article is a bit misleading. INCOME INEQUALITY is not an ingrained mathematical patter, as shown by 1960's era US or parts of Europe, and I think that is one of the big complaints of the modern time. That and crony taxpayer-subsidized risk-taking-with-no-consequence.

  • Jring7

    This qualifies as an interesting hypothesis. Now if we just had a constrasting one  we could design and run an experiment to detect fallibility in one --- or both. One candidate hypothesis holds that IF a community comes together with compelling purpose and abides by a set of interaction principles then co-leadership arises, as needed, throughout the network. Dee Hock's Birth of the Chaordic Age is a pattern.
    Experiment, anyone? 

  • Paul McCarthy

    All very interesting, but it imagines human beings as passive victims of history, and institutions such as corporations, stock markets, etc to be self-generating gods to rule over us. All institutions, including the "self-organising economy" are human creations that have come into being through decisions taken by human agents. Just as we have created them, we can and do alter, remake, repurpose or destroy them, through combinations of consumer behaviour, regulation, taxation, shareholder influence, etc

  • KiteZA

    It feels like this misses the point of the Occupy movements. Of course, different people will give different responses - some arguing that this kind of analysis is obviously wrong. I think the point is not, however, that an 'elite' shouldn't ever exist in any form whatsoever, but rather that the disparity between the elite and the rest has grown far too wide, and this is problematic.

  • Yaneer Bar-Yam

    There are a variety of different self-organizing dynamic processes. While many of them have inequality in the resulting distributions of links or other measures of "authority", the extent to which there is inequality depends on the specifics of the process.  So while  it is a "logical phase," a specific form is not inevitable.