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Source link: http://archive.mises.org/18819/banks-rule-the-world/

Banks Rule the World

October 26, 2011 by

An interesting piece at the New Scientists seems to confirm the worst fears of the occupy protestors.

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.

So, has reform ever been more urgent? To save capitalism, the banking cartel must be upended.

{ 10 comments }

Franklin October 26, 2011 at 11:23 am

The headline in the referenced article is as far as many folks will go. And it implicitly indicts “capitalism,” per se. The article does highlight the complicated nature of the study, however.

“So,” Jeffrey writes, “has reform ever been more urgent? To save capitalism, the banking cartel must be upended.”

Indeed, but that is not what the mass-placating medicine shall be. It will instead be more regulations.
And the 147 are thrilled by that, also contented that their potential competition is the other 146, rather than 6-billion.

billwald October 26, 2011 at 11:33 am

The 1% who own the banks own/control 90% of everything. When they own 99% and there is nothing else worth buying they will let the fiat money system crash and we will then all know the 99% are their serfs.

Juraj October 26, 2011 at 11:57 am
Jake October 26, 2011 at 12:26 pm

This is an important opportunity to show how central banking provides large banks and financial institutions with first-user privilege of inflationary money and credit and how this allows them to basically buy up everything (with basically no risk). It’s also important to note that Lehman Brothers doesn’t exist anymore and that other large institutions, given free market conditions, can fail like any other if they do not manage risk appropriately and how bailouts perpetuate the problem. It should be pointed out that the taxes and regulations proposed by the authors of the article are counterproductive while liberalization of the market and dismantling of the banking cartel will loosen the stranglehold that a few large players have on the entire system.

Franklin October 26, 2011 at 1:02 pm

“It should be pointed out that the taxes and regulations proposed by the authors of the article are counterproductive…”
These are smart folks, the ones who wrote this.

So one must show how regulations specifically benefit a minority at the expense of a majority (or even at the expense of another person).
One must show how regulations stifle competition and another’s’ livelihood.
One must show how “property” is defined and traded in the real world and how a concentration of so-called wealth and control will be avoided.
And I don’ t mean some academic Mises-ean paper, much as I admire the magnificent scholarship and the analysis. A hyperlink to a book or scientific analysis just doesn’t resonate. Unfortunately.

The response to the hypothesis (“leave everyone alone and they will be right”) is twofold:
Firstly, don’t throw out the baby with the bath water; the regulations are in place to protect the little guy and the consumer.
Secondly, without the regulations the big guy will crush the little guy; i.e., it’s pretty bad now, imagine how bad if there were no regulations.

That’s why there is really no hope.
Well, not in the next century anyway. Maybe longer.

Shawnesy October 26, 2011 at 1:59 pm

Franklin, I find your positions here contradictory. You tell us we must show, in a non-Misean way, how regulations benefit the few at the expense of the many. Then you tell us to “imagine” how terrible removing the regulations would be for the little guy. You merely assert that the regulations are in place for the benefit of society.

Franklin October 26, 2011 at 3:31 pm

I seek the refutation of those assertions (which I know are wrong) in an easily digestible manner. I mean no disrespect to the population at large, but the attention span is short and, as Ray Bradbury warned decades ago, nobody wants to read anymore. I enjoy the cognac-accompanied, nighttime scholarship to which I can only dream of conducting. It’s all so remarkable. But I’m among a minority. A small one at that.

Remember the Taxi Medallion piece by Reason, referenced at Mises?
http://blog.mises.org/17644/freedom-or-regulation-in-taxi-services/
This was quite effective in capturing the illicit government/crony partnership and the result for the working entrepreneur.
Somehow pieces like that capture a few nods, but only so far. The next breath is always, “Well, we shouldn’t hurt the little guy, so what we need are some regulations, better regulations, to help him. And some more oversight to make sure the rules are not discriminatory or preferential….”
And then it goes from there to here, where we are today.

My disappointment is that the unimaginative mindset of many people is an acceptance of those erroneous yet allegedly self-evident claims; i.e., regulations protect the little guy.
Admittedly, my post was somewhat of disgusted surrender, and I regret the moment of weakness or, rather, pessimism. But it’s just getting worse all the time.

Tim October 27, 2011 at 8:02 pm

Have regulations ever protected the little guy? Ever heard of regulatory entrapment? The idea that the US economy has been deregulated is chiefly a myth. The federal register has grown by hundreds of thousands of pages since the date that the left signalled the coming of the dreaded deregulation under Reagan.

Yonmin liv November 14, 2011 at 10:48 pm

I want economic book 1

Rayssa Lima December 6, 2011 at 12:47 pm

I want economic book too

thank you from Brazil
Rayssa Madeira Santos
Webmaster ofFunk Proibidão

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