Earth Incorporated: Centralization and Variegation in the Global Company Network

Abstract

Over the past 20 years, a widening gulf has appeared between the increasingly internationalized financing arrangements of the world’s leading corporations, and the persistence of nationally compartmentalized approaches to the study of corporate control. With direct studies of corporate control at the global level few and far between, the assumption has generally been that the globalization of ownership has taken the form of an expansion of arms-length, market-based arrangements traditionally prevailing in the Anglo-American economies. Here we challenge this assumption, both empirically and conceptually. Empirically, we show that three quarters of the world’s 205 largest firms by sales are linked to a single global company network of concentrated (5%) ownership ties. This network has a hierarchically centralized organization, with a dominant “global network core” of US fund managers ringed by a more geographically diverse “state capitalist periphery.” Conceptually, we argue that the this architecture can be broadly explained in terms of a Polanyian “variegated capitalist” model of contradictory market institutionalization, with the formation of the global company network actually a counterintuitive product of global financial marketization. In order to understand this formation, however, it is necessary to extend Polanyi’s model of the “double movement” to incorporate Veblenian processes of evolutionary institutional change, in what we dub a “Darwinian Polanyian” synthesis.