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Exactly who is in charge here?
Power has shifted from nations to companies
Published:Aug 09, 2008



Superclass — David Rothkopf

Ian Mann is a business consultant. He provides insights from the latest business books for his clients

If I told you that there was a huge imbalance in the distribution of power in the world, with great influence concentrated in a small cluster of elites, you would probably reply “And. ..?”

We all know that there are some ‘‘gee whiz’’ figures: the combined net worth of the world’s richest 1000 or so people is equal to twice that of the poorest two and a half billion.

From a different angle: in 1983 the top 500 companies were responsible for 15% of global GDP, but today they are responsible for 40%. And the 2000 largest companies in the world employ 70million workers worldwide.

If each worker has four dependents, these companies sustain 350 million lives and probably impact on a billion people when you add in their suppliers and customers.

The decisions of just a few thousand people — the board members and top managers — affect all these people for better or worse.

Rothkopf’s book deals with the type of world the global power elite is making.

Superclass compares the sales of companies with the GDP of countries. If you consider all entities with either sales or GDP in excess of 50-billion, you would be dealing with the 166 entities. Of these, only 60 would be countries; the rest would be companies!

The distribution of power hasn’t just shifted away from the US and Europe, but has shifted from nations to companies.

In almost every human pursuit, from sport to art, from literature to politics or business, there are a cluster of individuals who are at the pinnacle of their fields. These individuals dominate the worlds around them. Wealth, religion and politics are no different. In these three categories, too, there are a cluster of individuals — probably only 6 000 — who have enormous power over the lives of the six billion people with whom they share the planet.

In the arena of wealth, the power to dominate is not only a function of one’s wealth. Roman Abramovich, the billionaire Russian oligarch, Siberian governor and owner of Chelsea Football Club, is clearly dominant.

The power that politics provides is different from that of wealth, in that having been powerful at one time does not ensure power forever. Mi khail Gorbachev, Margaret Thatcher and Carlos Menem were powerful, but after losing their positional power, faded from the superclass arena. On the other hand, Lee Kuan Yew, Bill Clinton and Henry Kissinger are still in the superclass despite their lack of formal political positions.

The Pope, as the leader of one of the two major religious groups, clearly has formal power, but so does the Egyptian accountant-turned-Muslim-TV-superstar, Amr Khaled.

At the other end of the moral spectrum are the Hong Kong triads and the Russian mobsters who dominate the illegitimate worlds of drugs, human trafficking and other crimes. They are the shadow elite.

But licit or illicit, positional or personal, we are talking about individuals with vastly disproportionate influence.

Consider the enormous power wielded by Wu Xaioling, who governs the foreign reserves of the People’s Bank of China. She controls an entity with more financial assets than any other single public finance institution in the history of the world. Or Rex Tillerson, who oversees Exxon Mobil’s reserves, which span six continents.

Or H Lee Scott, CEO of Wal-Mart , a company with sales larger than the GDP of all but 22 countries in the world — and five times that of Microsoft.

The superclass described in this book is made up of people the author worked among and observed first hand. He describes them as “often brilliant, full of energy and creative, but also lucky — and most know it”.

They are deeply self-interested and, as you can imagine, are far removed from the world of most of the people on the planet.

If you are wondering how these people shape your life, consider the effect of the redirection of massive assets among markets and how this creates, dislocates or erases jobs around the world.

In similar fashion this small group defines how currencies are priced, which candidates have money for their political campaigns, and in hundreds of other ways defines the tenor of the times.

For members of the superclass, there is a commodity more precious than gold, silver, gems or oil: it is access.

This is why they share their time only with those who can offer greatest returns, and this also explains their lifestyles. Access and exclusivity go hand in hand and are achieved by staying in the prohibitively high-end hotels and eating in the best restaurants, where the likelihood of interacting with the people to whom you wish to grant access is maximised. Many attended the same universities and held senior and powerful positions in business and government.

They maintain their connections and leverage their power through attending the high-level annual meetings of the superclass, such as Davos and the Fathers and Sons Forum.

Yes, it is a small world, especially at the top.




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