Fortune 500 came out with its global 500 rankings for 2007 based on revenue, a tradition followed since 1954. And barring the number one-position (Wal-Mart, regained from Exxon-Mobil), out of top ten; nine were oil or oil-related industries – directly (6 refiners/exploration companies); or indirectly (auto-industries, 3).
Expanding the list little more from the top, when one considers top-25 Fortune 500; we get two more oil-firms and two more auto-companies.
So Fortune 500 has 90% representation from oil or oil-related firms in top ten; and more than 50% in top 25.
And the same 500-ranking, as done by the Financial Times based on market-cap (as on 30th Marchâ€™07, followed since 1988) had three oil-and-gas firms in top-ten; and one auto-company (Toyota). Out of top 25-FT list; there are three more oil-firms.
Top 25 Fortune firms, barring these 8 oil-and-gas firms and five auto firms, has ten more firms from banking, insurance and financial sectors â€“ all doing business with â€˜fiatâ€™ money as inputs and same as outputs.
In FT 500, within top ten (barring 3 oil-and-gas and one auto), we get three banking and financial firms. And within top 25 we get (barring 6 oil-and-gas firms and one auto firm); six more financial companies; having altogether nine financial firms in top 25 FT-500 lists.
And most of the rest in top 25 positions of FT 500 are taken up by pharma giants. Michael Mooreâ€™s Sicko is still raising debates. Again that may be a biased picture (more so as per mainstream media). However there are some elements of truth behind those stories in Sicko after all.
All the above may throw some interesting light to understand where our capitalism is heading. Barring productivity (little difficult to understand, and therefore multiple opinions with number crunching) and innovations (as we common people understand) of few sectors like ICTs (like Google, Apple and that lotâ€¦Microsoft is the only one in top-25 of FT 500 and all would agree that in innovations, MS continuously lacks Google or Apple; and it even has a record to inhibit innovations for self interest); it is hard to comprehend in simple terms what innovations the banks or the oil giants do; or even did in last 50 years to be still in the top. Point is no innovative company is found anywhere in top 25 of Fortune 500 or FT 500 firms (well barring GE if one thinks so, and Microsoft in FT); itâ€™s increasingly becoming clear that itâ€™s oil or fiat money that determines who scores what in present form of capitalism.
No wonder about all the attention that the Middle-East and more so Iraq receives; or how Russia flexes its mussel with new found energy resources. Or take for instance the impact of Japanese carry-trade with Yen; Chinaâ€™s manipulation with Yuan; and US deficits being funded by other central bankers in one side; and US investment firms acquiring assets in those countries at the same time.
True, above sample is only a snapshot picture. However there should not be any mistake that present capitalism is all about controlling the energy (read oil & gas resources, and trading them in dollar); and manipulating currency (both rate and supply) with continuous central bank interventions.
It may be early days to make any conclusions. However the trend must be disturbing to those who have so long been championing the free-wheeling capitalism in the name of productivity, efficiency and innovations without getting at the roots of present form of capitalism.
Even when one takes away the auto-firms (because they rather are the victims of oil price hikes); 18 firms in top-25 Fortune list is directly involved with oil & gas, or so-called man-made resources called â€˜fiat moneyâ€™. And in top-25 FT 500; there are 15 firms that deal with oil or money.
Where are the champions of productivity, innovations, efficiency that capitalism promotes? What explains this predominance of oil and financial firms in top-25 firms in both Fortune 500 and in the FT 500?
Does it speak about the success of capitalism or of its failure lately from too much success?
â€˜Can capitalism survive? No. I do not think it can.” Thus opens Schumpeter’s prologue to a section of his 1942 book, Capitalism, Socialism and Democracy. One might think, on the basis of the quote, that Schumpeter was a Marxist. But the analysis that led Schumpeter to his conclusion differed totally from Karl Marx’s. Marx believed that capitalism would be destroyed by its enemies (the proletariat), whom capitalism had purportedly exploited. Marx relished the prospect. Schumpeter believed that capitalism would be destroyed by its successes. Capitalism would spawn, he believed, a large intellectual class that made its living by attacking the very bourgeois system of private property and freedom so necessary for the intellectual class’s existence. And unlike Marx, Schumpeter did not relish the destruction of capitalism. He wrote: “If a doctor predicts that his patient will die presently, this does not mean that he desires it.”‘ From The Concise Encyclopedia of EconomicsÂ
Ranjit Goswami is a research scholar with the Indian Institute of Technology (IIT), Kharagpur, India; and is the author of the book â€œWondering Man, Money & Go(l)dâ€™â€œ.