The power of international elites
Eelke Heemskerk receives ERC grant for research into worldwide business network
Companies are strongly interconnected worldwide: they have mutual ownership, and share executive board members. But what is the structure of this complex network, and where does the power lie exactly? Eelke Heemskerk has received an ERC Starting Grant to conduct research into this phenomenon.
It may seem curious – a political scientist investigating the power structures among the business community – but actually it is perfectly logical, says Heemskerk. ‘Big companies have enormous influence, in both a positive and a negative sense. They provide employment and create economic growth and prosperity, yet at the same time they pollute the environment and are involved in tax fraud and exploitation. Companies wield a lot of power and engage politically, perhaps even more so than in “real” politics. For this reason it is extremely relevant for a political scientist to be studying the business community.’
Complex structure
Heemskerk plans to use his ERC to conduct research into the web of mutual connections between companies. Classical economic theories treat businesses as independent entities, ‘but since the advent of big companies they actually don't exist anymore’, says Heemskerk. ‘Companies share supervisory board members, sit on each other's executive boards and engage in mutual ownership. It is often in companies' interests to uphold these complex structures, for example to enable them – companies such as Starbucks – to operate under the most favourable tax conditions. Other companies do not want to be held responsible for possible misconduct by a subsidiary, and so create a complicated network structure. At the same time, in conversation with CEOs of major companies I notice that they themselves often don't know exactly how companies are interconnected. The answer to this question is essential in answering the question of where the power lies.’
Big data: a completely new approach to research
If Heemskerk had received his ERC five years ago, he would have got to work
the old way: requesting annual reports from Dutch companies and using them to
investigate which companies are interlinked. The arrival of big data enables a
completely new research approach. ‘New commercial businesses collect data on
companies from all over the world in enormous databases: who the shareholders
are, the executive board members, etc. This immediately makes the scope of our
study much greater, as we will no only be investigating companies in the
Netherlands, but worldwide. And we will not only be looking at a few major
companies, but at both large and medium-sized businesses. Altogether tens of
millions of companies will be involved.’
For his project, Heemskerk has put together a multidisciplinary team of
political economists and IT experts. ‘The latter group is absolutely essential,
as we are doing something truly unique: we will be delving into big data and
developing algorithms based on the information we derive from the
politico-economic content. It is a true crossover between the social sciences
and information technology.’
Contributing to transparency
The purpose of the study is not only to supply information on the structure of the global economy – it will also provide new building blocks for network theory. ‘We also aim to develop theoretical models that we can use to, say, predict which companies will develop connections in the future. Of course, there is also the value to society. The core of democracy is transparency, which is why it is so important for us to know how power is organised, and who or what has control over companies.’