51 of the largest economies are corporations? The Misleading statistic that won’t die.

In the Year 2000 a study by Sarah Anderson and John Cavanagh  made global headlines when it claimed  that “Of the 100 largest economies in the world, 51 are now global corporations; only 49 are countries”.  This statistic has since entrenched itself into foreign policy discourse- without any critical analysis of how this statistic came to be true.

The figure was arrived at through a comparison of corporate sales for the corporations and GDP for the countries. This is problematic because the two aren’t comparable. GDP is the value of goods and services produced in a country in a year. GDP only takes into account the value added by production. Sales on the other hand take into account total revenue- regardless of whether value was added. A better comparison to GDP in order to gauge the relative “power” corporations hold over countries would be there profits- which are a sign of how much value they’ve managed to add to their assets.

Let’s jump forward to 2014- the last year we will have good figures for. What’s the most profitable privately owned corporation today? Apple. It didn’t even feature on the 2000 top 100 list- a sign of how dynamic modern capitalism is. But I digress. Apple made $39.5 billion PROFIT in 2014. (Full list of global coronations by profit levels can be found here when one filters on profit levels).

Consulting global GDP figures on the ever-reliable Wikipedia we find that if Apple were a country – and if it were placed on the IMF list- it’s “GDP” would come in 91st- just behind Libya and slightly in front of Ghana.

So the table of economic entities by size currently stands at

1-90- Nation states

91- Apple

92- Ghana

Let’s finish off the table. The next most profitable private corporation in the world is Exxon Mobile. They made profits of $32.5 billion. Looking at the GDP list, and taking into account Apples presence in 91st, Exxon Mobile is 95th, behind the Democratic Republic of the Congo and just above Bolivia.

The next most profitable private corporation is Wells Fargo with profits of $23.057 billion. Looking at the GDP figures- and taking into account the existence of 2 corporations we find Wells Fargo to be 107th on the list of economic entities.

So to complete the newly revised table of the top 100 economic entities we have

 

1-90- Nation states

91- Apple

92- Ghana

93- Jordan

94- Democratic Republic of the Congo

95- Exxon Mobile

96- Bolivia

97- Ivory coast

98- Bahrain

99- Latvia

100- Cameroon.

 

So far from 51 of the 100 largest economic entities being corporations when one compares like with like one finds that just 2 of the 100 largest economic entities are corporations.  Several boogeymen like Shell, Walmart and JP Morgan don’t even make the top 105- let alone top 50.  While one may be concerned with the power corporations like Exxon have over very small states like Equatorial Guinea, it is worth putting the levels of corporate power into a proper perspective. The State is still more powerful.

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