NationStates Jolt Archive

Could a corporate entity become so strong as to,directly or indirectly, effectively control a country?


If yes, would it still be bound to maximize shareholder interests by any means legal?


If no, why not?

*coughHalliburtoncough* ;)

Could a corporate entity become so strong as to,directly or indirectly, effectively control a country?


If yes, would it still be bound to maximize shareholder interests by any means legal?


If no, why not?

Sure;

If a single corporation holds a monopoly on any product or commodity essential to the functioning of the economy (for example, cars, oil, iron, so on), it's capable of making the government follow its will.

As for maximising shareholder interests; Making the government give the corporation favourable conditions for expansion would probably be in their interests, no?

*coughHalliburtoncough* ;)

Shameonyou! Now there is Halliburtonspittle all over cyberspace. Yuck.

Shameonyou! Now there is Halliburtonspittle all over cyberspace. Yuck.
hehehe its highly infectious spittle, too... now you've got the disease.

you can buy the cure from Halliburton and its wonderful shareholders for just the tiny sum of all your life savings - buy now and we'll even throw in a free barrel of crude oil! ;)


deus ex, anyone? :D

Sure;

If a single corporation holds a monopoly on any product or commodity essential to the functioning of the economy (for example, cars, oil, iron, so on), it's capable of making the government follow its will.

As for maximising shareholder interests; Making the government give the corporation favourable conditions for expansion would probably be in their interests, no?

Think of the following as the ultimate path to socialism.

A corporation, over time, is allowed to become an enormous monopoly, enjoying coverage in all sectors of the economy. Because it is so powerful, the government is essentially a rudiment - a subsidiary organ.

Because there's only one company to invest in, just about everyone who has any money owns shares. So they are voting shareholders - who literally own the means of production (as well as work for the company).

The company gives benefits (medical, etc.) in addition to pay and retirement.

Think of the following as the ultimate path to socialism.

A corporation, over time, is allowed to become an enormous monopoly, enjoying coverage in all sectors of the economy. Because it is so powerful, the government is essentially a rudiment - a subsidiary organ.

Because there's only one company to invest in, just about everyone who has any money owns shares. So they are voting shareholders - who literally own the means of production (as well as work for the company).

The company gives benefits (medical, etc.) in addition to pay and retirement.

That's not socialism or even democratic. The ownership is unequal, and thus the voting rights are unequal. Theoretically, one person could hold all of the votes in such a system if they managed to obtain complete ownership. Those higher up on the money chain have more votes than the workers.

That's not socialism or even democratic. The ownership is unequal, and thus the voting rights are unequal. Theoretically, one person could hold all of the votes in such a system if they managed to obtain complete ownership. Those higher up on the money chain have more votes than the workers.

Agreed. But that's where we're headed. There are many multinational corporations who hold much more economic clout than most nations on earth.

That's not socialism or even democratic. The ownership is unequal, and thus the voting rights are unequal. Theoretically, one person could hold all of the votes in such a system if they managed to obtain complete ownership. Those higher up on the money chain have more votes than the workers.
sounds like a mix of consumer-capitalism and meritocracy.

Ever hear of a banana republic? United Fruit used to control Honduras. In 1910 they even overthrew the president of Honduras; the new, United Fruit-approved president then waived the company's taxes for the next 25 years.

So yes, it's perfectly possible for a large corporation to control a small country. Under such circumstances, what the company is legally required to do is irrelevant. It would be strong enough to ignore the law, because it would be the law.

But it's probably not possible for a single corporation, however large, to control a wealthy nation like the US in the same way.

:p

Agreed. But that's where we're headed. There are many multinational corporations who hold much more economic clout than most nations on earth.

I hope not...but time will tell.

That's not socialism or even democratic. The ownership is unequal, and thus the voting rights are unequal. Theoretically, one person could hold all of the votes in such a system if they managed to obtain complete ownership. Those higher up on the money chain have more votes than the workers.

That's why this sort of thing is sometimes called "corporate feudalism".

It's interesting how the structure of a modern corporation resembles a medieval feudal state. The only thing lacking is that employees are not bound to their corporations in a way comparable to the way serfs were bound to the land they worked. (In fact, corporations wouldn't want this, because such a binding works both ways. As it is, corporations are quite happy to jettison excess employees without any concern for their future welfare.)

:p

That's not socialism or even democratic. The ownership is unequal, and thus the voting rights are unequal. Theoretically, one person could hold all of the votes in such a system if they managed to obtain complete ownership. Those higher up on the money chain have more votes than the workers.Not to mention that it's wishful thinking. Since the ultimate purpose of a corporation is to increase profits, if there's a way for them to pay employees who have nowhere else to go even less, and provide them with fewer benefits, they'll do just that. And if there's no extra-corporational entity (a government, say) to force them to otherwise, they'll never do it willingly.

We've been through this before--it's called the Gilded Age.

Could a corporate entity become so strong as to,directly or indirectly, effectively control a country?


If yes, would it still be bound to maximize shareholder interests by any means legal?


If no, why not?

Sort of, but in doing so it must provide benefit to the entire economy of consumers.

And yes, that is the nature of a corporation, to maximize profits for shareholders, so it would still be bound.

That's why this sort of thing is sometimes called "corporate feudalism".

It's interesting how the structure of a modern corporation resembles a medieval feudal state. The only thing lacking is that employees are not bound to their corporations in a way comparable to the way serfs were bound to the land they worked. (In fact, corporations wouldn't want this, because such a binding works both ways. As it is, corporations are quite happy to jettison excess employees without any concern for their future welfare.)

:p

Yeah, agreed. Theres a definite parallel.

Not to mention that it's wishful thinking. Since the ultimate purpose of a corporation is to increase profits, if there's a way for them to pay employees who have nowhere else to go even less, and provide them with fewer benefits, they'll do just that. And if there's no extra-corporational entity (a government, say) to force them to otherwise, they'll never do it willingly.

We've been through this before--it's called the Gilded Age.

Well, if a corporation truly had monopolistic control over near anything, they would pay workers according to their industrial output. It isn't profitable for them to have stock sitting in the warehouse; they would pay workers enough to buy these goods (or they would lower the price of said goods). That being said, if it's more profitable to cut back on a certain product rather than pay employees enough to buy it, they'll do it.

Not to mention that it's wishful thinking. Since the ultimate purpose of a corporation is to increase profits, if there's a way for them to pay employees who have nowhere else to go even less, and provide them with fewer benefits, they'll do just that. And if there's no extra-corporational entity (a government, say) to force them to otherwise, they'll never do it willingly.

It would only be possible if you have a single corperation and no one else bidding on the labor.
This corperation would also need to decide what others do (like not leaving, not setting up their own companies, etc) and a way to enforce these decisions which basically turns it in a government.

It would only be possible if you have a single corperation and no one else bidding on the labor.
This corperation would also need to decide what others do (like not leaving, not setting up their own companies, etc) and a way to enforce these decisions which basically turns it in a government.

Not necessarily. If the smaller corporations are dependent on the products that the larger ones provides, the larger one can set conditions on the smaller ones.

Works even better if both are mutually dependent. "We will stop selling you X commodity if you do not lower the price of Y product by whichever means necessary."

Sort of, but in doing so it must provide benefit to the entire economy of consumers.

And yes, that is the nature of a corporation, to maximize profits for shareholders, so it would still be bound.

Why must it provide benefit to the entire economy of consumers?

Short-term profits or long-term? How long term, and who decides if said interests are being served? The shareholders can't always vote with their feet.

Not necessarily. If the smaller corporations are dependent on the products that the larger ones provides, the larger one can set conditions on the smaller ones.

Works even better if both are mutually dependent. "We will stop selling you X commodity if you do not lower the price of Y product by whichever means necessary."

The first works only to the point where the smaller corperation finds someone who is willing to pay more for the product.
The second is suicide if you don't have a possible replacement corperation selling Y. Why is it suicide? if there is only one maker of product X around, the moment you lower the profitability of the corperation selling Y to the point where they make a loss , or close to that, you effectively bankrupt a corperation you are dependent on . If there is more then one corperation you run the risk that they will sell to others if you are not prepared to pay their price and buy product X from a third party.

The first works only to the point where the smaller corperation finds someone who is willing to pay more for the product.
The second is suicide if you don't have a possible replacement corperation selling Y. Why is it suicide? if there is only one maker of product X around, the moment you lower the profitability of the corperation selling Y to the point where they make a loss , or close to that, you effectively bankrupt a corperation you are dependent on . If there is more then one corperation you run the risk that they will sell to others if you are not prepared to pay their price and buy product X from a third party.

Of course, with our current model. We're talking unheard of monopoly conditions though. The monolithic corporation has market dominance of many sectors, and it's impossible for smaller companies to establish a foothold without being crushed.

In theory, if Corporation selling product Y begins going bankrupt, the monopoly corp. begins a takeover. Or they offer to buy the schematics for product Y in order to keep the construction of product X totally in-house.

Could a corporate entity become so strong as to,directly or indirectly, effectively control a country?



If yes, how about two countries?

Of course, with our current model. We're talking unheard of monopoly conditions though. The monolithic corporation has market dominance of many sectors, and it's impossible for smaller companies to establish a foothold without being crushed.

Which is only possible if the corperation has defacto government powers or is the government. People have tried time and time again to get this kind of control and the only ones who've succeeded through the ages used government to reach it. Which is the point this thread asking.



In theory, if Corporation selling product Y begins going bankrupt, the monopoly corp. begins a takeover. Or they offer to buy the schematics for product Y in order to keep the construction of product X totally in-house.
First a bankruptcy is generally not instantanous. If there is any doubt about being able to pay the bills Corp Y cannot even get the resources needed to make it so that Corp X has to look for another source during the bankruptcy procedings or not make product X.
Secondly, there is a good reason why corp X let corp Y make product Y, Corp Y could do it cheaper then corp X could do it inhouse.

Why must it provide benefit to the entire economy of consumers?

Because a corporation generates income by providing utility to consumers, for it to have access to the entire society, it must provide utility to the aggregate consumer.

Short-term profits or long-term? How long term, and who decides if said interests are being served? The shareholders can't always vote with their feet.

The shareholders own the company, the shareholders are in charge of the company. If the shareholders do not like the direction the corporation is heading, they fire the management. The corporation has a duty to the shareholders and the shareholders only, so they decide what kind of profits they want to see.

*coughHalliburtoncough* ;)

Don't go saying something like *coughHalliburtoncough* again! Halliburton does not effectively control the US and Iraq!

:D

Shame on you for dragging the debate down to such an inflammatory level!

Because a corporation generates income by providing utility to consumers, for it to have access to the entire society, it must provide utility to the aggregate consumer.



The shareholders own the company, the shareholders are in charge of the company. If the shareholders do not like the direction the corporation is heading, they fire the management. The corporation has a duty to the shareholders and the shareholders only, so they decide what kind of profits they want to see.

The shareholders are not in charge of the company, the board is. Shareholders need to show up at a meeting, timed and placed by the board, in order to do something radical. Besides, a corporation can buy a majority of own shares, or effectively control a majority of its votes. The board has all the power.

Shareholders want interest on their investments, is all.

Well, if a corporation truly had monopolistic control over near anything, they would pay workers according to their industrial output. It isn't profitable for them to have stock sitting in the warehouse; they would pay workers enough to buy these goods (or they would lower the price of said goods). That being said, if it's more profitable to cut back on a certain product rather than pay employees enough to buy it, they'll do it.
Unless they're producing goods for export--then they have absolutely no need to even provide safe working conditions. Again, we've lived through this before--even the histories of the Gilded Age that praise the robber barons note that the average person working in those companies was little more than a slave.

Unless they're producing goods for export--then they have absolutely no need to even provide safe working conditions. Again, we've lived through this before--even the histories of the Gilded Age that praise the robber barons note that the average person working in those companies was little more than a slave.

Yes, you're correct. Although i'm thinking on the lines of a monopolistic corporation achieving such power in a first-world nation. I'm not sure that consumer-capitalist societies can or will switch to export-oriented ones.

Yes, you're correct. Although i'm thinking on the lines of a monopolistic corporation achieving such power in a first-world nation. I'm not sure that consumer-capitalist societies can or will switch to export-oriented ones.
Well, it wasn't until relatively recently that the US started having a trade deficit--within the last thirty years at most. Before that, we sold more goods around the world than we took in, if I remember correctly. Of course, we could speculate as to whether continuing along these lines would cause us to revert from a first world nation to a third world one.

..... Of course, we could speculate as to whether continuing along these lines would cause us to revert from a first world nation to a third world one.

Here is a clue:

Parents used to say to their kids who wouldn't eat: "Think of the children in Ethiopia"

Now it is: "Think of the children in New Orleans"

Fair trade works locally as well.