Recent years have seen the terms corporatocracy and corporatism thrown around a lot in US politics. Indeed, many believe that the US government is too corporate-friendly, perhaps to a point where corporations run the government.
This is known as corporatocracy, sometimes spelled as corporacy. As you can probably imagine, a lot of people have very strong opinions on the subject. Nevertheless, what is it and are we in one?
What is Corporatocracy?
The idea of a corporatocracy is only relatively new, at least in its modern incarnation. However, the philosophy behind it dates back to before the ideas of communism and socialism, perhaps as far back as Ancient Greece.
By its dictionary definition, a corporatocracy is an extreme form of government where the government is actually a corporation. This is ran for profit by shareholders, who own “shares” in the country/corporation.
In modern times, the term corporatocracy, otherwise known as corporacy, has been redefined to be much less than its original meaning.
Today, the corporacy is thrown around to describe a government with a significant corporate influence in it. Often, the largest corporations in a corporacy decide who will win elections and which bills will be passed or not.
Depending on how “severe” the corporacy is, there may be an extreme wealth gap between those who own everything and those who own nothing, or a slight one, with the rich being slightly richer than the poor.
Whilst this may seem like an alien concept, after all how can a corporation effectively run a government, many earnestly believe that several developed nations are corporatocracies, including the UK, Canada and US.
As you can probably imagine, the term is very divisive. Many people, on both sides of the political spectrum have incredibly strong opinions on the matter.
Recent years have yielded both pro and anti-corporatocracy marches in the US. Perhaps the most famous of these was the anti-corporatocracy Occupy Wall Street movement.
Are we in a Corporatocracy?
Recent years have seen many people, from educators, to actors to politicians state that the US is indeed a corporatocracy. However, are we really in one?
By “we” I am referring to the United States in particular, however, this argument could, in theory, be used (and adapted) for most other Western nations.
Reasons We Are
As you can imagine, people point to several different reasons as so-called “proof” that we are in a corporacy. These include:
Corporate Consolidation
For almost one hundred years, the US and other developed nations, have had very strictly enforced monopoly laws. Starting in the early 1900’s, any company over a certain size was broken up into several tiny companies.
With that being said, corporations today are merged and acquiring one another at a rate of knots. This is resulting in millions of jobs being lost in the US alone from this, not to mention those jobs moving abroad!
On top of this, these corporations are becoming megacorporations, often being the largest company in several different industries. At the same time, monopoly regulators are receiving less and less funding to launch these investigations.
The result has been megacorporations owning several different industries and politicians being too lazy to do anything. And it is the common worker that suffers, not the CEOs at the top.
Excessive CEO Pay vs Wage Increases
On top of this, CEO pay is increasing drastically. During the 1980’s, CEO to worker pay was at around 80:1, whereas today, it is at around 240:1. At the same time, wage increases haven’t happened for many other workers.
This has helped to create a sense of class division not seen in recent American history.
Whilst the highest earners at your company have continued to see incredibly high pay rises, not to mention their extremely generous stock schemes and bonus, you have been struggling to make ends meat.
And each year, you are getting poorer, whilst they are getting far, far richer. To those at the bottom, it just doesn’t seem fair…
Corporate Tax
On top of this, corporate tax, the tax placed on a corporation for operating inside the US (or other countries), has been lowered in recent years, in more than one way.
In 2016, the corporate tax rate was lowered by Donald Trump, which is one of the things that sparked him being called the worst US president in history. This was done in the hopes of bringing back tax haven dollars to the US.
The same bill that lowered the overall tax rate, also lowered the effective tax rate a lot less than it had been before (proportionally). This too saw corporations save billions of dollars.
As if this wasn’t bad enough, almost none of the money stored in tax havens has come back to the US. Of that money that has returned, much of it has gone on to be used to do some of the aforementioned things, not increase wages.
To those at the bottom, it just doesn’t seem fair…
Corporate-Friendly Policies
As you can probably imagine, the main piece of so-called “proof” that the US is indeed a corporatocracy is that it has pushed several corporate-friendly policies in recent years. Most of these have been by President Trump.
Many of these policies have reduced government oversight on specific industries, allowing them to become more profitable “at the expense of safety”.
These corporate friendly policies have also allowed many of these companies to “suppress union power” in the way that they have to jump through a lot of red tape in order to organize a strike.
Not to mention making it more worthwhile to not join a union than to be in one.
In return, these policies were meant to create jobs. Whilst these have often been effective in doing so, it isn’t the “fix it all” solution many people had hoped. Therefore, many have criticized them, stating that corporations drafted it to get more money.
To those at the bottom, it all seems rather unfair…
Reasons We Aren’t
Despite what many liberals and/or anti-capitalists may see as “smoking guns” as proof we are in a corpocracy, there are several reasons why we are not as well. These include:
It’s Just Political
There have certainly been examples of pro-business policies enacted to specifically help corporations and/or the people who own them. However, it is more of a political thing than anything else.
Often, the media portrays corporations as almost solely being conservative companies. But this isn’t really the case. Whilst yes, there are many Republican-aligned businesses, there are just as many Democrat-aligned ones too!
These businesses often have the financial resources or media influence to help that politician get elected. This is something that you, an individual, probably don’t have.
So these politicians “play” said corporations, taking their money, and allowing them to help draft maybe one or two lines of a bill several pages long. And this is one bill, not twenty.
Governments Aren’t Countries
By the very definition of it, a corporatocracy is a government controlled solely by a corporation or a group of corporations. One of the defining features of a government is their ability to levy taxes and have a military.
As of the time of writing, no corporation in the United States (or the world for that matter!) issues tax on its employees or its “citizens”. The only thing remotely similar is the optional 401(k) retirement plan.
No corporation has their own military either. Beyond security guards and seemingly infinite miles of cybersecurity (somewhat anyway), no corporation has a true military as say, the US or UK does.
The private militaries are the likes of private military contractors such as the infamous Blackwater (now Academi). And even these companies don’y go anywhere without the US Government’s say so.
Not That Much Policy is Affected
Even when you could argue that it is effective, it affects relatively little policy in the long run.
Think about it this way, a company in the business of making plastic straws doesn’t care about auto loan reform. As such, they wouldn’t bother trying to get politicians to vote either way on the issue.
However, even when corporations do get to “affect” a policy, it is usually only one to two lines of a policy that may be several hundred pages long. And even then, it is often re-edited and edited out time and time again.
When you think about it this way, even accounting for the several thousand bills passed each year, only a few percent are “altered” by corporations. If you dig deeper, perhaps only 0.01% of the legislation is actually “altered” in the long run.
Lobbying Isn’t Corporatocracy
A quick Google search of Corporacy will yield several results that focus on lobbying. Many of these articles/research papers focus on the fact that lobbying is just a way for corporations to make corporacy look legitimate.
These articles/research papers often argue that in exchange for generous donations to their campaigns, politicians will work on policies that will benefit the corporation directly.
Whilst this may seem damning, lobbying isn’t the same the corporatism. Whilst this does indeed happen, many of these policies were on the table long before elections happened.
And even when lobbying-induced bills do pass through state houses, or even federal ones, it is still a mostly fair vote. After all, no corporation would “bribe” 200 politicians for one bill… It’s just not worth it!
Summary
This is where undoubtedly, I will cause at least a few (hundred) arguments.
Today, the United States is not a corporatocracy, at least not in the official sense of the term. If you look back throughout history, there are indeed several time periods where the US was a corporacy (such as the Gilded Age).
However, the US isn’t really a corporacy, it’s just rather business-friendly. Recent years have indeed seen several policies that were overly corporate-friendly, potentially bordering on corporacy.
All in all, I do understand why people say that the US is a corporacy, but it isn’t really. It more has to do with your perspective, and when you remove that, you’ll realize that it isn’t really.
With that being said, I can already hear the angry commenters writing something akin to “You corporate friendly ****** you are paid by corporations to say that!” or something similar.
For the record, I am not being paid by anyone to say this. This is my professional (and earnest) take on the subject, having been a political analyst for several years.
Nevertheless, I understand that this issue strikes a nerve for millions of people in the US and the world in general. So, if you want to sleep better thinking that I’m backed by major corporations, you’re welcome to do so…
Perhaps one day the US will be a full-blow, undeniable corporatocracy. However, I highly doubt that this will be any time soon, however, history may prove me wrong, for better or for worse.
Do you think we’re in a corporatocracy? Tell me in the comments!
Featured image courtesy of Hollywata via Flickr.