Corporacracy
Encyclopedia
Corporacracy is a social theory that focuses on the increasing usage of corporate structure in today's society. With the advent of population explosion in the twentieth century, Corporacracy evolved into a major global force as a factor in the interaction of corporations and governments. As census numbers grew, corporations became the main producers of goods, transportation, and housing, and also tended to the civil matters of a growing populace. This theory has been widely discussed under many different names (see Corporate Capitalism
, Corporatism
, and Plutocracy
), but none have managed to encompass this concept under a single, neutral umbrella. Corporacracy tends to focus on using realist
perspectives to analyze current events. By this logic, one can observe Corporacracy in practically all parts of the socio-economic structure, rather than only in matters of conflict and opposing interests. Corporacracy can be divided into two parts: the commercial aspect and the government aspect.
Corpora: Plural of "Corpus," a large or complete collection of writings.
Corporation: An association of individuals, created by law or under authority of law, having a continuous existence independent of the existences of its members, and powers and liabilities distinct from those of its members.
Cracy: a combining form occurring in loanwords from Greek ( aristocracy; democracy ); on this model used, with the meaning “rule,” “government,” “governing body,” to form abstract nouns from stems of other origin: mobocracy; bureaucracy.
Because of the omnipresent nature of the corporate structure (a group of managers controlling a relatively much larger organization), Corporacracy is susceptible to mismanagement, political entanglements, and social abuses. A major problem brought by the corporate structure is a major shift in liability. Although managers make large-scale decisions that can affect the lives of thousands or millions of people, they often do not bear full responsibility for any negative actions. This leads to a situation where one individual's usual risk for an action is distributed among others who may not actually bear any responsibility for the action. This results in the individual being more willing to take risky actions, as in the cases of poor safety oversight in industrial accidents, wrongdoing in financial markets, and political scandals in government offices. Thus, Corporacracy has a tendency to create situations of moral hazard
. Corporacracy is a sort of government-within-government; that is, a corporation may establish its own rules and regulations (especially in the case of a township) that may violate state or federal constitutional law. Corporacracy's two main attributes are convenience and fear; corporations supply employment and goods and services to citizens, but they also exert tremendous power that can be used to bankrupt, defraud, or jail citizens.
Gulf of Mexico oil spill
In the Gulf of Mexico oil spill of 2010, British Petroleum committed gross negligence by failing to implement standard safety procedures on its oil well in the interest of extracting petroleum as quickly as possible. This resulted in a catastrophic event. This is not the first such event for BP; in the 2007-2010 period BP refineries in Ohio and Texas accounted for 97 percent of the "egregious, willful" violations handed out by the Occupational Safety and Health Administration (OSHA). The oil spill is an example of Corporacracy due to the economic backlash involved, namely that many pensions in the United Kingdom
hold shares of BP. In turn, this makes it a political event - British lawmakers do not want large-scale punishment brought on BP because it will hurt their constituents, despite wrongdoing on BP's part. British lawmakers experience this pressure of considering re-election because BP has become a large part of the British economy, and as such any action against the company will hurt their chances of re-election. BP's status as an important part of the British economy has made supporting the company despite criminal violations a major political choice for British lawmakers. Thus, BP has essentially managed to give itself the legal protection of the British government for economic gain, an incredible melding of the private and public sectors.
Citizens United ruling and ramifications
In Citizens United v. Federal Election Commission
, the United States Supreme Court ruled that corporations have the right to free speech under the first amendment of the United States constitution. This ruling allowed corporations to make unlimited contributions to federal campaigns. This unbridled usage of corporate funds results in a disproportionate amount of influence coming from corporations which is intended to influence officials' lawmaking irrespective of the desires of the populace. This creates an agency problem where the managers in the government (governors, congressmen, officials) are more inclined to act on the behalf of large contributors to their campaigns (corporations) rather than average stakeholders (taxpayers) whose views they are elected to represent. The agency problem is a classic problem in corporate structure which is often fixed with economic incentives in a private company. In a government, however, such measures are illegal; politicians are elected to office to serve the public's general welfare. Re-election can be seen as an incentive, but the large amount of capital that corporations are now allowed to donate to campaigns and activist groups results in the ability to sway the opinions of many individuals in the general population. Regulations were originally placed on campaign donations for this reason, but now that spending is considered free speech, no such regulations are allowed. This can be seen through the lens of Corporacracy as private companies using their funds to influence politicians and the general populace to support measures that benefit them, including industry subsidies and tariffs, as a means to re-elect officials so that they can implement such policies.
Wall Street and the Executive Branch
Many sources claim that the Recession of 2008 was caused by corruption scandals that occurred within institutions on Wall Street
, and also between those institutions and government officials. Many of the Obama administration's top economic advisors have been from top institutions on Wall Street, in particular Goldman Sachs
, a financial services firm which has come under fire for financial wrongdoing during the 2008–2009 crisis. This can be seen as an example of Corporacracy, as here the private sector seems to merge with the public sector to govern based on economic and commercial interests that overshadow motivation to produce aggregate welfare. Paul Volcker
, ex-chairman of the Federal Reserve, claims that a return to some principles of the Glass-Steagall Act of 1933 would help to separate the businesses of commercial banks and investment banks, the deregulation of which caused some of the problems of the 2008 financial crisis. A separation of commercial and investment banks would help to mitigate the effects of Corporacracy, as the products of investment banks would then not become so well-distributed throughout the economy as mortgage-backed securities
did during the financial crisis.
British East India Company
The British East India Company
, a British corporation that existed from 1600–1874, held a monopoly on trade between Britain and India which it enforced through military and economic means. The company is an excellent example of a corporation using its resources without restraint; it effectively acted as the governing arm of the British government in India. However, the Company was always owned by private individuals, and thus was not directly controlled by the British government. Because of this, the East India Company exhibited both the economic and governmental aspects of Corporacracy; it often drew from government resources without being subject to accountability from the people.
Corporate capitalism
Corporate capitalism is a term used in social science and economics to describe a capitalist marketplace characterized by the dominance of hierarchical, bureaucratic corporations, which are legally required to pursue profit....
, Corporatism
Corporatism
Corporatism, also known as corporativism, is a system of economic, political, or social organization that involves association of the people of society into corporate groups, such as agricultural, business, ethnic, labor, military, patronage, or scientific affiliations, on the basis of common...
, and Plutocracy
Plutocracy
Plutocracy is rule by the wealthy, or power provided by wealth. The combination of both plutocracy and oligarchy is called plutarchy. The word plutocracy is derived from the Ancient Greek root ploutos, meaning wealth and kratos, meaning to rule or to govern.-Usage:The term plutocracy is generally...
), but none have managed to encompass this concept under a single, neutral umbrella. Corporacracy tends to focus on using realist
Realism
Realism, Realist or Realistic are terms that describe any manifestation of philosophical realism, the belief that reality exists independently of observers, whether in philosophy itself or in the applied arts and sciences. In this broad sense it is frequently contrasted with Idealism.Realism in the...
perspectives to analyze current events. By this logic, one can observe Corporacracy in practically all parts of the socio-economic structure, rather than only in matters of conflict and opposing interests. Corporacracy can be divided into two parts: the commercial aspect and the government aspect.
Word Analysis
"Corporacracy" is formed from three words:Corpora: Plural of "Corpus," a large or complete collection of writings.
Corporation: An association of individuals, created by law or under authority of law, having a continuous existence independent of the existences of its members, and powers and liabilities distinct from those of its members.
Cracy: a combining form occurring in loanwords from Greek ( aristocracy; democracy ); on this model used, with the meaning “rule,” “government,” “governing body,” to form abstract nouns from stems of other origin: mobocracy; bureaucracy.
Definition
CORPORACRACY (cor-por-ah' -kra-see) n. 1. Quasi government within a democratic or republic society, operating under corporate structure, which regulates and controls civil obedience, disobedience,and commercial affairs. 2. Lower-tiered government with minimum constitutional restraint.Origins
Corporacracy has existed for as long as corporations have existed, although it has not until recently been apparent as a social theory. However, since the industrial revolution it has become far more important and its influence has increased considerably. Corporacracy, in its most basic sense, refers to the organization of individuals in a corporate structure so that they may collaborate and share resources under a single legal identity. One must be careful to realize that corporations are only a means of organization and legal representation - they do not innovate or create new ideas, but rather they are able to mobilize resources to empower their members to do so and bring their achievements to society as a whole. One example would be the computer mouse; Douglas Engelbart invented it, but corporations produced and distributed the product. In time, corporations have become large enough that they have exerted great influence on governments. Examples of this influence include campaign contributions and lobbying efforts.Concept
Corporacracy is an idea that is presented in comparison to, but not in opposition to democracy. Corporacracy occurs within democracy; James Madison held to this line of thinking when he wrote that "Democracy becomes weaker as it gets larger, and suffers more violently from the effects of faction.". In a large population, Corporacracy tends to override the democratic rights of individuals and project the ideals of an elite few, thus enhancing the effects of faction by making those factions more powerful. It is a force that is able to perform functions that would overwhelm a single government, that being the provision of a myriad goods and services. Corporacracy is, at its core, about control. It is virtually our only employer, it provides us with both basic necessities and luxuries, and it governs us. Municipalities are organized under corporate charters which allow a board of directors to set rules and regulations and raise capital. On an even smaller level, home owners' associations have arisen in recent years to govern neighborhoods; some restrict freedoms in building on and maintaining one's own land and require taxes in the form of dues.Because of the omnipresent nature of the corporate structure (a group of managers controlling a relatively much larger organization), Corporacracy is susceptible to mismanagement, political entanglements, and social abuses. A major problem brought by the corporate structure is a major shift in liability. Although managers make large-scale decisions that can affect the lives of thousands or millions of people, they often do not bear full responsibility for any negative actions. This leads to a situation where one individual's usual risk for an action is distributed among others who may not actually bear any responsibility for the action. This results in the individual being more willing to take risky actions, as in the cases of poor safety oversight in industrial accidents, wrongdoing in financial markets, and political scandals in government offices. Thus, Corporacracy has a tendency to create situations of moral hazard
Moral hazard
In economic theory, moral hazard refers to a situation in which a party makes a decision about how much risk to take, while another party bears the costs if things go badly, and the party insulated from risk behaves differently from how it would if it were fully exposed to the risk.Moral hazard...
. Corporacracy is a sort of government-within-government; that is, a corporation may establish its own rules and regulations (especially in the case of a township) that may violate state or federal constitutional law. Corporacracy's two main attributes are convenience and fear; corporations supply employment and goods and services to citizens, but they also exert tremendous power that can be used to bankrupt, defraud, or jail citizens.
Examples
One of the most important aspects of Corporacracy is that it can be used as a method of analysis. Several examples, both usual and unusual, follow:Gulf of Mexico oil spill
In the Gulf of Mexico oil spill of 2010, British Petroleum committed gross negligence by failing to implement standard safety procedures on its oil well in the interest of extracting petroleum as quickly as possible. This resulted in a catastrophic event. This is not the first such event for BP; in the 2007-2010 period BP refineries in Ohio and Texas accounted for 97 percent of the "egregious, willful" violations handed out by the Occupational Safety and Health Administration (OSHA). The oil spill is an example of Corporacracy due to the economic backlash involved, namely that many pensions in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
hold shares of BP. In turn, this makes it a political event - British lawmakers do not want large-scale punishment brought on BP because it will hurt their constituents, despite wrongdoing on BP's part. British lawmakers experience this pressure of considering re-election because BP has become a large part of the British economy, and as such any action against the company will hurt their chances of re-election. BP's status as an important part of the British economy has made supporting the company despite criminal violations a major political choice for British lawmakers. Thus, BP has essentially managed to give itself the legal protection of the British government for economic gain, an incredible melding of the private and public sectors.
Citizens United ruling and ramifications
In Citizens United v. Federal Election Commission
Citizens United v. Federal Election Commission
Citizens United v. Federal Election Commission, , was a landmark decision by the United States Supreme Court holding that the First Amendment prohibits government from censoring political broadcasts in candidate elections when those broadcasts are funded by corporations or unions...
, the United States Supreme Court ruled that corporations have the right to free speech under the first amendment of the United States constitution. This ruling allowed corporations to make unlimited contributions to federal campaigns. This unbridled usage of corporate funds results in a disproportionate amount of influence coming from corporations which is intended to influence officials' lawmaking irrespective of the desires of the populace. This creates an agency problem where the managers in the government (governors, congressmen, officials) are more inclined to act on the behalf of large contributors to their campaigns (corporations) rather than average stakeholders (taxpayers) whose views they are elected to represent. The agency problem is a classic problem in corporate structure which is often fixed with economic incentives in a private company. In a government, however, such measures are illegal; politicians are elected to office to serve the public's general welfare. Re-election can be seen as an incentive, but the large amount of capital that corporations are now allowed to donate to campaigns and activist groups results in the ability to sway the opinions of many individuals in the general population. Regulations were originally placed on campaign donations for this reason, but now that spending is considered free speech, no such regulations are allowed. This can be seen through the lens of Corporacracy as private companies using their funds to influence politicians and the general populace to support measures that benefit them, including industry subsidies and tariffs, as a means to re-elect officials so that they can implement such policies.
Wall Street and the Executive Branch
Many sources claim that the Recession of 2008 was caused by corruption scandals that occurred within institutions on Wall Street
Wall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...
, and also between those institutions and government officials. Many of the Obama administration's top economic advisors have been from top institutions on Wall Street, in particular Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
, a financial services firm which has come under fire for financial wrongdoing during the 2008–2009 crisis. This can be seen as an example of Corporacracy, as here the private sector seems to merge with the public sector to govern based on economic and commercial interests that overshadow motivation to produce aggregate welfare. Paul Volcker
Paul Volcker
Paul Adolph Volcker, Jr. is an American economist. He was the Chairman of the Federal Reserve under United States Presidents Jimmy Carter and Ronald Reagan from August 1979 to August 1987. He is widely credited with ending the high levels of inflation seen in the United States in the 1970s and...
, ex-chairman of the Federal Reserve, claims that a return to some principles of the Glass-Steagall Act of 1933 would help to separate the businesses of commercial banks and investment banks, the deregulation of which caused some of the problems of the 2008 financial crisis. A separation of commercial and investment banks would help to mitigate the effects of Corporacracy, as the products of investment banks would then not become so well-distributed throughout the economy as mortgage-backed securities
Mortgage-backed security
A mortgage-backed security is an asset-backed security that represents a claim on the cash flows from mortgage loans through a process known as securitization.-Securitization:...
did during the financial crisis.
British East India Company
The British East India Company
British East India Company
The East India Company was an early English joint-stock company that was formed initially for pursuing trade with the East Indies, but that ended up trading mainly with the Indian subcontinent and China...
, a British corporation that existed from 1600–1874, held a monopoly on trade between Britain and India which it enforced through military and economic means. The company is an excellent example of a corporation using its resources without restraint; it effectively acted as the governing arm of the British government in India. However, the Company was always owned by private individuals, and thus was not directly controlled by the British government. Because of this, the East India Company exhibited both the economic and governmental aspects of Corporacracy; it often drew from government resources without being subject to accountability from the people.