Common Sense, Uncommon Wisdom: The Coming Corpocracy: Part I

In the future the type of nation-state that most people can identify with today will no longer exist. It will, instead, be replaced with a form of government that has evolved from the previous tyrannies, monarchies, republics, and democracies. No longer will senators, presidents, prime ministers, or even the occasional monarch rule over the land. Instead, shareholders will elect board members who will, in turn, select top executives to run multinational vertically- and horizontally- integrated conglomerates. Maybe shareholders will even have a say in choosing these top executives. As distant as it may seem, this world isn’t very far away. To an extent, a skeleton form of the corpocracy exists today; however, this is only the beginnings of a brave new world.

The most overt act of this can be seen in a recent move by Wal-Mart to take over a 60-acre property in Inglewood, California, outside of San Diego. This is part of their ongoing strategy to open 40 grocery stores that would also have the traditional discount merchandise that the firm is known for. The Inglewood site would have consisted of a larger shopping experience for the consumer, being something of a mall a la Wal-Mart. In and of itself, this is a remarkable feat; however this is not what worries most people involved in the fray—neither is it what will necessarily bring the Bentonville, Arkansas-based company into the corpocratic status that will riddle the global landscape in the future. The fact that the word “sovereignty” has came up multiple times is what makes this different.

Reportedly, the space that the corporate giant was looking to establish it’s sovereignty on is the size of 14 football fields. I have lived in towns the size or smaller than this. It is a nice foothold: Today, sovereignty; tomorrow, establishing embassies in countries around the world. Even though Wal-Mart may be paving the road for the actual land-owning aspect of sovereignty, corporations have been exhibiting sovereign traits for a long time. Between the times of the Industrial Revolution and now, though, significant gains have been made by global firms to this end.

The the original “bad boy” of corporate monopolies: Standard Oil. Formed in 1870 by forming his business concerns into a single entity, John D. Rockefeller borrowed heavily in order to acquire 90 percent of the United States’ oil refining capacity. This move to become the largest monopoly that the world has ever known was a bolder organization than even AT&T or Microsoft. After becoming the wealthiest man in the world, the United States Congress, led by the Ohio senator John Sherman, passed the Sherman Antitrust Act in 1890. This law, citing that any corporate front for a combination of firms or corporations who agree not to lower prices below a certain rate (“price fixing”) for the purpose of reducing competition and controlling prices throughout a business or an industry was illegal, was used two years later by the Ohio Attorney General in 1892 to win a lawsuit again the company.

Standard Oil had developed several core competencies that have been adapted to many a playbook for current corporations: Aggressive competitive practices by offering their product for less price because they could produce & supply more of it than smaller competitors (“economies of scale”), and taking control of various aspects of producing oil, such as distribution or marketing (“economies of scope”). They also developed strategies in which they negotiated with various stakeholders to get them better deals for their business.

In the end, the same court of public opinion that businesses today must succeed with sealed the fate of Standard Oil. The Supreme Court ordered their breakup in 1911 into 34 smaller companies. Among these companies: