Corporate Power Approaches Escape Velocity

If corporations become more powerful than national governments, we are all in trouble. The reason for this is straightforward: Corporations are not real objects. They do not exist in nature. They are legal fictions created according to a set of laws that dictate what they can and cannot do. Those laws, which quite literally create corporations, are made by governments. The rights of corporations and the limits of their operations are entirely dictated by governments, which write the laws and administer the courts that both enable corporations to exist and make money, and put boundaries on them. If governments lose their ability to draw hard lines on the behavior of corporations—if corporations become so powerful that governments are no longer able to tell them what to do—then corporations become the supreme power on earth.

This is bad, obviously, but it is worth stating why it is bad. It is bad because governments, while imperfect and sometimes even malignant in many ways, ultimately derive their legitimacy from the will of the governed. Legitimate governments, good governments, democratic governments are obligated by some scrutable process to work for the public good, as they define it. We all know the many ways that this can go awry, but when governments are bad, we can tell that they are bad because they fail on their most basic task of empowering themselves with the will of the public to increase the public good.

That’s not what corporations do at all. Corporations care not for the public good, nor for the public’s very existence. Corporations are robots, algorithms—AI programs, if you like—that work for the lone goal of increasing profits. Their definition is the same as that of cancer. They grow without regard to the good of the larger body. A perfect corporation would enslave the entire world in order to enrich the last free people on earth, its own shareholders. (Indeed, various companies in history have tried their best to carry this out in portions of the world.) You can’t get mad at them for this any more than you can get mad at a bullet for killing you. This is their nature. This is their purpose. This is what they do. If you don’t want them to do this, you must place limits upon them. That is a big part of why governments exist.

This is rudimentary stuff, but I articulate it because unless we always keep it in our conscious minds, there is a risk that it can be stolen away. Corporations always and everywhere have a natural incentive to neutralize their master, the government. They do this by lobbying and buying politicians and running astroturf PR campaigns to shape public opinion and doing all of the other legal things that allow them to accrue formal political power, but all of that should be recognized as a half measure that they only tolerate while necessary. Corporations never seek to abolish or destroy the government—they need the government administering laws in order for them to exist. Instead they seek to completely subjugate the government to their own will. Their ideal state would be to write and administer the laws that govern their own behavior, to arrange society in such a way to maximally benefit them. Obviously! That’s what robots do. This has always been true and will always be true as long as private corporations are the primary way that global production is organized. Knowing that this is the case, government must always ensure that it is able to hobble corporate ambition before it begins to threaten society as a whole.

A three-year-long strike against Tesla in Sweden just ended. The strike was an attempt by organized labor in Sweden to get Elon Musk to acquiesce to the simple demand of collective bargaining with his employees. Setting wages and working conditions via collective bargaining, along with profit sharing and collective investment, are at the very heart of the Swedish postwar economic model that made the small nation into a haven of high living standards. The expectation that a company like Tesla would allow its workers to choose to collectively bargain a fair contract is much higher in Sweden than it would be in America. When multinational corporations go into, say, China to do business, and the governments demands that they, say, censor search engine results for “Tienanmen Square massacre,” the response from those corporations is generally to obey and then to turn around and shrug and tell their critics that they are obligated to follow the laws and customs of the nations in which they operate. But when it comes to something that might restrict their profits—allowing their workers to unionize—that attitude changes.

The strike in Sweden ran for three years, and pulled in support from organized labor throughout the country. It is done now, and it failed, because for all of those years, and despite the fact that collective bargaining is expected to be a central pillar of being a good corporate citizen in Sweden, Elon Musk (despite being the world’s richest man) simply refused. Tesla succeeded in buying out all of the striking workers until there was no one left to be on strike. This is sort of like buying a restaurant and closing it down rather than giving your waiter a tip. It is an abrasive and offensive act designed to prove a point about where the power lies in this relationship. [...]

Everyone who believes in democratic government and in human rights needs to have a radar that starts flashing when something like this happens. This strike is alarming in a way that the failure of a normal strike is not. This strike was popular, well-resourced, and supported in principle by the government and by the larger Swedish labor movement in ways that would be impossible in America. Tesla, a $1.3 trillion company whose stock price has risen by two thirds in the past year, could easily afford these workers’ demands. Elon Musk, whose net worth has increased by hundreds of billions of dollars during the time of this strike, would not have been affected one bit. Yet Tesla and Musk decided to buck public opinion and give the cold shoulder to all of Sweden and appear rude, obstinate, and greedy, in order to ensure that this small number of employees did not win a union. And Tesla succeeded.

by Hamilton Nolan, Works in Progress |  Read more:

Image: Getty

[ed. See also: Monopoly Round-Up: How to Stop the Enshittification of America (BIG); and, We’re in a New Era of Class Warfare. Is Change Still Possible? (NYT):]

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“All you had to do was pay us enough to live.”

The young man’s voice in the video is earnest and clear, forceful but controlled. His face is not visible, but his hand is shaking a little as he holds a lighter. “There goes your inventory.” More than $600 million worth of damages later, a Kimberly-Clark warehouse lay in a smoking mess, and the young man alleged to be in the video — Chamel Abdulkarim, who worked for a distribution company servicing the warehouse — was charged with arson.

Mr. Abdulkarim has pleaded not guilty; his possible motivations will soon be litigated in court. But even as they are, the early April torching of the warehouse in Ontario, Calif., seems to capture a political mood. That same week, someone lobbed a Molotov cocktail at the mansion of the OpenAI chief executive Sam Altman. In June, prosecutors revealed that their case against the man charged with setting the blaze that grew into the deadly Palisades fire in California hinged on the argument that he was motivated by class rage. (The jury, which could not reach a verdict, was less convinced.)

Hanging over all these attacks was the shooting of the UnitedHealthcare C.E.O., Brian Thompson, in broad daylight on a Manhattan street in December 2024, a crime that Luigi Mangione admitted to earlier this month. The manhunt for Mr. Mangione, and the ensuing coverage of his arrest and trial, helped cement an image of him as an avenger of all those wronged by private health insurance. But Mr. Mangione’s celebrity has spurred fear: Companies are spending more on security for their top executives. This year, a law enforcement intelligence hub put out a bulletin, as reported by The Intercept, stating that the rich are facing a “heightened threat environment” as more people blame them for economic duress: “Public discourse increasingly attributes the challenges faced by the middle and lower classes to the actions and influence of wealthy corporate executives.” [...]

Today’s class violence lacks logic; it seems only animated by revenge, resentment and despair. There is no conspiracy or political mobilization. The people committing these acts are acting alone. The very fact of their isolation hints at a society that is beginning to abandon the hope of transformation.