Corporations or the State?

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I’ve generally sided with those who claim business is more powerful than government; that the present-day nation-state functions basically as a rubber stamp for business, which is where the real Power resides. Admittedly the largest government, that of the United States, has a much larger financial footprint than the largest corporation, whether by financial footprint we mean size of asset holdings, operating budget, gross revenues, size of expenditures, etc. Jason Saul claims McDonalds has a bigger payroll, but I’m guessing that figure isn’t accounting for turnover. As John Pilger points out, pointing out that some companies are larger than some countries is comparing apples to oranges. I claim that whatever advantages come from size are more than overcome by the tactical disadvantages of the deliberative process of government. We are living in times in which legislation is drafted entirely within the private sector, and with such size and complexity that it is passed effectively “sight unseen.” Political leaders are passive players in the Power game, let alone the so-called “elites” in academia and the media.

Disregarding for the sake of argument differences of political maneuverability, and even the size of “de facto” business entities due to interlocking directorates or equity holdings, and looking only at the relative size of the largest commercial and largest governmental entities, what is the difference in size? Certainly less than two orders of magnitude (or a factor of a hundred). Does a 1-2 order of magnitude difference in financial footprint really imply that the public sector is uniquely qualified to create rent-seeking opportunities? Or dead-weight losses? I wouldn’t be too quick to point to “coercion” as the crucial difference. People and other entities get away with breaking laws pretty routinely. Coercion is not an effective means of social control. It is certainly not a determiner of economic outcomes; but at best an influencer.