A Corporate State?
By Arnold Kling
the purpose of property is to prevent violence. The formalist is completely unconcerned with the moral legitimacy of property rights. She is entirely concerned with their stability. To a formalist, a system in which no involuntary property transfers occur is always ideal
…The US government today has no king. On the other hand, it is certainly a distinct entity, and we can regard it as a corporation, that is, a virtual person with a single identity.
…this corporation (which here at UR, we call “Washcorp”) is a normal primary or sovereign property holder. Washcorp is thus a sovereign corporation, or sovcorp. Its primary ownership of its swath of North America, which to avoid confusion with political entities we call “Plainland,” is an absolutely normal relationship. The validity of Washcorp’s ownership of Plainland does not depend on the Constitution, the last elections, or any other magical rite, but simply on the stable and exclusive military control it exercises over the territory. As for the fees that Plainlanders pay to Washcorp, they are the normal cost of property rental.
…Neocameralism is the idea that a sovereign state or primary corporation is not organizationally distinct from a secondary or private corporation. Thus we can achieve good management, and thus libertarian government, by converting sovcorps to the same management design that works well in today’s private sector – the joint-stock corporation.
…While none of them comes anywhere near the neocameralist ideal, the city-states of Singapore, Dubai and Hong Kong certainly provide a very high quality of customer service. Note that none of them has any concept of constitutional, limited, or democratic government.
Read the whole thing, or at least the second half.He seems to be arguing that the best form of government would be profit-maximizing corporate city-states competing with one another for citizens.
My argument against this is that it simply shifts the crux of the problem to corporate governance. The crux of the problem is how can society be organized so that the incentives to engage in violence are minimized.
In a corporate city-state, there is an incentive to engage in violence in order to control the city-state. Latin American military juntas in the 1950’s were constantly undergoing coups.
We think of corporate governance as stable, but that is only because the managers and shareholders operate in an environment where their disputes are resolved peacefully under the watchful eye of the government. We don’t have violent coups to take over Microsoft or Goldman Sachs, ultimately because the government will not allow it. However, if Microsoft owned all of the land in the Seattle region and there were no higher authority, a clique of colonels would have plenty of incentive to stage a violent coup. So you would have violence and instability in the corporate city-state world. See Snow Crash, the novel by Neal Stephenson.