A Corporation is a deputy Government. The outstanding feature of Government is that it is seen as a unit — the individuals comprising it are not prime movers, but exercisers of Sovereignty. Government issues a charter to form a Corporation, and thereafter debts and the acts of individuals are not seen as applying to individuals, but to the Corporation as a whole: it is a “legal person”.

The system works because it is an instance of decentralization. A Corporation is closer to the problem than Government is, and can respond to actual conditions more quickly and effectively.

As Corporations become larger in relation to the Government, both their management and their bureaucratic support find that they have more in common with management and bureaucratic support in Government than with the People, and they build closer ties. In particular, Corporate management controls resources that can be used to influence Government management to establish policies and procedures that have the effect of aggrandizing the Corporation’s size and influence, both absolutely and vis-a-vis its competitors. (At the extreme this yields monopoly, which cannot exist at all unless Government enforces a pathological version of “private property”.)

At the same time and in the same way, Government’s tendency to self-aggrandizement yields closer and closer control of Corporate activities; the two impulses are positive feedback to one another, and the process continues until the advantages of decentralization are lost completely because the Corporation is micromanaged by Government under a fig-leaf of “private” operation. Both parties are anxious to preserve the appearance of separation; Government uses it to argue that its control is necessary to prevent abuse, and the Corporation exploits it to gain support from those with libertarian impulses.

The result is a hydra in the ocean. Depending on specifics the head named “Government” may be larger than the others, but whichever head eats you the detritus is shat out the same aperture.

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