Megacorporations

[Ford Prefect]

Don't most of these fictional megacorporations gain political power because they financed their own private army to secure their facilities? It would seem that for such megaocorps to arise, one actually needs a weak, anarchist society that threatens them.

Uh, no, most of the time it's never clear how a large corporation secures such immense power. Unless otherwise stated I'd probably just infer that it's an extension of current political corruption and influence, ie. goons with shitloads of cash getting more involved in politics behind the scenes. About the only megacorporation I can think of which essentially secured its position by force is the Shin-Ra Electric Company, but that's only in regards to the Wutai War - they probably ended up top dog due to their monopoly on Mako power.

[Chaotic Neutral]

Step 4: With experience gained from WAL-SEC, Wal-mart establishes a PMC division under the name of WAL-DEF

Step 5: God help any country that crosses Wal-Mart

WA-22 Cheetah Stealth Fighter

WM-8 Modular Rifle

W-54 Tactical Nuclear Weapon, created in conjunction with McDonald's Defense to be fired from the Ronald McDonaldd recoiless rifle.

This idea demands a story to be written.

And while we are on the subject, how difficult would it be for start-up companies in these areas? (Weaponry and planes)

[The Dark]

Step 4: With experience gained from WAL-SEC, Wal-mart establishes a PMC division under the name of WAL-DEF

Step 5: God help any country that crosses Wal-Mart

WA-22 Cheetah Stealth Fighter

WM-8 Modular Rifle

W-54 Tactical Nuclear Weapon, created in conjunction with McDonald's Defense to be fired from the Ronald McDonaldd recoiless rifle.

This idea demands a story to be written.

And while we are on the subject, how difficult would it be for start-up companies in these areas? (Weaponry and planes)

Firearms, not too bad. The third-largest manufacturer of handguns in the US is a company took 15 years from start-up to #3, and that was as a private company with no corporate backing. Get the necessary licenses from ATF, and you can make firearms. Work on developing them for the military, and you have justification for (limited) runs of firearms that exceed what's permitted for civilian use. The main difficulty would be in getting designers, rather than the actual capital.

Aircraft, on the other hand, would be extremely difficult. That's a lot more capital intensive, specialized (for aircraft capable of carrying a militarily useful payload), and requires less common knowledge (there are more gunsmiths than aircraft engineers). It's probably possible, but a lot harder than firearms or even (lightly) armored ground vehicles (which can be claimed to be VIP transports).

[Chaotic Neutral]

So it would probably take around 50 years to get a large amount of power in everything they need?

It probably wouldn't cost them too much money if they made a profit in most areas.

[lance]

What about if they do it as securing there property, and doing good, in an unstable location, in conjunction with bribes to another political party giving the control over a large area of a country.

I'm thinking of a country like Somalia with the corporation doing this to safe guard there shipping as the pretext. While they are there they run a ton of commercials, articles and town hall meetings to explain why they must stay to help the local people to swing public support so that taking action would cost them an otherwise neck and neck race.

[The Dark]

Honestly, possibly the simplest way to do it would be to have a company that already does services of some sort expand into the PMC market. The first one I thought of would be an oil company, like Schlumberger or Baker Hughes. They're working in areas that often have hostile locals, so they could justify having fairly large security forces. It would not be too much of a stretch for them to decide that it would be worthwhile to form PMCs in order to rotate people between guard duty for the company and earning money for the company contracting to others, while giving them a ready reserve in case they expand their own operations.

The key thing is that it needs to be justifiable. A company saying "hey, we want to deliver stuff to Somalia, and oh yeah we need an army to do it" probably won't fly very well. A company saying "hey, we're already in Saudi Arabia pumping oil, and they're getting more hostile, we need bigger security forces" is more likely to meet with approval.

[Thirdfain]

Honestly, possibly the simplest way to do it would be to have a company that already does services of some sort expand into the PMC market. The first one I thought of would be an oil company, like Schlumberger or Baker Hughes. They're working in areas that often have hostile locals, so they could justify having fairly large security forces. It would not be too much of a stretch for them to decide that it would be worthwhile to form PMCs in order to rotate people between guard duty for the company and earning money for the company contracting to others, while giving them a ready reserve in case they expand their own operations.

The key thing is that it needs to be justifiable. A company saying "hey, we want to deliver stuff to Somalia, and oh yeah we need an army to do it" probably won't fly very well. A company saying "hey, we're already in Saudi Arabia pumping oil, and they're getting more hostile, we need bigger security forces" is more likely to meet with approval.

Um, this sort of thing actually happens all the time, and it nicely illustrates the ways in which governments keep corporations from developing this kind of far-reaching power... or perhaps I'm putting the cart before the horse, and it's an example of why corporations don't *need* to go to the massive trouble of funding their own militaries. You see, the company doesn't use it's own rentatroops; they have their operations defended by their host-country's military. A perfect example of this is the unofficial French empire in West and Saharan Africa. In places from Cote d'Ivoir to Chad, French soldiers make sure that the governments are pro-French and in bed with French companies. Why the hell would a company like Total throw down it's money for a personal army when there's a perfectly good French army already in existence, willing to do what's necessary to keep the Congolese oil sands open for business?

Earlier, someone said that having a monopoly on a source of power is a prerequisite for a company with state-like powers. He forgot the other vital prerequisite for that kind of institutional independence: Isolation. The East India Company made sense so long as it was so remote from London as to make central government control worthless. Advances in communications and transportation technology eventually lead to a situation where direct rule was possible, and it was not long after that until the establishment of direct colonial control. In the modern world, the kind of isolation which made the various East India Companies make sense no longer exists.

In conclusion, so long as we're limited to Earth, megacorporations are a farcical idea. The alliance of business and government is strong enough to make it totally unnecessary.

[jollyreaper]

I am surprised no one N&P didn't start talking about how the USA is already a plutocracy controlled by megacorporations grown effectively uncontrollable and untouchable by gaining such tremendus power that the Founding Fathers couldn't foresee. Or something like that.

Yeah. It effectively is and the megacorps already exist but we call them transnationals. For the most part, they don't need military occupation forces because they can bribe the US government or use the local military for that.
US Fruit used the US military to overthrow and establish banana republics. Just look at the history of Royal Dutch Shell all over the world. The bad old days of the East India Tea Company are not so far gone.

The idea of Google (even theoretically) taking over Fiji isn't nonsense because of the money or logistics of them getting the right materials/people/equipment/condoms. It's nonsense because Google doesn't need to. They simply would just have to buy every mayor business in Fiji. Soon enough, as the governments see that their GPD

It's the difference between old-school and new-school imperialism. Old-school bankrupted the Brits trying to hold a global empire. New-school called it free markets rather than imperialism and a Vietnam the French couldn't hold and the US couldn't pacify by force of arms is running sweatshops to make our sneakers. The economic benefits of colonialism without all the cost. By this standard, Iraqistan represents a major fuckup by returning to the British way of running empires.

That's just an extreme case. I wouldn't be surprised if you could do it with less money and more strategy. Point is, that these corps sheer amount of money can manipulate politicians, manipulate the media (see Fox News) and so on.

Prezactly. Just this week we saw Nigeria trying to extradite Dick Cheney for a bribery case and Halliburton paid them off to make the charges go away. "Hey, can I bribe you to make these bribery charges go away?" Yes you can!

[jollyreaper]

To get to a real sci-fi megacorporation, a corporation needs to acquire so much political power that it becomes a nations equal, or takes control of a nation. That would require a weak government in said nation and/or the removal of the monopoly of force from said nation - as well as the rest of the world to not intervene.

We're arguably close to being there right now. We may be lacking the street samurai and cyberspace jacks in the back of our necks but we're there.

1. Goldman Sachs and the Finance, Investment, Real Estate sector of the economy can pretty much buy any legislation they want.
2. These corporations are so powerful they cannot be touched by law. They only fall when they screw up, not through any trust-busting efforts of the government.
3. A cable news network is operating as the direct propaganda arm of a major political party, a foreign-owned network at that!
4. We've got freakin' mercenary armies fighting our wars. Straight out of cyberpunk.
5. Did I not yet mention the CIA has freakin' assassin drones flying around killing people? Assassin drones! If that's not cyberpunk, I'll kiss your ass.
6. On the economic front, we saw an internet business like Yahoo get a larger market cap than GM during the bubble.
7. Google is an ever-growing economic powerhouse that sets its own foreign policy, negotiating with national governments. Witness the whole hacking and pullout debacle with China.
8. Wikileaks is the first big global internet infowar. Governments are losing their shit and violating all kinds of laws to prosecute Assange. Not through any claims or effort of his own but by virtue of the incredible overreaction to him he's earned a title of maybe not "most dangerous man alive" but certainly "man who most likely has the goods on someone because of how freaked out the governments are acting."

A disputed quote attributed to Mussolini says: "Fascism should more properly be called corporatism because it is the merger of state and corporate power." Obviously he felt that government should be wearing the pants in that relationship. In corporate fascist America, the corporations are wearing the pants.

[Ryan Thunder]

More proof that you can indeed have too much money.

[Sarevok]

Two problems with the megacorporation concept that I think will never go away no matter how technology changes.

1 ) They diversify too far in terms of products. In real world commerce all companies focus on certain areas they are good at. If Microsoft tries to make a car tomorrow it is almost certain it would fail. Look how hard it is for Google to break into the smartphone market. Now contrast with the seemingly omnipresent array of goods and services a science fiction megacorp is supposed to provide from weaponry to foodstuffs.

2 ) Megacorporations employ private armies and mercenaries. In real world maintaining an army is very expensive. Imagine telco operating in Afghanistan who have to protect their base stations from thiefs and vandalism as well terror attacks. The scifi solution would be a rapid reaction force that uses helicopters to fly in commandos as soon as base station comes under attack. Of course in reality the call revenue would never cover that kind of costs. Its better to rely on government protection and bribe local power brokers than put your own uniformed thugs on the street with guns.

[lance]

Two problems with the megacorporation concept that I think will never go away no matter how technology changes.

1 ) They diversify too far in terms of products. In real world commerce all companies focus on certain areas they are good at. If Microsoft tries to make a car tomorrow it is almost certain it would fail. Look how hard it is for Google to break into the smartphone market. Now contrast with the seemingly omnipresent array of goods and services a science fiction megacorp is supposed to provide from weaponry to foodstuffs.

There are several companies that have a vast amount of products, like Virgin which does spaceplanes, drinks, cars, airlines, stem cells and cell phones and some other stuff.

2 ) Megacorporations employ private armies and mercenaries. In real world maintaining an army is very expensive. Imagine telco operating in Afghanistan who have to protect their base stations from thiefs and vandalism as well terror attacks. The scifi solution would be a rapid reaction force that uses helicopters to fly in commandos as soon as base station comes under attack. Of course in reality the call revenue would never cover that kind of costs. Its better to rely on government protection and bribe local power brokers than put your own uniformed thugs on the street with guns.

It may be easier, but if the worlds governments are week then there is room for the corporations to fill the void.

[Ford Prefect]

1 ) They diversify too far in terms of products. In real world commerce all companies focus on certain areas they are good at. If Microsoft tries to make a car tomorrow it is almost certain it would fail. Look how hard it is for Google to break into the smartphone market. Now contrast with the seemingly omnipresent array of goods and services a science fiction megacorp is supposed to provide from weaponry to foodstuffs.

Yes, most megacorporations are premised on the idea of them being horizontal monopolies. Hence the 'mega'.

[Stark]

In some settings the megacorporation may simply be a holding structure for hundreds of acquired enterprises - regardless, it gives the owners great control over huge aspects of public life, which is the point of the fiction.

And sorry Sarevok, you're an idiot. If Microsoft wanted to enter the car market, they'd buy a car manufacturer. This is Business 101.

Most megacorporations are too disinterested to use helicopter raids to stop vandalism - that's the point, that they'd simply cut services (for example) once it became uneconomical due to gang activity/resistance/whatever.

Have you even READ any of this fiction? Your ignorance is astonishing.

[sirocco]

In UW1 (french comics) , you' ll have the CIC which are essentially essentially 5 megacorporations made themselves of smaller companies. They were restricted legally by Earth governments and work around that by having a unified board of administration so that each member was in fact employed in 2 other companies at least.

So there is always some kind of workaround.

[Sarevok]

There are several companies that have a vast amount of products, like Virgin which does spaceplanes, drinks, cars, airlines, stem cells and cell phones and some other stuff.

Hmm that is true. If their wildest dream pan out they could try becoming a lite version of Tessier-Ashpool from Neuromancer with orbital facilities and such.

It may be easier, but if the worlds governments are week then there is room for the corporations to fill the void.

Unlikely. A corporation that can both bear the costs and needs an effective war fighting military is a defacto nation. The East India company is often cited as an example. But bear in mind they frequent fought using local princes and nobles and their forces as proxies. The company never had enough troops to take on a place as developed as India. Instead the East India company used diplomacy and intrigue to run the place.

[andrewgpaul]

Unlikely. A corporation that can both bear the costs and needs an effective war fighting military is a defacto nation.

Well, yes. Isn't that the point of this thread?


The type of "megacorp" that confuses me is the universal megacorp that pops up in some fiction, that runs everything. The comapny in the old Doctor Who story The Sun Makers. If they run everything, then what, exactly, are they trading with? At least in traditional Cyberpunk settings Arasaka still had the USA, ESA and USSR to sell guns and rentagoons to.

[slebetman]

1 ) They diversify too far in terms of products. In real world commerce all companies focus on certain areas they are good at. If Microsoft tries to make a car tomorrow it is almost certain it would fail. Look how hard it is for Google to break into the smartphone market. Now contrast with the seemingly omnipresent array of goods and services a science fiction megacorp is supposed to provide from weaponry to foodstuffs.

There are several companies that have a vast amount of products, like Virgin which does spaceplanes, drinks, cars, airlines, stem cells and cell phones and some other stuff.

Another good example is Mitsubishi. They make everything from ocean going oil tankers to jet fighters to pencil sharpeners (and pencils, I remember using them when I was a kid).

[Simon_Jester]

Unlikely. A corporation that can both bear the costs and needs an effective war fighting military is a defacto nation.

Well, yes. Isn't that the point of this thread?

The type of "megacorp" that confuses me is the universal megacorp that pops up in some fiction, that runs everything. The comapny in the old Doctor Who story The Sun Makers. If they run everything, then what, exactly, are they trading with? At least in traditional Cyberpunk settings Arasaka still had the USA, ESA and USSR to sell guns and rentagoons to.

At that point, they aren't really a 'corporation' any more; they're just a government that models itself along corporate lines because of custom. Which is where megacorps tend to evolve in the literature anyway, when you think about it; their behavior may be justified in terms of profit-seeking motives, but you could say the same of most governments.

[Coyote]

The first step in establishing a line of thought like this would be to answer the question of why a megacorp would want to run a country. A corporation got to its position by being a profit-generating venture; running a government typically is a break-even venture at best and frequently loses money.

It makes far more sense for a magacorp to simply run its own business(es) and let a local government handle all the messy taxpayer stuff, and the megacorp can wield influence over that government without getting its hands dirty. Or better still, enter into a deal like that with a number of other large corporations-- essentially, fascism. When the companies want to open a new market in Trashcanistan, they pay off the government and the government works up a crisis, a confrontation with Trashcanistan and rallies everyone around the flag and God and apple pie, and the citizens join the army and fight for a few ribbons on their chests, get to go home feeling like they accomplished a great thing when in reality all they did was clear out the competition in Trashcanistan for exploitation. The companies then give the government that handled the mess for them a cut of future profits.

It's easier to get people to fight for esoterics like the flag and God and "the nation" and patriotism, etc, then "for the greater glory of Al's Air Conditioning Service".

No company wants to be recognized as the primary motivator of policy. Because when policy goes wrong, they get blamed. Better to have a compliant government be the public face while the company plays innocent local bystander.

[Simon_Jester]

The first step in establishing a line of thought like this would be to answer the question of why a megacorp would want to run a country. A corporation got to its position by being a profit-generating venture; running a government typically is a break-even venture at best and frequently loses money.

It makes far more sense for a magacorp to simply run its own business(es) and let a local government handle all the messy taxpayer stuff, and the megacorp can wield influence over that government without getting its hands dirty.

This is how the East India Company did it in India. By the time they were truly influential, the Mughal Empire that had previously dominated north India was in a state of profound decline. The Mughals were already engaged in tax farming and similar practices; all the EIC had to do was move into various areas and "rent" the profitable aspects of running a province from the Mughals (such as monopoly over its trade goods and the right to collect taxes), while leaving the Mughal officials nominally responsible for keeping things from falling apart.

It didn't take long before this system started to fall apart, as demonstrated by the Bangladesh famines of 1770. This also suggests one means by which a megacorp might wind up assimilating governments: if they are effectively forced to do so when the government abdicates or dissolves. The new governing authority in the area may not officially be a branch of the corporation, but everyone involved will know perfectly well that it might as well be a wholly owned subsidiary of the corporation even if it doesn't appear on the company's regular balance sheets.

No company wants to be recognized as the primary motivator of policy. Because when policy goes wrong, they get blamed. Better to have a compliant government be the public face while the company plays innocent local bystander.

True. It worked for John Company; it can work for you.

[Zaune]

What about getting people to fight for a large wad of cold hard cash? Blackwater seem to manage quite well, though I daresay the opportunity to shoot brown people doesn't hurt in some cases.

And there's another, related possibility we may have overlooked. There are plenty of private individuals whose personal fortunes would be more than sufficient to recruit and equip a military force adequate to topple the government of many small African or Latin American countries, and they wouldn't have to answer to shareholders or the board of directors afterwards. What's to stop one of them, or more likely one of their heirs, pulling something like this simply for the craic?

[The Dark]

1 ) They diversify too far in terms of products. In real world commerce all companies focus on certain areas they are good at. If Microsoft tries to make a car tomorrow it is almost certain it would fail. Look how hard it is for Google to break into the smartphone market. Now contrast with the seemingly omnipresent array of goods and services a science fiction megacorp is supposed to provide from weaponry to foodstuffs.

There are several companies that have a vast amount of products, like Virgin which does spaceplanes, drinks, cars, airlines, stem cells and cell phones and some other stuff.

Another good example is Mitsubishi. They make everything from ocean going oil tankers to jet fighters to pencil sharpeners (and pencils, I remember using them when I was a kid).

Any of the Japanese keiretsu make a good example. Going along with Mitsubishi, since you mentioned them; their core holdings include:
Mitsubishi UFJ Financial (second largest holding bank in the world)
Tokio Marine and Fire Insurance (largest private insurer in Japan)
Kirin Brewery
Mitsubishi Electronics
Nippon Oil
Nikon
Mitsubishi Chemical
Asahi Glass (largest flat glass manufacturer in the world)
Mitsubishi Steel
Nippon Yusen (10th largest shipping firm in the world)

That's everything from banking to brewing to steel, vehicles, oil, and the means to transport all of those, precision machinery, electronics...and they're not even the largest one (Toyota is).

[jollyreaper]

There's all manner of crazy government models that kind of get ignored by fiction in favor of the ones we're more familiar with. The nation-state has been very successful but is a relatively new concept given the length of human history.

Direct democracy never really scales well which is why we usually go with representative democracies for any sizable organization. Autocracies are the most usual form of government, the man with the big stick tells you what to do. That scales up from tribal headman to national dictator. You've got the idea of the sovereignty of the nation tied to a god-selected king, you've got the idea of that right belonging to the people who elect a leader to act in their stead, and all manner of combinations of that.

All well and good but then you get some crazy shit like the FARC in Columbia. They've pretty much taken over large tracts of the country and are operating as the government providing services, schooling, etc. The same thing happened with Hezbollah in Lebanon who have gone from terrorists to a part of the government. And yeah, that may be the usual path for successful terrorists who are now called freedom fighters and founding fathers now that they're writing the history books.

The biggest truism over most of human history is you need solid organization to scale and authority needs to be centralized. Big, prosperous countries without centralized authority will likely have poor defenses and get picked apart by neighbors, or regional powers will spring up and you'll have an ethnically homogeneous region balkanized into warring states. But we're now entering an era where immense power can be decentralized thanks to computers. We're only beginning to see the social impact of this.

Also, it depends on the spin you put on a "megacorp." What makes a corporation different from a government? You could say it's the areas of activity they're involved with. But given that the definition of megacorp is that a business has risen to the level of an equal player versus nation-states, what about certain communist dictatorships where everything is nominally owned by the state but is really owned by the party and potentially the hereditary dictator? Thinking of North Korea here. We're familiar with the idea of powerful businesses owned by a particular family but how about countries owned by a family? Thinking of the House of Saud running Saudi Arabia. Just another absolute monarch, nothing new to see here? Perhaps. But the flavor of old ideas reappearing can sometimes seem different.