One of the more overlooked facts about modern publicly traded corporations is that they are functionally almost identical to medieval fiefdoms. While a few others have compared them to 20th century totalitarian states, such a comparison is far too flattering for such organizations.
Totalitarian states, from Nazi-era Germany to present day China, differ from modern publicly traded corporations in many fundamental ways.
1. Successful totalitarian states throughout human history reward their faithful supporters in both obvious and non-obvious ways on a long-term basis. Modern corporations, in contrast, do not reward their faithful workers over the long-term and are only too happy to get rid of them at the slightest hint of trouble or a chance to make more profits.
Fiefdoms did however operate on a similar model and almost everybody in such systems was involved in a game of intrigue, deception, fraud and screwing each other for the smallest of reasons and gains. They therefore tended to be low productivity, low trust systems with frequent outbreaks of overt and covert violence.
2. Successful totalitarian states are capable of attracting, retaining and promoting competent people along with the usual bottom feeders. Nazi-era Germany, pre-1945 Japan had and present day China has a lot of genuinely competent people in very senior posts. Modern corporations, on the other hand, are defined by their ability to concentrate incompetent and deceptive bottom feeders to the exclusion of genuine competence.
Fiefdoms were similar to corporations in that their inner circles were devoid of genuinely competent individuals, and were instead full of witty sociopathic courtiers who owed their fortunes to chance and birth.
3. Successful totalitarian states will often actively better the life of their average compliant follower, if only to justify their rule. Even Stalin did many things to make Russia better for Russians- though some of his methods and actions killed lots of people. However a comparison of the conditions in Russia when Stalin took power to those present when he died do show that he was able to improve the lot of the average Russian (who had survived him and ww2).
Modern corporations expend a considerable amount of effort in actively reducing the quality of life of its compliant workers. The “elite” in medieval fiefdoms also spent a lot of time trying to reduce the quality of life for everybody to protect their power base.
4. Successful totalitarian states are afraid of publicly visible or obvious failures because they understand that their ability to continue ruling is linked to keeping things working. The leaders of modern corporations have no fear of failures of their enterprise as they can simply loot from the failing enterprise and hide behind laws, procedures and the pretense of “justice”. Feudal lords and courtiers, like CEOs and upper management, often looted a collapsing fiefdom with impunity and ran away to nearby friendly fiefdoms or kingdoms.
What do you think? Comments?