Will the corporation supplant the state as the world's dominant organizational structure in the coming century? It's a question to which many world thinkers adamantly answer "yes." In this bold vision for the future, national borders gradually wither away as transnational companies become ever more powerful, leading governments by the nose in pursuit of perfect supply chain efficiency. For advocates of this vision, the prevailing trends throughout the world, large companies' growing influence, the giant cash piles of companies like Apple and diminishing trade barriers all point to the coming predominance of the corporation. Skeptics, by contrast, say the obituary for the state is decidedly premature but concede that the corporation is likely to eat away at national power in the decades to come.
Major changes are afoot in the global economy, especially when it comes to advances in technology — the most geopolitically important of which Stratfor follows under its Fourth Industrial Revolution theme. Many of these new technologies will empower corporations, possibly even to the point at which they could challenge states.
Is the Sun Setting on the State?
The history of the world is essentially a history of the invisible lines that have shaped the global population. The basic societal unit, the human, is largely the same the world over, but systems have emerged to turn humans into cogs in larger machines. Organizations and institutions exercise power thanks to individuals' willingness to subordinate themselves to wider goals. In feudal times, a king's power depended on the loyalty of his lords, who themselves needed to keep their peasants in line to ensure their own continued strength. While ostensibly preoccupied with the world to come, the Catholic Church once wielded a large degree of power in the present realm. Today, however, the institution is a shadow of its former self because it has not succeeded in persuading as large a percentage of the population to believe in it, thereby reducing its power on a relative basis. In the centuries that followed the Peace of Westphalia in 1648, the nation-state began to supplant the church, ultimately providing a common sense of identity for which large groups of diverse people were willing to die.
But the idea that individuals could begin to rally around the corporation more than the nation-state is flawed. First off, the favorable geopolitical circumstances that have permitted corporations to thrive over the last seven decades might not continue. Beyond that, however, there are also deeper philosophical problems with the idea, centered on the question of personal motivation.
If corporations are to overtake the state in global importance, individuals would need to collectively switch their primary allegiance (or be compelled to do so by circumstance) to massive companies over their current polities. The situation would also require the average person to prize a corporate identity more highly than a national one – something that few have been willing to do thus far. National identities have coalesced over many centuries, becoming woven into families, cultures, traditions and languages. Corporations, by contrast, are relative newcomers to the realm of identity politics and have not managed to achieve the same degree of penetration into people's lives. Still, recent developments portend a shift in power from country to corporation.
Harnessing Knowledge in Pursuit of Power
In recent years, personal information has become an increasingly important commodity, particularly in Europe and North America. But whereas one would have expected the state to collect such information in the past, today it is the corporation that is amassing such knowledge. Western populations have been relatively content – the present fallout from the Facebook-Cambridge Analytica incident notwithstanding – to allow companies to learn vast amounts of information about them. Over the last two decades, companies such as Facebook, Google and Amazon have become interwoven in the daily lives of Western citizens, and they have amassed extraordinary amounts of information at an individual user level for the purposes of targeted advertising. These developments have given technology corporations the ability to gain access to a degree of knowledge over individuals' lives that a Western politician seeking election could only dream about.
Large proportions of people's lives are migrating online into areas such as social media, and if the trajectory continues at its current rate, corporations such as Facebook and Amazon could soon possess more knowledge about individuals in a Western country than national governments, which are largely restrained in the information they can gather and retain.
Large proportions of people's lives are migrating online into areas such as social media, and if the trajectory continues at its current rate, corporations such as Facebook and Amazon could soon possess more knowledge about individuals in a Western country than national governments, which are largely restrained in the information they can gather and retain. In a battle for hearts and minds, it is not hard to imagine Apple one day enjoying a better chance than a national government of persuading an individual to align with its interests. This could be the key to enormous persuasive power; indeed, it is possible that it could provide corporations with a path to ultimately win the battle for a population's hearts and minds.
Already, it appears that states are preparing a counterattack against the corporate challenger, particularly by resorting to antitrust legislation. Judicial officials in the European Union have launched legal action against major U.S. technology companies through such avenues, while a similar debate has begun in the United States as well.
The planet is a long way from sitting down to watch a World Cup match pitting Amazon versus Facebook instead of the likes of Brazil versus France, yet corporations will continue to make inroads into the lives of people around the globe to the degree that they could come to rival the state for power. As the recent legal proceedings in the European Union show, the first salvoes have been fired in the great battle between the state and the corporation, and more are likely to come.