Home
I wonder when the first multinational company will form its own country to avoid wars, government red tape, and corporate taxes. It feels inevitable. I assume it will involve seasteading.

The current notion of seasteading involves floating cities that are outside the control of existing nations. That concept has its appeal, especially as a way to test new forms of government. But existing corporations already have their own form of government called management, and despite its warts, it generally works.

Imagine, for example, that one of the world's beloved companies such as Apple or Facebook someday decides to start its own country on the sea. The company's existing management structure would need to add several functions, such as education, healthcare, and police. The corporate government would look a lot like the Chinese government. In other words, it would be efficient in terms of profit, while giving up freedoms that employees are already accustomed to giving up. For example, company employees don't have freedom of speech when it comes to criticizing management. Somehow we live with that restriction and it doesn't seem too onerous.

There would be no taxes for permanent residents of the company country. Public services would be funded from corporate profits. Every paid service in the country, from banking, to insurance, to groceries, would be company-run. The accounting would be transparent and the profits would flow to public services.

The big worry with this model is the "company store" abuse that was common during the early days of the United States. In some cases, an employer would take advantage of its monopoly on goods and services to gouge its employees, turning them into virtual slaves. But I think that risk can be addressed by accounting transparency, and by capping the compensation of top management to a multiple of the average employee pay. It also helps if employees can choose to leave whenever they want. That keeps management in line.

Wages in the company country would be low while still attracting top talent, so long as the cost of living islow, taxes are non-existent, and the lifestyle is awesome. Employees could earn less while saving far more, especially if they own equity in the company.

This prediction assumes that traditional governments continue to bankrupt themselves and strangle their own industries with red tape. That feels like a safe bet. But the main reason a company might want to form its own country is to attract the best minds, and the lowest cost of labor, from all over the world without any immigration issues.

Do company countries seem inevitable or unlikely to you?
 
Rank Up Rank Down Votes:  +71
  • Print
  • Share

Comments

Sort By:
Apr 9, 2012
@Scott Too late. It already happened. It's call The Vatican.

@DNA currently the difference between a company and a country is a company makes it's money by providing something of value to it's clients. A country makes it's money by taking it from it's citizens use of force. Yes, the IRS has guns and will use them to arrest you if you don't play nice.
 
 
Apr 9, 2012
I'm pretty sure it has already happened - to a degree. Multi-national corporations exist outside of the sovereign jurisdiction of any one country - allowing them to act as if they were a foreign country doing business on the soil of a sovereign nation. The only missing element is that the people that compose and lead the corporation are still subject to the laws of their home country.

So the final element of eliminating the distinction between corporation and country would be if a company - recognised as legitamate in several countries - had a President who was a displaced person without citizenship in any countries. Then the president would have to be considered a sovereign, and the company would be a sovereign state.
 
 
Apr 9, 2012
According to this, http://bigthink.com/ideas/19054 , the USA does attract top talent.

It doesn't seem too different from traditional government except for:
"...accounting transparency, and by capping the compensation of top management to a multiple of the average employee pay. It also helps if employees can choose to leave whenever they want."
...and governments aren't as profit driven as companies, more pandering to votes instead of paychecks. (I'm not certain about that though).
If governments are having with finances, why not just implement this company model instead? Governments already exist, so you don't have to start from scratch, which would be cheaper and therefore more effective for savings.
 
 
Apr 9, 2012
Any company with enough wealth and power to start it's own country most likely has enough sway with any government to manipulate the regulations as it sees fit. Creating a new country would be pointless when they already own the current government.
 
 
Apr 9, 2012
I have a hard time envisioning seasteading being a viable option. What if a once in a century storm destroys it? Who would come to their rescue? And how would they defend themselves when they piss off another country through dubious business dealings? (As they assuredly would.) Besides, with a bought and paid for Congress, why would any American megacompany want to leave?
 
 
+15 Rank Up Rank Down
Apr 9, 2012
Not a chance, this is a decades long project to save a few bucks to make some future CEO better off. Management never does that kind of long range planning unless they are aging whiskey.
 
 
Apr 9, 2012
Congratulations! You've just invented socialism. Or communism. Or some kind of -ism. I'm too lazy to look up all the -isms to see if we already have a word for this one.

I could only see it working for an employee-owned company. This way residents still have a right to vote, at least for board members and possibly other referendums.

The "state" owns everything and decides how everything is run. National income is unequally distributed among employees, based on position within the company. Free health care! Many services are contracted out, so you can still have McDonald's fries!

I could see Google putting a floating data center in international water and declare it to be own self-made country. Google negotiates and lobbies for international treaties and trade agreements for their little unmanned country. Then Google scales up far beyond the initial intent, expanding to a whole floating city and moving world headquarters there. Countries around the world quickly change their practices to avoid this sort of thing in the future, but Google is grandfathered in and becomes the only viable company-country in the world. Whee!
 
 
Apr 9, 2012
I grew up in a situation very close to this. My father worked for a big oil company in the middle east and for a variety of reasons both practical and political, we lived in our own "company compound." The company provided telephone service, water, sewer, roads, housing, sports & entertainment facilities, commissary, a few restaurants, periodic repatriation travel back to our countries of origin, and ... forgiving the crappy desert climate, it was pretty awesome.

Everyone made a good living, no unemployed, there really weren't social classes. "Problem people" (drugs & alcohol issues among others) were summarily fired and deported, so we had nothing like that. The housing was nice, and the schools were superior. Our arcade had all the best American games. Our theater had censored versions of popular American movies, even if several months delayed. We had our own company TV station and radio station. The compound was designed well, and although it could accommodate 10,000 families, most things were in walking distance. We had nice greyhound coaches for public transportation that made the distance between the main compound and the expansion compound a little more comfortable.
 
 
Apr 9, 2012
I've got my eye on Madagascar. With a GDP of $9 billion, you could pay 5 times "revenue" and still pay only $45 billion. Google has a market cap of over $200 billion and thus could probably swing it.

Of course there are the 21 million inhabitants that you'd have to deal with. That's one hell of a call center.
 
 
Apr 9, 2012
"The state is burdened by the hard-to-educate and the criminally inclined segments of society. Corporations would filter out the problematic individuals during the hiring process and onward. Most problems are solved by shipping the problem individuals back to their home countries. -- Scott"


Funny you should bring this up, the typical illegal alien has less than a high-school education and in your state of california they are a large amount of the prison population and putting your hospitals on the brink of bankruptcy. If CA didn't have to support them because the federal government did its job and kept them out, you could repurpose all those funds for other purposes. How much better off would your state and local area be if Calafornia did what you suggest a hypothetical country-company would do (even if you don't agree with what the country-company would do)?

So this begs a question: does a government/society have a right to keep the under educated or criminally inclined out? Should we have basic rules for letting people move to the US like no major crimes and a basic education?

There are pros and cons to either answer.
 
 
Apr 9, 2012
Markman, you've just described every libertarian's objection to the Federal Reserve, which is a government-corporate hybrid that was originally thought up by the 6 largest bankers in the US during a secret meeting and passed by congress for some excuse or another.
 
 
+7 Rank Up Rank Down
Apr 9, 2012
Unlikely. I seriously doubt there would be enough transparency to make it work. You can't trust MBA's to take care of the little people.
 
 
+2 Rank Up Rank Down
Apr 9, 2012
Scott,

Unlikely. Not because it is impossible. Because it is not necessary.

Say a company that you imagine actually exists and it meets all the requirements. Say it is named China or India. How will it be different from the countries named China and India?

China and India are too large for this sort of theory. Lets choose a smaller one. Say Myanmar, Thailand, Vietnam or Sri Lanka.

The people have citizenship of a country. The employees will have company numbers.

There are a minimum of 36 ministries in a country. There will be 36 operating companies in the corporate.

In a country, a citizen is free to decide if he wants to work for a living or become a senator. In a corporate, both are called job descriptions.

In short, I don't see any difference between a corporate and a country. I feel both are equally inefficient on a larger canvas.

.
 
 
Apr 9, 2012
Company Countries, while not like your idea, is a common theme in the cyberpunk genre and occasionally anime (The Big O). You could also call things like socialism, fascism, communism, and nazism company countries because the governments more or less run the companies. You also have another form of company country called crony capitalism, which is a corrupted form of capitalism.

Honestly, I think some form of company country is the natrual (but not necessarily good) state of things. It's all about power and control and one group or the other will end up at least trying to make a play to have the power or control.

You see it in religion vying with government for power a lot. You see cases where religion tries to take over the government, radical islam, or cases where the government takes over religion (or stamps it out), ie China, Britian when the pilgrams left it, Spain during the inquisition.

So basically we've just got a third player in the game of power-control.


Your version? Doesn't seem like enough of an improvement that most people would want to live thing. I don't think they'd want their boss to have all political power as well as economic power.
 
 
+14 Rank Up Rank Down
Apr 9, 2012
Back in the 1970's I interviewed for a job with just such a company: ARAMCO, the Arabian-American Oil Company. They had their own "country" - actually a large sefl-contained compound in Saudi Arabia, with housing, shopping, "education, healthcare, and police" and all the necessities of life. The women could even drive, as long as they never left the compound. ARAMCO provided everything, including paid travel back to the USA several times a year. They even paid your US income taxes, in addition to your salary. The pay was incredible, so it was an opportunity to build a ton of savings. Unfortunately, I was not offered the job. Fortunately, I was not there in 1980 when the Saudis nationalized the company.
 
 
Apr 9, 2012
Why on earth (or sea) would you hobble your experiment right from its birth by trying to provide for "education, healthcare, and police" when that sort of thing is why those countries you would be wanting to get away from are dying and corrupt because of bankruptcy and red tape? If you're going to do something different, you have to actually be different.

Provide access to the internet and education will take care of itself, as it always does as long as you don't hinder it. Don't regulate doctors and allow them to practice on your seastead; charge what they want and prescribe what they want- with ample public feedback from their patients- and many would probably jump at the chance to join your society. Don't regulate the tools (and acts) of self defense (and don't manufacture victimless "crimes") and your society will police itself. Almost every "social problem" has, at its root, The State. Don't repeat the mistakes.

[Corporations already have internal security and extensive employee training. I don't think anyone views those functions as broken. The state is burdened by the hard-to-educate and the criminally inclined segments of society. Corporations would filter out the problematic individuals during the hiring process and onward. Most problems are solved by shipping the problem individuals back to their home countries. -- Scott]

 
 
+20 Rank Up Rank Down
Apr 9, 2012
Do you mean like the company countries that already existed? For example Cuba Partners, Iraq & Sons, and Libya Corp. These companies saw the workers totally screwed by the Executives and BOD. They looted the whole company and hid their money in off-shore havens. Yeah that's a great idea let's try that again, especially since CEO's in the US haven't shown any signs of greed.
 
 
 
Get the new Dilbert app!
Old Dilbert Blog