Where Are the Cyberpunk Megacorporations? Why Big Companies Do Not Want Power

Every dystopian SciFI Cyperpunk setting has them: Megacorporations. Big, bad companies, willing to do everything for profit, literally leaving a trail of bodies behind, employing ruthless mercenaries that use ultra modern secret equipment and weaponry to secure shareholder value. The nation state is either powerless or ceased to exist.

But, as dystopian as our times are right now, they are still missing: What keeps Google, Facebook and Apple – and their Chinese Equivalents Baidu and Alibaba from taking power? What keeps Oil-conglomerates from building their carbon paradise on earth? In summary, the answer is quite simple: The deal is not right – yet – and sometimes having power is actually a drawback.

Let’s have a look at some numbers:

Amazon, the biggest Tech-Giant by revenue, can boost an annual revenue of 386 Billion US-Dollar in 2020. Apple comes in with a revenue of 294 Billion US-Dollar. Biggest Company by revenue, however, is Walmart with a staggering revenue of 559 Billion US-Dollar, also in 2020. Most other companies in this range deal with oil and are, in most cases, state-owned.

These figures do not match the United States with budget expenditures of 9,818 Billion US-Dollar or Japan with 2,362 Billion US-Dollar in 2020. However, Amazon surpasses Mexico with her expenditures of 314 Billion or Switzerland with 263 Billion US-Dollar.

You probably have noted that I’m talking here about the revenues of private companies, all the while comparing this figures to the expenditures of states. Aforementioned companies are generating a positive income, meanwhile, these states always have had holes in their budgets, holes, that actual circumstances only enlarge. We will see later, that this difference is part of the reason why we do not encounter Megacorporations today.

In terms of force, however, Tech Giants and other private sector behemoths seemingly don’t have much to show. Sure, they can kick people from their platforms and maybe start some kind of litigation, but they don’t have a standing army and an own police force. Certainly you are not beaten up and jailed for violating the plattform’s rules. They may employ shady tactics here and there and use private contractors, especially when dealing with countries that cannot guarantee the safety of the firms facilities.

However, they actively try to avoid any conflict and do what countries tell them to do. Think of the beating Apple, Microsoft and Facebook get from regulators worldwide, let alone the immense pressure the Chinese government puts on companies operating within its borders. The latest example for such an act was the temporary disappearance of Jack Ma, the CEO of the Ant Group a.k.a. Alibaba as a show of force after this Tech Giant overstepped the boundaries set by the government one time too much.

Operating under such circumstances is far from ideal for a company. Therefore, it makes sense for a company to break free from this restraints and try to become independent from any sovereign state. Such a company could make its own rules and operate the most profitable way. We shall name a company, that operates independent from any states, a megacorporation.

In history, we have examples of companies that meet the definition of such megacorporations: Think of the East-India-Company, that expanded its rule over India step by step, if necessary, by force with an own Army and Navy. Indeed, most of the early colonial enterprises were private in some way or another, brought forth by private entrepreneurs with the support of their monarchs, free to exploit their colonies without any restrains.

However, theses private endeavors did not withstand the test of time and ended up being integrated into their respective nations or whichever nation took control of the colony. Often, they relied on their home governments to support them both financially, albeit the trade with colonial goods usually was highly profitable, and with military means.

This points to the central problem: Whoever wants to be as powerful as a state, has the same responsibilities and therefore expenditures as a state. This is the fundamental relation between protection and obedience. Said concept has been most prominently formulated by Thomas Hobbes, whose creation is the namesake of this channel.

Of course, being powerful and commanding obedience is nice. Getting people to do whatever you want, forcing them to buy from your stores, using your products and services, charging them tolls for using your infrastructure et cetera is certainly great for your balance sheet. The cherry on top is no regulatory oversight or anti trust legislation.

However, there is the massive drawback of protection: Guess to whom the people are addressing their needs and reach out for support? You and your megacorporation! People expect from you to help them when you deprive them of their money and – usually – weapons. If you don’t help them, they might start to rebel against your rule, take what they need and want, finally destroying your means of production and your company altogether.

This rebellion is driven by your perceived shortcomings, since your megacorporation is the face of power and hence seen as responsible for literally everything. Like with the nation state, it doesn’t matter, whether you caused the situation in the first place or not or whether you did what you could to help. In a rebellion, security expenses quickly get out of hand and your earnings report goes south, driving your megacorporation to bankruptcy. The East India company had to turn to the Empire, after the Rebellion of 1857 destroyed the company’s realm in India.

Moreover, there is the risk of outsiders trying to take over your companies business as well. Who would stop them, when there is no state around? Therefore, you have to invest in defense, another expense on your balance sheet that does not yield immediate profit, like environmental protection and labor rights.

Finally, your corporate subjects maybe want to have a say in your decisions as well, since those decision impact their life like nothing else. Suddenly, you have to justify decisions that maybe make sense to you and your shareholders, but not to the general population. You can provide this justification either by introducing some kind of democratic process, which can yield unwelcoming results and tends to spread in more and more areas of your business, or by handing out monetary incentives – that is, welfare. Both ways come with a high price tag.

Sure, you can charge for more things then, but the balance sheets of most states are deep in the red for a reason; Amazon, meanwhile free from such expenditures, can rake in hefty profits.

This shows that an up and coming megacorporation has to choose between two paths to follow: Stay in the private realm as a normal, private company and bow to the leviathan; or become a state in its own right, a new leviathan, but with all the drawbacks.

A modern example for companies that at least veer to the latter approach are drug cartels and organized crime in general: Like every private company, they try to generate revenue by offering services and goods. However, since this illicit offerings usually negate state power and thrive in weak states, they tend to pick up functions of the state as well.

The prime example is the protection racket: The mob forces businesses in its territory to pay for protection, but this is not only an one way transfer: The mob actually has to provide protection and it does. In some places, local mobsters have replaced the national police force altogether.

Another example is disaster relief: Cartels around the world are known to hand out care packages etc. to locals. This isn’t just a PR-Stunt, but fosters acceptance in the populace that usually has to suffer under the mob, like getting a relief check makes people love their politicians, even though they pay much more in taxes. During the ongoing crises, some cartels even enforced curfews, certainly nothing that benefited them directly.

Organized crime shows, however, that there is a third way that both illegal and legal companies pursue: Being an indirect power.

As we have seen, being powerless has its drawbacks. But being powerful is not that great either, because people would demand expensive protection, support and participation. Wouldn’t the best way be to have some kind of straw man to whom people can direct their unheard pleas and who does the dirty jobs, like levelling taxes and defense – even better, levelling taxes that destroy your competition and offense military action against the really bad competition, all the while your hidden megacorporation pockets its profits. Your straw men then gets paid off for taking the blame. Furthermore, your straw men can justify himself with concepts like democracy and freedom which would be hardly believable if stated by a megacorporation. Facebook and Co. are trying it, though. It’s basically political outsourcing.

This concept describes the relationship between the nation state, which we commonly refer to as the state and to whom we direct our pleas, and the private sector. Private interest, be it a cartel, a big Tech Giant or a local plumber service bribe and influence officials on all levels of government to get their will, while offloading the consequences to the state itself, that is ultimately to the people. This is a win-win for politicians and civil servants, who are not held responsible for their deeds, on the one hand, and private interests on the other hand. That defines said private interest groups as indirect power contrary to the open direct power of the state.

In fairness, it is not strictly a one-way-relationship and companies grant their state favors too: Like helping with the surveillance of enemies of the state, censoring unwanted content et cetera. Usually, every state is powerful enough to squash any of its companies if necessary. This gives the state enough leverage on them to archive its own ends with support of this companies, all the while the state’s officials are able to pocket some sweet bribes on the way. As long as this is provided, a state can survive and serve the public interest, somehow. Therefore, we often see a symbioses between companies and their home states. In some nations, this relationship clearly favors a strong state which only allows companies to grow in its shadow. The CCP’s China is a prime example.

If, however, the indirect powers become too powerful and start to disrupt the functioning of the state, the state gets in an impossible situation: Drained by the demands of its citizens on the one hand, that is to maintain security and public welfare, and the demands of said indirect powers, that is letting them do what they want, on the other hand, the state loses power. This loss impacts its ability to grant protection against obedience. Think of the areas controlled by cartels in South Americas. If the indirect power is not willing or able to pick up this duty, the state might succumb – Another failed state has entered the world stage. I will talk about the death of states in another video extensively.

There we have it, the reason why there are no megacorporations around: At the moment, the states of the first world (including China) are too strong and the drawbacks are too big to justify for a company, even a Tech Giant, the step to statehood. In the third world, neither a domestic nor an international company has any interest to deal with the chaos this states are in, if a simple bribe and some contractors can do the job as well.

In its heart, every Sci-Fi-megacorporation is a state which is based on a capitalistic idea, heritage and organization. In our modern times, we have not seen such a state/megacorporation. No corporation is striving to become one, since the status quo as indirect power fits them well. However, if in future nation states that are home to big companies or cartels crumble, we might see one of them reluctantly picking up the eternal contract that reads: Protection for obedience and obedience for protection.