The State and Corporate Power – Sorry, Not the Same Threat to Liberty

Duke University political scientist Mike Munger recently made the following claim over at his fun blog KPC:

1. The left needs to admit that the state=coercion, which can metastasize into violence, and does so metastasize.

2. Libertarians need to admit that Karl Marx was right about concentrated corporate power. It’s every bit as dangerous, and in fact in most important ways it’s no different from, the worst aspects of the state. So, ipso facto, concentrated corporate power=coercion (see above about metastasis).


Sure, it is easy for someone – left, right, or center – to agree that the state = coercion.  Heck, anyone who has read Max Weber (“Arguably the foremost social theorist of the twentieth century” according to the Stanford Encyclopedia of Philosophy), taken a PoliSci 101 course, or been on the wrong side of the IRS or local law enforcement can understand that the “state is a human community that (successfully) claims the monopoly of the legitimate use of physical force within a given territory.”*  In other words, it is, as Weber understood, an institution of violence and domination.  Therefore it doesn’t “metastasize into violence” – it is the embodiment of purposeful violence by definition.

I don’t think the (educated) left disagrees with this definition as much as it thinks that a state can use this violence justly to achieve certain ends.  Of course, ideally state force would only occur via a process that is roughly democratic (though this is not necessarily the case as witnessed by the left’s approval of using courts to achieve social justice regardless of the views of the demos and a lot of recent EU history in which elites move forward with plans despite a vast democratic deficit).  And I for one have a hard time disagreeing with them that state violence can be justified for certain just ends (we just disagree on those ends) given that I’m not an anarchist.  Moreover, I don’t have a problem with the process being insulated in part from the people since I too fear the dangers of democratic rule (or at least of too much democracy).

However, the most problematic part of Munger’s claim is the second part.  I’m certainly willing to admit as a libertarian that concentrated corporate power can be dangerous.  However, I hardly think logic or history can support his argument that “It’s every bit as dangerous, and in fact in most important ways it’s no different from, the worst aspects of the state.”  Really? 

One doesn’t even need to use a sort of reductio ad Hitlerum to conclude that states have killed, maimed, robbed, and otherwise violated the human rights of far more individuals than large corporations (especially when one factors in only intentional rather than accidental harms like the Bhopal disaster**).  Moreover, corporations in even a constrained market are likely to face competition that keeps their size and power limited.  And if they could grow in size, scope, and power to rival small states, one would imagine the hand of monopoly grants by a larger state behind it!  But large states wouldn’t allow their own power to be rivaled by such corporations.  As Bruce Bueno de Mesquita points out in “The Dictator’s Handbook,” companies like Yukos were decimated by the state when they and their bosses got too rich and powerful.      

So the real danger from corporations is when they are tied to state power a la corporatism.  Absent this tie, corporations have very limited power and certainly far from the coercive power Munger claims.  Without the state initiating force on their behalf, concentrated corporate power isn’t “coercion” by any common definition of that term.  Coercion is the use or threat of unwanted physical violence by one person or legal entity against another. Can any other definition actually be honestly sustained, especially for use within a libertarian framework? 

Concentrated corporate power may lead to unjust use of power – that’s something we can actually debate – but it is an abuse of the English language to say it is “coercion.” 

* Max Weber, “Politics as a Vocation.”

** If Wikipedia is to be believed, the state was also involved in that tragedy to some extent given the Indian government owned almost half the company!

HT: Jason Sorens

8 thoughts on “The State and Corporate Power – Sorry, Not the Same Threat to Liberty

  1. I have long found the artificial and tortured “symmetry” between corporate power and government power argued by the left to be tiresome. It merely translates into “your side is just as bad as our side.” But Grover is right: it’s not true.

  2. It’s not a symmetry. It’s a problem of control of the state apparatus of coercion.

    First best: no large powerful state.

    Second best: given that we have a large powerful state, how to prevent corporate control of same. General Motors and Goldman Sachs are always going to be able to get the state to take money from the rest of us and give it their shareholders.

    So, if you help me get rid of state powers, good. But in the meantime, corporations are going to have too much power, BECAUSE the state apparatus is there to be manipulated.

    1. Perhaps I misunderstood what you were arguing. You did seem to set up a symmetry of sorts in your blog post in that you seemed to suggest that even under laissez-faire, corporations would be inimical to welfare/rights, but I do agree with what you have written here. How are we to tame corporate power in the current environment? How can the fox guard the henhouse?

    2. I don’t disagree with you that corporatism is a huge problem – though your post suggested there is something more going on than mere capture (thus it sounded like there was a left critique in the background that seems to be showing up more these days in liberaltarian and left-leaning libertarian arguments). Either way, I think you were too strong when you wrote that corporate power is “every bit as dangerous, and in fact in most important ways it’s no different from, the worst aspects of the state.” This seems too simple a model since corporations are frequently victims of the state even as other corporations utilize the state to do their bidding. And the state often does things inimicable to individual liberty that have little to do with corporate power — hence the state is a very dangerous creature all by itself while corporations are pretty harmless when unmarried to the state (especially if the state plays its proper role and punishes rights violations, fraud, etc by corporations). Or do you in fact have a stronger argument, as I inferred, about corporations being freedom-limiting, etc. due to market power, etc. rather than their ability to influence the political realm?

      1. But perhaps Lee and I were seeing something that wasn’t there (though I’ve thought so before in regards to your work on KPC).

        Moreover, worth stressing that I go a long way down the road with you – just trying to see where the differences are (so please take it in that friendly spirit).

  3. who is to blame for corporate violence? if corporations exist to maximize profit, and it is somehow profitable to conduct acts of violence, then this is probably what they will do. if there are rules in place which prevent violence and distribute punishment, then violence will be reduced. while it’s nice to think that shareholders care about ethics and that they have time to research every company they invest in, this is not really a rational expectation. it is the responsibility of the state to regulate violence, and failure in that regard is the state’s responsibility in the exact same way that individual criminals are the responsibility of the state (likewise: it’s nice to think people will just be ‘good’, but what matter is how they are dealt with when they’re not).

    1. You’ll note that I said this above: “especially if the state plays its proper role and punishes rights violations, fraud, etc by corporations.” So yes, I see a role for the state in deterring/punishing coercive rights violations.

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