The study of companies has focused primarily on effectiveness and objectives. The fact that firms are not meant to be perpetual in the same way as states has made their survival and growth paramount area of concern for managers and scholars. The status of companies as engines built and run exclusively for investor benefit is a tautology similar to the divine right of kings; their mandate from heaven needs to questioned, as firms have become for many a more visceral group membership than federal, state, and local government, religious organizations, and the family group.
Even when union membership was highest, the debate was not so much about the rights and expectations of the individual members of the firm, but about the antagonism between union members (the people) and executives (the rulers). While Peter Drucker discussed employees as critical units, he did so in the context of firm effectiveness and survival. What is needed is an examination of firms in a political context, not as components of a larger political system (with emphasis on the state) as has been the treatment by political scientists of corporations, but as political units in their own right. Today, as Elizabeth Anderson has articulated, corporations are governed in a feudal-authoritarian manner, in which certain castes of employee (and independent contractor) are permanently relegated to a sub-standard position, while other castes can climb the management ladder and participate in investor outcomes through 401k matching and equity grants or options.
The ideas that have built and solidified the current system are due to be examined in political terms, to make clear how one of the primary causes of inequality has been managed. Thomas Piketty’s Capital and Ideology explores the inequality’s history and concludes that additional rights for workers is one possible solution for of today’s high levels of inequality. Structures such as employee stock ownership programs and worker cooperatives can be better understood in the light of a corporate political science, as can executive pay, manager decision making, and corporate governance. If corporations are elevated to the status of countries and governments in political analysis (a status they have already achieved in terms of control over their “citizens” across the areas of privacy, location, standard of living, healthcare, and retirement outcomes), we can not only understand the current state of the world in a new and dramatic way, we can develop solutions for the challenges of our time that do not involve overcoming path dependent political systems as the first step. While companies have ossified into units resembling the predecessors of democratic states, the legal and financial structures they have created and refined represent an extraordinary opportunity in history for the development of more equitable, cooperative “states-within-states” with better political outcomes for their members in the near term, and better political outcomes for their surrounding societies in the long term.
Roman Ryan 