Private Government By Corporations

Posts in this series. This post is updated from time to time with additional resources.

The second chapter of Elizabeth Anderson’s Private Government: How Employers Rule Our Lives (And Why We Don’t Talk About It) begins with a striking image: the US corporation as communist dictatorship. The employer has the absolute rights to do as it sees fit with its employees with few restrictions. She singles out a few of the more absurd rules: an employer can fire a worker because of the way the worker votes, or opinions the worker expresses about politics, or, as we learn in one case, because the son of a friend of the employer raped the employee’s daughter.

We usually think of government as meaning only the state. Anderson says we need a broader definition of government: the legitimate exercise of power by one person over another. Thus, masters govern their servants and slaves, parents govern their children, the Church governs the faithful, the bridge club leaders have the right to exclude people from their games, and so on. We see something akin to this in Foucault’s discussion of governmentality.

Then Anderson draws the distinction between private and public government. A government is public if it is required to consider the interests of the governed, if governed people have the right to participate in the management of the government, and to review its actions and hold it accountable. It is private if the interests of the governed are irrelevant, if they have no power to influence or question the actions of the government.

Anderson defines the state following Max Weber in his essay Politics As A Vocation.

Weber’s definition is the following: “The state is seen as the sole grantor of the ‘right’ to physical force. Therefore, ‘politics’ in our case would mean the pursuit for a portion of power or for influencing the division of power whether it is between states, or between groups of people which the state encompasses.”

The state as the sole grantor of the right of the use of violence has a specific meaning. Only the state can empower a private group to exercise government over others. The master has the right to control the slave because the government says so. Parents’ rights to control children have the sanction of the state. Under the law of Coverture, husbands had the right to control the bodies and wealth of their wives. Anderson points to John Adams’ response to Abigail Adams request to “remember the ladies” in the construction of a new government.

Depend upon it, we know better than to repeal our masculine systems.

In each of these cases the state can regulate the control exercised by the grantee. For example, a state could determine that a parent hitting a child is abusive, and could punish the parent and take the child into protective custody. Or the state could simply withdraw its grant of control, as it did with slavery or the law of coverture.

The case of the corporation as employer is similar. The state could withdraw the right of the corporation to exercise any aspect of government it chose. It could, for example, make it illegal to fire a person who refused to attend a political rally for the candidate of the CEO’s choice; or more generally for any reason related to the employee’s politics. It can limit the right of an employer to fire an employee for illness.

In general, capitalists object to any infringement on their right to dominate the lives of their employee. The usual argument has to do with what capitalists call “freedom”, defined as the right to have the state leave them alone. Anderson could argue as she does in other cases, that this negative freedom for the capitalist inflicts massive losses of negative freedom on employees, who cannot support candidates of their choice, or stay away from undesirable political rallies, or organize into unions, or get sick. Thus, unrestrained control for capitalists requires substantial justification.

Instead, she points out that besides negative freedom, there are two other equally or more valuable kinds of freedom*: positive freedom, meaning having a wide choice of opportunities, and freedom from domination. It is frequently the case that restraints on negative freedom for a few produces much larger overall increases in these kinds of freedom.


1. The idea of private government mirrors the ideas of Bruce Scott and of Ellen Meiksins Wood on the role of corporations in the US. See this post.

2. Anderson seems to think a different outcome was possible, one in which the employer had control over the lives of employees only as to their jobs. I’m less sure of that. It seems to me that changes in the method of production do not impact the general governmental structures of a society. As Anderson points out, in England in the middle ages production was organized around feudal estates and guilds. Each was based on the idea that of top-down control. The monarch owned the real property and granted use rights to the aristocracy, which controlled agricultural production, and took much of the product for itself. Guilds acted as controllers of cloth and other artisanal goods, and decided who could participate and on what terms. In each case there was top-down control by agents empowered by the Throne to impose sanctions and discipline.

Private life followed the pattern. Husbands controlled wives, children, and servants. Churches exercised control over the religious lives of their parishioners, extracting tithes and demanding obedience.

As the methods of production began to change, these governmental structures remained in place. Apprentices were tacked onto that structure in the position of servants. When women started doing piecework for textile mills, they remained dependents. Fathers or husbands took their wages and used them as they saw fit. When children were put to work in mines and mills, they remained dependents of their fathers, who took their wages and used them as they saw fit.

The only change was the way people worked, not their social relationships. Those social relationships arose from ancient times. Anderson discusses the social theory that everyone must be controlled from above. This pattern starts with the Almighty, and continues through the monarch, down through aristos to common people to serfs and slaves, in what was known as the Great Chain of Being.

Social changes were in the long run influenced by the changes in the means and methods of production, as we can see from Anderson’s and Ann Hughes’ (Chapter 3) discussion of the Levelers and other dissidents in the mid-1600s. But those social relationships have a powerful hold on the minds of people. Like most bad ideas, the idea of the necessity of control from above is nearly impossible to eradicate. We see it today in different parts of society; where Biblical injunctions about wives and servants** still hold sway. John Adams was right. Men of all ranks will not want to give up their rights under their masculine systems.
*I discuss these freedoms at length earlier in this series. See the linked index.
** Some translations have “slaves”.

18 replies
  1. Dysnomia says:

    I think the definition of government (as “the legitimate exercise of power by one person over another”) deserves more discussion. In one sense, I think it’s an oxymoron, in that the exercise of power, defined as physical violence or the threat of physical violence, i.e. coercion, is never legitimate. Certainly under this definition what we call the government of the United States, as well as every other country in the world, is not a government, since none of these entities enjoys the genuine consent of the governed (social contract theory nonsense about implicit consent notwithstanding).

    And nearly every exerciser of power will claim that their imposition of authority over others is legitimate, that they have some moral authority, or that they have the consent of the other party, or that their imposition of authority is for the good of the other party, or is necessary for one reason or another, or some other justification. So basically all authority is government, if it’s about claimed legitimacy rather than actual legitimacy.

    The distinction between public and private government also needs some more consideration, I think. It’s a meaningful distinction, but what exactly does it mean to have the right to participate in the management of government? I think under this definition the “public” governments in the U.S. and other countries are actually private governments. While technically most individuals (with several exceptions) have the right to vote for candidates and even to run for elected office, the political system is structured in such a way that practically speaking most ordinary people will not be able to meaningfully influence the dictates of government.

    I think this goes beyond the issue of money in politics to the nature of representative vs direct democracy. Under representative democracy we delegate our power to a tiny minority of people who make our decisions for us, and our participation is extremely limited, consisting only of choosing our masters every few years then going home and letting those masters rule our lives. Even under ideal circumstances, I think it’s very dubious to say that ordinary people meaningfully participate in government under representative democracy.

    And another important consideration is the right to opt out. Do people have the right to not be subject to a particular government? Or to not be subject to any government at all? With regards to private government by employers, workers technically have the right to quit and seek employment elsewhere, but economic inequality forces us to be subjected to the government of some employer if we don’t want to starve or be destitute (depending on whether or not there’s a welfare state safety net). And with regard to state (supposedly “public”) government, no one even pretends that we have the right to opt out. Those who endorse social contract theory might argue that this doesn’t matter because we all implicitly consent to be governed, but if consent is automatic, unavoidable and irrevocable, then the concept of consent is meaningless.

    Any entity that claims the exclusive ability to grant the right to use physical violence, and that practically speaking is able to enforce this exclusivity at least most of the time, we call a state, but the state itself is under the control not of ordinary people but of the tiny minority who control the access to resources, i.e. wealth. Practically speaking the state is just a tool of wealth to maintain their privileged position and to bring physical violence to bear when the rabble starts getting uppity. For landlords to be able to evict tenants who can’t pay their rent, that requires some kind of state.

    I think there are basically five highly authoritarian (even fascistic) institutions in our society, the family (parents’ authority over children), the school (teachers’ authority over students), the church (clergy’s authority over the faithful), the corporation (employers’ authority over workers), and the state (government’s authority over everyone). These institutions habituate and condition us to being subject to the domination of others, and all of this is for the benefit of the tiny minority who own the society and control the resources. This is true under western-style neoliberalism, Scandinavian-style social “democracy,” and Soviet-style state “communism” (really just state capitalism). In all cases the authoritarian institutions of society ultimately work to maintain the small minority’s control over resources. Changing this requires remaking society from the ground up. I don’t think it can be done with existing institutions.

    (Hopefully all of this is coherent and not too rambly.)

    • Ken Muldrew says:

      Your definition of “power” is too limiting. Power is a generalized means of achieving a goal; violent coercion is just one mean among many. For example, rhetorical persuasion is a legitimate form of power. As to Weber’s definition of government as having a monopoly on violence, that means that the state can lock someone in prison for murder without the individuals who carry out the arrest, trial, and imprisonment being guilty of kidnapping.

      • Gayle Washburn says:

        “rhetorical persuasion is a legitimate form of power”…
        Why it’s not taught except at elite schools…

  2. earlofhuntingdon says:

    Weber’s definition seems to leave out an important set of relations – between individuals or groups and the state itself. It’s the money shot. As it is when government favors one group over another.

    Europeans were and are often surprised, for example, by how overtly American government is biased in favor of capital over labor. Rather than recognize both their interests as legitimate and attempt to mediate their conflict, the government is profoundly biased in favor of capital.

  3. earlofhuntingdon says:

    About your twtr comment that referee whistles are useful with large crowds, I recommend dive whistles. They are often colorful (easy to see), slightly larger (easy to grasp with wet hands), plastic-bodied (resists corrosion), and very loud (for signaling at sea).

  4. Peterr says:

    When I read the headline of “private government,” the first thing that went through my mind is the increasing demands of corporations for their employees and their customers to submit any disputes to binding arbitration, rather than the courts.

    Outsourcing the administration of justice to the private sector is not a sign of a healthy democracy.

    • earlofhuntingdon says:

      A functioning government would not submit its citizens to secret discriminatory dispute resolution involving how people earn their daily bread.

      Binding arbitration was originally designed for use between businesses, with comparable access to information and resources. It was never intended for use between individuals – consumers or employees – and much larger entities. The power disparity readily works in the larger player’s favor. Corporations also pay for the arbitration system, which gives them considerable unacknowledged power over arbitrators and the rules and processes they use.

      Arbitration is also secret, which hides potentially systemic wrongs committed by large economic players, allowing them to perpetuate.

      Binding arbitration between consumers and sellers, between employees and employed, should be prohibited as a matter of public policy. That it is not is government failing to do its job.

      • bmaz says:

        This is right. An early example is the process when one insurance carrier goes after another carrier to recoup payouts over a claim. They have a model for that, but it is between the carriers, not the insured on either side. But they fight on effectively equal ground, which is never, as Earl points out, the case when it is a giant corporation versus an individual consumer.

  5. jaango says:

    Again, a Tip of my Hat to you, Mr. Walker.

    When It comes to Pragmatism, I come at this Academic Legacy from the standpoint that is the Indigenous Creator, and thusly, the three canopied view that is “health, happiness and decency personified” is always my starting point.

    In the first draft of my latest to be book,(to be published and where 7,000 have been pre-sold) I focus on this Age of Pragmatism when applied to today’s Democracy and how this Pragmatism is to be applied in the near and far into the future that is premised on our demographics. And since my public utterance of consequential advocacy is of importance, I do so via the National Association of Latino Elected and Officials. And if one has a intuitive understanding of Chicano and Native American military vets, is the realization that the 17 intelligence-gathering agencies, are standing tall and at full-attention since my readers, are, for the most part, military veterans, writ large.

    Consequently, addressing the Pragmatism that is part and parcel to our public discourse, the Philosophy of Pragmatism, in particular the Indigenous Hemispheric version, incorporates both National Security and Defense. In contrast, the hollowed halls of Academia do not address the “value” of Demographics and where the Euro-Centric view transitions into the Indigenous view here in our United States, and not necessarily inclusive of all of this pragmatism that this hemisphere entails.

    Therefore, on the subject matter, for example, on a woman’s reproductive rights, I revert to a soon-to-be-a demographic orientation of our nation’s ‘brown’ democracy for “Governments–federal, state, county and municipals–shall not interfere in a woman’s reproductive rights.”

    Now, need more be said on my part?

    And lest, I not forget, I need to mention that I thoroughly enjoy the commentaries posted on each of these threads on this Philosophy of Pragmatism. And again, my thanks.

  6. jaango says:

    In this Age of El Trumpudo and all that he represents in our Arts and Sciences of Communication, the Progressive Mindset should be focused on the Marketing and Sales in and of Journalism/Education. And for a number or a variety of Reasons and where integration and assimiliation does comes full circle. Thus, my insertion of an Indigenous “pragmatism.”

    Given that our hemisphere is comprised of 23 nation states, what occurs here in the United States via public law should be exported throughout this western hemisphere, and in doing so, our current attempt at Decency Personified would be comparable to our National Security and Defense i.e., foreign policy efforts given the high level of federal spending for War and not necessarily for Peace. Enter the “brown” Democracy! And just waiting around the corner, I might add!

    In my earlier post I exemplified the public law of “governments–federal, state, county and municipal shall not interfere in a woman’s reproductive rights.” And in doing so, exporting this typical public law into the 23 nation states would have tremendous and affirming impact relative to Decency Personified. And unbeknown to most of us, familial and neighborhood violence is the driving force of inmigration/immigration into our southern United States. The standardized view is in seeking employment, and yet, not so. And this standarized view defies Common Sense, a Common Sense being sold by both Conservatives and Centrists.

  7. Bill says:

    Governments exist to protect the interests of the dominant class.
    The US was founded on the idea of equality even though many of the founders were slave-owners. The slave-owner’s class “rights ” were protected by the government. Although the founders had lofty ideals about equality, they allowed slavery to persist.
    To talk abstractly about “private government by corporations” is
    misleading. Government For Corporations is more accurate.
    is misleading.

    • earlofhuntingdon says:

      A tad anachronistic. Corporations did not play the role they do now for a hundred years after the founding, not until the days of the big railroads.

      Government is a catch phrase for what we choose to do jointly or collectively, in a word capital has tried to make an epithet (even as capitalists work jointly in the same fashion they would deny to private citizens).

      Government persists through time and does what people cannot do individually. That a dominant class seek to control such an institution is an ancient observation. That’s why the US Constitution is so inefficient. It separates powers and assumes – a little blithely – that conflicts among its competing parts would be sufficient to keep it working for the governed.

      What’s left out of that equation is the Fourth Branch – people, not the press. They created government and must constantly check how well it works.

  8. DAT says:

    I feel “private government” is a clunky phrase. I prefer “corporate feudalism.” As you mention, our social relationship forms have a long prehistory. “CF” recognises that. Regarding that prehistory, I wonder if God the all powerful, wasn’t first modeled on the warlord, rather than the other way around.

  9. Daulnay says:

    Some of these definitions of government fail to catch an essential characteristic; governments are institutions. A single person isn’t a government, the apparatus supporting them is. At most, a single person is a tyrant at the head of an institution. A government persists beyond any group of individuals, as EarlofH points out. A government also needs some mechanisms to give it power over the governed – otherwise it cannot govern.

    By this definition, the medieval Church was a government; it had mechanisms to govern not just the lower classes, but ways to coerce royalty, and it did. Excommunication was the most extreme, but the sacraments of the Church gave it critical control over royalty. Marriage in particular controlled inheritance and succession.

    As Earl of H pointed out, corporations have not been a full-fledged governments until (historically) recently. Many pre-modern governments controlled economic activity, so we could see the emergence of corporate governments as a re-governmentalization of economic activity. Just as the Church coexisted – and fought for power with – feudal royal government, the modern state and corporate governments coexist as two competing institutions.

    ‘Private government’ doesn’t really catch what’s going on, nor does ‘corporate feudalism’. A new kind of government has formed, around control of money/capital instead of control of territory. They may stop being authoritarian and hierarchical (e.g. syndicalism), and certainly aren’t all feudal (characterized by bloodline inheritance of power). I can’t come up with anything better than “corporate government”, which confuses government of people by corporation and the government of a corporation. Any ideas?

    Corporate governments now fight for governmental powers with the governments of the preceding form, and for freedom from being governed by them. Peterr and BMAZ pointed out that binding arbitration is a sign of an ailing or poorly-functioning government. Really, corporate governments are just taking over a power of territorial governments. Education has been the remit of religious and territorial governments, now the allies of corporate government push for ‘privatization’ of education – meaning transferring that function from territorial to corporate government. Many powers and functions have been or are in the process of getting transferred, even legislation! Although corporations aren’t passing laws (yet), they are – through ALEC – writing them.

  10. Daulnay says:

    If you see the current situation as ‘government by state’ vs. ‘government by corporation’, the positions of Libertarianism take a different light. Libertarians aren’t promoting freedom from government, they advocate shifting government from the territorial State to the economic Corporation.

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