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I am working on a short story set in a world where governments have been usurped and now has been replaced by mega corporations that span the Solar system. They have there own mini armies, colonies, assets, citizens, workers, research facilities, AI bots and currency. In the story I would like to flesh out a flashback, the years from 2025 to 2075 which essentially would detail how the transition have happened, from democracy to corporate feudalism. The transition from the world as we know it now, to the proto-mega corporation era. The key question here would be how would a mining company for example be able to amass so much power, be able to issue its own currency, own its assets and have its own global citizens. I would then be able to extend this proto-mega corp to a Solar system spanning mega corp from there.

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    $\begingroup$ They already are. $\endgroup$ – Daniel B Oct 7 '18 at 8:45
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    $\begingroup$ I've never understood these dreams. Corporations exists to make money. Running a state is expensive. Almost all the states in this world run deficits, that is, they lose money. Why on Earth would a corporation burden itself with education, public transportation, public safety, public administration, justice? And nevermind the why -- consider the what. An entity which provides justice, public safety, public administration, public transportation, education, pensions, insurance etc. actually is a state. That's what a state is, by definition. All you have achieved is changing job titles. $\endgroup$ – AlexP Oct 7 '18 at 8:59
  • $\begingroup$ @AlexP a corporation being more powerful than a state doesn't mean the company runs all the low-level day-to-day stuff that a state does. It could just mean they have sufficient legal or financial power to enforce their overall will from behind the scenes, while piggybacking on the state. $\endgroup$ – Philip Rowlands Oct 7 '18 at 9:08
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    $\begingroup$ And for the question as asked: some corporation are already much more powerful than most countries. Compare the goverment of Romania (annual budget about 25 billion USD, about a million public employees of all kinds) with, say, the Volkswagen Group (annual revenue about 260 billion USD, about 650,000 employees) or Walmart (annual revenues about 500 billion USD, about 2.3 million employees). And Romania is not a particularly small country, neither is she particularly poor (nominal GDP per capita is just above world average, or about 1.5 times the world average at purchasing power parity). $\endgroup$ – AlexP Oct 7 '18 at 9:16
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    $\begingroup$ This actually looks backwards not forwards in terms of societal set up, the idea of the Company Town and Company Store is this in miniature; a space in which the company owns and controls everything it's worker/citizens do. The question becomes how does the world return to a place where that's acceptable to people, that's a big story element that you need to think about we can't do that kind of work for you. I would suggest looking at the Shadowrun future history for some ideas. $\endgroup$ – Ash Oct 7 '18 at 9:37
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There are a few factors that would help:

  • Lots of money.
  • A larger army (more cash potentially means more troops).
  • Weaker central governments in the regions they work in (thus reducing oversight, and possibly justifying the number of hired guns...I mean, corporate security personnel). This is probably the key one - complete anarchy is probably too expensive to exploit, but a government that's too strong can rein in the corporation too much.

There's a few historical examples that are worth looking at:

  • The British East India Company. They were initially granted a monopoly on trade between England and anywhere east of the Cape Good Hope; eventually, they essentially ruled the entire Indian subcontinent, and at their height had a standing army that was twice the size of the British Army. However, after the Indian Rebellion in 1857, the British government did revoke their charter.
  • The United Fruit Company. They ruled large parts of Latin and South America in all but name, to the point that the term "banana republic" is derived from their effective ownership of Honduras.
  • The Hanseatic League were looser and less well-defined than the above two, but they managed to bully a lot of local rulers into providing tax and toll exemptions for their trading posts.

However, none of those ruled every part of people's lives. As @AlexP pointed out, that's expensive and likely tedious an onerous economic and regulatory burden. It would be far more likely that the corporations would consider that Somebody Else's Problem and attempt to just offload it to the state.

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How to become so powerful?

Gradually. Intel spends 12 bln usd on r&d in 2017, so spent a few more times than my country (Poland) for that purposes (both private and public sector combined). Does it raise any eyebrows? Nope. Does a private oil rig looks improper? (except Deepwater Horizon ;) ) Space X? They are even liked. Would anyone object a private space mining venture?

Oh yes... space mining venture requires some infrastructure. No gov to provide that? Happens. The corporation would have to build it on its own.

How it happened? Well, compound interests...? Private ventures tend to outperform public ones. In long run it means simply outcompeting govs from space exploration. Shareholders tend to be overly impatient with quarterly earnings, but are not as irresponsible as voters who simultaneously demand more free goodies and tax cuts. Oh... In that time (2025-2075) huge gov investments weren't exactly the priority, as govs were being crushed under costs of retirement spending. Nothing could be done about it, as retirees are very disciplined electorate, so no politician would seriously dare to cut spending on them.

The only missing piece is getting a few dozens of space outpost being officially recognised as state like entity. Maybe some lobbying would be necessary, or maybe after a while of keeping them under some equivalent of flag of convenience, they would officially declare independence from Liberia or Panama.

I somewhat doubt companies taking over states part. It would be rather new high profit outposts were corporate property, while hollowed out states technically speaking exist.

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