Could a welfare state co-exist with mega corporations?

Question

The Hegemony is a welfare state dedicated in giving all citizens: housing, education, basic necessities (water, food, etc), and help with either finding employment or a job assigned by the Hegemony.

The Hegemony is built on the principles: prosperity, security, and conformity (as in equality/everyone has a place in the Hegemony since the Hegemony provides one common culture).

However large corporations still exist within the Hegemony. Some of these corporations like Prometheus step into Mega-corporation territory owning their own regions (company towns, reservations) as well as their own police forces (private security due to the scale of these corporations).

Could a welfare state (a unitary global government) coexist with megacorporations without many ramifications? What sort of economic or political compromises would have to be made?

Note:

Hegemony is still a free market. While any one can apply for state housing anyone can also buy their own housing. This applies to any of the state benefits. Any one can buy private instead of state goods if they want.

Hegemony would be considered "Big Government" since it is a unitary state with smaller regions having limited autonomy and legal authority.

The laws on monopolies have been relaxed with only "harmful" (as in causing stagnation) monopolies broken up.

Answer 1

It's simple: the megacorporations coexist with the government because they're under contract.

Let's say for the sake of argument that the Hegemony was not always a welfare state. Once, it didn't provide such things for its citizens, and then at some point it decided to do so. This is a massive undertaking for any state: it has to study its own people, organize aid disbursements on an unprecedented scale, and add new bureaucracy to manage these functions. Making matters worse, many of the things it's providing are not things it's used to providing. Does the government have the facilities to physically receive and ship massive quantities of food from the farms to its citizens? Does it have nationalized power plants and the highly-trained staff needed to run them? Does it have retailers? Marketing staff to determine which luxuries the people want? Analysts to decide what fields it should focus education on? Very likely it doesn't.

Who does have that infrastructure and those people? Corporations do; that's what they're for. Rather than creating its own government dispensaries for, say, medicine, the government goes to the existing pharmacies and drug companies and insists that they will provide certain products and services to designated standards, in return for subsidies. This way, the Hegemony isn't duplicating existing infrastructure, and its role is limited to regulation, oversight, and contracting - all things governments have more experience with.

Over time, the government and corporations would grow more symbiotically entwined with one another. The corporations can't simply walk away from the government, because they would operate at a loss without those subsidies - not to mention the loss of markets. On the other hand, the government can't shut down too many corporations or it loses the ability to provide for its citizens. This protection applies best to larger corporations and cartels, though; if a small corporation misbehaves, the government can smack them down and rely on their rivals to pick up the slack. So there's a strong incentive for corporations to merge into ever larger, more diverse conglomerates in order to negotiate with the government on a more equal footing.

Answer 2

Of course megacorporations can coexist with a welfare state. Duh. We know they can because they do. You may have heard of Philips (which coexists with the Dutch welfare state), IKEA (which coexists with the Swedish welfare state), or Airbus (which coexists with a number of Western European welfare states).

Now, what the question posits could be understood to refer not so much to a welfare state but to a form of totalitarianism. Such an understanding makes for a (slightly) more interesting question: can megacorporations coexist with a totalitarian state?

And the answer is again that yes they can; we know because they did and they do. One can hardly imagine a state more totalitarian than fascist Italy, or national-socialist Germany, or the communist Soviet Union, or the People's Republic.

Fiat coexisted with the Italian fascist state; not to mention the Institude for Industrial Reconstruction (IRI), the mother-of-all-holdings, created by the fascist state and which survived until 2002.

In national-socialist Germany they had such megacorporations as the infamous I.G. Farben, Krupp A.G. or Telefunken; not to mention the Todt Organization, a mammoth engineering company created by the Nazis.

In the Soviet Union they had countless megacorporations; for example, the Gidroelektrostroy Trust (that would be "Hydroelectroconstruct" in English), Elektrosila ("Electropower") and the famous LOMO, the Leningrad Optical Mechanical Organization, which gave its name to the lomography movement. ("Lomography" is a trademark of the Lomographische A.G.)

Actually, megacorporations were a major structural principle of traditional communist or socialist economies based on the Soviet model. By and large, in countries which modelled their planned economies on the Soviet model, vast tracts of economic activity were organized into country-wide sectorial megacorporations. Of course, they were not called megacorporations, but rather trusts, or centrals, or enterprises...

And in the modern People's Republic we find that megacorporations coexist just fine with the most recent instantiation of the eternal Chinese state; Huawei, CNPC, COSCO, Lenovo, Tencent, TP Link, ZTE...

Answer 3

Absolutely

In fact, it would be in the best interest of the mega-corp to have at least one welfare state hanging around. Somebody pays. Somebody always pays. In the case of a welfare-state, it's the government that pays by taxing everything else under the sun. And it's easier to convince one government than it is millions of people (especially when you have a group of people politically biased toward taxing everything to ensure everybody has everything in equality).

Could a mega-corp exist only within the context of a welfare-state? Probably not. But do they want one or more from many states? Absolutely.

Answer 4

I'm going to argue that this is exactly what we're moving to with varying degrees of effectiveness from country to country.

Put simply, it's in the interest of EVERY government (hegemony, dictatorship, democracy, communist or capitalist state) to keep its citizenry in good health and productive. The question of how that should be done is one of the key differentiators between the different economic models.

On the one extreme, Communism is based around the belief that it's the personal responsibility of the state to maintain the populace as a healthy, productive and equal work force.

On the other, Fascism states that it's the responsibility of the powerful to maintain the population and that the state's role is little more than mutual defense of the powerful as a large cartel; anything else is just getting in the way of the people who organise the production.

By comparison to Australia, the USA has a political spectrum that is far more right shifted (although it would appear we're drifting towards that ourselves) and the obvious example of it to me is healthcare. In Australia for instance, we have a state funded health care system, but there is a lot of pressure on wealthier people to switch to private healthcare instead to take pressure off that system (even though outside of the two major cities Sydney and Melbourne, there isn't a lot of choice).

In the USA however as I understand it, the healthcare provision is essentially an employment benefit. In that sense, the government has an interest in the welfare of the people but outsources it to the corporations. I suspect that the same concept could be extended beyond healthcare to the point where mega corps could be tasked with more and more responsibility for the welfare of the people under the guidance and regulation of a hegemony.

In essence, the scenario where the two co-exist is one where the hegemony has the power, and the mega-corps have the funds. The hegemony exercises its power to ensure the welfare of the people through regulating the mega-corps into increasing their cost of doing business by making them responsible for the welfare of its employees.

The next logical step is to take all citizens that are not employed by a megacorp, and putting them into a government enterprise of some sort, whether it be public administration, road building or whatever. In that sense, you achieve full employment, outsource the expensive elements of social welfare to the corps, and pay for those who slip through the employment cracks via the taxes those same corps pay.

Answer 5

Yes. But details depend on who's in charge.

1. Hegemony is in charge. All corporations, mega or not, need to play by its rules. They are allowed a freedom to make profits, but have to pay taxes and should never go political. Hegemony, on the other hand, keeps ordinary people content and takes care of those who didn't find a place to work at mega-corporations. When corporation tries to skirt the rules, Hegemony would make an example of it.

2. Corporations are in charge. Hegemony is heavily influenced by the big money, no decision is made without considering corporate interests. Mega corporations like to make profits, but they realize the danger of large discontent underclass. As a solution, Hegemony acts as a law enforcement and welfare agency jointly run by the corporations.

Answer 6

Mega corps are really only interested in on thing profits. A lot of the time they are not even interested in the well being of their employees, outside of keeping them just happy enough for them not to leave. They are definitely not interested in the general welfare of the populace as a whole. Having a government around would benefit the mega crops in various ways. The government provides an atmosphere to do business in buy ensuring law an order, an educated populace from which to recruit workers, a national defense, a source on income in the form of government contracts, a social safety net(health care, basic income), infrastructure(roads, bridges, electricity, water, telecommunications), and protection against foreign mega corps in form of protectionist trade policies. All this helps mega corps maximize their profits. In turn the mega corps provide tax revenue, jobs, products, services, and an economy in general.

Answer 7

Absolutely. The welfare state is not a selfless, charitable effort. It is an investment in the resilience of the working population.

It's important to understand that, while there is a significant humanitarian aspect to the welfare state, it is also an investment by the government (and its tax-paying citizens) in the wellbeing of its population. It can be argued whether the benefits outweigh the investment, but ultimately it is easily viewed as a business transaction.

We pay some of our earnings to provide for people who cannot work. Because we do, if we suddenly cannot work we are also provided for. Then, because we are provided for while we cannot work (thus avoiding nasty things like starvation), we are more likely to become productive members of the working population again.

If you want to cut out the humanitarian aspect, then you just need to engineer a situation where for megacorps it is worth providing welfare. I can think of a few options:

1. Provision of welfare is used as an incentive to recruit high performing and motivated staff (like good dental plans in the US). This would work especially effectively if one high performing individual could provide welfare for additional members of their family, both widening the spread and increasing the social pressure for someone to come work for your company.
2. It's something seen as desirable by the buying public. Something like FairTrade which costs more to produce, but increases the appeal of the product.
3. Welfare as a strategic investment in the long-term health of their working population (this is the main benefit our current governments reap from things like provision of welfare and free universal healthcare). In addition to tiding people over in rough patches, providing welfare could also have benefits like reducing the likelihood someone will have to resort to criminal activity to make ends meet. A happy, healthy, crime-free workforce will be more productive than an oppressed, unhealthy workforce that's just had their house burgled.