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I was wondering if the debt of major developed countries (especially the USA) were to grow too high (possibly with interest rates above GDP as this is the current view of what it takes to go backrupt) a corporatio could propose to buy back the debt in exchange for a part in the infrastructure like for example Amazon shows up and says "we'll buy 10 billion of your debt but give us control of all the bridges" or something. And then Google buys all the public buildings.

Is this a possible thing in theory?

I assume it would bring those companies closer to controlling the country, however they wouldn't have executive power. What would need happen then for one or multiple companies to essentially do a soft coup and take power? Would buying back the army be likely? What would it lead to?

I'm thinking of precipitating this with bad handling of the debt in my world (mostly thinking tax breaks like the ones that made the debt skyrocket at least three times now).

Thanks for the help

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  • $\begingroup$ @Draft85 I’m not sure I understand you. Sorry. $\endgroup$ – Nierninwa Apr 12 at 10:34
  • $\begingroup$ The thing is, in the US at least, 10 Billion dollars is chicken feed next to the national debt, which currently 28 Trillion. (Huh, I don't know the escape character for the dollar sign.) $\endgroup$ – Jedediah Apr 12 at 19:47
  • $\begingroup$ @Jedediah yes but Amazon is over a trillion and makes 280 billions a year so could they physically take a loan for like a trillion and pay it back at 7% of their benefits within 50 years? $\endgroup$ – Nierninwa Apr 13 at 14:24
  • $\begingroup$ My point is that 10 Billion simply isn't a big enough number for something as nakedly dangerous as granting a single corporation "control of all the bridges". Though, for that matter, the Federal government in the US couldn't do that, anyway; roads etc "belong" to the states. (Though perhaps 10 Billion might plausibly enough to gain "control of all the bridges" in a particular state...) $\endgroup$ – Jedediah Apr 13 at 14:36
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This is called privatization.

https://hbr.org/1991/11/does-privatization-serve-the-public-interest

This newfound faith in privatization has spread to become the global economic phenomenon of the 1990s. Throughout the world, governments are turning over to private managers control of everything from electrical utilities to prisons, from railroads to education. By the end of the 1980s, sales of state enterprises worldwide had reached a total of over 185 billion—with no signs of a slowdown. In 1990 alone, the world’s governments sold off 25 billion in state-owned enterprises—with continents vying to see who could claim the privatization title. The largest single sale occurred in Britain, where investors paid over 10 billion for 12 regional electricity companies. New Zealand sold more than 7 state-owned companies, including the government’s telecommunications company and printing office, for a price that topped $3 billion.

Privatization includes the military. The name Haliburton will be familiar to anyone old enough to be paying attention during the Iraq war. Many functions which were once done by soldiers (for example, food service) are contracted out to civilian employees.

Your scenario is not fiction at all: not a bit. That means you can start with what is real and run it in the direction you envision for your fictional world. That is how good fiction works.

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  • $\begingroup$ But would countries actually privatise most of their infrastructure to the point they basically lost control of the entire place? Cause that's the eventual thing I want, that by privatising to try and reduce the debt they end up having to surrender control to those companies… a bit like a shareholder in a company except their no longer the largest shareholder in the country in this case… $\endgroup$ – Nierninwa Apr 13 at 14:26
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    $\begingroup$ Read up on en.wikipedia.org/wiki/Russian_oligarch because something very similar to what you describe happened during the privatization of state assets after the USSR dissolved. The government lost control. It took a guy like Putin to wrest it back but things could have gone in a different direction - like they will in your fiction. $\endgroup$ – Willk Apr 13 at 16:33
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This has been happening for the better part of a 100 years now. Look at the United Fruit Companies involvement in South America for a good example. China is currently doing this in Africa. This is essentially corporate colonialism.

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  • $\begingroup$ But that's a foreign company from a very wealthy and powerful contry managing to place themselves in developing countries, kind of the East India Company in greater India. But could Google and Amazon pull this on the USA or Europe? $\endgroup$ – Nierninwa Apr 13 at 14:28
  • $\begingroup$ I would argue that in certain areas / spheres of influence certain companies basically own the United States government. The U.S. is a good example honestly of a corporate distopia. But in general, given enough shock to the system I think that coproprations could take over at least parts of the United States. Naoki Klein's book Shock Doctrine discusses this. $\endgroup$ – DouglassYancieFunnie Apr 13 at 19:07
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No sane company would choose to do this. While many of the criticisms of cyberpunk are correct, this is one where the genre missed the mark. The problem we have now in the US is actually one of a form of corporate socialism, in which companies take extreme risks and privatize the profits while externalizing the costs. The bailout in 2008 is an infamous example, but it is far from the only one. The same thing happened with the CARES Act in 2020.

The economic concept of externalities is useful to consider here, as corporations are all about maximizing externalities and thus profits. If something is a result of a transaction but is not measured within that transaction, it will lead to a type of market failure that benefits private companies at the expense of wider society. Pollution in general falls into this category unless it is regulated, as the cost is always borne by those outside of the given transaction. CO2 and climate change not being accounted for in energy pricing is probably the most well known version, but similar problems affect things like plastic waste and lack of recycling. The Chinese government recently banned imported low quality plastic because the environmental and public health costs were greater than the profits, but companies still made enough of a profit for it to be worth it from their more limited perspective.

Government funded infrastructure is also an externality, and private companies benefit from not paying for it. While there are companies that make a profit maintaining infrastructure, they generally only do so using government funds. The problem is that companies benefit more from allowing government spending to maintain it than they would from taking it over themselves. This also applies to the internet and computing, where much of the infrastructure comes from either open source or government research but companies still make massive profits on selling the ends of the road.

Private military companies are similarly entities that benefit from externalities in the same way. They externalize their training costs, most of the heavy and expensive weapons and logistical support, as well as the fact that they lack the outright military power to take on nation states.

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