Plutocracy 101 - Business Governance for Dummies?

Question

A plutocracy is "a country or society governed by the wealthy", typically represented as a government made up of corporate interests. Simple enough to design and write, right?

Nope! Turns out that there's an awful lot of confusing jargon up there in the land of corner offices and mahogany desks. I want to build my plutocracy in a way that doesn't sound hilariously wrong to people with MBAs and JDs, without having to go to business school or pass the bar exam myself.

In a society ruled by a corporation-based plutocratic government:

1. What type of corporation would the top-level entity/ies be?

Would this be the most common legal structure among Fortune 100 companies (e.g., Inc, LLC, something else), or is there another type of corporation that would be suitable for a plutocratic ruling entity?

2. What is the likeliest leadership/management structure among a group of large companies?

For example, if one or more corporations rule society, what would the top-level entity (the equivalent of a king or president) be? Would it be one company as a whole, the president/CEO of that company, etc? What would its immediate sub-entities be (the "vice president" or "cabinet" role, i.e., secondary in-charge and advisor roles)? In a governing structure made up of corporations, would it be logical to have any other sub-entities that participate in the government (a "Congress" or "Senate"?), and/or any check-and-balance entities (such as the Executive, Legislative, and Judicial branches of the US government)?

3. How would the top-level corporate entity (the "president") enforce social order?

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Note: I'm not looking for full legal definitions - this is the For Dummies version. All I, as a creator of a plutocratic government, really care about is things like "is an Inc or an LLC or a Holdings more appropriate as the top-level government entity?" and "if you're the president of Plutocratic Government, Inc, what, exactly, is your position and how many minions do you get?".

Answer 1

1. "Inc." makes more sense than "LLC". An LLC is an intermediate state between a sole proprietorship/partnership and a corporation. Plutocrats wouldn't be intermediate. They'd be full on corporations. In the US, this would be called "Inc.". In other countries they would likely have different names. I might call these members of the Corporate Senate. Continuum called this the Corporate Congress. Another possibility would be the United Corporations or UC (a play on the United Nations/UN).

2. I don't think that they'd make corporations into cabinet officials. It would probably work more like a Parliament or the US Senate. Each Plutocratic corporation would send a representative to the "Corporate Senate" and they'd share votes somehow. Since some will be more equal than others, you may want to consider the UN model. In the UN there is a General Assembly where each country is represented. Then there is the Security Council where a sample of members are represented. Then there is permanent Security Council which has Russia, the United Kingdom, France, China, and the United States with veto power. The UN model makes sense here because it already has to handle the problems of differing influence of its members.

3. Entities are likely to want to do their own enforcement. This will cause problems and they will increasingly delegate to the central organization. Or they collapse because they refuse to delegate. Both have historical support. Anyway, at founding, they are likely to want to be as separate as possible. Over time power is likely to centralize.

The corporate Senate would be the legislative branch and would likely be lead by a Chairman (or Chairwoman).

Perhaps the judicial branch would be the extra-equal members of the Corporate Senate. That might be the mechanism by which they exercise their veto power--by having representatives on the top court.

I would expect the executive to look similar to what most countries have now but with some different terms. For example, the cabinet secretaries or ministers might be called Vice-Presidents instead (more in line with corporate structure). The Treasury Secretary might be called the CFO and the Director of Management and the Budget might be called the COO. CEO is just another name for the President. Since the President is selected by the Corporate Senate, it's unnecessary to define an automatic successor. They'd just appoint a new one (we don't do that because it requires holding a new year-long election; they'd just have a regular vote).

The constitution would be called the bylaws.

Answer 2

There’s a very influential work of science fiction, Looking Backward by Edward Bellamy, in which the United States is run by a “trust” (a kind of holding company that had huge influence at the time, but is now illegal) and every citizen is a shareholder in that trust. Plutocracy has a lot in common with aristocracy, in that the real power consists of ownership of property, the entire country is owned by one person or a handful of them, and the important rules are not the formal laws but the agreements between these property-holders. If the corporations that run the country are non-profits, this has a lot of similarity to syndicalism, a system where people are represented through the union they belong to.

In terms of the real world, people used to call Scoop Jackson, “The senator from Boeing.” You seem to be talking about a system where that’s either literally true, or at least rich people hold all the power within the system and effectively cannot be checked by a popular vote.

It would be very possible to keep most of the institutions intact; corporations are generally headed by a President and run by a Chief Executive (officer), who might be the same person. A Board of Governors is a reasonable structure to work federalism into the system. There might be Trustees or shareholders as well; for instance, Social Security and Medicare taxes might be replaced by forced investments that vest in a retirement pension, and other taxes might purchase voting shares, with some categories of person, such as legal immigrants, receiving non-voting shares instead. That makes more explicit the premise that taxes are the price of citizenship and that government invests its revenues for the future.

An important fact to keep in mind is that, for this kind of setup to actually work, people need to see what’s in it for them. Otherwise, it’s just a kleptocracy run by billionaires out to enrich themselves, and I’m sure you can think of examples of those.

Answer 3

There is a difference between an open, unapologetic plutocracy and a covert plutocracy. There have been many examples of countries where the rich run the show covertly, while there are few or now overt plutocracies.

1. Regarding your first question, the most likely names will be taken from democratic institutions, i.e. "President", or informal, "el jefe", "boss".
2. What is the point of a plutocracy if there are checks and balances, unless they're between individual plutocrat and their clans? So perhaps a pseudo-corporate structure with the CEO controlled by a board and shareholders. The CEO might be a compromise candidate between shareholders or a major shareholder. The largest power bloc would be tempted to rig the checks and balances so that they stay on top. Think of gerrymandering, except that it covers all sorts of business regulations.
3. Mao once said that political power grows out of the barrel of a gun, so all plutocrats would want a share in the armed forces, or a way to have it neutralized in their power plays. But what happens when the environmental inspectors are controlled by polluting industries?

Summarized, democracy, the rule of law, and a stable business environment go hand in hand. The largest businesses are tempted to undermine it, but ultimately that's against their own self-interest.