Corporatocracy: a society which is dominated by business interests and exploitation, government, judicial and military/law enforcement captured by corporate capital; the idea of government dominated by corporate business interests over the functions and interests of the state in a capitalist society. Corporatism: the organization of a society into groups which are determined by their collective common interests.



Corporatocracy, from corporate and kratía; short form corpocracy. A society in which corporations have substantial economic and political power. The  term used to refer to an economic, political and judicial system controlled by corporations or corporate interests.

The concept is an explanations for:

  • bank bailouts
  • excessive pay for CEOs, directors and board members
  • exploitation of national treasuries
  • exploitation and rights deprivation of employees
  • plundering of natural resources
  • formal power of the World Bank
  • unfair lending practices – loans and debt as a means of soft power
  • use of free trade agreements to disempower homeland working class


  1. Historian Howard Zinn argues that during the Gilded Age in the United States, the U.S. government was acting exactly as Karl Marx described capitalist states: “pretending neutrality to maintain order, but serving the interests of the rich”.
  2. According to economist Joseph Stiglitz, there has been a severe increase in the market power of corporations, largely due to U.S. antitrust laws being weakened by three decades of neoliberal reforms, leading to growing income inequality and a generally underperforming economy. He states that to improve the economy, it is necessary to decrease the influence of money on U.S. politics.
  3. In his 1956 book The power elite, sociologist C Wright Mills states that together with the military and political establishment, leaders of the biggest corporations form a “power elite” in control of the United States.
  4. Economist Jeffrey Sachs described the United States as a corporatocracy in The Price of Civilization (2011). He suggested that it arose from four trends: weak political parties in the United States and strong political representation of individual districts, the large U.S. military establishment after World War II, large corporations corporate political donations|using money to finance election campaigns, and globalization swept the balance of power away from workers.
  5. In Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge and Change (2013), economist Edmund Phelps criticized the economic system of the U.S. and other western countries in recent decades as being what he calls “the new corporatism”, which he characterizes as a system in which the state is far too involved in the economy, tasked with “protecting the corporate elites against everyone else” in which big companies had captured a great deal of the government, with lobbyists’ suggestions being “welcome, especially if they come with bribes”.


  1. ==Corporate influence on politics in the United States==
File:The Bosses of the Senate by Joseph Keppler.jpg|thumb|240px|”The Bosses of the Senate”, corporate interests as giant money bags looming over United States Senate|senators.Joseph Ferdinand Keppler|Joseph Keppler, Puck (magazine)|Puck (January 23, 1889)
  2. CORRUPTION: During the Gilded Age in the United States, corruption was rampant as business leaders spent significant amounts of money ensuring that government did not regulate their activities.
  3. CAPTURE: Corporations have a significant influence on the regulations and regulators that monitor them. For example, US Senator Elizabeth Warren explained in December 2014 how an omnibus spending bill required to fund the government was modified late in the process to weaken banking regulations. The modification made it easier to allow taxpayer-funded bailouts of banking “swaps entities”, which the Dodd–Frank Wall Street Reform and Consumer Protection Act|Dodd-Frank banking regulations prohibited. She singled out Citigroup, one of the largest banks, which had a role in modifying the legislation. She also explained how both Wall Street bankers and members of the government that formerly had worked on Wall Street stopped bi-partisan legislation that would have broken up the largest banks. She repeated President Theodore Roosevelt’s warnings regarding powerful corporate entities that threatened the “very foundations of Democracy.”
  4. Wall Street spent a record $2 billion influencing the 2016 United States elections.
  5. Joel Bakan, the University of British Columbia Law professor and author of the award-winning book The Corporation: The Pathological Pursuit of Profit and Power (2004) writes:
    • “The Law forbids any motivation for their actions, whether to assist workers, improve the environment, or help consumers save money. They can do these things with their own money, as private citizens. As corporate officials, however, stewards of other people’s money, they have no legal authority to pursue such goals as ends in themselves – only as means to serve the corporations own interests, which generally means to maximise the wealth of its shareholders. Corporate social responsibility is thus illegal – at least when its genuine.”
  6. In a 2015 interview, former US President Jimmy Carter stated that the United States is now “an oligarchy with unlimited political bribery” due to the Citizens United v. FEC ruling, which effectively removed limits on donations to political candidates.

The Bosses of the Senate


  1. US Labour’s share of American GDP has declined from 1970 to 2013, measured based on total compensation as well as salaries and wages. Capital’s share is increasing with no sign of redistribution.
  2. With regard to income inequality, the 2014 income analysis of the University of California, Berkeley economist Emmanuel Saez confirms that relative growth of income and wealth is not occurring among small and mid-sized entrepreneurs and business owners (who generally populate the lower half of top one per-centers in income), but instead only among the top .1 percent of the income distribution, who earn $2,000,000 or more every year.
  3. Corporate power can also increase income inequality. Nobel Prize winner (Economics) Joseph Stiglitz wrote a Vanity Fair article in May 2011: “Much of today’s inequality is due to manipulation of the financial system, enabled by changes in the rules that have been bought and paid for by the financial industry itself—one of its best investments ever. The government lent money to financial institutions at close to zero percent interest and provided generous bailouts on favorable terms when all else failed. Regulators turned a blind eye to a lack of transparency and to conflicts of interest.” Stiglitz explained that the top 1% got nearly “one-quarter” of the income and own approximately 40% of the wealth.
  4. Measured relative to GDP, total compensation and its component wages and salaries have been declining since 1970. This indicates a shift in income from labour (persons who derive income from hourly wages and salaries) to capital (persons who derive income via ownership of businesses, land, and assets).
  5. Larry Summers estimated in 2007 that the lower 80% of families were receiving $664 billion less income than they would be with a 1979 income distribution, or approximately $7,000 per family per annum. Not receiving this income led many families to increase their debt burden, a significant factor in the 2007–2009 subprime mortgage crisis, as unscrupulous out of control lenders brought about a vast underclass of highly leveraged homeowners who then suffered a disproportionate reduction in their net worth during the crisis. Further, since lower income families by necessity spend a higher percentage of their income than higher income families, shifting more of the income to wealthier families slows economic growth across the whole population.
  6. U.S. corporate effective tax rates have fallen significantly since the year 2000. Large U.S. corporations use a strategy called tax inversion to change their headquarters to a non-U.S. country to reduce their tax liability. About 62 of the 100 largest companies have reincorporated in low-tax countries since 1982, including 24 since 2012.
  7. Another indication of increasing corporate power was the removal of restrictions on their ability to buy back stock, contributing to increased income inequality.
    • In September 2014, William Lazonick (Harvard Business Review) blamed record corporate stock buybacks for reduced investment in the economy and a corresponding impact on prosperity and income inequality.
    • Between 2003 and 2012, the 449 companies in the S&P 500 used 54% of their earnings ($2.4 trillion) to buy back their own stock. An additional 37% was paid to stockholders as dividends. Together, these were 91% of profits. This left little for investment in productive capabilities or higher income for employees, shifting more income to capital rather than labour.
    • Lazonick blamed executive compensation arrangements, which are heavily based on stock options, stock awards, and bonuses, for meeting earnings per share (EPS) targets. EPS increases as the number of outstanding shares decreases. Legal restrictions on buybacks were greatly eased in the early 1980s.
    • In the 12 months to March 31, 2014, S&P 500 companies increased their stock buyback payouts by 29% year on year, to $534.9 billion. U.S. companies increased buybacks to over $701 billion in 2015, according to Goldman Sachs, an 18% increase over 2014.
    • For scale, annual non-residential fixed investment (a proxy for business investment and a major GDP component) was estimated to be about $2.1 trillion for 2014.

Percentage of banking assets held by the largest five U.S. banks from 1997 to 2011

  1. Brid Brennan of the Transnational Institute explained how the concentration of corporations increases their influence over government: “It’s not just their size, their enormous wealth and assets that make the TNCs [transnational corporations] dangerous to democracy. It’s also their concentration, their capacity to influence, and often infiltrate, governments and their ability to act as a genuine international social class in order to defend their commercial interests against the common good. It is such decision-making power as well as the power to impose deregulation over the past 30 years, resulting in changes to national constitutions, and to national and international legislation which has created the environment for corporate crime and impunity.” Brennan concludes that this concentration in power leads to again more concentration of income and wealth. An example of such industry concentration is in banking. The top 5 U.S. banks had approximately 30% of the U.S. banking assets in 1998; this rose to 45% by 2008 and to 48% by 2010, before falling to 47% in 2011.
  2. The Economist also explained how an increasingly profitable corporate financial and banking sector caused Gini coefficients to rise in the U.S. since 1980: “Financial services’ share of GDP in America, doubled to 8% between 1980 and 2000; over the same period their profits rose from about 10% to 35% of total corporate profits, before collapsing in 2007–09. Bankers are being paid more, too. In America the compensation of workers in financial services was similar to average compensation until 1980. Now it is twice that average.”

US Labour’s share of American GDP has declined from 1970 to 2013