SCHOLAR: THEORY OF THE CORPORATE STATE

Theories seek to identify the cause and effect of phenomena.  The Corporate State would result if there is economic inefficiency.  Corporations rose in the Great Depression because there was a need for change.  Such is the case with Texas Instruments and Ford both legally public companies.  These corporations grew in the 1900’s and they are considered larger than some countries.  With those mentioned, it becomes clear that the cause here is economic inefficiency.  Economic inefficiency is the result of fiscal policy or monetary policy that does not reflect the demands of the economy with relation to the world at large.  Monetary policy was one of the major causes of the Great Depression, in that it was specifically the reduction of supply of currency, which caused public panic resulting in private bank closures.  What is important to note here is that corporations such as Ford responded and Texas Instruments innovated so that they would transcend the economic depression.  These corporations did this in such a way as the following;  Ford downsized its operation and had massive layoffs to adjust to the economy, while Texas Instruments created new innovative technology which compelled the publics.  Thus, it becomes evident that the aforementioned corporations emerged because of a need to innovate or make changes in order to adjust (respond) to the depressed economy in a bid to make profit.  Corporations have a different view than governments when it relates to revenues.  It is often said that the government operates at a loss with the fundamental belief that such losses are a result of supporting the people.  This is the case for a lot of Socialist countries.  There are public health care systems, public education systems, and publicly owned companies offering “public goods.”  The fact that the government provides such “public goods” means that its citizens would rather take a “free ride” than to pay a premium on “normal goods”.  And that is the problem here.  The issue is the public and private divide.  The fact that there is a deficiency in interest in the public market pertaining to the “public goods” i.e., they get neglected, means that a change needs to occur as it pertains to the proposed Theory of the Corporate State.   The goods and services already provided should continue but further, supplemented goods and services should be provided.  This concurs with the theory in that a Corporate State would rise if there is an economic inefficiency.  This is how the Corporate State would be created in the modern world.

To make this clear.  A “Corporate State” would have to have to concern a public and a private corporation as per the proponents of this theory.  There is competition between the public corporation’s goods and the private corporation’s goods.  The public corporation’s goods are the goods that promote the aspiration to the private corporation’s goods.  The private corporation’s goods serve as luxuries obtained through social mobility.  For a feasible Corporate State to occur the public corporation needs an axis private corporation.  This would create an economic climate whereby the free markets and capitalism are supported, henceforth competition is rigorous, and information is freely available.  It is also important to note that fair competition between these corporations is encouraged as to promote government legitimacy.  Government regulation on such goods must promote incentives to produce and to continue to produce such goods.  It is widely known that government public companies experience inefficiency because its employees as compared to the private companies have better job protection.  Hence, the government public company are less concerned with “economic performance” despite this however the Crown corporations behind these companies have a main concern of fiscal and monitary policy as it pertains to GDP.  Regardless, axis corporations are realized when one or the other corporation engages in corporate espionage, medaling or interference with the other corporation.  It is these stimuli that promote competition between the legal entities. 

The model for the public corporation is highly contrasted from the private corporation and the government public company and its Crown corporation.  The public corporation per the proposed Theory of the Corporate State provides its goods according to the facts of phenomena in macro/meso/micro society.  It uses policy to create a product.  The product is created through the development cycle.  Such products can be referred to as “justice products” for example, the “justice products” address the facts of inequity experienced by certain demographics of people in the community.  In contrast the private corporation uses the demands of the macroscopic environment to determine wants rather than needs to produce its products.  This is done through product design.  Rather than using policy based on fact to create a product, the private corporation uses idealism.  Both corporations have the ability to use the aforementioned (fact and ideal), but it is essentially the priority which determines the designation of “public corporation” or “private corporation” per this theory.  For example, the public corporation is trying to design a product to address the misogyny in society.  They would articulate and aggregate information to determine the facts of the issue.  This corporation would then create policy pertaining to the subject matter.  Such policy would result in a “justice product” considerate of the proponents of facts and idealism.  Facts are used to back the product and idealism is used to sell the product to the public and to create interest.  Now, since the policy is more important than the idealism used (perspective of the public corporation), the corporation is deemed to be “public” as it pertains to this Theory of the Corporate State.  With the private corporation, they would produce a product based on facts obtained from the macroscopic environment and then they would go through the development cycle with higher concern of “idealism” in response to the factual trend in society.  Say the trend was misogyny, the private corporation would take note of the fact and design its product without a concern for policy but rather a priority for idealism henceforth it would not qualify as a “justice product” but a “consumer good.”  These are the different perspectives on product design of the public corporation and the private corporation as it pertains to the theory in question.  As for the government public company, they create their products (goods and services) based on various factors such as demographic analysis through such mechanisms as the census and Stats Canada.  These allow the government public company to render goods and services.  government public companies and the Crown corporation provide "public goods" as mentioned.  Further their "goods" are often "inferior goods" designed to provide the basic supports to its citizens.  This occurs through the the policy function of distribution whereby these are provided to citizens whereas in this theory, "public corporations" and "private corporations" see the consumer.  Regardless, the goods and services produced by the public corporation are directly related to the policy and facts of the matter and they are “complimentary goods” (the policy product and the goods and services product) meaning the rise in price of the “goods and services” leads to a decrease demand for the other good (the target matter of the policy- misogyny).  The policy results in the goods and services which are then purchased.  If the price of the goods and services is high, the direct response would be that the demands and interest for the policy product would be reduced. 

The private corporation operates solely on a for profit basis with less concern of the citizens whereas, the public corporation operates both on a for profit basis and a Socialist concern while government public companies are unable to operate on a for profit basis and the Crown corporation behind these operates per GDP factoring in all the mentioned corporations revenues.  This means that the public corporation has mechanisms in place whereby supports and social levers can be provided to the public at large if they need it similar to government public companies and the Crown corporations behind them.  It is done through corporate social responsibility measures and social justice via a charitable section of the corporation.  The public corporation earns tax breaks in return for such mechanisms from the government Crown corporation.

Substitutes refer to the rise in price of a good resulting in an increased demand for the other good.  As the demand for the public corporations products increases because of affordability, the private corporations products are released at higher prices. These are how the public corporation’s products are related to the private corporation's products; The public corporation produces complement goods- the “justice product,” it is purchased by the target audience of the policy product which interest is reduced if the price is high.  For example:  Say the policy product was pertaining to an injustice occurring in society in the form of misogyny towards women, its perspective is to increase awareness of the matter via promoting seminars and support groups.  The corporation then goes through the development cycle and produces the supplement "justice product” a "consumer good".  It could be an advertising blitz or even a public forum where people can share their experience.  The fact that those products are released by the public corporation means that the rise of interest in the justice product is variable to price which results in varied demand for misogyny.  If the “justice product” is priced high, the demand for the objective of the policy product would be reduced.  Hence the complimentary good in the form of a “justice product.”  Now, since the private corporation operates a for profit business, it’s prices would essentially be higher.  The private corporation produces products via ideal, this could be a high production film or video or a magazine spread promoting femininity.  This means that the private corporation's product would result in high prices because of the factors of production which regardless still results in an increase demand for the substitute public corporation’s product i.e., in this case the “justice product.”  Henceforth since affordability of the private corporations product is less, the consumer would be more interested to indulge in the "justice product".  This means that in the Theory of the Corporate State, the public corporation needs to be aware of the private corporation and the government public companies and the Crown corporation behind it so that the products price remains competitive with concern of the price of the other corporation's product/(s). 

The public corporation essentially produces what are called inferior goods, like some parts of the government public company which also produce public goods.  This means that the rise in income decreases demand.  The public corporation produces inferior goods so that when individuals have social mobility, they transfer to normal goods produced by the private corporation.  The “justice product” in question released by the public corporation is priced affordably.  This means that when the individual ascertains higher income, they would be more likely interested in the private corporation’s product in this case a high production film or video or a magazine spread all of which are priced higher than the public corporation’s “justice product.”  Essentially the private corporation produces what are called normal goods wherein the rise in income increases demand.  In the Theory of the Corporate State herein, this is how the “public corporation” interacts with various “private corporations.”  Essentially interest in the “public corporation” per the theory would be high in individuals engaged in matters pertaining to law as they serve equality, equity, and justice.  The opportunity for income is attained via reducing overhead costs and operating costs while gaining a consumer base.  The consumer base for the “public corporation” is always going to be higher than the consumer base of the “private corporation” and the consumer base for the government public company and the Crown corporation is the highest.

Further, the public corporation per the theory has an absolute advantage (high wage and high factor endowment- in the form of a educated labor force and adherence to the government regulations resulting from policy production creating checks and balances resulting in better products) however the opportunity cost is high.  Meaning that the producing of goods and services is costly.  The private corporation has a comparative advantage were as they offer low wages and low factor endowment meaning there is a low opportunity cost compared to the alternative but their labor force is more efficient.  Thus, in a private corporation the opportunity cost is low.  With all of these mentioned it is interesting to note that convergence hypothesis stipulates that the private corporation offering the comparative advantage is going to have higher growth rates due to factor endowments (the size and efficiency of the labor force) and changes to technology (the products produced are based on ideal resulting in innovation in technique resulting in lean production) which is why they focus on higher priced goods.  Hence the aforementioned explains why some legally public corporations have become larger than some states and this is why government public companies have remained stagnant.  In this theory, the "public" corporation does not always ascertain the support of its government to become a government public corporation, but the public corporation can still become a legal public corporation provided they adhere to the government regulations and despite these however the corporation can still operate on a for profit basis and with a concern for society via a policy integration function and the private corporation henceforth has no public policy function.

WORK CITED

Krugman, et al., (2018).  Macroeconomics.  New York, USA.  Macmillan Learning. 

Powell, et al.  (2012).  Comparative Politics Today.  Illinois, USA.  Pearson.