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‘The new corporate state’: Who exercises the real power: governments or corporations?

A Roundtable discussion with Professor Stephen Wilks

Despite the rainy and wet conditions, our roundtable with Professor Stephen Wilks was well attended. The event began with a brief overview of the themes and conclusions of The Political Power of the Business Corporation.


Professor Wilks explained how a growth in the power of the corporations had begun in 1980s under Thatcher and had been accepted as consensus by the later Blair and Brown governments.


Corporations Wilks argues can no longer be seen as a separate entity to the state but have rather become part of the institution. They are not outside interests exerting pressure but are inside, acting as part of the state.

As more parts of the civil service are outsourced and public contracts are increasingly being delivered by private corporations, the lines between the state and corporations are becoming increasingly blurred.


Furthermore management practices and corporate structures are increasingly being utilised within government. A revolving door is being created with former Chairmen of large corporations being recruited as non-executive directors on the boards of government departments and senior civil servants leaving to work within the private sector.


All this combined with the decline of traditional checks on corporate power such as trade unions has resulted in the creation of the ‘corporate state’.


Many participants also observed the spread of corporate practices into the voluntary sector, as funding bids and contracts offered by the state demand increasingly corporate language and structures of delivery. 


But how can this power be effectively checked or challenged? The discussion today offered a number of possible alternatives from a restoration of the power of trade unions to ensuring that boards are more balanced in terms of interests and gender.


Some argued that there needed to be a more diverse range of corporate forms, while many agreed that there needs to be a change in the wording of company law to allow boards to take account of more than just shareholder value in their decisions.


Many participants also agreed that shareholders do not have the power nor the inclination to check corporations as many shares are held in the short term, disconnected from any long term social or community interests. In light of this some participants agreed that some recent political reforms to shareholder power were, in fact, failing to address the underlying issue.


There was also an interesting questioned raised concerning who actually owns the corporate world, as it was recognised that through pension schemes, many of us actually represent significant investors. Recognition of this investment power, it was argued could open up the possibility of using consumer forces to potentially check corporate power.


Another interesting point was made about how there are other forms of the ‘corporate state’. For example, in France there are many nationally-owned large infrastructural corporations which make high returns and are in part owned and run by the government. These firms are now operating within the UK, who is relying on the state corporations of other countries for services.


It seems there are no easy answers yet it is still important to have these debates and discussions. One thing that today’s event demonstrated was that many of the participants had over the years witnessed within their own fields the growing trends toward privatisation and the increasing power of corporations. Professor Wilks’s book and indeed today’s discussion was a great way for these different experiences and trends to be drawn together to present the bigger picture of how the ‘corporate state’ developed.

Posted on 10 September 2013

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