1. Although exploitative worker/manager relationships traditionally have received the most attention, the real problem area in the U.S. today is the relationship between a company's owners - its shareholders - and its management.
2.As a firm grows into a giant, the original investors, who monitored management carefully, sell off their shares to thousands of small shareholders. Effective ownership power dissipates. A "commons problem" emerges because no single stockholder has a strong proprietary interest. In the absence of effective shareholder power, all real authority is ceded to top management. The balance of power shifts and allows top management (or corpocracy) to sink a hook into the shareholders.
3. Like a tapeworm, a corpocracy can feed undetected for decades on the wealth of a great corporation. Among the many American firms infected with this silent, parasitic disease was Walt Disney Productions.
4. The sheer enormity of companies such as Disney protected them from raiders even when, economically speaking, they deserved to die. The fiercest lion is still too puny to bring down the most parasitized bull elephant.
5. Only a major economic innovation could upset the bionomic relationships and make these lumbering giants vulnerable to corporate predators. In 1977, just such an economic mutation took place when the "junk bond" was invented by Michael Milken.
6. Like top predators in an ecosystem, corporate predators serve a vital economic role. They weed out weak firms that mismanage people and resources.
7. In the U.S., the laws governing relationships between shareholders and management are written at the state level. The choice of a corporation's state of legal residence makes an enormous difference in the balance of power between shareholders and management. The favorite state of corpocracies is Delaware.
8. No one can accurately calculate the damage done to the American economy by corpocracies. One guess puts the total cost at more than $800 billion per year. At 16 percent of America's GNP, this estimate probably is way too high. But whatever the invisible cost, it certainly dwarfs the $13 billion done by the highly publicized parasitic acts of robbery, burglary, larceny, and auto theft.
9. Without question, our standard of living would rise significantly if the corpocracies were purged from America. However, the required reforms will probably not be implemented. Like enormous tapeworms, these persistent, unobtrusive parasites will be sapping our economic strength for a very long time to come.