In Completing the Groundwork of a Hierarchy of Sovereign Corporations, I suggested that we have all long lived under the government of a stack of sovereign corporations, in each of which we each own an effectual single share; and that a transition to a feudal stack of such sovereign corporations could be effected if these shares were split into two classes of dividend paying shares: D for denizens and C for denizens who are also citizens [for more on the similarities and differences between D and C shares, please review that post].
What would happen if such D and C shares were issued, one of each class to each citizen?
Recall that D shares cannot be transferred between natural persons, but only between natural persons and their sovereign issuers. But C shares can be sold and bought ad libitum by the natural persons who own them. So, the first few months after the issue would see a massive transfer of C shares, with those who wanted cash and not their C shares selling to those who wanted C shares and had cash to spare. The details of this entirely voluntary transfer of ownership of the franchise to the more provident and prosperous members of society, and the structural consequences for public policy of the chance to earn dividends on shares of either type, are the subject of two essays I posted in 2013: The Metastasy of Wickedness, and A Modest Proposal: Enclose the Commons. [Those essays don’t comprehend the notion of the two different share classes I now discuss, but their analysis otherwise flows without ripple into this.]
This vast and peaceful and voluntary transfer of political power would result in the almost instant stratification of society into distinct classes:
- Strangers, who hold no shares of any kind: these are people who were resident within the borders at the issue date who were not already citizens.
- Denizens, who hold only one D share each: these are people who were citizens at the issue date, but who have sold their citizenship along with their C shares; they are likely to be poor.
- Citizens, denizens who each hold at least one C share: these are people who were citizens at the issue date, who did not sell their citizenship, and who might have bought a few more C shares. They are likely to be middle class.
- Aristoi, citizens who each hold lots of C shares: these are people who were citizens at the issue date, and who had lots of assets they wanted to exchange for the C shares that less prosperous denizens were offering to sell. They are likely to be upper class.
Of these the most notable is the appearance of a more or less stable aristocracy, who would thenceforth be both in control of public policy, and motivated to ensure its prudence, so as to maximize the net present value of the stream of dividends they – and the less prosperous citizens and denizens – would be able to expect from the shares they owned.
Then almost overnight every sovereign corporation in the stack would be run by an aristocracy paying close attention to the overall prosperity of the people.
Now, it must be understood that there is always an oligarchy. This is a problem only when the oligarchs are not virtuous: are not noble, sagacious, just, prudent. It is a problem, that is to say, only when the oligarchs are not aristoi. With the concentration of C shares, there would be two important structural differences from the oligarchy we now suffer.
First, the existence and power of the aristocracy would be ostended honestly, and straightforwardly. Everyone would know about it, and everyone would know that the aristocrats had got their C shares fair and square.
Second, while there are always bound to be some scoundrels and fools in the oligarchy, over time the set of oligarchs would be more and more likely to intersect more completely the set of aristoi – the “best, noblest, bravest, most virtuous” citizens. For, just as now – just as always – the oligarchy would be permeable at the bottom: oligarchs could by their own imprudence or ill fortune fall on hard times, and become mere denizens; while mere denizens could by their prudence, enterprise and good fortune gain great wealth and buy their way into the aristocracy. This would tend to make the oligarchy more and more aristocratic – more and more noble.
Despite this necessary flux in its membership, the aristocratic class would tend – as it always has – to remain rather stable across the generations.
Because they would all expire without value at his death, but could respire perpetually so long as they were owned by a living person, an aristo who owned many C shares would want to avoid their loss to his family at his death. So he would be inclined to transfer as many of them as he could while he yet lived to other, presumably younger family and friends, who could continue to own them until they in turn died or transferred them. Thus a family or clan could maintain ownership of many C shares across many generations, generating just the sort of dynasties that societies always generate in any case – whether openly and honestly, or not.
I would rather give my shares to my children or sell them to my business partners or brothers in arms than let them expire. Death being unpredictable, this constraint, and the preferences it generates, should disincline wealthy aristoi to miserliness. It should incline them rather to transfer their C shares generously and foresightfully to younger people whose loyalty and prudence they trust. This should keep the reins of power from being concentrated in only one pair of hands, or even in one set of families. It should also incline the aristocracy to reproduce their families; and should foster a familiar society in general; for men who are childless would rather give their C shares to their nephews, or the sons of their friends, than lose them altogether.
It should also fulfill the social function of the old laws of primogeniture, minimizing conflict among heirs by an intentional pre-mortem transfer of assets.
[Excursus: Most reactionaries these days abhor voting, as being an act of ritual obeisance to the current liberal regime. Voting would not be a problem necessarily, however, were it to take place as a formal procedure of a political order that was essentially illiberal. And because hierarchy is implicit – is a foregone conclusion – in a corporate structure wherein some shareholders can amass many votes, and so form an aristocracy, corporations are essentially illiberal (even when they preach leftist or modernist bromides)(this is why the Left will always hate corporations as such, and seek to destroy them no matter how much progressive twaddle their marketing and HR departments spew forth).
I should note here also that while no formal procedure is needed in order for a sufficiently small and intimate group of shareholders to arrive at a consensual agreement about which one of them should lead them, and who therefore has their fealty, nevertheless some formal procedure or other is indeed needed in order for their consensual agreement and their fealty to be recorded and promulgated – to be, in a word, accurately remembered and published. Voting is one such formal procedure. It is, properly, a record of evaluations already freely owned and attested, rather than a way of coercing obedience.]
Understanding that there might be a great deal of variation between sovereign corporations, how would sovereign corporations generally want to set forth their by-laws in such a way as to optimize their moral → economic → financial performance within the stack? Let us then see how this might play out in practice, working from the bottom of the social hierarchy to the top.
Say there is a family of five, living in Chester. There are five votes in it altogether. They are cast by the head of the household, generally the father (whoever thinks that his wife has no political influence upon this vote is an idiot). He takes ownership on their behalf of the dividends accruing to the shares of his children, so long as they have not attained their majority. Once they do attain their majority, they take ownership of their own shares, vote them, and transfer their C shares ad libitum. But until they attain their majority, the C shares owned by the children are inalienable.
The family owns five shares of each class in Chester. They own five shares of each class also in Windsor County, in Vermont, and in the USA.
The C shareholders of Chester meet to elect a Town Council. These councilors will generally – although not necessarily – be the largest C shareholders in town, the local notables. But not necessarily. A particularly sagacious farmer or businessman, a wise scholar or discerning poet, or a sapient clergyman with only a single C share to each of their names might find themselves elected Councilor.
The Chester Council then meets in camera to elect from among themselves somehow or other a Squire – a sovereign. Again, the Squire need not himself be a large C shareholder. But in practice, he will usually be one of the largest C shareholders in town – or a prominent member of the family that owns the most C shares among them. This creates an incentive for families to be large, and to stay close to each other (both emotionally and geographically), so as to have a better shot at controlling their destiny.
When the councilors elect their Squire, they vote him also their delegate up to the Windsor County Board of Supervisors. But this opens a vacancy on the Chester Council; so the council elects another C shareholder to fill it.
When the Squire is away on county business, someone is needed to run the Town in his stead – a vicar or viceroy. So when the Chester Council has elected their Squire, he appoints from among them a Mayor. The Mayor runs the town for the Squire, as it were his prime minister. Their relation is like that between a ship’s captain and her executive officer or first mate or first lieutenant. The captain makes the decisions and is the “king” of the ship; the XO carries out his orders, with wide variance in the latitude of his discretion, given the circumstances, his relation with the captain, the captain’s policies and preferences, the experience and sagacity of the XO, etc.
When the Squire is away representing Chester at the County Board, the Mayor runs things on his own recognizance, as the squire’s steward, and vice president of the Town Council.
So here’s the crucial step, by which the familiar integrity of the village community makes itself felt in the deliberations of its county, and then on up the political stack: when a squire goes to the county council, he votes all the C shares of the county that are owned by citizens of his village.
Notice that this step is not an innovation. Delegates to legislatures at every level of the political hierarchy already do exactly this.
A squire’s constituent subjects might by their sagacity and prudence have acquired many more C shares of the county than denizens of other villages. So a single wealthy village might exert outsize influence over a county. This, too, is what we already have; what we have always had, under every political order.
The Windsor County Board then elects one of its members their Count. The Count then governs and represents Windsor County at the Vermont Legislature, and votes all the C shares of Vermont owned by his constituent subjects; a Viscount runs Windsor County in his absence.
This same pattern is replicated again. The Vermont Legislature elects one of its own their Duke. The presence of the Duke renders the State a Duchy. The Duke then governs his fellow C shareholders in the Duchy, and votes their C shares of the nation in the US Senate; a Governor runs the State as his Executive Officer.
The US Senate elects one of its own their King, rendering the nation a Kingdom; and he in turn governs and represents his Kingdom and votes the C shares of the Empire owned by his constituent subjects in the Imperial Parliament (his Executive Officer, the President, runs the USA in his absence), who likewise elect one of their own as Emperor or High King.
The formal procedures by which a given council elects a sovereign may vary widely from one jurisdiction to another. They need not be formal at all.
Sovereigns can be removed peacefully under this system. They can be voted down. But this is extremely unlikely to happen except in the case of widespread moral failure in them or among their familiar allies, who voted them into office, that results in business reversals or other problems which force them to sell their C shares. Depending on the morality and stability and prosperity of a polity, its officers are likely to remain in office for a long time, and also to pass their sovereignty down to their heirs.
There is no reason why election to sovereignty need be for any particular term – why it might not reiterate even annually, or only at the death or incapacity of the sovereign, or of his heirs. But, it is a waste of time and money to fix what isn’t broken: if things are going along well enough, a change in leadership is not called for. If things are not going well, perhaps it is; and the corporate structure makes such a change possible without resort to war.
Hostile takeovers are possible. But only from within. You can’t own shares of a corporate government that does not govern you. Secession, too, is possible at every level of the stack. Rensselaer County might switch allegiance from New York to Vermont – or, more likely, Upstate might sever ties to NYC. But such things are beyond the scope of this essay.
What about the sacred aspect of all this? There is no reason why election to a high office might not be sealed with holy rites, as of anointing, coronation, weighty oaths, and the like. There is no reason that the CEO’s duty to his constituent shareholders cannot be construed by all and sundry as sacred. Societies do better when they order themselves explicitly under, and toward, the Logos of Heaven, which is the Truth about Reality. Citizens and aristoi are therefore likely to agree upon a common cult that approximates the proper worship of the Most High, and that then consecrates the various sovereign offices, girding and protecting them, aye and bounding and correcting them, too, with dreadful authority. There is, in particular, good reason to think that sovereigns of such corporations would be subject to ecclesial authority – or wield it. The king could be high priest, and has often been. But this would be to make him answerable to the Episcopal College as well as to the House of Lords.
Nor need the formal aspects of such a set up vitiate the moral and emotional bonds of fealty characteristic of feudal orders. Upon election of a sovereign, his immediate electors could swear an oath of fealty to him on behalf of their own electors, in his capacity as the occupant of his sovereign office. One swears fealty to the sovereign qua sovereign, and not qua man. Yet there would inescapably be a personal and friendly, and indeed fraternal aspect to that fealty; the sovereign must after all be first a man, so that his manhood is caught up in and transmuted by his accession to sovereignty. And so one elects a man sovereign first on account of the man one knows him to be, and admires. The sovereign of a domain is somehow or other chosen and elected by his colleagues as best and fittest of them all; then is he dubbed, anointed, crowned, and avowed their leader.
NB that the sovereign might seldom be the wealthiest man of his domains. He would nevertheless usually be among the very rich, as having acceded to his high office in virtue of his influence – familiar, friendly, or just proprietary – over a large number of C shares of all the governments to which he was subject.
Such a society would be familiar. It would be organic. It would be subsidiaritan. It could be sacred, and would do better if so. It would be inegalitarian; yet it would be magnanimous, would tend to govern well, due to the feedback circuits of dividends generated by corporate success at every level. The prospect of dividends would align the interest of all three classes in the promotion of the general welfare and the common good.
Finally, it would approximate to the robustly stable Polybian ideal, for at every level of the stack, all three classes of subjects – denizens, citizens, and aristoi – would have influence in government. Even denizens would have informal influence, as being (at the very least) able to emigrate from improvident sovereignties – especially the most excellent among them, upon whose labors the prosperity of any realm ever depends.
None of this, of course, is to say that the enclosure of the present commons of government would solve all our problems. It is not a panacea. There is no such thing.
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How is it that C-share holders would be motivated to improve the realm in any way? The State makes money through taxation. What you’re suggesting is nothing but redistribution of wealth.
The more prosperous the realm, the greater the dividend to C shares, ceteris paribus. C shareholders would therefore have the same interest in the growth of the prosperity of the realm that common shareholders in a private corporation now have in the growth of the profitability of the corporation. Lots.
There is always redistribution of wealth. Among other things, society per se *just is* a system for the sharing – the redistribution – of wealth. Every society does it, and in practice you can’t obtain a society without it: society is commensal first, somehow; or it is nothing. And both the relatively wealthy and the relatively poor are always with us, no matter what system or custom is used to share and redistribute wealth.
Recognizing that this is so, then the thing to do is set up your system and custom of redistribution in such a way as makes for the success of society: in such a way, i.e., as is economically efficient and supports true human flourishing. That cannot be accomplished if fools are admitted to the electorate. The free trade of C shares will tend to concentrate them – and the power over economic and political policy that comes with the electoral power they confer – in the hands of the most prudent, canny and foresightful members of society. Their control over public policy – and, perhaps more important, the dwindling influence over policy of the most foolish as they sell their C shares – will tend to lead to policies that engender proximally optimal economic outcomes for the realm as a whole, leading to the increase of prosperity of the whole people, thus to the growth of the tax base, to increased sovereign revenues, and so toward optimization of the present value of future dividends to C shareholders. The C shareholders are rewarded most for good public policy.
Ah, this was an old post so I didn’t expect anyone to reply, so thank you. I do want to understand your theory (I read “Completing the Groundwork of a Hierarchy of Sovereign Corporations” also) but I’m having a bit of trouble, and I think I may be missing something.
Your idea reminds me of a less egalitarian version of Andrew Yang’s Freedom Dividend. But here is where I’m confused. Assuming the realm employs progressive taxation, where the rich are taxed more than the poor. Then surely the rich, by buying C-shares, would de facto just be buying back the money that was taxed from them by the State? It seems like an unnecessary process if the money is just circulating right back to where it came from. I could feasibly see that these aristoi may be motivated to attract wealthy people to the realm so that their C-share dividends are greater – but as the money is cyclical, all this amounts to is the aristoi trying to lessen the taxation burden on themselves. Which may be a motivator, but I don’t see how it’s an improvement on a simple traditional monarch who wants to attract wealthy people to the realm to enrich himself (I’m a plain old throne and altar reactionary, you see, not a neoreactionary).
Having a proportional or flat rate tax (where everyone within means is taxed the same) would change things somewhat – in this situation the aristoi, by buying C-shares, would become a de facto oligarchy, parasitising (for lack of a better word) on the lower classes. Again, I don’t see how this plutocracy is better than a simple monarchy.
An aristocracy of C shareholder electors would be at liberty to deploy a progressive scheme of taxation, but because progressive taxation penalizes economic success – a perverse result – my bet is that, being interested to foster and encourage such success, most sovereign corporations would not do so. They’d opt instead for a flat tax of some sort. Indeed, my bet is that most of them would converge pretty quickly on a revenue generation mechanism that abjured coerced taking of any sort, and instead operated on purely voluntary agreements. The way to do that is with a series of fees or charges that must be paid in order to transact this or that sort of business within a realm.
This is not a new idea. One of the things sovereigns do is sponsor, defend and regulate markets. It has been customary throughout history for sponsors of markets to charge fees for entry thereto, and for transactions therein.
In a modern polity, this would take the form of tonlieux charged for entry of persons to a domain and for their safe passage therein, of tariffs on imported goods or services, and of transaction fees – these days called “sales taxes” or “value added taxes.” I’ve written about this topic a fair bit at the Orthosphere, so you might want to check out some of those posts.
Generation of sovereign revenues by such means is not at all coercive: no one is forced to do business in this or that realm, after all; so, sovereign corporations will suffer some competitive pressure to keep their fees, tonlieux and tariffs in line with the prevailing market, so as not to lose business.
As to the parasitism of the aristoi, remember that there is always an oligarchy. For, oligarchy is a niche in the ecology of society: someone is going to fill it. The question is not whether there will be oligarchs, then, but whether they will be excellent – i.e., whether they will be aristoi.
One of the things to remember about the system of C and D shares I have proposed is that the dividend to each share is identical. If C dividends change, so do D dividends. So, when the C shareholders prosper, so do the D shareholders. In this system, the interests of denizens and citizens are aligned. Thus the parasitism that afflicts polities where the oligarchs are vicious is averted, and instead the symbiosis that is proper to social relations prevails.
Sovereign corporations could modify their bylaws at will, so they would not necessarily labor under any purely legal obligation to adopt something like the C and D shares I have suggested. But the system of C and D shares makes economic sense, so a society that intends economic success is going to track it.
The obligation of aristoi to seek the good of their people is imposed not so much by positive human law as by the Law of Nature; by the Lógos: as a matter of sheer economic logic, aristoi do best when their people do best. Their concern for the welfare of their people is therefore first a moral and aesthetic – and purely rational – obligation, before ever it becomes an obligation under law.
Okay, I could see how under this system the aristoi would be incentivised to enrich the realm. But I’m curious to know how this is any better than, say, a single sovereign monarch, who is likewise incentivised for his own enrichment? As was the case in European monarchies throughout history. It seems to me monarchy would be preferable, as parasitism/high taxation would be reduced (there only being one individual who derives profits from the State, as opposed to an entire class/population).
Thanks for your interest in this topic, Mr. Crannis.
The primary advantage of the system, to my mind: because every class of subjects of the sovereign (other than the strangers temporarily within the realm) would benefit from state dividends, every class would be interested in the discovery and implementation of good public policy that would tend to increase prosperity, state revenues, state profits, and state dividends. There would probably still be lots of people trying to game the system for their own peculiar benefit, of course; there always are. But the dividend would make explicit the benefit of good government that redounds to everyone thereunder, and so would constrain such efforts.
Remember that every subject of the realm (other than strangers) would own at least a D share, inalienably; and, so, enjoy at least one dividend. Most subjects – all but the poorest – would also be likely to own at least one C share, and so would enjoy at least two dividends: a D dividend, and an equivalent C dividend. A few – the most economically successful, the aristoi – would own lots of C shares. Every C share would carry one vote. So most people would be electors, even though the aristoi would exert more influence upon policy than persons of any other class.
So, everyone – even the poorest – would enjoy financial benefits from state ownership. Everyone would be a “parasite.” Everyone would be interested in optimizing state revenues – which is to say, setting the haircut the state imposed on transactions at the economically optimal rate: not so high as to damp economic activity. Everyone would be interested in rational economic regulations, laws, subsidies, customs, foreign policy, defense policy, and so forth.
The system would not prevent the institution of monarchy. On the contrary, because its emphasis at every level of society upon economic rationality would tend to encourage subsidiarity, a hierarchy of offices would naturally tend to emerge; and all such hierarchies terminate at a monarch. The monarch of such a system would probably be someone who owned lots of C shares. He might also be granted as a perquisite of his office an S share, which would entitle him to, say, 100 regular dividends, 100 votes, and a right of veto.
But no natural person would be able under this system to act tyrannically. Policy decisions would need to appeal to most people. For, however many C shares the aristoi owned, the middle classes would own far, far more. Good kings and true aristoi are never interested in tyranny anyway, but on the contrary love their people, and want to serve them; so they would not suffer that constraint as an imposition upon them from without, or therefore chafe at it.