A Political Capability Approach to Corporate Power: A “Political” Political Theory of the Corporation

Abstract

The recent political turn in theorizing the corporation has drawn attention to the extensive power that corporations possess, but has not yet provided a systematic normative account of corporate political power. This article proposes a “political capability approach” to address this. It identifies four forms of corporate political power: law-making, governance, discursive, and democratic will-shaping. The approach differentiates politically significant corporations from ordinary ones along two dimensions: vertically, by how many of these capabilities a corporation possesses in combination; and horizontally, by the scale and reach of each. Conventional metrics such as firm size or wealth are imperfect proxies for political power. The political capability approach instead connects normative evaluation directly to the concrete powers corporations exercise. It offers a more nuanced and empirically grounded basis for assessing which corporations warrant democratic justification, and for matching regulatory remedies to the specific capabilities that threaten democratic values.

Introduction

Why should political theorists care about the business corporation? A straightforward answer is that the business corporation has become increasingly central to the organization of social and political life. As Berle and Means observed in 1932, “[t]he modern corporation may be regarded not simply as one form of social organization but potentially (if not yet actually) as the dominant institution of the modern world” (Berle and Means 1932, 356). This insight has only grown more salient. Today, large business corporations are indeed dominant institutions, and they exercise various forms of power whose legitimacy is deeply questionable. For example, Anderson (2017) famously describes companies like Apple and Walmart as “private governments,” drawing attention to how corporate managers wield arbitrary power over individuals’ lives. Her call echoes a broader concern among political theorists about the political role of intermediate economic associations in liberal democracies (Ferreras 2017; Kwok 2025b; Kwok and Li 2026; Malleson 2014). The kind of domination enabled by corporate managerial authority, especially when unchecked, can threaten core democratic values of autonomy and equality (Herzog 2020). Moreover, corporate power is not confined to internal governance. Contemporary business corporations often exercise a wide range of external powers that affect societies and states (Zingales 2017). A political theory of the corporation, therefore, ought to center on a normative analysis of corporate power and its ramifications for democracy and social justice.

In recent years, there has been a “political turn” in the study of the business corporation within political theory (Claassen 2023). Scholars have increasingly questioned the traditional view of corporations as purely private or economic actors, instead examining the political nature and legal origins of the corporate form (Ciepley 2013; Singer 2018, 2019). These efforts have revived classic debates about whether corporations are essentially creatures of the state, as in concession theory, or aggregations of private contracts, as in aggregate or nexus-of-contracts theory. This literature has provided important insights into what corporations are, the extensive political power they wield, and the social roles and purposes they should serve. However, we still lack a normative theory that directs our attention to systematically analyzing how modern corporations actually exercise power in practice and why those exercises of power matter politically and normatively. In other words, the political turn would be more “political” if it pays more attention to the power dynamics that make corporations problematic political actors.

Bernard Williams (2005, 3-4, emphasis added) suggests that “the first political question” is how power is used to secure “order, protection, safety, trust, and the conditions of cooperation” in ways acceptable to those governed. Following this, the first political question for a political theory of the corporation should be: Are the powers exercised by corporations acceptable and legitimate to those affected? And relatedly, have some forms of corporate power undermined the state’s capacity to meet its own “basic legitimation demand” (Williams 2005)? This article aims to pursue precisely those questions. It advocates what might be called a “political political theory of the corporation,” that is, an approach grounded in empirically informed accounts of corporate power and its social-political consequences, as the basis for normative theorizing about corporations. Even if one does not fully embrace Williams’s formulation, the central claim here is that political theory needs a normative account of corporate power in order to distinguish corporations that pose political threats from those that do not. Not all corporations are equally worrisome from a political perspective. A normative theory of corporate power would help identify which corporate actors ought to be the focal point of political scrutiny and which can be treated as relatively benign.

This article proposes a political capability approach as a conceptual framework to differentiate big (i.e., politically significant) business corporations from more ordinary corporations and firms. By political capabilities, I mean the capacities a corporation has to influence political outcomes, broadly construed. The core idea is that we should pay attention to how corporations structure and exercise their power in reality. This is crucial because current debates often talk past one another for lack of a clear way to distinguish degrees of “bigness” or power. On one side, proponents of the classic Chicago-school or contractarian theory of the firm often downplay or deny corporate power and authority, implicitly imagining a context of small firms in perfectly competitive markets. Alchian and Demsetz (1972), for instance, famously called it a “delusion” that firms have any hierarchical power, comparing the firm–employee relationship to a customer’s freedom to “fire” their grocer by shopping elsewhere (777). This analogy might hold in a world of many small businesses and ample consumer and worker choices. On the other side, advocates of the firm–state analogy or “workplace democracy” routinely draw on examples of giant corporations, such as Walmart, Shell, Apple, Google, whose scale and influence are nothing like that of a corner grocery store (Landemore and Ferreras 2016; Malleson 2014; McMahon, 2013). The lack of a conceptual framework to distinguish a small firm from a massive and powerful corporation has been a source of confusion. The political capability approach developed in this article is intended as a complement to the political turn in corporate theory. By constructing an explicit theory of corporate power, we can better ask normative questions about how much power corporations have and how they use it. It provides a more nuanced way to identify which corporations truly function as political actors in a troubling sense, and therefore merit democratic oversight and constraint, and which do not.

The article is structured as follows. Part 2 reviews the recent political turn in theorizing the corporation and demonstrates how the political capability approach helps to advance the debate. Part 3 develops an account of the major forms of political power that contemporary business corporations exercise, drawing on an empirically informed typology. Four key forms of corporate power are identified: (a) law-making power, (b) governance power, (c) discursive power, and (d) democratic will-shaping power. Clarifying these forms of power will set the stage for a new approach. Accordingly, part 4 develops the political capability approach, which uses those forms of power as criteria for differentiating “politically big” corporations from smaller ones. This part contrasts the political capability approach with simpler benchmarks like size or wealth, and argues that focusing on political capabilities offers a more normatively relevant way to understand why some corporations are more politically threatening than others.

The Political Turn in Corporate Theory

Recent political theorizing about corporations has been dominated by two approaches, which we might label the concession approach and the transaction cost approach (Claassen 2023). Both approaches mark a turn away from viewing corporations as purely private market entities. The two approaches form a shared research program: to explain why corporate governance and corporate activity raise distinctively political questions in democratic societies. What unites this “political turn” is a set of concerns about how corporate institutions are constituted, how they rule, and how they condition collective self-government. Contemporary work increasingly treats the corporation as an institutional form that can generate domination, dependencies, and democratic vulnerability, and hence it is a proper object of political evaluation (Anderson 2017; Ciepley 2013; Ferreras 2017; Singer 2019).

This political turn has converged on three interlocking sites of corporate political salience (Claassen 2023). First, corporations are constituted and empowered through law and political authorization; public law does not merely register pre-political associations but creates durable entities with distinctive capacities (Ciepley 2013; Pistor 2019; Robé 2020). Second, corporations govern internally: managerial hierarchies make and enforce rules that structure the lives, opportunities, and status of workers and other organizational dependents (Anderson 2017; Ferreras 2017; Kwok 2021; Malleson 2014; Singer 2019). Third, corporations can shape democratic politics and the background conditions of justice through lobbying, regulatory influence, control of information channels, and strategic agenda-setting (Bennett and Claassen 2022; Claassen 2023; Kwok 2025b; Ron and Singer 2024; Singer and Ron 2023).

The first theme concerns the fact that corporations derive from state action and exercise state-like power because of the state’s authorization (Ciepley 2013). Accordingly, incorporation is a legal technique for creating private organizations with public-authorized governance capacities (Claassen 2023; Pistor 2019; Robé 2020). Ciepley’s (2013) central contribution is institutional more than genealogical: corporate law authorizes centralized and internally binding rule-making that resembles governance in miniature, enabling corporations to operate as “franchise governments” or “states writ small” within their jurisdictions. Moreover, the legal privileges of the corporation grant it the ability to accumulate resources, and hence governing power, to an extent that individuals normally could not (Pistor 2019; Robé 2020). The political stakes follow from the content of the delegation. Once corporate law empowers the corporation to make rules that bind members and to deploy sanctions for noncompliance, backed ultimately by the state’s legal order, corporate governance becomes a locus of legitimacy questions. The relevant question is why those who are subject to corporate rule should accept that rule, what social purposes should corporations serve, and what forms of representation, contestation, and accountability are owed to them (Anderson 2017; Claassen 2023; Ferreras 2017; Kwok 2020; Malleson 2014).

A second theme of work emphasizes corporate authority from the inside and its relational implications. Anderson’s (2017) depiction of the workplace as “private government” focuses attention on the arbitrariness and asymmetry that can characterize employment relations under conditions of contemporary employment. Ferreras (2017) similarly treats modern firms as political entities because workplace hierarchy constitutes a form of governance over workers who, as democratic agents, have claims to voice and representation that existing corporate structures systematically subordinate. Malleson (2014) therefore draws our attention to the “democratic paradox,” in which political democracy is increasingly undermined by economic authoritarianism (see also Landemore and Ferreras 2016). Singer’s account deepens this internal perspective by insisting that the firm exercises concrete relational power: it structures obligations and role-defined expectations that can shape workers’ lives in ways that resemble political governance (Singer 2019). In other words, Singer (2019) suggests that the firm’s power is relational in nature, since the firm does something more than simply coordinating pre-given preferences in that it also actively organizes and reshapes them (Claassen 2023). The key point, then, is that hierarchy both economizes on transaction costs and institutionalizes authority relations that can generate domination and erode relational equality. As such, the economic function of the firm constitutes only a constraint on, but does not provide an answer to, how such relationships should be structured. Thus, his “efficiency horizons” argument (he calls it “maximal viability horizon”) is a bounded reform argument: efficiency constrains institutional options, but it does not settle in advance how the firm’s internal governance should be structured (Singer 2019: 156). For example, if a democratic reform is too costly, people might simply abandon the corporate organization of production and revert to the market mechanism, that is, the price mechanism. (Singer 2019: 156).

A third and increasingly influential strand shifts from internal authority to the wider democratic consequences of corporate power. Here, the central question goes beyond how firms govern workers. It is about how they profit from, reproduce, and even deepen failures in the background conditions of justice and democratic equality. Singer’s (2019) “justice failure” framework is important because it recasts corporate ethics around duties not to create, exacerbate, or entrench such failures, especially where corporate influence distorts equal citizenship and democratic procedures. Singer and Ron (2023) generalize this into a social-subcontract view: because market society empowers firms with discretionary power under conditions of imperfect regulation, businesses incur subcontractor obligations not to corrupt the processes through which their own terms of operation are set and revised. In that respect, this strand also connects with political-CSR approaches that treat firms as political actors once the division between economic and political power breaks down (see also Ron and Singer 2024; Scherer and Palazzo 2007). What unites these views is an account of the democratic limits of corporate power under structural injustice and democratic fragility.

Recent work has also further emphasized the tension and trade-offs between democratic values and the regulation of corporate power. Bennett and Claassen’s (2022) “corporate power trilemma” argues that responses to corporate power are structured by a three-way trade-off: accepting powerful firms sacrifices power balance, promoting competition can sacrifice economies of scale, and making firms more accountable can sacrifice minimizing agency costs. Claassen’s (2025) more recent work on corporate purpose and democratic theory likewise argues that competing governance models are structured by a trilemma among minimizing externalities, agency costs, and principal costs, so that shifts toward greater stakeholder inclusion and responsiveness predictably generate trade-offs. A central implication is that if reforms are constrained by predictable losses elsewhere, political theory needs a more discriminating account of what is normatively troubling about a given corporation’s power, so that remedies can be matched to the relevant danger and trade-offs assessed on a more principled basis.

This is where the current literature, despite its advances, often remains under-theorized. “Corporate power” is frequently treated as a background condition without a systematic articulation. Sometimes it appears as legal privilege, sometimes as workplace authority, sometimes as wider political influence. Debates then proceed by proxy, leaning on markers such as legal form, sector, market concentration, or firm size. Yet these are imperfect substitutes for what political theorists actually care about. Employee headcount can track the reach of a firm’s internal governance, but it says little about a platform’s capacity to shape public discourse. Concentration can suggest economic dominance, but it does not tell us whether a firm can co-write regulation, set de facto rules for public communication, or mobilize political will. And the corporate form is crucial for understanding how private power is stabilized and scaled, but it cannot by itself distinguish an ordinary local corporation from a multinational that has inserted itself into the polity’s core institutions. The risk is that we keep arguing about “the corporation” as if it were a single political object, when the hardest normative questions attach to particular configurations of power that only some firms possess.

The political capability approach developed in this article is meant as a contribution to this broader political turn. It asks a “power-centric” question: what can corporations do, politically, once they exist, and when do those capacities trigger demands of democratic justification and constraint? To answer, the approach disaggregates corporate political power into four analytically distinct capabilities: a law-making capability (the capacity to shape the rules under which the firm and others operate), a governance capability (the capacity to issue and enforce rules within organizational relationships), a discursive capability (the capacity to shape public discourse and informational environments), and a democratic will-shaping capability (the capacity to mobilize, steer, or manipulate preference formation and political outcomes). The central idea is that democratic concerns become acute when these capabilities are present at scale and in durable combinations. A large employer may pose a significant problem of workplace domination while remaining politically ordinary in other respects; a communications platform may employ relatively few workers and yet wield outsized discursive and will-shaping power. Treating “corporate power” as a bundle of capabilities makes those differences visible and normatively tractable.

Recasting the political turn in these terms also helps connect normative proposals to the powers they are best suited to constrain. For example, workplace democracy targets governance capability; antitrust law addresses combinations of capabilities sustained by concentration; campaign finance rules and lobbying regulation target law-making and will-shaping capabilities; platform regulation concerns discursive capability. In this sense, the political capability approach helps to specify which corporate powers threaten which democratic values, to clarify when corporations become plausible objects of democratic justification, and to identify when they act more like routine participants in market life. The next section begins this task by detailing the four capabilities and illustrating how they operate in contemporary political economies.

The Political Power of the Business Corporation

The political capability approach aims to further the concerns over the political power of the firm by offering a more nuanced account focusing on the political capability of the firm. It begins by outlining the distinct forms of power that a business corporation can possess. By doing so, it provides a vocabulary and set of criteria for distinguishing a politically innocuous firm from a politically formidable one. We can then say: when a corporation amasses enough of these powers, to a sufficient degree, it transcends the realm of the “private” and becomes a legitimate subject of democratic concern and regulation. This approach is empirically informed as it looks at what corporations in fact do in contemporary political economies; it is also normatively oriented in the sense that it links those empirical realities to principles of democratic legitimacy and social justice.

One might worry that “power” is a slippery or expansive concept. Indeed, power is famously an “essentially contested concept” (Lukes 2005, 30). In reality, different forms of power often overlap and intertwine. The typology I propose of corporate powers should therefore be understood as an analytical categorization to help clarify discussion, while, in practice, a single corporate action might involve multiple dimensions of power. For instance, an oil company lobbying to weaken environmental regulations could be exercising both law-making power and discursive power if it shapes public opinion in the process. The categories correspond, roughly, to multiple dimensions of power identified in political sociology, such as Lukes’s (2005) classic three-dimensional view of power: decision-making, agenda-setting, and preference-shaping. The key point is that the more of these powers a corporation holds and exercises, the more politically capable and potentially threatening it is. A corporation that merely sells products and has a handful of employees is very different, in political terms, from one that also writes pieces of legislation, rules a large workforce, dominates media narratives, and mobilizes voters.

I propose that we can distinguish four primary forms of corporate political power:

(a) Law-Making Power: The ability to shape or co-write the rules under which it operates, whether through lobbying, regulatory capture, or even bypassing national laws via transnational legal mechanisms.

(b) Governance Power: The authority a corporation exercises over persons within its domain. Essentially, it refers to its internal rule-making and coercive power over employees, and sometimes consumers and suppliers.

(c) Discursive Power: The influence a corporation has over public discourse and information, for instance, through control of media, communications platforms, or the possession and utilization of data, thereby affecting or even manipulating what people know and believe.

(d) Democratic Will-Shaping Power: The capacity to alter political decisions by interfering with collective will formation, for example, through financing political campaigns, astroturf movements, or leveraging networks of users and customers as political actors.

Each of these forms of power can be manifested to greater or lesser degrees. The political capability approach assesses corporations along each of these axes. I will examine each form in turn, with contemporary examples, to see how they contribute to a corporation’s overall political power.

Law-Making Power

Law-making power was traditionally regarded as the exclusive terrain of sovereign governments. In the era of globalization, however, nation-states find themselves sharing the stage of rule-making with other actors, including business corporations (Arato 2015; Kwok 2025b; Robé 2020). States increasingly must compete or negotiate with transnational corporations and other organizations when setting policies. As David Held (1997, 253) observed, we are experiencing “a shift in the spatial form of human organization and activity to transcontinental or interregional patterns of activity, interaction and the exercise of power.” In reality, this means that a corporation’s decisions about where to invest or not invest can pressure governments into particular policy choices. The movement of global capital can compel nation-states to pursue business-friendly laws lest those corporations take their investment elsewhere. In this way, corporations exert a passive law-making power: by threatening exit or withholding investment, they remove certain policy options from the table. Entire categories of laws, such as stringent labor protections or corporate tax increases, may never be enacted because policymakers fear capital flight (Babic et al. 2022; Fairfield 2015). This agenda-setting aspect of law-making power allows corporations to veto laws before they even materialize.

We can distinguish between two broad modes of corporate law-making power: passive and active. Passive law-making is the power to block or preempt laws that a corporation dislikes. Simply ensuring that a potentially unfavorable law never comes into being is a profound exercise of power, even though it is less visible than pushing a new law through. Active law-making, by contrast, is the power to directly shape, introduce, or rescind laws to advance corporate interests. In both cases, corporations go beyond mere compliance with existing law: they become authors of the legal rules that govern them.

Modern corporations have developed a sophisticated arsenal of methods to exercise active law-making power. The first is direct bribes and quid pro quo arrangements: In some cases, corporate actors straightforwardly bribe public officials to achieve legislative outcomes. While outright cash bribes are illegal in most jurisdictions, corporations may offer officials personal incentives too good to decline that are functionally equivalent to bribes. A notorious example is how Citigroup maneuvered to change the Glass–Steagall Act. In 1998, Citigroup arranged a merger that was illegal under Glass–Steagall, on the expectation that the law would be changed. Indeed, then-Treasury Secretary Robert Rubin helped persuade Congress to repeal the law, and within months of the repeal Rubin was hired by Citigroup at $15 million per year. Citigroup thus effectively purchased a legal change by dangling a lucrative reward to a key official (Zingales 2017, 122).

The second example is lobbying and campaign finance: More routine than bribes is the use of lobbying and political campaign contributions to shape legislation. Major corporations maintain large teams of lobbyists whose job is to influence lawmakers and regulators in the corporation’s favor. For instance, facing new regulatory threats, the four big technology companies (Apple, Amazon, Facebook, Google) dramatically ramped up their lobbying spending, doubling their combined lobbying expenditures from $27.4 million in 2016 to $55 million in 2018 (Kang and Vogel 2019). Such spending buys access and friendly ears in government. To illustrate, U.S. Speaker of the House Nancy Pelosi “received nearly $43,000 in total donations” from political action committees and employees of Amazon, Facebook, and Google for her 2018 campaign, and she has long been “a champion of tech companies” in policy debates (Kang and Vogel 2019). While causation can be debated, the correlation between corporate donations and favorable treatment is hard to ignore.

The third method is through revolving doors and elite networks: Corporations also leverage personal networks and the revolving door between business and government. Top corporate executives often have direct access to high-ranking officials. A study by Brown and Huang (2020) even found that, from 2009 to 2015, when a company’s executives visited the White House, the company’s stock price tended to bump up by about 1% in the following 2 months (see also Zingales 2017, 123), presumably because investors expected those meetings to yield favorable policy outcomes. The case of Google under the Obama administration is telling. Eric Schmidt, Google’s then-CEO, was a close advisor to President Obama (Zuboff 2019), and during Obama’s tenure a major antitrust investigation into Google’s monopolistic practices was mysteriously dropped, despite a leaked Federal Trade Commission staff report concluded that “Google had unlawfully maintained its monopoly over general search and search advertising” (Zingales 2017, 123). The implication is that Google’s political connections helped it escape a legal challenge that might have curtailed its dominance.

These examples are just the tip of the iceberg. They illustrate that even in robust democracies like the United States, powerful corporations do not simply follow the law. They play a significant role in making the law to suit their interests. When Apple, Amazon, Facebook, and Google feel threatened by proposed legislation, they do not passively await the outcome; they unleash resources to shape that legislation.

Corporate law-making power extends beyond domestic politics into the international realm as well. International legal scholars have observed that multinational corporations now exert quasi-legislative power in global governance. For example, Arato (2015) argues that multinational corporations have acquired the power “to create primary rules of international law, at stark cost to the state’s regulatory autonomy,” including the capacity to secure international legal rights and to enforce those rights through arbitration (229). One mechanism for this is the investor–state dispute settlement system embedded in many trade treaties, which allows corporations to sue states for regulatory changes that damage the corporation’s profits (Kwok 2025b). In this sense, corporations helped shape those treaty rules and now use them to override domestic laws. A striking case was Azurix v. Argentina: Azurix, a corporation, held a 30-year water utility concession in Buenos Aires. When local authorities terminated the concession due to water quality and public health failures, Azurix sued Argentina under a bilateral investment treaty (Arato 2015; Kwok 2025b). The international arbitration tribunal ruled that Argentina’s regulatory actions violated Azurix’s treaty-based rights, and Argentina was forced to pay compensation (Arato 2015; Kwok 2025b). In other words, a corporate contract was elevated to the level of international law, trumping a sovereign state’s domestic regulations. Such cases show how corporations today can author binding rules through treaties and arbitration awards that constrain state policy (Arato 2015), a role traditionally reserved for states themselves.

Contemporary business corporations thus exhibit both passive and active law-making power. They are not simply passive market actors operating within a framework of rules set by states; they can be co-authors of that framework, often to a degree where the distinction between public law-maker and private law-subject blurs. A powerful corporation can intervene in the process of writing and revising the very laws that govern it, whether by lobbying legislatures, influencing regulators, negotiating treaty provisions, or pressing for deregulation. Recognizing this law-making power is crucial, because it directly challenges the classical liberal picture in which the state alone makes laws and private firms merely comply. Instead, large corporations have become part of the law-making apparatus, thereby raising profound questions about accountability and legitimacy.

Governance Power

Beyond influencing public laws, corporations wield significant governance power internally, that is, power over those within the organization. Governance power refers to a corporation’s authority to set rules, policies, and norms that govern the behavior of its members, including employees, and sometimes even other stakeholders like suppliers or users. Every business firm creates an internal regime of governance, such as company policies, codes of conduct, performance criteria, disciplinary procedures, and so on. This has a clear political dimension. Corporate governance power is about directing individuals to act in certain ways through rules and sanctions. As Anderson (2017) points out, large corporation operates as a “private government” for its employees, with rules that can deeply affect workers’ lives and wellbeing.

Some theorists attempt to downplay the political significance of workplace governance by arguing that if employees are free to quit, such as when a robust exit option exists, then managerial authority is not truly power in a coercive sense (Pettit 2006; Taylor 2017). However, this argument overlooks the reality that exit options are often limited and costly, especially as firms grow larger and full employment does not exist (Malleson 2014). Moreover, even when exit is possible, the impact of corporate governance on individuals can be profound (Hsieh 2005). One stark indicator of this impact is the phenomenon of workplace suicide. In certain corporate environments, the pressure and conditions imposed by management have led workers to take their own lives, a tragic outcome that highlights how high the stakes of internal corporate power can be. In Japan, a prosperous democracy, overwork and harsh workplace regimes have created what some call a national crisis of “karo jisatsu” (overwork suicide), with cases of depression and suicide linked to job stress (Targum and Kitanaka, 2012: 36). In China, the Foxconn factory, a major supplier for Apple, saw a cluster of employee suicides, which drew international attention to the desperate conditions on the shop floor and forced some improvements (Chan et al. 2013). These extreme cases make visible the otherwise routine fact that corporate governance decisions, about workload, surveillance, evaluation, discipline, can have life-and-death consequences. Even if actual suicide is rare, the fact that it happens at all due to work pressures suggests that internal corporate rule is not a trivial or easily escapable aspect of life.

Corporate governance power is closely tied to what legal scholars and economists call incomplete contracts (Hart 2017). When an employee signs an employment contract, that contract is usually “poorly worded, ambiguous, and leave out important things” (Hart 2017: 1732). Thus, it cannot spell out every aspect of what the job will entail or how the workplace is run (Singer 2019). Many terms are open-ended and subject to management discretion. This means that within the broad bounds of the contract and applicable labor law, corporations enjoy a residual right of control over how work is organized (Coase 1937; Hart 2017; Zingales 2017). The fewer the legal constraints, such as labor regulations setting minimum standards, the more expansive this residual control becomes. Thus, there is a continuum: the less external law restricts the employer, the more governance power the corporation has over employees’ lives. We have already seen in the previous sub-section that corporations often seek to shape laws in their favor; one motive for that is precisely to expand the scope of their internal authority. For instance, if a corporation lobbies to weaken labor laws, such as overtime pay requirements or union protections, it is effectively enlarging the zone of managerial prerogative as it gains more ability to set working hours, wages, and conditions unilaterally.

How far can corporate governance power go? Beyond setting wages and schedules, can it reach into employees’ personal lives and minds? Unfortunately, contemporary examples suggest that it can. Consider the example of Amway Corporation. According to a detailed study by Butterfield (1985), Amway’s internal training programs in the 1980s and 90s were notorious for attempting “to shape workers’ family lives, political convictions, religious beliefs, personal goals, and self-concepts” (Leidner 1993, 38). Amway openly encouraged its salespeople to “break off ties with friends or relatives who are critical of Amway,” seeking to create a closed ideological world around the worker (Leidner 1993, 38). Another example is Combined Insurance, a global insurance company that subjected its employees to intensive “mental training” programs. In these sessions, employees were taught to reframe any discontent with corporate arrangements as a personal failure of attitude, not living up to the company’s “Positive Mental Attitude (PMA) philosophy” (Leidner 1993, 99–105). Trainees would be made to stand and chant slogans like “I FEEL HEALTHY, I FEEL HAPPY, I FEEL TERRIFIC!” while simulating triumphant gestures. The underlying message was total ideological alignment with corporate goals, treating all aspects of an agent’s life as relevant to job performance (Leidner 1993, 100–101).

These examples of corporate cultural engineering illustrate that, under conditions of weak external constraint, corporate governance power can extend well beyond traditional workplace matters into the psychological and social domains of workers’ lives. To be clear, not every corporation attempts this level of control, and many workers are able to ignore and resist such pressures. But the point is that, in principle, the internal authority of corporations can be very far-reaching. And because some measure of incomplete contracting is inevitable in any employment relationship, corporations always exercise some governance power that goes beyond what employees explicitly consented to. In this sense, corporations are always political entities, as they wield power that affects individuals’ autonomy and well-being, and thus they always raise questions of legitimacy and justice (Herzog 2020).

Put simply, governance power is the corporation’s internal counterpart to the state’s governing authority. A large corporation often unilaterally establishes rules and norms that its members are expected to follow, and it enforces those rules with sanctions (Kwok and Li 2026). The more extensive the corporation, such as those having tens of thousands of employees across different regions, and the fewer external regulations binding it, the more significant its governance power becomes. In extreme forms, corporate governance power can intrude upon personal freedoms as deeply as any public government can, if not more so. Recognizing this adds another layer to why some corporations function as political actors: internally, they rule over a small polity of workers. When those polities are large enough, or their rules harsh enough, we have reason to scrutinize them with the same concern we have for governments that rule over citizens.

Discursive Power

A third kind of corporate political power is discursive power: the power to shape public discourse, meanings, and knowledge. In a democratic society, public discourse, the flow of information and the framing of issues, is a critical terrain of power. Control over information can translate into control over how people understand their world and what they consider acceptable or important. Corporations, especially in the media and technology sectors, increasingly serve as gatekeepers of information. They can amplify certain messages, suppress others, and thereby influence public opinion and political agendas. This capacity to frame discourse and influence collective perceptions is a form of ideological power in Lukes’s (2005) sense, as it shapes people’s beliefs and preferences, often without obvious force.

Winter (1996) called the news media “democracy’s oxygen.” The metaphor highlights that a healthy public sphere relies on a free and pluralistic flow of information, much as a living being relies on oxygen. When corporations control major news outlets, they effectively control a significant portion of that oxygen supply. They can decide what information is broadcast and how issues are framed. For instance, if a few large corporations own most newspapers and television stations in a country, they have the ability to filter and color the news that citizens consume. Empirical studies have found that the information people receive tends to reinforce their existing biases, the phenomenon of “echo chambers” or “filter bubbles” (Flaxman et al. 2016). This means if a corporation skews information in a certain direction, over time it can produce a self-reinforcing effect on public opinion. People become resistant to counter-information once their worldview has been shaped by selective exposure (Garrett 2009; Iyengar and Hahn 2009; Sunstein 2007).

Corporate discursive power is not limited to traditional media. In the age of social media and online platforms, tech corporations like Facebook, Google, and X exercise tremendous discursive power (Aytac, 2024; Kwok, 2025). These platforms are the new public squares, but they are privately owned and operated. The corporations behind them control the algorithms that decide what content people see in their news feeds or search results. By tweaking these algorithms, companies can invisibly steer public attention. Moreover, social media firms also set the rules of speech on their platforms. They unilaterally determine what counts as hate speech, misinformation, or community standards violations, and they remove content or users accordingly (Kwok, 2025). As The Economist (2020) starkly put it, free speech on social media “is too important to be determined by a handful of tech executives.” Yet currently, it is largely these executives who decide the boundaries of acceptable speech online. When X or Facebook chooses to ban or suspend a political leader, or when they allow misinformation to spread, they are making decisions with enormous societal impact, thus in fact regulating the speech environment for millions of people without democratic accountability. Discursive power also extends to agenda-setting in public debate. Corporations often engage in public relations campaigns, advertising, and strategic communications to frame issues in ways favorable to them. For instance, fossil fuel corporations have long financed efforts to undermine the credibility of climate research, thereby influencing how the public understands and debates climate change over an extended period (Union of Concerned Scientists 2012). Large corporations might sponsor “astroturf” groups (i.e., fake grassroots organizations) to promote industry-friendly narratives (Lits 2020). All of these affect which problems gain public attention and which are downplayed.

Hence, discursive power is a form of corporate influence that operates through shaping information, narratives, and ideas in the public sphere. It overlaps with agenda-setting power, referring to deciding what issues are discussed, and ideological power, meaning shaping beliefs. Corporations with ownership of media channels or dominant platforms have an outsized ability to exercise this power. When evaluating the political threat of a corporation, we must then ask: does it control means of communication such that it can shape public understanding? A corporation like Facebook, which mediates political communication for billions of users, clearly holds discursive power on a scale previously unseen. That power can be used in ways that profoundly affect democratic society, for better or worse, and thus it demands normative and political justification.

Democratic Will-Shaping Power

The fourth form of corporate political power is what I call democratic will-shaping power. This refers to the capacity of certain corporations to directly shape the political will and behavior of citizens in a democracy, in ways that can influence democratic outcomes. This goes beyond the general framing of discourse and enters the realm of actively steering political decisions: for instance, influencing how people vote, whether people mobilize in support or opposition to a policy, and even shaping the outcome of elections and referenda.

Two developments have significantly increased corporations’ will-shaping power in recent years: the rise of big data analytics and the advent of platforms that can mobilize large user bases on demand. First, big data and algorithmic analytics give corporations unprecedented insight into individual behavior and preferences. Big data is characterized by massive volume, velocity, and variety of data, allowing real-time analysis and micro-targeting (boyd and Crawford 2012; Christin 2020). Companies like Google, Facebook, and Amazon have amassed detailed data on a large number of people. This data can be used not just for commercial targeting, like personalized ads, but for political micro-targeting. The infamous Cambridge Analytica scandal revealed how Facebook data was used to target political advertising to influence voter behavior (Cadwalladr and Graham-Harrison 2018). Such micro-targeting can exploit psychological profiles to sway voters in ways traditional campaigns never could. As Zuboff (2019) shows, Google and others have used techniques to modify user behavior for commercial ends; those techniques can readily be adapted to politics. Indeed, members of Barack Obama’s 2008 campaign team have openly noted that they used big data from social media to predict and influence voters. One campaign analyst claimed, “We knew who … people were going to vote for before they decided” (Zuboff 2019, 144), thanks to data on over 250 million Americans and their online behavior (Kreiss and Howard 2010, 1033). While some of the claims may be exaggerated, the main point is that corporate controlled data and analytics hugely enhance the ability to track and shape political preferences. For example, Larry Grisolano, an Obama campaign adviser, said the campaign “literally knew every single wavering voter” it needed to persuade, “by name, address, race, sex and income,” and had learned how to place television advertisements before them with a “previously inconceivable level of knowledge and accuracy” (Rutenberg, 2013; Zuboff 2019). Even if these techniques are not all-powerful, companies that master them hold a powerful tool for political influence, one that operates largely out of sight.

Second, some corporations can leverage their platforms and consumer base to directly mobilize the public in political contests (Chan and Kwok 2021; Pollman and Barry 2017). A striking example is Uber’s tactics when facing regulatory threats. In 2015, when New York City’s mayor, Bill de Blasio, proposed capping the number of ride-share vehicles, a policy seen as adverse to Uber (Fitzsimmons 2018), Uber mobilized its users against the proposal. The company added a special “de Blasio” button in its app, showing riders a hypothetically slowed service to scare them about the policy; it also encouraged users to sign a petition and provided free rides for people to attend a protest at City Hall via the app (Pollman and Barry 2017). In Portland, when a city ordinance obstructed its black-car service, Uber used a 1-day free-ice-cream promotion to build a database of sympathetic users and convert them into advocates for its ride-sharing operations (Pollman and Barry 2017). In these cases, Uber treated its customer base as a political force, which amounts to an army to be summoned, to pressure city governments. This is a qualitatively new kind of power: a private company marshaling citizens to oppose democratically enacted rules, using the company’s own service and communications platform as the organizing tool.

Democratic will-shaping power is especially associated with the tech sector, but any corporation with a large consumer following or workforce could, in theory, attempt something similar. For instance, imagine a retail giant encouraging its millions of customers to lobby against a tax increase, under threat of raising prices and cutting jobs. The key feature is the ability to intervene in the democratic process by actively shaping voters’ choices and orchestrating political action among the public. Why is this form of power particularly alarming? Because it blurs the line between genuine democratic participation and corporate-orchestrated influence. When citizens protest or vote at the urging of corporations, particularly on the basis of manipulated information, this can distort the democratic will. The policies that prevail might reflect corporate interests more than the considered preferences of citizens. It is true that corporations are not the only actors who try to shape public will; political parties and interest groups do this as well. The difference is that corporations, especially those dominating information platforms or essential services, can leverage dependencies and asymmetries of information in ways that typical political actors cannot. Furthermore, when corporate influence is coupled with the other powers discussed, such as law-making and discursive control, it creates a feedback loop enabling corporations to entrench their influence further.

Having identified these four dimensions of corporate power, we can now see why certain corporations present a unique challenge. A company like Facebook, for example, exhibits all four: it lobbies and shapes laws (law-making power), it governs a workforce and also the community standards of users (governance power), it controls a major communications platform (discursive power), and it can nudge user behavior or mobilize users politically (will-shaping power). Such a corporation wields a bundle of powers that begin to resemble those of a political entity, indeed, arguably more extensive than those of many states. This is the sense in which big corporations can become rivals to the state’s authority. Habermas (1996, 433–434) captures the concern well: “[s]tate sovereignty is undermined to the extent that powerful corporations are involved in the exercise of political authority without being legitimated for this and without submitting to the usual responsibilities incumbent on government authorities.” In light of these realities, one might argue that any actor, corporate or otherwise, exercising such power should be subject to normative principles of legitimacy and democratic control. In other words, the normative claim that the state ought to check or regulate corporate power does not rest primarily on the fact that corporations have a public origin, as suggested in the concession theory argument. Even if corporations were viewed as purely private associations, once they accumulate de facto political power that can threaten democratic values or citizens’ basic rights, there is a strong normative rationale for the state to intervene (Singer 2019; Singer and Ron 2023). In principle, power is power: if a billionaire individual or an unincorporated conglomerate somehow had the same power as Facebook or Amazon, we ought to hold them to similar standards.

However, in practice the entities that amass such multi-dimensional and far-reaching power are almost invariably corporations (Kwok 2025b; Singer 2019). It is not a coincidence that the paradigmatic cases of troubling private power in contemporary discourse, Apple, Amazon, Google, Meta, Walmart, Uber, and so on, are all corporations or groups of corporations. One struggles to find examples of partnerships or sole proprietorships that rival these in influence. The reason is that the corporate form, with its ability to pool vast capital, outlive individual owners, limit liability, and expand indefinitely, is a necessary enabling vehicle for achieving this scale of power (Claassen 2023; Kwok 2025b). Incorporation allows for the unification of capital and organization that undergirds law-making lobbies, global operations, massive workforces, media ownership, and cutting-edge data manipulation. In other words, while the normative concern is with power rather than legal form per se, the corporate form has historically been the pathway to accumulating the multi-faceted power I have described. Therefore, identifying and addressing corporate political power not only responds to a practical reality but also, indirectly, vindicates the concession theory’s insight. By granting corporate charters and rights without adequate regulations, the state may have inadvertently armed private entities with the capacity to become its internal rivals.

The analysis so far has laid out what forms corporate power can take and why they matter. The next section then turns to develop a framework for differentiating corporations based on these powers. I build on this understanding to propose the political capability approach, which defines the “bigness” or political salience of a corporation in terms of its possession of the law-making, governance, discursive, and will-shaping capabilities.

A Political Capability Approach to the Corporation

Political theorists and the general public often use the term “big business” or “big corporation” to denote companies of special concern, but what exactly makes a corporation “big” in the relevant sense is seldom defined with precision. Two intuitive metrics are commonly used: the size of a corporation (often measured by number of employees) and its wealth (measured by assets, market capitalization, or revenue). I will argue that while size and wealth can be indicators of power, they are imperfect proxies. Instead, building on the analysis in the previous section, we should define a corporation’s political bigness in terms of its political capabilities, that is, the concrete powers it can wield. The political capability approach offers a more nuanced and normatively attractive way to distinguish a politically large corporation from a smaller one.

First, consider what we might call the size view: the idea that a corporation’s significance is determined by how many people it employs. This view underlies some regulatory thresholds in policy. For example, Germany’s co-determination laws impose additional obligations on companies above certain employee counts: corporations with 500 or more employees must allow worker representation on the board, and those below that threshold do not (Kwok 2021; Page 2018). The implicit rationale is that companies with more employees have more power and impact and thus should face more legal constraints to protect workers’ interest. Intuitively, having more employees does mean a company directly governs more lives and likely has more clout in labor markets or politics. However, the size criterion alone is a blunt instrument. In labor-intensive industries, a moderately powerful firm might have tens of thousands of employees, while in tech or finance, an extremely powerful firm might have relatively few. For instance, General Motors (GM) in 2018 had about 164,000 employees worldwide (Reuters 2020), whereas Facebook had around 45,000 employees in 2019 (Spangler 2020). By a pure headcount measure, GM is over three times “bigger” than Facebook. Yet few would argue that GM wields more political power than Facebook. Facebook’s influence on communication and politics (discursive and will-shaping power) is enormous, far outstripping anything GM can do, despite GM’s larger workforce. This comparison shows that numbers alone can mislead: the nature of the firm’s activities and the kinds of power those activities confer are what really matter.

Second, consider the wealth view: the idea that the scale of a corporation should be measured by its financial size, including its assets, revenues, or market value. There is some merit to this, since wealth can be translated into influence, such as through lobbying, acquisitions, etc., and we often see statistics like “Corporation X’s revenue is larger than the GDP of country Y” to dramatize corporate power. Zingales (2017, 113) points out that, if states and corporations are ranked together by annual revenue, corporations make up a majority of the world’s top 100 economic entities, and 10 of the 30 largest entities in 2015 were business firms rather than governments. The ability to convert wealth into power depends on the institutional context. For example, a very rich company in a jurisdiction with strict campaign finance laws, strong labor protections, and antitrust enforcement will have fewer avenues to exert undue influence than a similarly rich company in a laissez-faire context. In other words, the translation of economic resources into political capability is mediated by laws and institutions. Thus, while corporate wealth correlates with potential power, it does not automatically equate to actual political power. A virtue of the political capability approach is that it encourages an interactive conception of corporate power, accounting for both a corporation’s own resources and behaviors and the surrounding regulatory environment that enables or checks its influence. Political power, thus, is co-produced by their interaction with states and societies. Indeed, as argued earlier, politically powerful corporations are to some extent co-creations of the state. They grew powerful because certain legal regimes, perhaps inadvertently, allowed or even encouraged it. And once powerful, those corporations can further alter the legal environment to perpetuate their power.

Given the limitations of simple size or wealth metrics, the political capability approach proposes that we define the “bigness” of a corporation by the kinds and magnitudes of power it wields. Concretely, we can say:

(a) A corporation has a law-making capability if it can substantially influence laws and regulations (e.g., through lobbying, regulatory capture, treaty influence, etc.).

(b) It has a governance capability if it exercises significant rule-making authority over a large number of people (e.g., a huge workforce or supply chain under its control).

(c) It has a discursive capability if it can shape public discourse (e.g., owning media, controlling information platforms, or otherwise directing mass narratives).

(d) It has a democratic will-shaping capability if it can shape political outcomes by mobilizing citizens or micro-targeting influence in elections and policy battles.

The vertical dimension of corporate power can be understood in terms of how many of these capabilities a corporation has. A company that only has, say, governance power (perhaps a large factory with many employees but little external influence) is politically smaller than a company that combines governance power with law-making and discursive power. For example, a corporation that not only employs a vast workforce but also lobbies governments and owns a news network is more formidable than one that is merely a big employer. The extreme case is a corporation that checks all four boxes. Such an entity is operating on multiple power fronts and is thus politically very big.

The horizontal dimension concerns the degree or extent of a given capability. If two corporations have the same general type of power, we compare them by scale and reach. For instance, suppose two corporations both mainly exercise governance power and do not engage much in lobbying or media. If Corporation A has 50,000 employees and Corporation B has 5,000, then A’s governance capability is larger than B’s. A affects ten times as many livelihoods directly, and likely has a greater impact on communities and the economy through those jobs. We can thus say A is “bigger” politically in that dimension. Similarly, if two corporations both have discursive power, but one controls a national television network while the other owns a small chain of local newspapers, the former has a greater discursive reach.

By evaluating corporations along these axes, we get a more granular picture. For example, Facebook has: a medium-sized workforce (tens of thousands, so some governance power), enormous discursive power (billions of users on its platforms), growing law-making power (massive lobbying and influence on tech regulation worldwide), and strong will-shaping power (demonstrated ability to affect information flow in elections). General Motors, in contrast, has: a larger workforce (hundreds of thousands, significant governance power in that sense), some law-making power (lobbying in the auto industry, but far from dominating policy globally), minimal discursive power (it doesn’t control media or information distribution), and minimal will-shaping power (it can run ads and mobilize perhaps its employees or car dealers on issues, but not the general public to the degree a platform can). By these criteria, Facebook is politically “bigger” than GM, despite GM’s greater number of employees and decades-old global presence. This matches our intuitive sense that companies like Facebook or Google have inserted themselves more deeply into the fabric of public life than an old industrial corporation like GM, which is powerful in a narrower economic domain. The political capability approach thus reorients the normative focal point on what corporations can do in the political realm, rather than just their size or wealth abstractly. It directly connects to the normative concern that corporations that have the capability to shape laws, constrain governments, direct public discourse, or manipulate democratic processes are the ones that pose a challenge to democratic legitimacy and social justice. These are the corporations that political theory should prioritize in thinking about how democracies ought to regulate them. Those lacking such capabilities might require less attention, as they do not (yet) endanger political values in the same way.

An important implication of this approach is that it recognizes the role of the corporate form without making it the major concern. Incorporation is what allowed many of these capabilities to concentrate. So, the corporate form is indirectly vindicated as a key enabler of political power. The political capability approach looks at how that form has been leveraged in practice to produce power. In this sense, the political capability approach mediates between the concession view and the transaction cost view. It agrees with concession theorists that corporations as such have special public significance thanks to their legal form, but it also agrees with the transaction cost approach’s point that we should not rule out unincorporated firms that actually wield substantial power. By specifying which corporations wield such power, we ensure that we target our normative concerns appropriately. Any entity of comparable power should face similar demands, and the political capability approach is about how we identify those entities.

Another virtue of focusing on capabilities is that it inherently considers the interaction with public policy. For example, if campaign finance reform removes a corporation’s ability to finance politics, its law-making capability is reduced. If antitrust action breaks up a conglomerate, its various capabilities may be split apart. The approach can thus have practical relevance. To curb a corporation’s political power, we should target the capability that is most problematic. If a company’s discursive power is the issue, media ownership caps or platform regulation might be the solution. If its law-making power via lobbying is the issue, campaign finance limits or lobbying transparency rules are relevant. By diagnosing power rather than just complaining about “bigness,” we get closer to concrete remedies.

Put differently, the political capability approach differentiates corporations by examining which forms of political power they possess and to what extent. Vertically, a corporation that combines multiple forms of power is more politically significant than one that has only one of those. Horizontally, among corporations with similar types of power, we compare scale, such as how much influence and how many people affected. This framework allows us to categorize corporations along a spectrum from relatively politically small, such as a local corporation with only internal governance power over a small workforce, to politically big, such as a multinational tech giant that affects laws, governs a huge workforce and community, controls key information channels, and can sway political movements. This approach allows political theories of the corporation to answer more rigorously the question of which corporations merit the most concern, and why. It also provides a foundation for a normative political theory of the corporation that is more firmly rooted in empirical reality, based on what and how they exercise political power. Some corporations have become governance actors in their own right, wielding power that demands justification just as state power does.

Conclusion

This article has argued for a power-centric approach to the political theory of the corporation, and has developed a “political capability approach” to corporate power for this purpose. The recent “political turn” in theorizing the corporation has fruitfully drawn attention to corporations as political institutions, but it has not yet provided a fully satisfactory account of corporate political power itself. I have proposed refocusing on corporations that actually exercise extensive political power. The political capability approach developed here serves as a framework to identify and evaluate those corporations. The central claim is that a normative political theory of the corporation should begin by differentiating corporations that are politically threatening from those that are not, based on the kinds and degrees of power they wield. I identified four key forms of corporate power: law-making, governance, discursive, and democratic will-shaping power. When a corporation accumulates these powers to a great extent, it becomes a kind of private political authority, raising questions of legitimacy, accountability, and justice that are at the heart of political theory.