The People's Republic of ... Applestan?

It’s time to unfreeze the corporation. It’s been virtually unchanged since revolutionaries invented it 150 years ago. The industrial revolutionaries of the 19th century, that is. To help propel capital into the high-risk yet brilliant inventions popping up every day, they tossed a legal invisibility cloak over investors – limited liability – to ensure the venture itself, not the investors, got sued if things went haywire.

But today, the corporate world looks mighty different, with some business empires dwarfing political ones. And with so many countries in dire financial straits, how long will we have to wait till some beleaguered country rescues itself not by selling itself to the devil, but to a rich corporate, so ushering in this new kind of entity – the 'corpocracy'. Cyprus might be an early starter.

Let’s say you sit on the board of the world’s largest public multinational. For fun, we’ll call it 'Apple Inc'. Imagine too that it’s hoarding a gigantic cash pile of $137 billion, which you don’t have to because the real Apple recently confessed that its iPockets were already bulging with that sum. That’s so much money it could splash out and buy, well, anything.

Just a year ago, Apple’s money mountain was 'only' around $100 billion. In that one year, the almost $40 billion spare cash balloon alone could almost swallow the market value of Australia’s Woolworths.

Wow, indeed.

Apple is famous for inventing beautiful gizmos so, with all this cash pouring in, what about Apple’s brilliant design team dreaming up a new corporate suit, a perfect metamorphosis for every business giant who’s getting weary of all those pesky regulators all around the world who insist on nosing into its affairs.

How many anti-trust suits does a corporate giant have to put up with?

A dose of sovereign immunity might come in pretty handy, right?

So, voilà – the “corpocracy”.

Imagine it like this. Apple (or some other entity) has so much cash raining in, it decides to outlay its entire cash hoard, plus some lashings of still currently cheap debt. But they’re not going to give it back to shareholders – heavens, no! – or snap up some wondrous patent or chunk of technology. They’re not even going to buy a business or a company. So last century!

Instead, Apple dives in to buy a country, an entire nation.

(Technically, it’s a reverse takeover with a constitutional twist, so Apple gets complete control of the state and its legislature, simultaneously enriching the residents for kindly voting all their rights away, as well as tossing them a few call centre jobs to keep them busy.)

History is full of countries nationalising companies, so why hasn’t anyone tried the reverse? Actually, they have. More on that shortly.

But first, think of the benefits. As mentioned, there’s sovereign immunity. Plus a handy military to enforce it might be nice. Lots of chief executives would secretly love to slough off all that lovey-dovey feel-good HR claptrap and get back to those simple “command and control” days.

There’d be other benefits, too. If the corpocracy was Greece, Apple could rebrand Athens’ iconic hill as the 'Mac-ropolis'? If it was Italy, Google could rename its capital as “Chrome”.

This notion might be the subplot for a novel. (Indeed, there is, ahem, a corpocracy subplot in my upcoming eco-cyber-thriller, The Trusted.)

But you don’t have to rely on a novelist’s fertile mind for this because, in researching the book, I stumbled over the little-known fact that the world has already seen one real corpocracy.

It was in the 1950s when the shipping magnate, Aristotle Onassis, tried it on with Monaco. His attempt almost worked but due to a flaw in his plan, it played out like a Greek tragedy, so it’s hardly surprising no one has attempted it since.

But the ex-investment banker-cum-novelist in me seized on Onassis’s blunder, seeing it as a Harvard-style case study for shaping not only how my fictional tycoons could do it but, more importantly, how this could work for real.

Onassis’ plan was brilliant. It was his execution that sucked. In 1953, Monaco was verging on bankruptcy. Its casino, half the principalities reserve funds and swathes of its plum real estate were held inside the royal family’s teetering corporate vehicle. So, years before he hooked up with Jacqueline Kennedy, he sailed his superyacht Christina into Monte Carlo harbour and, for a mere million bucks, took control of the royal’s assets and Monaco’s velvet purse strings.

With a compliant royal family under his belt, or so he thought, and piles more of his own drachmas, Onassis set about transforming this tired, tatty seaside village into a glitzy jetsetters’ playground.

That wasn’t all. To confect even more caché for his Mediterranean Mecca, he flew in a glamorous Hollywood star, Grace Kelly, ostensibly for a photo shoot. Prince Rainier III reacted precisely as Onassis planned, falling in love with Kelly and the Prince’s glittering wedding to the radiant Princess Grace won gazillions in freebie publicity for their fledgling paradise.

But … drum roll … once Monaco’s royals were back up on their bejewelled feet, they changed the rules and unilaterally diluted their generous benefactor’s shareholding down to worthlessness.

Onassis tried suing, but he got nowhere. He discovered the obvious: if you’re the law, which he wasn’t but they were, you can virtually do what you like. Onassis’s big flaw was in what M&A experts call the 'social issues'.

He left the royals in place as the lawmakers. Effectively, this meant he mounted only a partial takeover. No self-respecting corpocrat would ever do that again.

But if you’re thinking about spruiking this idea to your favourite mega-national – or if you’re one yourself – get in quick now that the corpocracy cat’s out of the bag.

Premiums for sovereignty scarcity will be high even to start with, and when the first 21st century corpocracy does pop up, it will likely trigger a high-stakes scramble, since there aren’t a whole lot of countries – likely the smaller, less developed ones – which would be willing to be snaffled up.

Of course, a company like Apple may not want to go down this route. It is, after all, a world unto its own. But others might. Big Pharma, perhaps?

How about Big Tobacco? Under a cloud of sovereign immunity, legal suits in many countries would be blown aside and, in some others, while the suits themselves might still stand, punitive damages could be avoided. Hmm? Anyone up for 'Marlboro Country' in a 'flags for fags' deal?

Rupert Murdoch’s spectacular Wapping manoeuvre which, in 1986, revolutionised the newspaper industry, was a walk in the park compared to a corpocracy. Murdoch has often been dubbed a king-maker, but what about King Rupert? Imagine that.

John M. Green is a leading company director, commentator and novelist. His upcoming novel, The Trusted, an eco-cyber-thriller is released next week in paperback and ebook. Click here for a sneak peek.