Part 1 - State vs. Corporation

If you grew up in the United States, you were probably taught a very simple story about how our economy works.

On one side are corporations and “the market”: dynamic, innovative, profit-seeking. On the other side is the state: cautious, regulatory, sometimes clumsy, but necessary to keep corporations from going too far. The ideal, we’re told, is a balance between the two. Too much government and you get Soviet bread lines; too much corporate power and you get robber barons and child labor. Somewhere in the middle lies “mixed economy” capitalism, the best of both worlds.

This story is so common that it barely feels like a story at all. It just feels like reality.

In this project, I want to argue that this picture is wrong in a very important way.

The problem isn’t just that corporations are greedy, or that government is corrupt, or that we haven’t found the perfect balance yet. The deeper problem is that the supposed opposition between state and corporations is mostly a myth. What we actually live under is a state–corporate complex: a tight, mutually reinforcing partnership in which each depends on the other to survive.

Understanding that relationship is the first step toward seeing why our lives are more expensive, more precarious, and more exploited than they need to be—and why a genuinely free market would look nothing like what we call “capitalism” today.

The official story: rivals in “checks and balances”

Let’s start inside the mainstream narrative.

Government, we’re told, is the thing we create together to provide public goods, enforce rules, and protect us from abuse.
Corporations are private organizations that take risks, invest, and deliver goods and services efficiently.

When corporations go too far—pollution, unsafe products, monopoly pricing—the state steps in with regulation: antitrust laws, safety codes, environmental rules, labor protections. When the state goes too far—overregulation, red tape, bureaucracy—corporations lobby, innovate around it, or move to more “business-friendly” places. The tension between the two is supposed to keep either side from becoming too powerful.

If that picture were true, we would expect to see:

governments regularly reining in big firms;
big firms regularly fighting against special favors, subsidies, and bailouts on principled free-market grounds (“no special treatment for anyone”);
and most importantly, an economy where your living standards track your productivity reasonably well.

That’s not the world we live in.

Where the story breaks

Look at how the state and large corporations actually behave around real money and real power.

When major banks and corporations are about to collapse, we don’t let “the free market” sort it out. We bail them out with public money.

When industries face rules that would truly threaten their profits, they don’t shove government away; they move inside it. They hire lobbyists, fund campaigns, and literally help write the regulations that supposedly restrain them.

When companies build business models on intellectual property, we don’t just ask the market nicely to respect their wishes. We send courts and police to enforce patents, copyrights, and trademarks—backed, ultimately, by the threat of violence.

In each case, the relationship looks less like “rivals in balance” and more like partners in a joint venture: the state supplies legally enforced privileges; corporations supply profits, investments, and a story about how this is all for the greater good.

You can see this partnership in the gap between what the free market could give us and what capitalism actually gives us:

The free market gave us the smartphone as a concept: a pocket-sized general-purpose computer. Capitalism gave us the $1,000 locked-down phone, full of proprietary software you’re not allowed to repair or modify.
The free market gave us cheap, mass-produced medicines and the know-how to make them. Capitalism gave us insulin priced like a luxury good, where people in a rich country ration doses so shareholders can hit their quarterly targets.
The free market gave us printers and the ability to manufacture them at scale. Capitalism gave us DRM-locked ink cartridges that cost more per milliliter than human blood.
The free market gave us the internet, a decentralized network for sharing information. Capitalism gave us local ISP monopolies that charge high prices for mediocre service and lobby to keep competitors out.

In each case, there’s a pattern:

People discover something genuinely useful.
Markets show that it can be produced at low cost.
Then, instead of everyone getting the benefit, a state-backed corporate structure grows around it to wall it off, meter it, and extract rent.

That “walling off” is not a natural feature of markets. It’s a feature of the state–corporate alliance.

What I mean by “state–corporate complex”

I’m not talking about a secret cabal in a smoky room. I’m talking about a systematic pattern:

The state has a legal monopoly on making and enforcing certain rules—especially about property, money, and violence.
Corporate capital has money, organization, and a direct interest in shaping those rules to protect its income streams.
Over time, they evolve into a symbiotic relationship:
- The state uses law, police, and courts to grant and enforce special privileges.
- Corporations use those privileges to secure profit, and in return provide tax revenue, jobs, and political support.

When you look through that lens, a lot of things that seem mysterious or “just the way it is” start to make more sense.

Why are housing costs so brutally high in many cities even though we clearly know how to build apartments?

It isn’t just “supply and demand.” It’s zoning rules, building codes written with input from big developers, and enforcement of land titles that keep large amounts of land in the hands of people who don’t live on or use it.

Why is it so hard to fix your own tractor or phone?

It’s not that markets hate repair. It’s that intellectual property laws, DMCA-style rules, and “authorized service provider” regimes make unauthorized repair illegal or impractical.

Why can Elon Musk or any billionaire accumulate wealth on a scale that makes no sense in human terms—tens of millions of times the wealth of a typical person?

It’s not because they are literally tens of millions of times more intelligent or hardworking. It’s because the institutional structure helps those who already own large piles of capital multiply those piles faster, through legal privileges, subsidies, and barriers to competition.

None of this is an accident. It’s what you’d expect from a system where the rules of the game are written by a partnership between the referee and the richest players.

Why this is so hard to see

If this all sounds extreme or conspiratorial, that’s partly because you weren’t taught to see it.

We get a steady diet of ideas that blur or hide the state–corporate partnership:

We’re told that wealth is a direct measure of contribution: if someone is a billionaire, they must have created a billion dollars’ worth of value (and then some). If you’re struggling, you must not have worked hard enough, or you chose the wrong major.
We’re told that ownership of property and capital is simply natural and legitimate, without examining how that ownership was originally acquired or maintained. The violence and coercion needed to enforce it—evictions, police, courts, jails—are treated as background noise.
We’re told that market outcomes reflect merit, while the legal scaffolding that shapes those outcomes is treated as neutral, technocratic “policy.”

On top of that, the most important monopolies are invisible from the street. You don’t see banking law when you swipe your card. You don’t see zoning ordinances when you pay rent. You don’t see patent law when you buy a phone or a pill.

What you do see is the final price you’re forced to pay and the limited set of options on the shelf.

From your perspective, it can feel like bad luck or a mysterious “cost of living crisis.” From the perspective of the state–corporate complex, it’s just the machinery working as designed.

Why this matters: stolen time and unnecessary scarcity

All of this might still sound abstract, so let’s bring it down to what it means for your life.

Most people feel, vaguely, that they are being squeezed:

You work more hours or produce more value per hour than earlier generations, but your wages don’t keep up with productivity or with the cost of living.
Rent eats an enormous chunk of your paycheck.
You are pushed into debt for housing, education, medical care, and basic emergencies.
You pay recurring “junk fees” and penalties precisely because you don’t have much money.

We’re constantly told that this is simply the price of living in a complex, advanced economy. But once you see the state–corporate partnership, it becomes clearer that a lot of this is not necessary complexity; it’s engineered scarcity.

Under a genuinely free market—without a state propping up monopolies and rigged privileges—the basic cost of living would be dramatically lower:

Housing would be cheaper and more plentiful without artificial restrictions and land monopolies.
Basic goods and medicines would be cheaper without intellectual property regimes that let a few firms legally exclude competitors.
Credit would be more widely available on fairer terms without banking privileges and legal barriers blocking mutual credit and community finance.
More of the value you create with your labor would actually go to you, instead of being siphoned away to landlords, creditors, and corporate shareholders who can profit without working.

That stolen difference—the gap between what your life costs now and what it could cost in a freed market—is not just a statistical curiosity. It is measured in years of your life spent working to pay off rents and fees that shouldn’t exist, instead of doing things you actually care about.

From myth to mechanism

This first part of the project has one job: to crack the story that “the state and corporations are rivals in balance” and replace it with a more accurate picture of mutual dependence.

The state is not a neutral referee; it is an active partner in enforcing specific kinds of property, debt, and corporate privilege.
Large corporations are not just players in a neutral market; they are architects and beneficiaries of the rules that keep them on top.
The result is not “the free market,” but a structured system where your time, your wages, and your options are constrained in ways that are neither natural nor inevitable.

In the next part, we’ll go deeper into the mechanisms of this partnership. We’ll look at some of the key monopolies that make the state–corporate complex profitable—especially in money, land, trade, and ideas—and how they translate into the prices you pay, the debt you carry, and the sense that, no matter how hard you work, you’re always running to stay in place.

Only once we’ve seen those mechanisms clearly does it make sense to ask what a freed market—a market without this apparatus of privilege—might actually look like.