Why Do Corporations Love Authoritarianism?
The least fun fact you're likely to read today:
IBM helped the Nazis.
Through its German subsidiary Dehomag, "Big Blue" custom-engineered Hollerith punch card machines specifically designed to meet the Third Reich's requirements for tracking, sorting, and processing human beings.
These were specialized systems developed to enhance the efficiency of Nazi operations, including the Holocaust itself.
The machines developed by IBM allowed for rapid processing of census and registration data, enabling the identification, concentration, and deportation of Jews and other targeted groups.
IBM technicians maintained on-site operations at various concentration camps, with each camp assigned a specific IBM customer number. These technicians regularly serviced the equipment and designed custom card formats to meet the specific requirements of the SS.
Thomas Watson, IBM's CEO, maintained business relationships with Nazi leadership even as evidence of the regime's horrific crimes mounted, accepting the Merit Cross of the German Eagle with Star from Hitler in 1937.
Through complex international arrangements involving subsidiaries and European offices, IBM New York maintained control of its German operations and continued to profit from them even after the United States entered the war.
The financial incentive was real - IBM's European operations saw record profits during this period. The company's leasing model for these machines (rather than selling them outright) ensured ongoing revenue and maintained IBM's control over the technology throughout the war years.
This isn't a conspiracy theory. The history was extensively documented in Edwin Black's 2001 book IBM and the Holocaust, which drew on thousands of documents from archives across multiple countries to establish the depth and deliberate nature of IBM's collaboration with the Nazi regime.
What interests me about IBM and the Reich isn't just corporations = evil.
I would consider that an axiom that leads nowhere particularly useful anymore.
To me, the interesting question is: what incentive structures produced this outcome? And do those same incentive structures still operate today?
If IBM's Nazi collaboration was just a bizarre historical anomaly, we could safely file it away with other horrifying 20th-century oddities.
Unfortunately, it's not.
It represents a base alignment problem between profit-seeking entities and authoritarian politics.
In the 1990s, the oil-rich Niger Delta saw a perfect storm of corporate-authoritarian collaboration. Royal Dutch Shell had been mining oil since 1958, leaving behind environmental devastation: gas flares burning 24/7, oil spills poisoning farmland and fisheries, and pipelines cutting through ancestral territories. Local communities, particularly the Ogoni people, watched their livelihoods vanish while oil wealth flowed outward.
When writer and activist Ken Saro-Wiwa organized the Movement for the Survival of the Ogoni People (MOSOP) in 1990, Shell faced its first serious challenge in Nigeria. MOSOP's demands were hardly radical: environmental remediation, fair compensation, and a share of oil revenues. Their tactics were explicitly nonviolent: protests, documentation, and international advocacy.
Jess Worth
Instead of addressing environmental concerns, Shell treated the Ogoni resistance as a security threat requiring military suppression. Internal memos described meetings where Shell executives discussed the "Ogoni problem" with Nigerian military officials. The company provided financial support, vehicles, and logistical assistance to military units conducting operations against Ogoni villages.
In 1993, Shell suspended operations in Ogoniland, blaming "security concerns." It was, basically, a pressure tactic, depriving the Nigerian military government of revenue and creating economic justification for a crackdown.
Within Shell's decision-making framework, violent repression represented a cheaper solution than addressing environmental damage or revenue-sharing demands.
The collaboration culminated in the 1995 arrest of Ken Saro-Wiwa and eight other Ogoni leaders on fabricated murder charges. Despite international outcry, they were executed after a sham military tribunal. Shell publicly expressed "shock" while privately continuing to coordinate with the same military authorities that conducted the executions.
Documents later revealed that Shell had specifically requested intervention from the military unit responsible for the most severe human rights abuses. The company paid salary bonuses to Nigerian security forces and provided detailed intelligence on Ogoni activists' movements. Shell knew exactly what kind of "security" it was purchasing.
Shell's Nigerian operations represented humanity-free economics: optimal resource removal with minimal investment in environmental protection or community development. The authoritarian military government provided the perfect partner, willing to violently suppress local opposition in exchange for oil revenue.
The corporate calculus was straightforward: supporting military repression cost less than addressing legitimate environmental and social concerns. Shell didn't need to operate the death squads directly; it just needed to provide resources and legitimacy to those who did. This arm's-length arrangement preserved plausible deniability while achieving the desired outcome: continued gains without any meaningful accountability.
Shell calculated that authoritarian alignment was Good Business.
And historically, they're not alone.
Before IBM got involved, German industrial giants like Krupp, Thyssen, and I.G. Farben had already bankrolled the Nazi Party's rise.
Italian corporations embraced Mussolini.
Spanish businesses rallied behind Franco.
When Pinochet took power in Chile, domestic and foreign corporations rushed to support his regime despite its brutal human rights record.
Today, U.S. tech firms eagerly build surveillance tools for authoritarian states, their own and those overseas.
There's a persistent pattern: left to standard profit-maximizing incentives, corporations keep landing on the wrong side of history.
Why?
There are five reasons:
- Controlled stability: Authoritarian regimes provide predictable business environments free from democratic messiness.
- Labor suppression: Dictatorships crush unions and worker protections that might cut into profits.
- Influence capture: Authoritarian states offer more direct avenues for businesses to shape policies to their own ends.
- Desperate times: Corporations ally with authoritarians when threatened by more radical alternatives - socialism, etc.
- Unlimited value extraction: Without the limitations of a system that protects its people, corporations are free to take as much value as they want (literally all of it) without being concerned with long-term harm or regulations.
Corporations value authoritarian governments because they eliminate the uncertainty that comes with democratic processes.
Elections might bring regulation-friendly administrations, public opinion might turn against your industry, and labor might organize. Democracy is unpredictable because it reflects the pesky will of the people.
You know, those annoying human beings.
Authoritarian regimes promise controlled stability.
Once you've navigated the patronage system and secured the dictator's favor, you can expect consistent policies and protection from popular backlash.
We can find empirical support for this. Authoritarian transitions often trigger stock market rallies, suggesting investors believe authoritarianism benefits corporate bottom lines. When Brazil elected far-right Bolsonaro, the Ibovespa index surged 3.7% on hopes of "economic stability."
Similar patterns followed Erdoğan's consolidation of power in Turkey and Donald Trump's re-election in 2024.
Labor suppression is a historical driver for corporate authoritarianism.
Authoritarian regimes reliably crush independent labor movements. Hitler abolished trade unions within months of taking power. Mussolini subordinated workers' organizations to the Fascist Party. Pinochet banned collective bargaining and purged union leaders.
This labor suppression translates directly to corporate profits. When workers can't organize, wages stagnate. When strikes are illegal, companies face less pressure to improve conditions. When labor leaders disappear, worker militancy tends to decline.
When Guatemala's democratic government attempted mild land reforms in the 1950s that would affect United Fruit's massive holdings, the company lobbied the U.S. government to orchestrate a coup. They got their wish in 1954 when democratically-elected President Árbenz was overthrown, beginning decades of military dictatorship. United Fruit kept its land, and labor organizers were systematically eliminated.
The math here is straightforward. If suppressing labor increases profits by X%, and supporting authoritarian politics costs Y% in lobbying/bribes/reputation damage, then when X > Y, the profit-maxing choice is to back authoritarians.
This creates a natural alliance between corporations seeking to minimize labor costs and political movements promising to crush worker power.
No conspiracy required - just aligned incentives.
Authoritarian systems offer more efficient avenues for capturing influence.
In democracies - functional ones, at any rate - companies navigate complex lobbying channels and laws, public opinion, media scrutiny, and competing interest groups. In dictatorships, they just need to keep one person (or ruling clique) happy.
Streamlining influence operations makes authoritarian states potentially more profitable environments for corporations with sufficient resources to access the inner circle. Once you're in, you can shape regulations with minimal public accountability.
We see this in economies like Putin's Russia, where oligarchs with close ties to the regime receive favorable regulatory treatment, government contracts, and protection from competition. The system is brutal for small businesses while obscenely profitable for large corporations with the right connections.
This is a sociopathic efficiency argument. Bribing one dictator might be more cost-effective than maintaining armies of lobbyists, PR teams, and lawyers to navigate democratic regulatory processes. Democracy's transaction costs are high.
This creates a disturbing alignment: corporations seeking regulatory influence will gravitate toward political systems where that influence can be purchased on the cheap.
Authoritarianism offers a discount.
The "desperate times" hypothesis frames corporate-fascist alliances as defensive reactions to "radical left" (aka humanitarian) threats.
The idea is that business support for authoritarianism intensifies when faced with credible left-wing alternatives, largely because left-wing alternatives tend to benefit human beings rather than monolithic profit-driven death cults.
German industrialists claimed to have backed Hitler primarily to prevent a communist revolution. Italian business elites supported Mussolini to counter socialist labor organizing. Chilean corporations welcomed Pinochet's coup against socialist Allende.
But it doesn't explain corporate-authoritarian collaboration in contexts without strong leftist movements.
For instance, multinational tech companies readily adapt their products to enable surveillance and censorship in authoritarian markets today despite no meaningful communist threat.
The truth: authoritarian cooperation is driven more by profit opportunities than ideological panic.
This is the fifth explanation: unlimited value extraction.
Healthy democratic systems develop regulatory frameworks, labor protections, environmental standards, and tax policies that limit predatory behaviors. They constrain how much value corporations can take from society.
They push businesses toward positive-sum activities where profit derives from creating rather than removing value.
Authoritarian regimes allow for more efficient corporate feeding. They remove democratic constraints through:
- Eliminating accountability mechanisms that expose toxic, harmful practices
- Suppressing civil society organizations that might resist corporate exploitation
- Centralizing corruption channels, making "permission to extract" cheaper to purchase
- Creating legal impunity for well-connected corporations
- Weakening property rights for ordinary citizens while strengthening them for elites
This helps explain why certain industries seem particularly prone to authoritarian collaboration. Industries that are, at their core, extractive (mining, oil, plantation agriculture) show stronger tendencies toward supporting authoritarian regimes than industries where profits depend more on innovation and human capital development.
It also explains why even corporations that aren't ideologically aligned with fascist movements still find authoritarian environments commercially attractive. They're not necessarily pro-dictator; they're pro-extraction.
Basic pattern matching suggests that corporate-authoritarian alignment is an emergent property of the global economic system. The incentive structure of hypercapitalism has always and will always pull corporations toward political arrangements that allow maximum value yield with minimum constraints.
Yes, this sucks.
Yes, it's the reality of our current economic system.
Yes, it has to go.
There is a fundamental tension (or absolute disconnect, pick your poison) between corporate interests and democracy.
It's not that corporate leaders loathe democracy in principle - they don't have any concept of "principles" in the first place. Billionaires and oligarchs don't hate voters any more than a farmer hates his livestock. But on a simple level, they find any human constraint to be inconvenient.
For the vast majority of profit-hungry entities, authoritarianism looks like a delicious all-you-can-eat buffet of labor suppression, tax avoidance, and regulatory demolition. They sprint toward authoritarian with the same enthusiasm with which they build apocalypse bunkers in New Zealand. The only thing they love more than a good stock buyback is a dictator who promises to keep those selfish workers from demanding crazy things like "living wages" and "not dying from preventable workplace accidents."
IBM helping optimize Holocaust logistics wasn't a corporate "whoopsie" moment where the ethics department was on vacation. It was capitalism functioning exactly as designed.
The moral failings of individual corporations matter, but they emerge from hypercapitalism's DNA—a structural misalignment hardwired into the system since its birth.
Today's world offers the same incentives.
Today's corporations respond with the same calculus.
Today's authoritarians receive the same technological gifts wrapped in the same plausible deniability.
Different century, same capitalist operating system running the same reliable program: If authoritarianism pays, authoritarianism stays.
This pattern repeats - consistently - across history. Different corporations, different authoritarian movements, different technologies - but the same alignment problem keeps emerging, from the East India Company to Meta.
The players change, but the game remains the same.
Most corporate-authoritarian collaboration isn't as blatant as IBM and Shell. It happens through regulatory capture, surveillance partnerships, platform censorship, union suppression, and tax avoidance. These practices don't immediately register as "enabling authoritarianism," but they keep shifting power away from democratic institutions toward unaccountable corporate and state actors.
The corporate-authoritarian alignment problem is fundamentally about power and accountability.
Democracy distributes power and demands accountability.
Authoritarianism concentrates power and eliminates accountability.
Corporations are drawn to the latter because accountability is expensive, power concentration enables lucre, and corporations themselves are fucking sociopaths.
Corporations and authoritarianism are a match made in Milton Friedman and Mussolini's heaven. As long as we keep pretending corporate-authoritarian collaboration is just a series of unfortunate ethical lapses rather than a structural feature, we'll keep cycling through the same pattern—different corporations, different authoritarian movements, and the same catastrophic, bloody, costly outcomes.
We have a choice to make.
It's a choice we've been putting off for the better part of a century - about the kind of economic system we want to live in.
Do we want a system that deliberately, calculatedly enables and profits from authoritarianism? Or one designed to strengthen democracy and give human beings a Fair Go, even when doing so limits the end payoff?
The first system gave us IBM and the Holocaust, United Fruit and banana republics, Shell and their sponsored death squads, tech giants and surveillance states, Donald Trump and Elon Musk.
A second system is entirely possible, no matter what libertarians and simp-fascists on Reddit want you to believe.
If we want to break the corporate-authoritarian alignment that keeps reproducing across history, we'll need to build that second system.
Not by politely asking soulless corporations to behave better within existing incentive structures (spoiler alert: they fucking won't) - by creating new structures with different incentives and better, stronger disincentives. With teeth.
The forces pulling corporations toward authoritarianism are powerful, persistent, and profitable. They won't be overcome with minor adjustments or hopeful platitudes. But they are vulnerable.
Despite their promises of crackdowns and control, dictatorships are incredibly unstable. Strongmen die. Coups happen. Revolutionary backlash builds. Economically illiterate, unpredictable leaders make impulsive decisions that tank the stock market. The median dictatorship lasts only about 9 years.
A system that rewards companies for enabling authoritarianism will inevitably and consistently produce authoritarianism.
That's not a political opinion - it's a design specification.
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