Companies are the new City-States

That’s why we need to build better ones.

Companies are wealthier than nation-states. With a market cap of $2.1 trillion, there are only seven countries in the world with a wealthier GDP than Apple—if it were a country, it would be part of the G7. Microsoft isn’t far behind—with a market cap of $1.9 trillion, it would be the 10th richest country in the world. Saudi Arabia’s Saudi Aramco has a market cap more than double its country’s GDP.¹

Companies don’t have borders. Multinational corporations like Amazon, Netflix, Mitsubishi, Airbus, and BP operate around the world, with offices in many countries and employees who can easily move between them thanks to relocation packages and work visas. Though nation-states remain gridlocked against refugees and NGOs struggle to relocate them, after Russia’s 2022 invasion of Ukraine, companies like Google, Snap, and Revolut helped workers relocate to European offices, paid for their moving expenses, and expanded operations in Poland and Dubai to hire talent migrating away from Ukraine.

To attract workers, companies have also pioneered workers’ rights. It was Kellogg and Ford that popularized the 40-hour work week and Panasonic that brought it to Japan. It was companies like General Motors that pioneered healthcare for employees, and companies like Dell, HSBC, and Bank of America that introduced “weekends” and “vacation days” to India. Today, companies like Spotify and Lululemon are pioneering six-month parental leave for both mothers and fathers and unlimited vacation time. Companies like Microsoft Japan, Kickstarter, and Buffer are experimenting with the four-day workweek. Costco recently raised its minimum wage to $30.

It is only after companies popularize workers’ rights that governments step in to legislate them. Laws creating the 40-hour workweek, vacation time, and maternity leave came only after companies made them successful. The US federal government still doesn’t mandate vacation time and maternity leave even though many companies do. Right now, governments are even hindering progress to workers’ rights. Independent contractors and gig workers are still not considered employees by US federal law and are only eligible for benefits if they work 30 hours a week or more. Once a law changed in Utah allowing independent and contract work to apply for benefits, Lyft and Target began running pilot programs in the state. Lyft drivers can now receive 7% of their quarterly earnings in a flexible benefit fund, and DoorDash is now running a similar pilot in Pennsylvania with workers earning 4%.

Companies often fill in the gaps where governments fail. Where the national education isn’t good enough, companies like Walgreens have stepped up to train its pharmacy technicians in-house, tech companies like Google began providing coding bootcamps to incoming high school graduates. Because of the need for more tech employees, Google provided technical training to more than 5 million people in Africa. As home ownership becomes more expensive, companies have had to step in and provide housing as well. Disney provides housing for theme park workers, Meta and SpaceX are building housing communities for their employees in Texas. Vail is now building housing for their hospitality staff in Park City, Vail, and Whistler. Ikea and Marriott are building employee housing to attract talent to their locations across Europe.

Companies also have to act in the best interest of their customers which means companies are often more inclusive than nations. A mom-and-pop bakery might decline to sell a wedding cake to a gay couple, but a commercial baker like Thomas’ would never be so exclusionary. It’s in the company's best interest to sell to as many people as possible and that means not alienating any potential customers by catering only to a small group.

Companies are also more inclusive at headquarters. Regardless of political affiliation or ethnicity, you can find a wide variety of people working at any given company. “Side by side in a Mckinsey office you will find Bosnians and Serbians, and they won’t think anything of it,” Parag Khanna, founder of AlphaGeo, told me. “Go to Dubai today and walk in the office of PwC or Facebook or Twitter or LinkedIn—you’re going to see Egyptians, Israelis, Palestinians, Jordanians, Saudis, and Iranians. Whatever their countries or even their societies feel about each other, their prejudices and so forth, that literally does melt away in the office.”

Our lives have been improved by companies. Companies provide our food and housing and bridges and cars. Companies brought us electricity and installed telephone wires and eventually WIFI throughout the country. Companies created commercial air flight and container ships that facilitated global trade. Companies produced oral contraceptives and antibiotics and polio and malaria vaccines. Companies are launching satellites that provide internet access to the most rural parts of the world and exploring space. Companies are building solar farms and nuclear reactors. They are cleaning our oceans and developing medical breakthroughs and inventing AI.

Companies are even forcing countries to protect the environment. If they don’t, companies won’t move there. China significantly reduced air pollution in Shenzhen and parts of Beijing to attract high-tech and green businesses. South Korea rehabilitated industrial zones and heavily polluted rivers (like the Cheonggyecheon Stream in Seoul) to attract talent for their companies. Germany aggressively cleaned up industrial pollution and invested in renewable energy to create new jobs, become a leader in climate change, and reduce their dependence on foreign oil. Costa Rica reversed deforestation, cleaned up its waterways, and shifted almost entirely to renewable energy to market itself as a hub for sustainable businesses and eco-tourism.

Companies are smaller and more nimble than nation-states. We have about 200 countries, each with millions of citizens. But there are millions of companies each with only a few hundred or thousand employees—that’s better. Because we have so many companies to choose from, companies compete for workers (which makes them treat workers better) and compete for customers (which makes them more inclusive). Unlike governments, companies with bad leaders fail and are replaced by better ones. In a free market economy we can create new companies left and right, introducing new ways of doing business—and better ones. We can create mini labs of company formation.

Companies are also more efficient and less polarized than countries. We might spend several years fighting over every move of our presidential candidates, but companies can make big decisions relatively quickly and with little fanfare. It’s in the company’s best interest to do well or they won’t survive. Mistreated employees can leave companies more easily than mistreated citizens can leave their country, and disgruntled customers can more easily boycott products than citizens can protest or leave bad governance. Unlike countries, companies rise and fall by good and bad decisions, and bad leaders are fired for mishandling them.

Company campuses can be a lot like city-states. In 2023, Google earned $307 billion in revenue, twice as much as Switzerland earned in tax revenue. With close to 200,000 employees spread across 70 offices in 50 countries, their campuses function a lot like a collection of city-states. In Palo Alto, Google employees access free transportation to and from the office. They enjoy complimentary breakfast, lunch, and dinner at onsite restaurants. They can drop in on campus healthcare workers including physicians, chiropractors, and massage therapists. They enjoy free gyms and fitness classes. Employees can access subsidized childcare, and recreational spaces with foosball, ping-pong, and video games, as well as nap pods. Google campuses even have their own private security.

Google works very much like a nation-state but paid for with profits rather than tax dollars.

A Google employee is better cared for than a United States citizen.

I’m not saying nation-states don’t play an important role—they do. Governments can shape and create markets as well as correct market failures. They can protect citizens during times of unemployment, and ensure that all citizens regardless of work status have access to education and healthcare and infrastructure. They provide public services like parks and libraries and national parks. I’m also not saying companies are perfect—far from it. Companies have caused rampant wealth inequality which has led to rampant power inequality. They have lobbied our governments and paid our politicians to represent their interests over our own. They have stifled competition and pushed their own products over competitors. They decide what media gets reported and which views will be suppressed by their algorithms.

What I am saying is that for all of the attention we place on politics to solve the world’s problems, there is a lot of good we can do with our companies, and they are often our most accessible way to do so.

Imagine any outcome you want to create—better wealth equity, better democracy, cleaner energy solutions, cures to diseases, a meatless future, clean water access, high-speed travel. Trying to move a government toward those goals is like trying to move a mountain—with every person disagreeing about which direction we should move it. But a company can bore a tunnel through the mountain and build a new city on the other side that provides better wealth equality to workers. Another company can pave a road to the top and build a city that researches cancer. Another can set up solar panels at the base and build a smart city that powers all the other ones. Nation-states might provide an important foundation, but companies are the more nimble entity—they can create a wide variety of outcomes for workers, customers, communities, and the world without needing to move the whole mountain to do it.

I am bullish that If we want to create a better future, we need to build better companies, and that is directly in our power. We can create cooperatives, employee-owned companies, and steward-owned companies. We can build companies that champion workers’ rights and environmental protections—that use profits for the benefit of our communities. We can use our companies to innovate and do a lot of good in the world—just like Kellogg, Ford, General Motors, Patagonia, Lululemon, and Spotify have done. Every time we create a new company we create a new city—a new way things could go for companies and workers and customers—and as we do we are creating successful models our governments can eventually incentivize and make the norm.

If better companies rise up alongside our traditional ones, maybe cooperatives would have just as much power over our politics as Facebook. If we achieve better wealth equity with our employee-owned businesses, maybe there won’t be a few wealthy founders calling the shots but all of our voices would count alongside theirs. If more of our companies champion workers’ rights and environmental protections and are successful doing it, maybe governments will incentivize other companies to do the same.

Mondragon, the €11 billion cooperative in Spain, is already a fully functioning democracy that provides robust social services for its 80,000+ workers—it could operate autonomously with very limited government support if it needed to, and it has during periods of dictatorship.

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Mondragon as the new City-State

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If we build more companies like that, we can protect democracy and champion workers’ rights and provide human flourishing regardless of what happens with our nation-states. We can create every outcome we want to achieve without waiting around for our governments to solve them.

We can create the economy our governments should eventually incentivize.

Companies are already creating a world of city-states. Now we need to create better ones.²

I see this playing out the way power adapters have. When we electrified our homes in the early 1900s, we created wall outlets that would allow us to plug appliances directly into a power source. But every country made them differently, and they were meant to power large appliances that remained in place, like refrigerators and television sets, which made them too powerful when we eventually needed to power smaller devices like cell phones and laptops.

When tech companies entered the scene they invented the USB adaptor. But the USB wasn’t perfect, and different companies created different versions of them (USB-A, USB-B, mini-USB), so in 1995, a consortium of tech companies including Apple, Intel, Microsoft, HP, and Dell came together to create a better one. The USB Promoter Group was formed to create a universal, reversible connector that could replace older USB ports and provide faster data transfer speeds for a wide range of devices. Over the course of 10 years, they worked together to iterate on the USB, introducing better versions every year or two until, in 2014, they came up with the USB-C. This superior standard was adopted by Apple and Google in 2014, followed by Microsoft and Dell. Eventually, to cut back on charger waste and foster interoperability between manufacturers, the EU passed legislation that made the USB-C standard for phones, tablets, and laptops. They were followed quickly by India, the US, and Brazil.

That’s how I see the slow evolution of our companies and nation-states from here. Our current nation-states might provide the foundation—they are the old wall outlet in this metaphor and they are still important when we need to, say, plug in a vacuum cleaner. But there is one thing slowly becoming even more important: Companies—they are the USB. They allow us to do so much more than our wall outlets ever could—like use our devices in our cars and even other countries. What we need now is a consortium of businesses that can create better and better versions of them until we’ve arrived at a gold standard—a USB-C. By iterating over and over again, creating businesses that are better and better for workers and consumers and communities, and studying what works and what doesn’t, governments can eventually step in to make that the norm, legislating an elevated capitalism that works better than the one we currently have, and creating a better society than the one we have now.

I’m going to spend the next several years studying the best ones, learning from companies who are iterating on the old model and creating new ones. I’m going to write them into a blueprint for a better business—one other businesses can copy and follow, one entrepreneurs can proliferate and expand upon, and one that governments can eventually legislate into action. I’ve written about some of them already—I’ve studied cooperatives like Mondragon, worker-owned companies like Central States Manufacturing, and how we can create more of them with good government policy—but I want to dig even deeper from here. I want to study the companies that are already getting it right and creating a better model for the rest of us, starting with the largest and most successful ones.

One day I want to be able to hand that blueprint to our governments and say: “Here’s what companies should look like. Here’s proof that this model works better for everyone. Here’s the gold standard you should incentivize.” I’ll tell you more about that project over the next couple of weeks.

But if there’s one thing I’m bullish on it’s that, if we want a better future, we need to build better companies. And that is directly within our power to do—both in the companies we already work for, and at the new ones we create. We can create a better economy, and world, by creating millions of companies—tiny city-states that progressively work better for all of us, and that create a better future in the process.

If you know of any good case studies, please help me with my research and leave them in the comments!

Thank you, as always, for reading,

Elle Griffin

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1. Market cap is not the same thing as GDP, I’m well aware of this. A company can’t spend its market cap the same way a country can’t spend its GDP, but it serves as a helpful way to compare the wealth of the two even if it’s impossible to compare them in an apples-to-apples kind of way.

2. A note about why I think companies are the future, not “network states.”

Balaji

Srinivasan once said that we will create new countries with networks, but I disagree. His seminal work The Network State says that we will start gathering friends online, creating Discord servers and WhatsApp groups. Once we create big enough communities we will crowdfund money from them and use it to buy land and create our own cities. We will create our own countries alongside our existing ones—he calls them “parallel societies” and at his most recent Network State conference, he used Prospera/Vitalia, Edge, Zuzalu, and Culdesac as examples.

But all of these examples are actually companies. What they call “pop-up cities” are conferences we pay to attend. We may be creating communities, and they may go on to purchase property and form cities, but it’s not because we created a Discord server of likeminded people, but because a group of them started a business and are earning a profit from it. It is not “network states” that will eventually come up alongside governments then, but companies, and there are far larger examples than Prospera and Edge and Zuzalu that we can look to. Like Google and all of the other companies mentioned in this article.