By Helena Cross
A decade ago, Apple’s market capitalization quietly surpassed the GDP of Denmark. Today, more than a dozen corporations command revenues larger than most national economies. Their decisions—on wages, logistics, and data flows—shape the daily lives of millions across borders. Yet these choices are not subject to democratic vote, only to shareholder approval. In this asymmetry lies a growing reality: multinationals function less as companies and more as shadow states.
The Geography of Contracts
Traditional geopolitics maps territory with borders, but supply chains redraw them through contracts. A garment factory in Bangladesh may answer not to Dhaka but to a brand’s compliance office in New York. Mining concessions in Congo hinge less on parliamentary oversight than on agreements signed in corporate boardrooms. These paper borders dictate wages, environmental safeguards, and even speech, as non-disclosure clauses muzzle workers and whistleblowers alike.
The International Labour Organization estimates that 450 million workers—nearly one in seven globally—labor within supply chains governed by multinational directives. In practice, these workers live under overlapping sovereignties: the flag of their nation and the contract of their employer.
Private Governance, Public Consequences
When corporations step into roles traditionally held by states, accountability fractures. Consider Amazon’s logistics empire, where algorithms allocate warehouse labor with a precision rivaling central planners. Or Meta’s content moderation teams, effectively policing speech for billions without judicial oversight. These are not marginal functions; they are core attributes of sovereignty—control over territory, labor, and information.
Yet unlike governments, corporations can relocate. If regulations in one jurisdiction tighten, a supply chain can pivot elsewhere. This mobility weakens the bargaining power of states and leaves workers caught in a race to the bottom. In practice, corporate “exit rights” often trump citizens’ voting rights.
Who Holds Them Accountable?
Some advocates argue that shareholder activism and ESG frameworks provide a form of check on corporate power. But shareholder interests remain financial, not civic. The Bangladeshi garment worker has no vote at the annual general meeting. Global compacts, like the UN’s Guiding Principles on Business and Human Rights, remain voluntary. Enforcement falls to investigative journalists, labor organizers, and a handful of courts willing to pierce the corporate veil.
The stakes extend beyond economics. When corporations negotiate directly with governments—whether for tax holidays, mineral rights, or internet infrastructure—they shape sovereignty itself. In some regions, it is not embassies but boardrooms that set the terms of engagement.
Toward Democratic Supply Chains
If multinationals now act like states, the response must be equally structural. Binding international agreements on labor rights, enforceable transparency requirements, and stronger global tax coordination are starting points. Civil society has shown that pressure can yield results: after the Rana Plaza disaster in 2013, brands were forced into safety accords that saved lives.
The larger challenge is conceptual. Do we still think of corporations as private actors, or do we acknowledge their sovereign-like role in shaping borders, rights, and futures? The answer will determine whether workers remain subjects of contracts or citizens of a global order that finally holds boardrooms to account.
