I can't see any difference between the government or a company that has monopoly over utilities. It literally draws all the power from the same source. America was founded on infrastructure tariffs. How does a government differ from a corporation?

  • Are you considering the maintenance of social order and territorial integrity as utilities?
    – phoog
    Oct 23, 2018 at 16:29
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    In a nutshell, the difference is that I could put a bunch of solar panels on my roof and tell the power company to go to Hell.
    – jamesqf
    Oct 23, 2018 at 18:44
  • @jamesqf, A monopolistic power company might sponsor politicians just so they can pass laws or raise taxes to drive solar panel vendors out of business.
    – agc
    Oct 24, 2018 at 6:08

6 Answers 6


Governments are different from companies with monopoly power because they seek to solidify political power and perpetuate themselves rather than an increase in profits or the accumulation of capital.

Taxation is not a "price" paid for "utilities" provided by the government (if that is what you're suggesting). After all, the government has other means to extract labor value from its citizens such as forced labor or conscription. It even has methods to appropriate capital through nationalization of corporations or entire industries. Since you mentioned America, these powers have been exercised in the past and present, with only conscription being absent from current practice.

It is even possible for a "successful" (stable) government to be like the Kingdom of Saudi Arabia, where the government owns the industry responsible for the majority of GDP, while governing as a monarchy/theocracy that pays its citizens from oil revenue rather than taxing them on their labor.

It should be pretty self evident even from looking at dictatorships that enrich themselves greatly at the expense of their citizens that political stability, however its obtained, is more important to governments that just money.

  • "Taxation is not a "price" paid for "utilities" provided by the government (if that is what you're suggesting)." Unfortunately, maybe. Otherwise I hardly would pay to almost any company providing such services.
    – rus9384
    Oct 23, 2018 at 8:40
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    Good answer, I would include the concept of the "tragedy of the commons" which makes government part of being human and choosing to live in a community Oct 23, 2018 at 12:47
  • "companies with monopoly power" aren't the same thing as "utilities."
    – phoog
    Oct 23, 2018 at 16:30
  • Forced labor and conscription might here be considered a form of taxation paid by the barter of labor.
    – agc
    Oct 24, 2018 at 6:10
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    @agc By that logic nationalization could be a form of wealth tax. These terms exist because they are distinct enough to be useful.
    – Teleka
    Oct 24, 2018 at 8:05

A democratically elected government is... elected. A privately owned corporation is owned and controlled by someone or a small group.

If a private company (absent a regulating government) wants to act unethically or directly against your interests, there is nothing you can do about it. They are a corporation. They exist to make money. You can try to buy from a competing corporation, but it is in the corporations' interest to shut down their competition or to collude against you.

If an elected official acts unethically or against the interest of the people, those people can vote. "The government" is not a singular entity. It is made up of elected officials chosen by citizens throughout the country. The purpose of the government is not to make money. The government takes in money so that it can spend it in the interests of the people to provide things that require impartiality and universal scale.

The individuals within the government are driven by the need to get the people to vote for them so that they can be re-elected. Some might sometimes attempt to cheat the system by doing this in unethical ways, but the basic premise of the system is to incentivize the leaders to act in the voters' interest.

Your analogy is not entirely out of the question for a totalitarian state. A dictatorship, particularly one with a resource based economy (like oil) does actually have a lot in common with a private corporation.

However the basic principle of a democracy is the antithesis of this. In a corporation, power is centralized so that profit is centralized. Democracy is all about the decentralization of power.

The more power the government has, the more of a say you as an individual have over your environment, because the government is the only entity that everyone gets a say in.

If you try to send your ballot to your utility company, you'll be lucky to make someone chuckle before they throw it in the trash.



So the purpose of government is to exist for the interests' of citizens of a nation.

The purpose of a corporation is to provide profits for shareholders.

A government usually has an obligation to a Constitution where a corporation often has to follow its mission statement.

In short, purpose and obligation. A government has an obligation to citizens and a corporation has an obligation to shareholders. Governments have to provide for citizens who are vulnerable and protect citizens from threats (internal or external), often demonstrating values citizens feel represent their national identity. Corporations, have to create products / services that customers value, to generate profits for shareholders.


I can only have electricity delivered to me by one company, which is a monopoly. I can only have natural gas delivered to me by one company (at least by pipe), so it's a monopoly.

If I want, I can use less electricity and pay less to the electric monopoly. Or I can turn down the temperature and use less natural gas. Because I am a customer and can choose not to purchase. I can even buy an electric heater or a natural gas light and shift between the monopolies (stoves, water heaters, and dryers also come in both versions).

I can't use less government services and pay less taxes. My taxes are the same regardless of how much I take advantage of government services. I can't tell them that I don't want to pay more for police; I'd rather buy an alarm system. I suppose I could work less and pay less income tax. Or buy a smaller house and pay less property tax. But those things are disconnected from government benefits. Consider that I can buy a more fuel efficient car, pay less in gasoline taxes, and still get the same transportation benefits.

Some might say that a government differs from a corporation in that governments offer citizens elections while corporations do not do the same for their customers. But not all governments allow free elections (e.g. China and Saudi Arabia). Further, some companies do offer customers the right to vote. That's how mutual insurance companies and credit unions work. That's at best a tendency and not a rule.

A government is like a corporation that can decide how much you will pay for their services and choose what services they will supply. That is to say, not much like a corporation at all.

  • Re last part: most (non-monopolistic) corporations that sell things also decide on both supply and price. Suggested edit s/decide/compel/.
    – agc
    Oct 24, 2018 at 5:54

No and yes, it's a complicated question and since it touches so much (the nature of government, humans and economics) I switch into lecture mode under the provision, that this is only my (somewhat informed) opinion and understanding and may well be very wrong:

In short: The main utility (public service) a government provides is "enforceable contracts". Here most governments are so successful, that they have an effective, natural monopoly. But they often do not act and use that monopoly like a profit-maximizing entity (a corporation) would, because that is not what they are.

Enforceable contracts allow people and groups of people to escape any instance of a prisoner's dilemma or the tragedy of the commons to reach the overall highest payout situation and are therefore highly prized - their value is the overall payout difference between the current nash equilibrium and the highest overall payout of the game (just redistribute the payout through the contract).

An simple example of those enforceable contracts is a neutral third party holding money for a wager which is to be paid out to the winner. But those contracts can be arbitrarily complex, two relevant examples I would like to mention are

  • Money - A storage of value making many transactions feasible, that were not accessible through barter.
  • Laws - of which 90% are about possession.

These give a range of disallowed actions and transactions, setting the rules of the game and defining which contracts are enforceable. Many constitutions even define inalienable rights, which can not be traded, removing them from simple economic transactions. Contracts containing the transfer of these rights will not be enforced by the government and their formulation may even be illegal.

A corporation with a monopoly (as one of the purest real world incarnation of a profit-maximizing entity) would see itself not just able but actually justified in taking nearly all of that additional value for providing the service of an enforceable contract as profit. Also it would try its best to defend its monopoly from other entities. If you want to read a bit how such an entity would act in the state position, the history of colonialism gives many tragic examples.

Most modern western style governments do not act like profit-maximizing entities, although it is still very common in the world, has been throughout history and may be so in the future. The modern liberal democracies were simply not designed to be profit-maximizing. They often provide utilities at or below cost to their populace. They also often try to reduce the cost and the prize of an utility - The opposite of the rent-seeking behavior profit-maximizing entities engage in. They also often try to move public services into private hands in hopes that those provide them more efficiently. Non standard utility examples would be notaries and lawyers, which are by necessity strictly regulated.

This is because the highest value of the liberal democracies are the individual freedoms as defined by their constitutions and continuously redefined by their constituencies. Huge amounts of capital in all forms far in excess of the nominal economic output of those states stands ready to defend those freedoms and I hope this will continue.

And a finishing simile:

The corporation is like a player in a game, the state is like a game designer. One is interested in playing the game, the other in designing and improving the game. One can be modelled quite simply - The player wants to win and will do everything to maximize the chances of doing so - and the other is a bit strange and difficult to model, asking questions like "What is winning?", "Why do you want to win?" and "Are you having fun?".


Government is like a utility monopoly, but they have a monopoly on one additional utility that most corporations don't: "Force".

All of a government's other monopolies rely on its monopoly on the use of force to coerce behavior. The government can give concessions on the use of force to other entities, just like it can give concessions on other utilities, but at the end of the day, every other power of government is backed by the ability to use force to enforce compliance.

Governments that don't maintain their monopoly on force find themselves toppled by a larger force.

  • Wow, three downvotes without comment. Downvoters, what's wrong with this answer?
    – phoog
    Oct 23, 2018 at 14:55
  • @phoog For a start, presenting democratically elected governments as being just the same as a totalitarian dictatorial state is literally propaganda. Its so baseless and childishly ridiculous that it doesnt really feel like it warrants a response.
    – Tal
    Oct 24, 2018 at 0:35
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    @Tal neither democracy nor totalitarian dictatorship is mentioned in this answer. Do you imagine that this distinction is implicit in the mention of force? Using force to control the population is a near universal feature of governments. Democratic governments do it, for example, when they imprison people who break the law.
    – phoog
    Oct 24, 2018 at 6:55
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    @Tai legally speaking a government is certainly a distinct entity with its own identity, as shown in the captions of criminal cases such as "the People v. John Doe." The fact that the accused may be one of "the people" does not change the fact that the government uses the threat of force to enforce its will. If you prefer to say that the people collectively use the threat of force to enforce their will, that's fine; it doesn't change the role of force in law enforcement. Further, it's not only lethal force; the power to stop someone for questioning is another example.
    – phoog
    Oct 24, 2018 at 12:57
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    @Tal You seem to be projecting a lot of things on to me and my answer. "Force" is a necessary shorthand for all the things it encompasses: Law enforcement, military, even basic enforcement of contracts. Similarly, "monopoly" is the correct word to use here, especially in context of the question. All of the "emotional propaganda" nonsense you're seeing is you, not in the words I used.
    – JKreft
    Oct 24, 2018 at 20:02