The Marginal Return of the King


Published on undefined

Written by Jonathan

19 min read


Many discussions around politics can be summarised by the following question: 

“How should the nation we live in be run?”

This appears to be a simple question but an immensely complicated one to answer, mainly due to the difficulty in measuring what a successfully running nation looks like. Metrics such as “equality”, “prosperity”, “freedom”, “stability”, “power projection”, etc are all considered by those in different camps in different measures, and it is this more fundamental disagreement that is a major source of confusion.

For example, if we are being charitable, a socialist would judge as successful a nation whose citizens are materially equal, or at least where inequality is minimised, whereas a libertarian would prefer a nation where they are free from tyranny. It makes no sense for them to be arguing over the minutiae of party politics or specific public policy when they fundamentally have different aims for the nation that they live in.

Since all sides have different metrics for what success and failure look like, there is the tendency for the answer to the question: “How should this nation be run?” to be “It does not matter, so long as me and my allies are running it.” It is not difficult to see how this could lead to instability if left unchecked, whether we value stability or not.

Fundamentally, the answer to "How should this nation be run?" is one of management. If we are to have a system of government (apologies to any anarchist readers), how should it be constructed such that those involved in its management have, at the bare minimum, a somewhat unified idea of what success looks like? This we will attempt to answer here.


A Proposition

An example of a management structure such that all those responsible for decision making have a shared vision is a joint stock company, otherwise known as a corporation.

Roughly speaking, a joint stock company is a company that is owned entirely by its investors. To count a percentage of the company as your property, you must invest your pre-existing resources to purchase stock in the venture. You are then entitled to a share, proportional to how much stock was purchased, of any profits made by the corporation in the form of a dividend, as well as a say in how the company is run. This share is considered an asset like a gold bar, a bitcoin token, a house or a car, and its value may go up or down depending on the performance of the company. The initial sale (or floatation) of these shares gives the newly created company capital with which to invest in the business’ operations, hopefully leading to its eventual success and increased shareholder wealth.

oval brown wooden conference table and chairs inside conference room

“Material profit” then is the vision for what success looks like in a corporation: the increase in value of a shareholder’s personal property and how much of a dividend they receive, as well as any growth in the underlying value of the share above its nominal value (known as total shareholder return). Shareholders can and do have different ideas for how to achieve this success, and will vote on it. Unlike in a modern political system however, the votes are on how to achieve the objective, not a confused muddle of this and what the objective should be in the first place. Note that this is not explicit, I may absolutely vote for the company to risk the material wealth of both myself and all other shareholders pursuing some other end. The incentive is to avoid this however.

Votes are counted in proportion to the voter’s stake in the company, if you own 51% of the stock then you would win every vote and have what is known as a “controlling share”. The counterbalance to this is if your proposed strategy is unsuccessful then you will lose more of your wealth than everyone else. It can be common in some jurisdictions and depending on the size of the company for such an individual to also be the Chief Executive Officer (CEO) of the business, taking on direct responsibility for its future performance. 

Shareholders vote at an Annual General Meeting (AGM) for whether they see value in the direction of the current leadership team, but otherwise take no part in the direct management of the Company. At no point is the low-level office drone particularly influential in or concerned by decisions the CEO is making on any given day. In modern times we assume that mass democracy is the most effective decision making system, yet for some reason we do not care that in the vast majority of companies, low level non-shareholding employees get no official vote.

Since the middle ages, this model of organisation has become ubiquitous in private business across the world. Other structures of private enterprise do exist (co-operatives, charities, etc), but the tendency for corporate-like structures to dominate in freer markets seems obvious historically, whether we accept that what we currently live in is a free market or not.

If we make the assumption that the geopolitical landscape is "free", i.e. there is no higher political power dictating interactions between sovereign nations, then why do nations structured like corporations not dominate? What would a nation structured like a corporation even look like? For a start, how does one buy a share in a nation?

The answer to this is simple. Consider a small fictional nation of 50,000 square miles, roughly the size of England, where each natural resource is distributed perfectly evenly. If I was to obtain 500 square miles of this land (80% of the size of Greater London) I would own a 1% stake in the country. I would be entitled to 1% of the profits of the nation and my vote on its direction would count for 1%.

We have just rediscovered the concept of a landed nobility.


A Different View of History

What of the King? Similar to the role of a CEO previously discussed, theoretically he is the landowner with a controlling share of the land, known as Crownland. This land is his personal property, just as Elon Musk’s shares in Tesla belong to him as an individual. It being property, it is perfectly reasonable for it to be passed on to whomever he wishes upon his death, be it a firstborn son or some other benefactor. This is true of all landowners, lords, shareholders in Amazon, and your aged grandmother in the house she bought in 1973.

In practice the actual percentage of land held by a monarch tends to wax and wane, with their status being maintained through tradition and often religious support. Lower down the feudal ladder, titles and the land itself were more closely intertwined, with barons, lords and knights holding specific parcels of land and a level of protection in return for his allegiance to a local Earl. This Earl may have a similar arrangement with a Duke or the King himself. This is not a formal, principled, academically theorised “system”, like a modern nation state. This is evolutionary, driven by survival, short term necessity, long term tradition, and mutual benefit. If our modern civilisation collapsed tomorrow, do we suppose that the world would quickly coalesse into liberal, democratic nation states? Of course not. We expect warlords and their retainers. In the absence of top down geo-political control, kingdoms form. In the absence of top down economic control, corporations form.

Note that we are not advocating a return to medieval feudalism here, merely offering a way to understand history. We are offering a model or analogue, the consideration of which might make the causes of past events become clearer. We should not assume that the people that came before us were simply mad or stupid. Instead we must seek to understand the reasons for their actions and why, to them, they were perfectly rational.

As we alluded to earlier, some element of material profit would be the incentive for acquiring land. After all, potentially productive people live on that land, to which a lord could charge rent or collect taxes. Again this is not apologia for serfdom or taxation, although the incentives to keep local taxes low and peasants happy are analogous to private enterprises offering higher pay or exclusive benefits to ensure loyalty. Loyalty to a private enterprise is manifested as not leaving to work for a competitor, whereas loyalty to a feudal lord is shown through support in times of war and, ultimately, not outright revolting.

house and trees

A lord’s land may be rich in natural resources or have some strategic importance, and it is here where our analogue breaks down slightly. In a corporation, profits are taken into a central pot and distributed to each shareholder, according to the percentage of the shares that they own. In the feudal kingdom we have been considering, each landowner is entitled to as much of the profits of their land as they can persuade its producers to part with. Either way, more land equals more return on investment, although we should concede the point that unlike shares in a company, not every square mile of England is equal.

This persuasion by a lord of his people may be at sword point, and undoubtedly often was, although the English story of Robin Hood demonstrates that this was perhaps considered the sign of a bad lord. There is no shortage of peasant revolts in medieval England which might affirm this. Today however, excessive taxation is not generally seen as a sign of a bad democratic government, indeed some Northern European states who receive the most praise have the highest tax rates. Failure to pay up still results in a boot on the neck of the poor unfortunate peasant who would like to keep the product of his labour.


Politics and Policy

Central policy is also subject to these incentives. Recall that until very recently, the houses of Lords and Commons were made up exclusively of noble landowners, although near the end of that practise their influence had been shattered by the industrial revolution [1]. Excessive taxation, regulation or other interference with ordinary people at the behest of a central authority (i.e. the king or foreign powers) would lead to a drop in their productivity, and therefore hurt the bottom line of the policy makers themselves.

In fact, this is the purpose of parliament: to grant consent to be taxed to the king [2]. If the king wished to raise money for war, he would have to summon parliament and persuade them to grant it. Doing this at sword point was not an option, and as Charles I found, being retired by his board of shareholders was a very real possibility. 

Having a personal, financial stake in your own peasants’ material success gives a powerful incentive for any MP or Lord to work towards that end. What threatens a policy maker more, a vote in three years time or the value of their investments dropping overnight? This should be obvious, and is demonstrated by the combination of investment and policy decisions undertaken by certain members of the US house of representatives [3].

Elizabeth Tower in London under blue and white skies

The reforms of one Anthony Blair at the turn of the 21st century put a final end to these incentives in the UK Parliament, with the changing of lordships from hereditary titles to lasting the life of the holder. He should not get all the blame however, it had been a slow death ending in a country led by, at best, failed businessmen, ex journalists, lawyers and mediocre academics. None of these people have any direct stake in the success of the people living in their constituencies.

The role of the House of Commons is a curious one. In essence, it is a method by which the King may allow his junior shareholders (or in the modern day, non-landowning citizens/non-shareholding employees) to select a shortlist for him to consider as personal advisors and/or administrative staff (government). In the corporate analogue, the modern House of Commons is more analogous to an overblown HR department or internal workers union.


Some Examples 

A Duke may well be able to carve out a small petty kingdom of his own if he never submits to a powerful king. Alternatively that neighbouring king may crush him, either directly or by obtaining the loyalty of this Duke’s own subordinate earls and barons, analogous to a hostile takeover in a modern corporation [4]. In our more enlightened times, obtaining stock in a corporation is ideally non violent, above board, and simply an exchange of assets. History is more brutal, full of violent wars and grand plots for both titles and territory, the exact same process just on a grander and often bloodier scale.

But enough theory. Let us consider some examples of the incentive structures we have discussed at play.

The Barons' Revolt

Consider a vast fictional company named Angevin Ltd. The CEO of this, John Lackland, is unpopular with his senior shareholders after being forced to sell a subsidiary company, Normandy Inc., to a competitor, France Industries, who are projected to overtake Angevin in profits in future years.

John is in trouble, and these senior shareholders, owning significant proportions of the company between them, are aiming to force him to sign a company charter that would cede them more power over the company’s direction, since they have deemed that he cannot be trusted. A “Great Charter” if you will. John in fact lost a great deal of say over Angevin’s direction after being forced to sign this, and he would step down soon after, gifting his shares to a younger CEO who would also sign the charter after some amendments by Senior Director William Marshal.

3 men in gold and black suit statue

This story sounds like standard shareholder jostling in a large corporation with a bad CEO, yet this is exactly what happened in the early 13th century England after the collapse of King John’s Angevin Empire. The supposedly absolute monarch had made bad decisions, but the Baron’s had the necessary land between them to force him and future kings to cede some of that power to them, both for their own benefit and for the benefit of their peasants.

Personal Unions

In medieval politics, a personal union was two kingdoms who happened to have the same king. This is analogous to someone in modern times owning a controlling share in multiple companies. These companies can be considered “allies” and may have a degree of integration, but they remain separate entities, and one cannot be considered a subsidiary of the other.

It is not a political union, they may have entirely different systems of government below the monarch. They may have different legal systems entirely.

Notable examples include but are by no means limited to:

  • The Kingdoms of England and Scotland, before their merging into Great Britain in 1707
  • The Kingdom of Austria and multiple Hungarian, German, Italian and Balkan kingdoms at different times from the 13th to 20th centuries.
  • The Kingdom of Denmark and Kingdoms of England, Norway, Sweden and Iceland at different times between the 10th and 20th centuries.
  • Kingdom of Poland and the Grand Duchy of Lithuania, later forming the Polish-Lithuanian Commonwealth.
  • Iberian Kingdoms of Leon, Castile and Aragon, later forming Spain
  • The Duchy of Hanover with Great Britain and Ireland from 1714 to 1801.

The formation of another whole nation from constituent personally unified kingdoms is a political union. It is not difficult to imagine modern CEOs consolidating their various companies into fewer larger ones, this happens all the time and it is the exact same process.

Glorious Revolution

Some four and a half centuries after King John’s Barons’ War, a similar event took place. King James II was a Stuart king of England but a Catholic, making him deeply unpopular with a great many powerful landowners in his kingdom. A hostile takeover occurred, with the Dutch Stadtholder (Duke) William of Orange gaining the support of many senior landowners in England at the time, persuading them to use their share of the power to make him king. Chief among these men was the great general John Churchill, Duke of Marlborough, who abandoned the king he personally deemed unfit to run the country and supported William. James was forced out, relinquishing his land, of which William immediately took possession.

The historian Niall Ferguson writes:

This ‘Glorious Revolution’ is usually portrayed as a political event, the decisive confirmation of British liberties and the system of parliamentary monarchy. But it also had the character of an Anglo-Dutch business merger. While the Dutch Prince William of Orange became, in essence, England’s new Chief Executive, Dutch businessmen became major shareholders in the English East India Company. … In particular, the Anglo-Dutch merger of 1688 introduced the British to a number of crucial financial institutions that the Dutch had pioneered

Ferguson goes on to discuss how this royal merger laid the foundations for the British Empire, and indeed in another article for the Wellington Project, Lessons from the Old Frontier [6], we discussed how the first colonies in America were set up soon after by London businessmen and Devonshire country squires as joint stock companies.

The Glorious Revolution was not a revolution in any real sense. The old order was mostly maintained, with more power granted to shareholders and employees of England rather than the CEO. A real revolution would have been analogous to a company’s new CEO obtaining all shares, dissolving it and deciding to start from scratch. The idea of confiscating a company's shares from its shareholders, redistributing them equally to all employees from the most important director down to the cleaner, and expecting it to continue to turn a profit is considered ludicrous, yet this is what is proposed by revolutionaries with more socialist leanings.


The Tory Party

The Conservative party has its roots in the cavalier supporters of King Charles I and his son Charles II. These were country gentlemen who also served as MPs in some of the many parliaments summoned in that tumultuous time, and their opinions reflected their background. Winston Churchill explains this further [7]:

The traditional Tory view was that England should not aspire to play a leading part in the Continental struggle. Her true policy was to intervene only by sea-power, and amid the conflicts of Europe to gain many territories overseas in the outer world. The Tories regarded with aversion the sending of large armies to the Continent. They looked with disparaging eyes upon victories in Europe. They groaned or affected to groan under the burden of Army expenses. They alleged that the interests which urged active intervention made great profits out of the war by subscribing to Government loans. They declared that the country gentle-men were being mulcted while the City of London, its bankers and its merchants, established an ever-growing mortgage upon the landed. 

brown concrete building near green grass field during daytime

It was the Whigs of the early 18th century that pushed for land wars in Europe and supported the Duke of Marlborough in his struggle with Louis VIX of France. It was the Tories that pushed for global trade and non-interventionism, precisely because it led to less of a tax burden upon their land and prosperity for those they depended on. It is not difficult to see how and why they have taken on their current form as a party, no longer being the party of country squires but of mass city businesses.



To return to our original problem, we have discussed a management structure where all those involved in policy making have a unified idea of how to measure a successful policy: a joint stock company, also known as a corporation. All involved are interested in increasing their material wealth, and the amount by which they do so is proportional to the investment that they have made. Their ability to influence company policy is similarly bound to their skin in the game, 5% of the shares gets you 5% of the profits and 5% of the vote. Any discussions are about how to go about increasing the company’s material success, and therefore shareholder profit, not whether that is the aim in the first place.

We then considered the following apparent paradox: if these sorts of enterprises tend to dominate an unregulated free private sector, then why do similarly structured nations not dominate the supposedly sovereign nations of the world? The answer is they do, or rather they did. They are called kingdoms.

The fact that kingdoms do not dominate nowadays, and instead we see the ascendancy of the liberal democratic nation state, points to two perhaps unsavoury propositions:

  1. Policy makers have discovered a way to enrich themselves without also needing to enrich the people residing in their fiefdoms.
  2. Our assumption that the nations of the world are de facto sovereign is wrong, there is a truly global (or at least western) international order, distorting the geopolitical landscape through regulation the same way it would a market.

A kingdom is a privately owned nation, the property of and driven by those with a stake in its success. A democratic state is a publicly owned nation, the property of and driven by everyone equally, regardless of each individual’s stake in its success.

Explicit parallels between a kingdom and a corporation can be made as below.

House of LordsBoard of Shareholders
House of CommonsEmployee’s Union
GovernmentBoard of Directors
InvestmentPurchase of title, or Conquest

To push these thoughts even further, we could flip the apparent thesis of this article on it’s head. We could say the following:

It is not that nations structured like corporations dominated the world for most of history, but that private enterprises structured like feudal monarchies dominated markets.

Monarchy works, because if it did not then most of us would not be working for one.







[5] Niall Ferguson, Empire. Chapter 1: Why Britain?


[7] Sir Winston Churchill, A History of the English-Speaking Peoples Vol. 3


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