It is widely believed that the power of modern multinational corporations dwarfs that of the state. Giant companies can, it is argued, easily cajole or simply bribe governments to do what they want. Developments in the energy industry, often seen as a bastion of corporate power, show that this view is misplaced.In Latin America several countries, most notably Bolivia and Venezuela, seem to have been successful in gaining better terms from foreign energy companies (see news analysis). It is true that such moves fall short of full-scale expropriation – if they had gone further the story might be different – but they went far enough to call the view of the all-powerful corporation into question. However, the clearest example of the real character of the relationship between the corporation and the state in the energy sector is Britain. Gordon Brown has imposed windfall taxes on the revenue of energy companies without the firms being able to do anything about it. Although an impoverished state such as Bolivia might find it hard to resist energy firms under some circumstances, the developed states have no such problem. Once the relationship between companies and the state is seen in a more balanced way other related trends can be understood differently. For example, the idea of deregulation – that states now impose minimal rules on corporate activity – is a myth. A more accurate term would be “reregulation”. Regulation has changed rather than become minimal. In fact, despite rhetorical attacks on “red tape” by both main parties – Labour and Conservative – the scope of regulation steadily rises. The government may not own large sectors of industry any more but the corporate sector is subject to more extensive regulation than ever. The City of London, often seen as a bastion of free-market capitalism, illustrates clearly the trend to reregulation. Before the “Big Bang” of 1986, the City was run like a gentlemen’s club. Those who transgressed its unwritten codes of behaviour would be blackballed. Today, in contrast, the Financial Services Authority has a vast array of detailed rules that firms are expected to follow. This is not to romanticise a past in which, for instance, foreign firms were excluded from participation on the London Stock Exchange. But the idea that in the era of “deregulation” the state has minimal power over corporations is simply wrong.